Some business leaders are cozying up with politicians and
scientists to demand swift, drastic action on global warming. This is a new
twist on a very old practice: companies using public policy to line their own
pockets.
The tight relationship between the groups echoes the
relationship among weapons makers, researchers and the U.S. military during the
Cold War. President Dwight Eisenhower famously warned about the might of the
"military-industrial complex," cautioning that "the potential
for the disastrous rise of misplaced power exists and will persist." He
worried that "there is a recurring temptation to feel that some
spectacular and costly action could become the miraculous solution to all
current difficulties."
This is certainly true of climate change. We are told that
very expensive carbon regulations are the only way to respond to global
warming, despite ample evidence that this approach does not pass a basic
cost-benefit test. We must ask whether a "climate-industrial complex"
is emerging, pressing taxpayers to fork over money to please those who stand to
gain.
This phenomenon will be on display at the World Business
Summit on Climate Change in Copenhagen this weekend. The organizers -- the
Copenhagen Climate Council -- hope to push political leaders into more drastic
promises when they negotiate the Kyoto Protocol's replacement in December.
The opening keynote address is to be delivered by Al Gore,
who actually represents all three groups: He is a politician, a campaigner and
the chair of a green private-equity firm invested in products that a
climate-scared world would buy.
Naturally, many CEOs are genuinely concerned about global
warming. But many of the most vocal stand to profit from carbon regulations.
The term used by economists for their behavior is "rent-seeking."
The world's largest wind-turbine manufacturer, Copenhagen
Climate Council member Vestas, urges governments to invest heavily in the wind
market. It sponsors CNN's "Climate in Peril" segment, increasing
support for policies that would increase Vestas's earnings. A fellow council
member, Mr. Gore's green investment firm Generation Investment Management,
warns of a significant risk to the U.S. economy unless a price is quickly
placed on carbon.
Even companies that are not heavily engaged in green
business stand to gain. European energy companies made tens of billions of
euros in the first years of the European Trading System when they received free
carbon emission allocations.
American electricity utility Duke Energy, a member of the
Copenhagen Climate Council, has long promoted a U.S. cap-and-trade scheme. Yet
the company bitterly opposed the Warner-Lieberman bill in the U.S. Senate that
would have created such a scheme because it did not include European-style
handouts to coal companies. The Waxman-Markey bill in the House of
Representatives promises to bring back the free lunch.
U.S. companies and interest groups involved with climate
change hired 2,430 lobbyists just last year, up 300% from five years ago. Fifty
of the biggest U.S. electric utilities -- including Duke -- spent $51 million
on lobbyists in just six months.
The massive transfer of wealth that many businesses seek is
not necessarily good for the rest of the economy. Spain has been proclaimed a
global example in providing financial aid to renewable energy companies to
create green jobs. But research shows that each new job cost Spain 571,138
euros, with subsidies of more than one million euros required to create each
new job in the uncompetitive wind industry. Moreover, the programs resulted in
the destruction of nearly 110,000 jobs elsewhere in the economy, or 2.2 jobs
for every job created.
The cozy corporate-climate relationship was pioneered by
Enron, which bought up renewable energy companies and credit-trading outfits
while boasting of its relationship with green interest groups. When the Kyoto
Protocol was signed, an internal memo was sent within Enron that stated,
"If implemented, [the Kyoto Protocol] will do more to promote Enron's
business than almost any other regulatory business."
The World Business Summit will hear from "science and
public policy leaders" seemingly selected for their scary views of global
warming. They include James Lovelock, who believes that much of Europe will be
Saharan and London will be underwater within 30 years; Sir Crispin Tickell, who
believes that the United Kingdom's population needs to be cut by two-thirds so
the country can cope with global warming; and Timothy Flannery, who warns of
sea level rises as high as "an eight-story building."
Free speech is important. But these visions of catastrophe
are a long way outside of mainstream scientific opinion, and they go much
further than the careful findings of the United Nations panel of climate change
scientists. When it comes to sea-level rise, for example, the United Nations
expects a rise of between seven and 23 inches by 2100 -- considerably less than
a one-story building.
There would be an outcry -- and rightfully so -- if big oil
organized a climate change conference and invited only climate-change deniers.
The partnership among self-interested businesses,
grandstanding politicians and alarmist campaigners truly is an unholy alliance.
The climate-industrial complex does not promote discussion on how to overcome
this challenge in a way that will be best for everybody. We should not be
surprised or impressed that those who stand to make a profit are among the
loudest calling for politicians to act. Spending a fortune on global carbon
regulations will benefit a few, but dearly cost everybody else.
Bjoern Lomborg is director of the Copenhagen Consensus, a
think tank, and author of "Cool It: The Skeptical Environmentalist's Guide
to Global Warming" (Knopf, 2007).
This article was originally published in The Wall Street Journal. The author has given his permission for a republication on atlantic-community.org.
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June 20, 2009
John Hadjisky, Blogger, Platinum Contributor (328)
I don't know how many times I've had the following conversation with a climate "true believer" (TB):
Me: There are an increasing number of reputable scientists who are skeptical of the global warming (AGW) consensus or the Kyoto policies.
TB: They all get money from big oil or other capitalists!
Me: Not the one's I'm talking about (Pielke, Roy Spencer, Syun-Ichi Akasofu, Lomberg, many others).
Me: Besides, since when did government money become as pure as the driven snow? Don't governments make mistakes, and engage in herd behavior, and succumb to undue influence? Don't certain companies supporting the consensus stand to benefit tremendously from policy changes?
TB: You are irrational!