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Greenhouse Market Mania

The Corporate Strategy: From Opposition to Co-optation

The prime business goal for the climate summit in The Hague is to ensure unrestricted emissions trading, including the full use of carbon sinks. The corporate lobby -involving not only fossil fuel companies but virtually all sectors of industry - is inspired by the desire to pre-empt what they consider the worst case scenario- binding government regulations on business. Moreover, most companies have discovered that huge profits can be sucked up if they succeed in shaping the Kyoto mechanisms in their interests.

his lobbying strategy is a far cry from the corporate approach to climate change in the early 1990s. Business has gradually moved away from its initial aggressive, defensive strategy of denying the existence of climate change and disputing its causes. Later, the focus was on attempts to delay decision-making, including emphasising the high costs of reducing greenhouse gas emissions and stressing the responsibility of developing countries. Today, industry has overwhelmingly adopted a 'constructive' approach- promoting voluntary action by companies in combination with market-based 'solutions'. The shift was clearly visible in 1997 for the first time, when industry pushed for voluntary action as the most effective solution in the run-up to the Kyoto Summit. After Kyoto, industry quickly embraced the Protocol's market-based mechanisms and began to clamour for their expansion. This transformation in corporate strategy is a calculated response to the gathering momentum of the political process around climate change, especially in Europe. Faced with the risk of being marginalised, which could have resulted in governments adopting climate policies in conflict with the corporate agenda, industry realised that engaging in negotiations about solutions was a more effective way of delaying or avoiding regulatory action.

The Reality of 'Voluntary Action'

Corporate lobby groups routinely claim that government intervention to reduce CO2 emissions is counter-productive and that they themselves can handle the situation through investments in new technology. Typically, these claims are 'backed' by glossy publications full of heart-warming case studies from TNC-run factories where emissions per production unit have been reduced. [65] Missing from these evasive reports are overall figures on the status of global CO2 emissions by these same corporations, to say nothing of 'side-effects' like emissions from the highly unsustainable transport systems they promote.

The UN's Research Institute for Social Development (UNRISD) recently published a report on voluntary environmental initiatives by industry that concludes that these voluntary initiatives "often result in 'non-compliance, double standards, inadequate targets or standards, or greenwashing'." [66] Elaborating on the strategic use of "greenwash" by polluting companies, the report states that "the illusion of more profound change stems partly from the fact that the TNCs and business or industry associations involved are big players on the international stage and are actively publicising their new approach through the media, corporate advertising, publications, conferences and international institutions." [67]

European-based corporations and their lobby groups generally made the shift earlier than their counterparts in North America, mainly due to political realities in Europe, where climate change has been a hot political issue since the early 1990s and where the political risks of continued denial were greater. On the other side of the Atlantic, business has now also jumped on the bandwagon of political engagement in order to promote market-based mechanisms. But the domestic political reality, with environmental issues carrying less weight with the public, enables many US business groupings to follow a hypocritical twin-track path- promoting market-based 'solutions' in the international climate negotiations, while domestically denying human-caused climate change and opposing ratification of the Kyoto Protocol by the US Congress.

As the oil industry itself has put it, the challenge for companies on both sides of the Atlantic is not to try to settle the political dispute, but "rather to seek responses to hemispherically distinct expressions of consumer interest that can also serve shareholders." [68] However, despite this geographic strategy split over how to respond to environmental policy pressures, industry has been disturbingly united and well-organised during climate negotiations over the past year. Cooperating in international groupings like the International Chamber of Commerce (ICC), the World Business Council for Sustainable Development (WBCSD) and the International Climate Change Partnership (ICCP), they have closed ranks in order to dominate the political process.

'The Europeans': Voluntary Action Will Do

The most influential European corporate lobby groups are without exception very energetic players in the climate debate. Groups like the employers' organisation UNICE, the chemical industry federation CEFIC and the European Roundtable of Industrialists (ERT), which brings together 45 of the largest European corporations, are involved in intense lobbying both in EU capitals and during UN climate negotiations. Given the more challenging political climate in which they operate, these European groupings were quicker to embrace a proactive agenda in order to avoid the threat of government regulation to force emissions cuts and in particular to shirk the much dreaded EU-wide CO2/energy tax. While their agendas are virtually identical, each of the three groupings has its own priorities and distinct working styles.

The three corporate heavyweights have converged upon an undisputed primary target in their campaigns towards COP-6- the unlimited use of the Kyoto mechanisms as an escape route from forced emissions reductions in Europe. Another demand is that emission credits obtained through any of the three mechanisms be fully tradable and interchangeable. Finally, TNCs are lobbying for a full use of carbon sinks under CDM and JI projects, and against the exclusion of any technology, including nuclear energy.

Although the international climate negotiations are an important battlefield for European industry, their crusade for self-regulation is primarily waged at home, where they target European Union institutions and national governments. The most active and sophisticated approach in this field has come from the ERT, which as always fully exploits its exceptionally privileged political access to both the European Commission and national governments. [69] The Roundtable has wrapped its message to the EU in a glossy new report strategically released in mid-October, just a month prior to COP-6. Featuring case studies of voluntary action by industry to reduce CO2, the ERT hopes that the EU will refrain from political moves that would conflict with the corporate agenda. This 'positive action' approach, also adopted by other major industry groups, was pioneered by the ERT with its 1997 climate report launched in the run-up to Kyoto. In those days, former Assistant Secretary-General Caroline Walcot made no secret of the fact that the ERT had chosen to engage "in a positive debate with governments to promote measures on a voluntary basis" mainly due to the political consensus about human responsibility for climate change, a fact that the ERT disputed. [70]

In steering EU climate policies away from government regulations such as an EU-wide energy/CO2 tax and towards corporate-friendly solutions like voluntary initiatives and emissions trading, the major lobby groups have counted on the help of the Centre for European Policy Studies (CEPS). CEPS is a golden example of the corporate think-tanks that have mushroomed all over Brussels during the past few years, inspired by the influential role of such groups in US politics. In the run-up to The Hague, a CEPS working group on "EU Climate Change Policy: Priorities for COP-6" organised a series of workshops. The working group, chaired by BP Amoco's Barbara Kuryk, delivered workshop reports with corporate policy recommendations to EU decision-makers. [71]

The strategic transformation of industry is clearly visible in the cases of BP and Shell, the two uncrowned kings of climate greenwash. After having undergone expensive corporate facelifts, they now present themselves as leaders in reducing CO2 emissions and supporting renewable energy. To convince the public that they have turned over new leaves, they have employed a highly sophisticated mix of PR methods including BP's "Beyond Petrol" and Shell's "Profits and Principles" advertisement campaigns. But under the layer of corporate PR, the reality is that both companies continue to increase their oil production year after year and have no intention of changing this in the near future. And although both companies have remodelled their images in response to strong pressure from the environmental movement in Europe, Shell and BP Amoco remain active members of US lobby groups such as the American Petroleum Institute and the Business Roundtable (BRT). These US-based industry lobbies still actively oppose the ratification of the Kyoto Protocol and wage multi-million dollar disinformation campaigns about climate change.

USA: The Boldest Offensive

The United States, responsible for 25 percent of the world's greenhouse gas emissions, is predictably home to some of the most aggressive corporate climate campaigns. Beyond the well-established major business groups like the Business Roundtable (BRT), the US Council for International Business (USCIB) and the American Petroleum Institute (API), corporate virulence towards climate change has also given birth to single-issue groups like the Global Climate Coalition (GCC) and the secretive Climate Council.

From the early 1990s until the birth of the Kyoto Protocol in 1997, the main strategy pursued by US industry has been to pour millions of dollars into disinformation campaigns that deny the existence of climate change and confuse the public. These campaigns have made use of deceptive reports and the promotion of scientists sceptical of climate change to counter well-reviewed evidence. Such tactics have been complimented and boosted by countless reports warning of the disastrous impacts that a commitment to binding emissions reductions could have on the US economy. To delay government action, US corporations have also insisted that any agreement without binding targets for Southern countries would be unbearable for the economy, while at the same time cynically lobbying these same countries to reject environmental obligations as a hindrance to development.

These old strategies have by no means been abandoned, but since 1997 US climate industry lobbies have embraced two new goals- preventing the ratification of the Kyoto Protocol while simultaneously promoting self-regulation and fighting for the unrestricted use of emissions trading and carbon sinks. This strategy secures a win-win situation for business no matter what happens. Decision-makers, generously buttered up with financial contributions from industry, have helped to grease the way for corporate victories in US climate policy. One example is the 1998 Senate resolution (passed 95-0), which prevents the US from signing any climate agreement that excludes Southern countries from binding commitments or harms the US economy. Business also celebrated the Congressional decision to cut funds for global warming research as well as recent legislation which encourages voluntary action by industry as the panacea to climate change.

This diversity of strategies could at first glance appear contradictory; however, it jives with the reality and subtleties of both domestic and international political processes.

Since 1998, BP and Shell, as well as major US companies like Ford, Texaco, Daimler-Chrysler and General Motors, left the Global Climate Coalition. This corporate lobby group is the most vociferous proponent of denial and obstruction strategies towards climate change, and the target of environmental campaigns and negative media coverage. The Global Climate Information Project (GCIP) and the Information Council for the Environment (ICE) were disbanded for the same reasons. Rather than celebrating these changes as signs of a constructive new approach to the climate crisis, it should be recalled that large oil corporations remain active members of even darker groups such as the American Petroleum Institute. The birth of new alliances such as the Pew Centre and 'Safe Climate, Sound Business' reflect pragmatic moves by corporations to hedge their bets. While pursuing their campaigns to block effective government policies, they simultaneously cultivate progressive corporate images and position themselves at the forefront of the emerging emissions markets.

Speaking With One Voice in the International Front

During international climate negotiations, strategic splits on issues like whether to deny the reality of climate change are dropped in favour of a strong common position for industry. This is most visible within business groups operating at the international level, such as the International Chamber of Commerce (ICC), the World Business Council for Sustainable Development (WBCSD), the Transatlantic Business Dialogue (TABD) and the International Climate Change Partnership (ICCP).

This collective and compromised position has been fine-tuned over the last few years at major UN negotiations. The hundreds of business lobbyists present at the two main rounds of negotiations following the signing of the Kyoto Protocol - COP-4 in 1998 in Buenos Aires and COP-5 in 1999 in Bonn - presented a united front under the leadership of the International Chamber of Commerce. The ICC, one of the most influential corporate forces behind world trade and investment deregulation, is also a forceful player in the global environmental debate. As the ICC's Juahni Santaholma explains, the group has facilitated the participation of business in the climate process by being present at the UN negotiations with strong delegations. [72] The ICC's mission for the upcoming summit in The Hague is crystal clear- the unimpeded use of all of the Kyoto mechanisms including carbon sinks so that lucrative new markets can be opened up, and the sidestepping of real action on climate change.

Both the ICC and the WBCSD are well positioned to facilitate the participation of business in the global climate debate. Pioneers of 'corporate environmentalism', [73] they have developed strong links with UN agencies and have greatly contributed to the successful portrayal of TNCs as part of the solution, and not the problem, a mirage which is also reflected in the Kyoto Protocol. Bjorn Stigson, then President of the WBCSD, acknowledged this victory. "One of the major outcomes of Kyoto was the recognition that business is a key engine that will drive us towards a more sustainable future". [74] The WBCSD, a coalition of some 140 CEOs of major corporations, is working closely with the World Bank and UN development agencies such as UNDP and UNCTAD in pilot schemes for the CDM and emissions trading.

Another corporate group that has chimed in to fortify the voice of industry at the UN climate negotiations is the Transatlantic Business Dialogue (TABD). The TABD, primarily a very influential tool for EU-US trade deregulation, has been active on climate policy since 1997. Its approach is particularly strategic- profiting from its well-established daily working relations with both the US and the EU administrations, the Business Dialogue encourages both negotiating parties to "speak with one voice" at the UN negotiations in promoting a "market-based approach". [75]

Industry has also joined hands internationally in a number of specific groupings that work primarily on climate change issues, such as the veteran London-headquartered International Petroleum Industry Environmental Conservation Association (IPIECA) and the International Climate Change Partnership (ICCP). Both lobby groups parrot general industry demands and priorities for COP-6. The ICCP, which represents a wide range of industrial sectors, has strategically focused its efforts on keeping the US government from compromising its bold stance. The group, which claims to take a "constructive and responsible" approach, opposes public involvement in the Clean Development Mechanism and outright rejects the raising of equity considerations at COP-6.

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