Excerpted from the new book The Big Ripoff: How Big Business and Big Government Steal Your Money, by Timothy P. Carney, published by Wiley.
These days, some of the greenest voices on the national scene are not the environmentalist groups or the liberal politicians, but big business.
Although the media often portray the environmental policy debate as being a battle between friends of the Earth and friends of industry, big business is often the most effective advocate of environmentalist restrictions. Usually the businesses calling for environmental regulations stand to profit from those regulations.
Examples of corporations seeing green — as in cash — In the environmental movement are not rare.
In May 2005, General Electric (GE) hopped on the bandwagon with a new initiative they called “ecomagination.” The idea, promulgated through expensive ad-buys and public relations campaigns, was that GE would invest more in cleaner sources of energy and reduce the greenhouse gas emissions from its own operations. Perhaps to reassure shareholders, GE CEO Jeffrey Immelt said at ecomagination’s launch party, “it’s no longer a zero-sum game — things that are good for the environment are also good for business.” That’s great. If GE can help the planet and help its bottom line at the same time, more power to them.
But one has to wonder whether Immelt really believes his ecomagination plan is a profitable one. The hoity unveiling of the initiative, complete with wine from solar-powered vineyard and organic canapés, was not held at the company’s corporate headquarters in New York. Instead, it was in Washington, D.C., on Pennsylvania Avenue — the same street as the White House and the Capitol. Immelt made it clear that another element is necessary to make ecomagination profitable. “Industry cannot solve the problems of the world alone,” he told the solar-powered-wine-sipping guests, “we need to work in concert with government.” That same day, Immelt met with Senator John McCain, a Senate champion of mandatory CO2 caps, and Bush’s environmental advisor James Connaughton.
Ecomagination involves investing in certain fuels and technologies, and then working with government to make those fuels or technologies mandatory. Fuel mandates or caps are not just restrictions on what factories or power plants can use — they also bind you as an energy consumer. If your power company uses more expensive fuel, you pay higher prices for your electricity. If you have a choice between companies and you believe windmills and solar power is important enough, you might go with the clean power company and sacrifice a few bucks a month. But ecomagination doesn’t stop there. It wants to force you to use or subsidize alternative fuel sources, however unproven they are.
Good corporate citizenship for GE involves limiting your freedom and driving up your prices.
Chevron invests in renewable fuels and then funds environmentalist groups that lobby to make those renewable mandatory. DuPont voluntarily invests in CO2 reductions and then lobbies to pass mandatory CO2 reductions, trying to turn their voluntary reductions into cash. Duke Energy calls for a tax on CO2, knowing that its coal-fired power plants have government-protected monopolies, and it can pass the higher cost onto consumers.
These companies, including GE, all stand to profit from heavy-handed government environmental laws, and they are not alone in corporate America. But for some reason, the media largely ignore the fact that environmentalist regulation and legislation will be profitable for some business. But the media do focus on how free-market policies benefit other businesses.
On Nov. 27, 2005, Washington Post reporter Juliet Eilperin penned a preview of a meeting the following week in Montreal to discuss strategies for implementing the Kyoto Protocol.19 Eilperin quoted and cited a handful of government and nonprofit types talking about the need for mandatory limits on greenhouse gases. For balance, she ended the piece by citing research scientist Roy Spencer, “who does not believe the climate will warm as rapidly as many computer models predict,” as Eilperin put it.
Spencer opposes government measures to limit energy use. When she quoted Spencer, she made sure to mention that he “contributes to the freemarket online journal Tech Central Station, which is in part funded by oil companies opposed to mandatory carbon limits.”
An academic opposes government restrictions on energy use and the reporter feels the need to mention he occasionally freelances for a web site that gets some money from companies who oppose these restrictions and who will likely see decreased profits in government intervention. Fair enough. But what about turning the tables? What about the environmentalists she cites?
The article mentions that Sen. Joseph Biden has endorsed a proposal to impose mandatory emissions cuts, but leaves out that one of Biden’s best sources of political contributions over the past six years is the DuPont Corporation, who supports greenhouse gas laws and has invested in CO2 credits. Employees of the company gave more than $16,000 to Biden from 2001 to the end of 2005,20 likely more than Tech Central Station has given Roy Spencer.
Eilperin quoted eager environmentalist David Doniger from the Natural Resources Defense Council (NRDC).The NRDC has received nearly a quarter-million dollars from Citigroup Foundation over the past decade. Citigroup, the parent company, in 2004 invested $23 million in a factory that makes wind turbines — an investment that would clearly be worth more if the government began attaching a monetary value to emissions reductions. Citigroup has also invested in other renewable energy and “clean technology” according to its web site. Still, Eilperin did not write: “Doniger’s group is funded by a banking corporation that stands to profit from restrictions on greenhouse gas emissions.” Not wanting to engage in mind reading, we ought to presume Biden and Doniger favor green laws because they think they are good for the planet. Similarly, men like Spencer believe that free-market approaches to environmental issues will be even better for all people. If a free-marketeer’s indirect corporate funding is worth mentioning, so is an environmentalist’s.