How the giant corporations most responsible climate change emissions are working to defeat climate change legislation and block international agreements
Executive Summary of Who’s holding us back? How carbon-intensive industry is preventing effective climate change legislation [PDF], published today by Greenpeace International.
The corporations most responsible for contributing to climate change emissions and profiting from those activities are campaigning to increase their access to international negotiations and, at the same time, working to defeat progressive legislation on climate change and energy around the world.
These corporations – while making public statements that appear to show their concern for climate change and working with their own seemingly progressive trade associations like the World Business Council for Sustainable Development (WBCSD) – threaten to defeat urgent global progress on climate change and economic development for the 99% of the world’s population that desires both clean energy and clean air.
This report helps to demonstrate why decisive action on the climate is being increasingly ousted from the political agenda. Firstly we summarise the lack of action at a national level in several key countries to build the right preconditions to a global climate agreement, which stands in stark contrast to public opinion demanding change. Then, the report reveals through clear case studies how a handful of major polluting corporations such as Eskom, BASF, ArcelorMittal, BHP Billiton, Shell and Koch Industries, as well as the industry associations that they are members of, are influencing governments and the political process on climate legislation.
What the people want
A global poll in 2009 showed that 73% of people placed a high priority on climate change1, and a recent poll confirmed that global concern about climate change has risen since the Copenhagen climate summit in 2009, despite the ongoing global financial and economic crisis.
- According to the latest Eurobarometer opinion poll released in October 2011 concern about climate change among Europeans has grown since 2009 and almost eight in ten respondents agree that tackling climate change can boost the economy and create jobs. Analysis by the European Commission and several independent research institutes5 indicated that it would now be in Europe’s economic interests to introduce stronger climate legislation.
How the carbon-intensive corporations are holding us back
Carbon-intensive corporations and their networks of trade associations are blocking policies that aim to transition our societies into green, sustainable, low-risk economies. These polluting corporations often exert their influence behind the scenes, employing a variety of techniques, including using trade associations and think tanks as front groups; confusing the public through climate denial or advertising campaigns; making corporate political donations; as well as making use of the ‘revolving door’ between public servants and carbon-intensive corporations.
- In the US alone, approximately $3.5 bn is invested annually in lobbying activities at the federal level. The US Chamber of Commerce tops the list of lobbyists. In recent years, Royal Dutch Shell, the US Chamber of Commerce, Edison Electric Institute, PG&E, Southern Company, ExxonMobil, Chevron, BP and ConocoPhillips all made the top 20 list of lobbyists. The climate campaign organisation 350.org estimates that 94% of US Chamber of Commerce contributions went to climate denier candidates.
- Sector-specific trade associations such as the American Petroleum Institute, the Canadian Association of Petroleum Producers, the Australian Coal Association, the Energy Intensive Users Group in South Africa or BusinessEurope and the European steel and chemicals associations Cefic and Eurofer often campaign outright against measures that would cut greenhouse gas emissions, or run campaigns in support of unfettered fossil fuel energy.
- Some companies, on the other hand, have distanced themselves from such practices. PG&E, Exelon, PNM Resources and Apple all left the US Chamber of Commerce over the Chamber’s positions and lobbying against climate change action. In the EU more than 100 companies have supported a unilateral increase of the EU’s outdated 2020 GHG emission target to 30% – taking publicly the opposite position of BusinessEurope that claims to represent them.
- Key associations such as the Business Council of Australia13, Association of Mining and Exploration Companies, Australian Chamber of Commerce and Industry1, the Australian Coal Association, the Australian Trade and Industry Alliance18, as well as companies including coal-mining firms, steel and aluminium producers and coal power generators have been opposing the introduction of a carbon tax in Australia, citing among other things job losses, rising prices and carbon leakage as reasons for their opposition. These carbon-intensive sectors launched a series of colourful and seemingly chilling print, TV and online advertisements highlighting their importance to the Australian economy and seeking to undermine both the carbon price and the proposed resources tax.
State of play – The European Union
Carbon-intensive companies and their apologists, such as BusinessEurope, Cefic and Eurofer and the Alliance for a Competitive European Industry, continue to block serious progress on climate policies.
The EU has been embroiled in an effort to increase its emissions reductions target for 2020 to 30% from
- 20%, but this new target has been undermined by the heavy lobbying by carbon-intensive industrial players, including BASF, ArcelorMittal and Business Europe. These companies and their associations not only exert their influence to hold back progress but are boldly reframing the debates despite economic analysis and reports that show the economic benefits to taking action on climate change. This report reveals how, despite EU Commission analysis showing the economic benefits of a 30% emissions reduction target, BusinessEurope and others have been successful in holding back action by creating a false debate on the ‘de-industrialisation of Europe’.
- ArcelorMittal has been granted very generous emission allowances, so large that the excess allowances by 2012 are likely to overtake Belgium’s annual emissions, and ArcelorMittal is set to profit highly from sales or banking of these unused allowances. These pollution ‘gifts’ – for which ArcelorMittal paid nothing – were the result of ArcelorMittal’s and its predecessors’ close relationship to and lobbying of the governments in the countries it operates in, all while it undermines the public understanding of climate science by financially supporting US Senate candidates denying climate change or blocking climate change legislation.
State of play – The United States
- In recent years in the US, Royal Dutch Shell, the US Chamber of Commerce, Edison Electric Institute, PG&E, Southern Company, ExxonMobil, Chevron, BP and ConocoPhillips all made the top 20 list of lobbyists. When it comes to lobbying on climate change many sectors in the US have more than trebled their numbers of lobbyists between 2003 and 2008.
- Greenpeace revealed an internal American Petroleum Institute memo in August 2009, detailing an initiative by the API to ride the coat tails of the rising Tea Party. API was instructing members that they should deploy their employees to so-called Citizen Energy rallies to be held in key states nationwide. The target of these rallies was draft climate legislation being debated in Washington. The memo was explicitly supposed to be kept secret.
- Koch Industries is one of the most powerful corporations holding back progress on climate change in the United States. Koch Industries and the Koch brothers who own the company are deeply involved in the climate denial movement funding numerous efforts on that front. One controversy that has recently emerged is Koch’s hidden agenda for the tar sands and the Keystone XL pipeline running from Canada to the Gulf Coast in Texas for oil export around the world. A Koch subsidiary in Canada, Flint Hills Resources Canada, made a declaration to the Canadian government that it has a ‘substantial interest’ in the pipeline’s approval. But in the US, Koch representatives told members of Congress that the pipeline has ‘nothing to do with any of our businesses’ and ‘we have no financial interest in the project’. Evidence shows Koch has been organising and funding so-called ‘citizen’ support for the pipeline.
State of play – South Africa
South Africa is hampered in its efforts to supply clean, affordable, renewable energy for its people by the country’s state-owned electricity provider and its close links to the carbon intensive industry:
- South Africa’s state-owned, coal-reliant utility Eskom contributed a massive 45% of South Africa’s annual greenhouse gas emissions in 2010. An estimated 45% of electricity used in South Africa is consumed by just 36 companies represented in the Energy Intensive Users Group of Southern Africa. Eskom’s biggest customers include ArcelorMittal, BHP Billiton and AngloAmerican – with some of them also supplying coal to Eskom. The Energy-Intensive Users Group has been openly lobbying against the introduction of effective emissions control measures such as a proposed carbon tax.
- Average industrial prices are substantially cheaper than average residential prices in South Africa. Secret price contracts between Eskom and the Australian mining company BHP Billiton for example are estimated at about 350% less than a low income residential customer in 2008/9, and less than half Eskom’s reported production price in the period.
- In 2010, when the government put together a special task team to draft the country’s electricity plan (and thus its emissions pathway) for the next 20 years, Eskom representatives and significant industry lobbyists were part of the process, while civil society and labour representatives were excluded.
- Eskom claims to support a strong outcome in Durban and clean electricity. Eskom is currently planning a massive expansion of generation capacity that it claims is necessary to ‘keep the lights on’ for Africans. In reality, the vast majority of this capacity will be used by industry and remains coal-based.
State of play – Canada
Canada is the only country in the world that signed and ratified the Kyoto Accord and then openly announced it would not meet its commitments. Canada is also the only country to decrease its mitigation emissions pledge for 2020. In addition, the Canadian government provides over $1.3 bn Canadian dollars in handouts to the oil industry every year, despite calls from within the Department of Finance to end these subsidies and committing to phase out fossil fuel subsidies at the G20 in 2009.
- At the heart of Canada’s intransigence on climate change is the development of the tar sands, the fastest growing source of emissions in Canada. Oil sands emissions numbers were deliberately left out of the most recent national inventory of Canada’s greenhouse gas pollution submitted to the UN, but these data were given to oil and gas lobbyists from the Canadian Association of Petroleum Producers (CAPP) by Environment Canada engineer.
- The Canadian government’s efforts to undermine clean energy policy extend beyond its own borders. The current government has established an ‘Oil Sands Advocacy Strategy’, developed in coordination with companies such as Shell and other members of CAPP. The Department of Foreign Affairs and federal officials are systematically working to weaken and undermine clean energy and climate change policies in other countries in order to promote the interests of oil companies, including California’s low-carbon fuel standard, a US federal clean fuels policy known as Section 526, and the EU’s Fuel Quality Directive.
- Working with the Canadian government is Royal Dutch Shell, the world leader in greenhouse gas emissions. While Shell claims to be concerned about climate change, it is investing almost exclusively in the continuous discovery of new oil reserves, including the huge expansion of the tar sands. Shell is a signatory to several climate leadership statements, including the Prince of Wales’ recent 2 Degree Communiqué, yet our report details how Shell has directly made statements opposing the EU 30% emission reduction goal. As a prominent member of the Petroleum Association of Japan, it has also opposed Japan making a second commitment to Kyoto, and as a member of the American Petroleum Association it has opposed US climate legislation.
The campaign for increased and privileged access for the business sector could open the door for the same carbonintensive companies that are successfully lobbying against more climate ambition on the national level to influence the very architecture of an international climate agreement.
- While a broad range of companies came to Copenhagen and Cancún and supported a global deal through signing progressive business statements such as the Copenhagen and Cancún Communiqués, many of the signatories are the same carbon-intensive companies – such as Shell and BASF – that have been holding us back from tackling climate and energy challenges for the past 20 years.
- The World Business Council for Sustainable Development (WBCSD)* has shifted in recent years to playing an increasingly high profile role as a convener and focal point for corporations engaging in the UNFCCC. While the WBCSD has a broad range of companies within its overall membership, its Executive Committee is dominated by some of the largest nonrenewable energy and carbon-intensive companies in the world. The WBCSD executive committee is a ‘Who’s Who’ of the world’s largest carbon-intensive companies who continue to profit from continued inaction on climate change.
- The increased dialogue with the different COP host governments is part of a much broader attempt by the private sector, led by the WBCSD, to institutionalise a direct and privileged private sector input into the UNFCCC agenda.
This report will show that carbon-intensive companies are acting to block key governments from tackling climate change through international and domestic policies. Without good renewable energy policies, a commitment to zero deforestation, promotion of green and decent jobs and legally binding regulation to control greenhouse gas emissions, the transition to green economies powered by clean and safe energy will not happen fast enough to avoid catastrophic climate change. Greenpeace applauds progressive corporations who are distancing themselves from the business associations who are lobbying against progress and engaging in strong efforts to ensure national and international policies and agreements to keep the world below 2°C. Greenpeace is calling on governments in Durban to listen to the people and not the polluting corporations, and:
- Ensure a peak in global emissions by 2015
- Emission reductions: Close the gap between politics and science
- Ensure that the Kyoto Protocol continues and provide a mandate for a comprehensive legally binding instrument
- Deliver the necessary climate finance
- Set up a framework for protecting forests in developing countries
- Address the needs of the most vulnerable countries and communities
- Ensure global cooperation on technology and energy finance
- Ensure international transparency in assessing and monitoring country commitments and actions
- Ensure transparency, democracy and full participation in the UNFCCC process