Environmentalism is a Profitable Business
Global Experiment With the Climate
I want to preface this column by saying that I am very concerned about climate change. The rapid growth of atmospheric carbon dioxide shows no sign of abating, and I have concerns over what this will ultimately mean for the climate. The fact is that we are conducting a global experiment with the atmosphere, and predictions of severe consequences as a result should be taken with the utmost seriousness.
Having said that, I think it is important to maintain a healthy scientific discourse on the matter. “The science is settled” is just not a statement that I am comfortable with, and I am uncomfortable labeling those who question climate change with something that evokes comparisons with Holocaust denial.
Without a doubt, some of the attacks against climate science are ignorance-based. But some of those challenges and questions are by sincere people — sometimes scientists — who doubt the science in the same way that there have always been skeptics in science. In most cases the small band of skeptics is wrong, but sometimes they overturn entrenched paradigms. Those skeptics should be engaged on the basis of science, and not politics or personal animosity. (Hint: If your willingness to accept the conclusions of a report is based on whether it agrees with your position, then your position isn’t based on science nor is it objective — regardless of which side you are on).
So, in a nutshell I accept that accumulating carbon dioxide has the potential to change the climate — and may very well be doing so now — but I believe skeptics should be engaged scientifically rather than shouted down. On the flip side, I believe skeptics must engage on the basis of the science and not engage in ad hominem attacks.
Not all skeptics are idiots. But not all proponents are well-informed, as I show in today’s column.
Organized Environmentalists are Often Naive
I have always considered myself an environmentalist, in that 1). I care about the environment; 2). I want to protect and preserve our wildlife; 3). I try to promote sustainability; and 4). I try to minimize my impact on the environment in my personal life. I recycle, drive a fuel efficient car, grow a portion of my family’s food, walk or bike when I can, etc.
However, the “environmental movement” has often come to represent something I do not wish to associate myself with, because it often appears to me to be synonymous with willful ignorance. Certainly, many (if not all) who would characterize themselves as being a part of this movement are sincere and caring people who believe their actions are just, warranted, and effective. But far too often their actions are based upon misinformation.
An example of just how misinformed this group is can be seen in the recent “Twitter storm” against fossil fuel subsidies. The Guardian described the campaign: Activists hail success of Twitter storm against fossil fuel subsidies
Climate and anti-poverty activists have launched a 24-hour “Twitter storm” against the hundreds of billions of dollars of government subsidies paid each year to the petroleum and coal industry, despite the global economic downturn and the rise in emissions. The blitz, which has been supported by Stephen Fry, Robert Redford, actor Mark Ruffalo, politicians and environmentalists, took the hash tag #endfossilfuelsubsidies up to number two in the ranking of globally trending topics and number one in the US.
“This world has a few problems where a trillion dollars might come in handy – and we’d have a few less problems if we weren’t paying the fossil fuel industry to wreck the climate,” said 350.org founder Bill McKibben. “This is the public policy no-brainer of all time.”
As I will show here, there is great irony in the fact that anti-poverty activists were actively involved, and a great deal of misinformation along the lines of McKibben’s claim that we are “paying the fossil fuel industry to wreck the climate.” Incidentally, McKibben is the friend of a good friend of mine. My friend – who walks the talk because he lives the life of an environmentalist – described McKibben to me as a caring and sincere human being, but said that he is “in error”, that “environmentalists don’t understand energy,” and that “I suspect they are naive, well-intended idealists.” So please don’t misconstrue this as a personal attack on McKibben. I just believe he is wrong.
Fossil Fuel Subsidy Numbers: Full of Misinformation
The source that McKibben and company relied upon for the claim that $750 billion or $1 trillion of fossil fuel subsidies is being paid out each year is Oil Change International. (I know this because I asked). The site claims $775 billion in global annual fossil fuel subsidies — a number that was repeated often during the Twitter storm — and they said the number was “quite possibly higher.” Naturally advocates went with the “quite possibly higher” number, which is the source of the $1 trillion claim.
Here is the irony. Of the total of $775 billion, $630 billion was for “Consumption Subsidies in Developing Countries” and another $45 billion was for “Consumption Subsidies in Developed Countries.” In contrast to McKibben’s claim that these are handouts to the fossil fuel industry, they are overwhelmingly handouts to poor people so they can afford fuel. Examples of these subsidies are Venezuela’s policy of keeping gasoline prices very low for consumers, and the Low Income Heating Assistance Program (LIHEAP) in the U.S. that liberals have staunchly defended. Thus, you have anti-poverty activists and liberals arguing to eliminate programs they actually staunchly support because they are ignorant of what these subsidies actually entail.
Of course some will argue (and indeed have argued with me) that these aren’t really fossil fuel subsidies, and that isn’t what they are against. The problem is that LIHEAP, for instance, is mentioned by name as a fossil fuel subsidy and the amount spent on that program is included in the total. Thus, 87% of the total subsidies being cited are directed at making energy more affordable for consumers. A fossil fuel subsidy? Sure, and one that results in increased fossil fuel consumption. A “massive giveaway to Big Oil” which is how the issue has been framed? No, and by constantly framing the issue as such people are being grossly misinformed.
Thus, climate change advocates are shooting at the wrong target. They are making a lot of noise for sure. They are raising a lot of money (more on that below). But is their campaign going to have any impact on policies in Venezuela or Nigeria to stop subsidizing fuel for their citizens? Of course not. Thus, campaigns like this are totally impotent at getting the desired results because they have spent their money and their time in the wrong area.
The Environmental Movement is a For-Profit Industry
I am not so cynical to believe that this is all about money, but I do question how money influences some of the environmental organizations. I recently spent some time looking through the financials of a prominent environmental “non-profit.” They have $250 million in assets, annual donations of more than $100 million, and a dozen employees listed as receiving more than $200,000 a year in compensation. I think it is safe to say that environmentalism is indeed a lucrative business for some.
Climate change advocates would argue that this sort of funding is necessary because they are up against the deep pockets of Big Oil. I am sure they would deny that money influences their objectivity just as it influences the objectivity of the banking industry, the pharmaceutical industry, or the oil industry. I do not reject this notion, because I get press releases every day from environmental organizations that are misleading, factually incorrect, and grossly misinformed.
Waging Battle Away From the Wrong Target
Yet despite all of the funding and activity of the advocates, carbon dioxide emissions are not only increasing, in the past few years they have accelerated. Why haven’t the advocates managed to make a major impact? Because most climate change advocates in the U.S. are fighting a tiny local skirmish, while the real war rages elsewhere. The following graphic from my recent article Global Carbon Dioxide Emissions — Facts and Figures tells the story:
From that graphic, one can see that U.S. emissions 1). Are a small fraction of Asia Pacific’s; and 2). Have declined in recent years. In fact, since 2006 the U.S. is the world leader in reducing carbon dioxide emissions. But the biggest reasons for the decline in carbon emissions have nothing to do with the environmental movement. People have cut back on fossil fuel consumption due to high oil prices and a recession. Low natural gas prices have resulted in a large shift for power producers from coal to natural gas. Not only did environmentalists have nothing to do with any of this, they have actively fought against the growth of natural gas.
Further, if one were to limit the emissions to only emissions from U.S. consumption of oil (which I will do in a follow-up), you can immediately see that a lot of money is being spent in an area that will have little to no impact on the overall problem. It’s as if you are trying to cure obesity by launching a major campaign to ensure that everyone clips their toenails. Sure, it will help you lose a tiny fraction of an ounce, but is that really where you want to focus your efforts? Does that really address the root problem?
The Danger of Misinformation
I believe some of these organizations do more harm than good by misleading people, because misinformation causes people to spend their money and expend their time in the wrong places. Meanwhile, a new year brings a new record for global carbon dioxide emissions.
The truth is that current and future emissions are being driven by developing countries, and developing countries are the overwhelming source of fossil fuel subsidies cited in the recent Twitterstorm. The narrative being spun by the environmental movement tells a story that is disconnected from the facts.
Environmentalism is big business, so there is a large incentive to spin misleading narratives that stir people’s emotions if that helps with the fundraising. Perhaps most of these organizations are started with the purest of intentions, but I suspect somewhere along the line the people in charge recognized a profitable opportunity. So if they can keep people angry enough about fossil fuel subsidies to companies like ExxonMobil, the donations come pouring in.
I am not suggesting that there is nothing at all to be done in the U.S., but I am suggesting that a disproportionate amount of money is being spent on an increasingly marginal part of the problem. So it should come as no surprise that while their misleading narratives are effective at raising money, these organizations have been wholly ineffective at impacting the real problem.
2015 EIA Energy Conference
June 15-16, 2015 - Washington, D.C.
Platts North American Crude Oil Summit
February 26-27, 2015 - Houston, TX