One of the more surprising developments in the ongoing global warming debate is the Clinton Administration's success in lining up major corporate support for the greenhouse gas reductions stipulated under the Kyoto Protocol.
Signed by the United States and 158 other nations in Kyoto, Japan in December 1997 but as yet not ratified by the U.S. Senate, the Kyoto Protocol would require industrialized nations to make significant reductions in carbon dioxide and other greenhouse gas emissions - emissions some policymakers allege are causing dangerous warming of the planet. The United States would be required to reduce its greenhouse gas emissions by more than 30 percent over 15 years, resulting in the loss of millions of jobs, loss of global competitiveness and rampant inflation.
Despite such dire economic consequences, at least 19 companies have endorsed the emissions reductions, including some of the biggest names of American industry such as Boeing, Sunoco, Weyerhauser and DuPont. The key to the White House's success in co-opting industry lies in the fact that every corporation that has endorsed emissions reductions stands to profit from these climate change policies.
Although it is obvious why companies specializing in alternative energy sources, such as Enron (natural gas, wind and solar power), were immediate supporters of emissions reductions, the Administration's success in securing the backing of key oil companies was a surprise. In May 1997, British Petroleum (now British Petroleum Amoco) became the first major oil company to endorse the White House's view that global warming represented a major problem and announced it would take steps to reduce its own greenhouse gas emissions. Later that year, Royal/Dutch Shell also announced its support for reducing emissions.1 Another explanation, however, for their concern over the environment may be found in the fact that Royal Dutch/Shell and British Petroleum Amoco believe that there is money to be made in renewable energy. A 1998 Royal Dutch/Shell study concluded that renewable energy could supply half the world's energy by the middle of the 21st century. With an eye on this future market - and aware of how emissions reductions would increase its profitability - both companies announced that they were increasing their investments in renewable energy development by $1.5 billion soon after endorsing the Administration's calls for cutting man-made emissions.2
One of the most significant developments in the emerging White House-industry alliance occurred in May 1998 when the Pew Center on Global Climate Change (backed by Enron) announced that 13 corporations agreed to join it in proselytizing the Administration's global warming policies. These companies included Toyota, 3M, Lockheed Martin, American Electric Power, Intercontinental Energy Corporation, U.S. Generating Company, Whirlpool, Maytag and United Technologies.3 The common denominator uniting these disparate corporations is that each would profit in some manner from implementation of emissions reductions.
For example, Toyota's decision to endorse emissions cuts makes perfect business sense as it has already developed a product with lower emissions, thus giving the company a major edge over U.S. competitors. This year, Toyota unveiled the Prius sedan, a "hybrid" car that runs on a combination of gas and electricity and gets 66 miles per gallon. Emissions limits would be a godsend for the Japanese carmaker as the Prius could easily meet the higher government-mandated fuel mileage standards that such cuts would require.4 Aerospace giants Boeing and United Technologies also stand to gain from restrictions on greenhouse gas emissions as both are leaders in developing technologies such as lightweight metals that reduce fuel use, which the Clinton Administration has publicly cited as necessary to reducing greenhouse gas emissions in the auto industry. No doubt, Boeing and United Technologies presumably recognized the potential new markets that could open for their technological expertise when it endorsed the Administration's emissions reductions strategy.5 Similarly, Maytag has just developed a new - and expensive - washing machine that is more energy efficient than older models and could conceivably be in high demand in a more energy-conscious economy.6
Other companies support the emissions limits simply because they have federal contracts that depend on supporting the Administration's global warming agenda. Lockheed-Martin, for instance, operates several of the Department of Energy's research laboratories where validating the global warming theory is a top priority.7 Likewise, Honeywell contracts with the Department of Energy to upgrade federal facilities to make them more energy efficient, an activity that would be in higher demand if the Administration has its way.8
Clearly, the Administration is employing a classic divide-and-conquer strategy that plays upon narrow considerations of corporate self-interest to gradually undermine, through a process of attrition, a constituency vital to fighting ratification of the Kyoto agreement in the U.S. Senate. Although much of the business community remains opposed to Kyoto, the Clinton White House's skillful lobbying campaign could continue to cause businesses to defect to the Administration's position and place additional pressure on reluctant companies to end their opposition to the treaty.
1 Bette Hileman, "Nations, Business Interests Struggle Over Policies Before Kyoto Meeting," Chemical & Engineering News, November 17, 1997.
3 "Pew Center Takes On Climate Change," Inside the Greenhouse, U.S. Environmental Protection Agency, Fall 1998 (http://www.epa.gov/globalwarming/greenhouse/pew.html).
4 Miguel Llanos, "Are 'Green' Cars Finally Maturing?" MSNBC News Internet web site (www.msnbc.com), January 5, 1999.
5 Secretary of Energy, Federico Pena, "PNGV and NATT: Contributions to the Future," Speech at the Northwest Alliance For Transportation Technologies Kick-Off Conference," Seattle, Washington, August 27, 1997.
6 Michael L. Martin, "FY 1999 Budget Appropriation For Energy Efficiency Programs, U.S. Department of Energy," Testimony before House Appropriations Committee Interior Subcommittee, March 4, 1998.
7 "Westport Innovations Inc. and the U.S. Department of Energy's Idaho National Engineering and Environmental Lab Announce Strategic Alliance," press release, Idaho National Engineering and Environmental Laboratory, May 26, 1998.
8 Martin, March 4, 1998.
John K. Carlisle is director of The National Center for Public Policy
Research's Environmental Policy Task Force. Comments may be sent to JCarlisle@nationalcenter.org.