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Fight Climate Emergency by Nationalizing US Fossil Fuel Industry, Says Top Economist

“If we are finally going to start taking the IPCC’s findings seriously, it follows that we must begin advancing far more aggressive climate stabilization solutions than anything that has been undertaken thus far,” writes Robert Pollin.

In the wake of a United Nations report that activists said showed the “bleak and brutal truth” about the climate emergency, a leading economist on Friday highlighted a step that supporters argue could be incredibly effective at combating the global crisis: nationalizing the U.S. fossil fuel industry.

“With at least ExxonMobil, Chevron, and ConocoPhillips under public control, the necessary phaseout of fossil fuels as an energy source could advance in an orderly fashion.”

Writing for The American Prospect, Robert Pollin, an economics professor and co-director of the Political Economy Research Institute at the University of Massachusetts Amherst, noted the Intergovernmental Panel on Climate Change (IPCC) and high gas prices exacerbated by Russia’s war on Ukraine.

“If we are finally going to start taking the IPCC’s findings seriously,” Pollin wrote, “it follows that we must begin advancing far more aggressive climate stabilization solutions than anything that has been undertaken thus far, both within the U.S. and globally. Within the U.S., such measures should include at least putting on the table the idea of nationalizing the U.S. fossil fuel industry.”

“With at least ExxonMobil, Chevron, and ConocoPhillips under public control, the necessary phaseout of fossil fuels as an energy source could advance in an orderly fashion”

Asserting that “at least in the U.S., the private oil companies stand as the single greatest obstacle to successfully implementing” a viable climate stabilization program, Pollin made the case that fossil fuel giants should not make any more money from wrecking the planet, nationalization would not be an unprecedented move in the United States, and doing so could help build clean energy infrastructure at the pace that scientists warn is necessary.

The expert proposed starting with “the federal government purchasing controlling ownership of at least the three dominant U.S. oil and gas corporations: ExxonMobil, Chevron, and ConocoPhillips.”

“They are far larger and more powerful than all the U.S. coal companies combined, as well as all of the smaller U.S. oil and gas companies,” he wrote. “The cost to the government to purchase majority ownership of these three oil giants would be about $420 billion at current stock market prices.

Emphasizing that the aim of private firms “is precisely to make profits from selling oil, coal, and natural gas, no matter the consequences for the planet and regardless of how the companies may present themselves in various high-gloss, soft-focus PR campaigns,” Pollin posited that “with at least ExxonMobil, Chevron, and ConocoPhillips under public control, the necessary phaseout of fossil fuels as an energy source could advance in an orderly fashion.”

“The government could determine fossil fuel energy production levels and prices to reflect both the needs of consumers and the requirements of the clean-energy transition,” he explained. “This transition could also be structured to provide maximum support for the workers and communities that are presently dependent on fossil fuel companies for their well-being.”

Pollin pointed out that some members of Congress are pushing for a windfall profits tax on Big Oil companies using various global crises—from Russia’s war to the ongoing Covid-19 pandemic—to price gouge working people at the gas pump. The proposal, he wrote, “raises a more basic question: Should the fossil fuel companies be permitted to profit at all through selling products that we know are destroying the planet? The logical answer has to be no. That is exactly why nationalizing at least the largest U.S. oil companies is the most appropriate action we can take now, in light of the climate emergency.”

The economist highlighted the long history of nationalizing in the United States, pointing out that “it was only 13 years ago, in the depths of the 2007–09 financial crisis and Great Recession, that the Obama administration nationalized two of the three U.S. auto companies.”

In addition to enabling the government to put the nationalized firms’ profits toward a just transition to renewables, Pollin wrote, “with nationalization, the political obstacles that fossil fuel companies now throw up against public financing for clean energy investments would be eliminated.”

Nationalization “is not a panacea,” Pollin acknowledged. Noting that “publicly owned companies already control approximately 90% of the world’s fossil fuel reserves,” he cautioned against assuming such a move in the U.S. “will provide favorable conditions for fighting climate change, any more than public ownership has done so already in Russia, Saudi Arabia, China, or Iran,” without an administration dedicated to tackling the global crisis.

Pollin is far from alone in proposing nationalization. Writing for Jacobin last month, People’s Policy Project founder Matt Bruenig argued that “an industry that is absolutely essential to maintain in the short term and absolutely essential to eliminate in the long term is an industry that really should be managed publicly.”

“Private owners and investors are not in the business of temporarily propping up dying industries, which means that they will either work to keep the industry from dying, which is bad for the climate, or that they will refuse to temporarily prop it up, which will cause economic chaos,” he wrote. “A public owner is best positioned to pursue managed decline in a responsible way.”

In a piece for The New Republic published in the early stage of the pandemic a few years ago, climate journalist Kate Aronoff—like Pollin on Friday—pointed out that nationalization “has a long and proud tradition of navigating America through times of crisis, from World War II to 9/11.”

As Aronoff—who interviewed New College of Florida economist Mark Paul—reported in March 2020:

In a way, nationalization would merely involve the government correcting for nearly a century of its own market intervention. All manner of government hands on the scales have kept money flowing into fossil fuels, including the roughly $26 billion worth of state and federal subsidies handed out to them each year. A holistic transition toward a low-carbon economy would reorient that array of market signals away from failing sectors and toward growing ones that can put millions to work right away retrofitting existing buildings to be energy efficient and building out a fleet of electric vehicles, for instance, including in the places that might otherwise be worst impacted by a fossil fuel bust and recession. Renewables have taken a serious hit amid the Covid-19 slowdown, too, as factories shut down in China. So besides direct government investments in green technology, additional policy directives from the federal level, Paul added, would be key to providing certainty for investors that renewables are worth their while: for example, low-hanging fruit like the extension of the renewable tax credits, now on track to be phased out by 2022.

While Pollin, Bruenig, and Aronoff’s writing focused on the United States, campaigners are also making similar cases around the world.

In a June 2021 opinion piece for The Guardian, Johanna Bozuwa, co-manager of the Climate & Energy Program at the Democracy Collaborative, and Georgetown University philosophy professor Olúfẹ́mi O Táíwò took aim at Royal Dutch Shell on the heels of a historic court ruling, declaring that “like all private oil companies, Shell should not exist.”

“Governments like the Netherlands could better follow through on mandates to reduce emissions if they held control over oil companies themselves,” the pair added. “It is time to nationalize Big Oil.”

JESSICA CORBETT April 8, 2022

Climate Solutions, News, Observation, Politics

Rising authoritarianism and worsening climate change share a fossil-fueled secret

Around the world, many countries are becoming less democratic. This backsliding on democracy and “creeping authoritarianism,” as the U.S. State Department puts it, is often supported by the same industries that are escalating climate change.

In my new book, “Global Burning: Rising Antidemocracy and the Climate Crisis,” I lay out connections between these industries and the politicians who are both stalling action on climate change and diminishing democracy.

It’s a dangerous shift, both for representative government and for the future climate.

Corporate capture of environmental politics

In democratic systems, elected leaders are expected to protect the public’s interests, including from exploitation by corporations. They do this primarily through policies designed to secure public goods, such as clean air and unpolluted water, or to protect human welfare, such as good working conditions and minimum wages. But in recent decades, this core democratic principle that prioritizes citizens over corporate profits has been aggressively undermined.

Today, it’s easy to find political leaders – on both the political right and left – working on behalf of corporations in energy, finance, agribusiness, technology, military and pharmaceutical sectors, and not always in the public interest. These multinational companies help fund their political careers and election campaigns to keep them in office.

In the U.S., this relationship was cemented by the Supreme Court’s 2010 decision in Citizens United. The decision allowed almost unlimited spending by corporations and wealthy donors to support the political candidates who best serve their interests. Data shows that candidates with the most outside funding usually win. This has led to increasing corporate influence on politicians and party policies.

When it comes to the political parties, it’s easy to find examples of campaign finance fueling political agendas.

In 1988, when NASA scientist James Hansen testified before a U.S. Senate committee about the greenhouse effect, both the Republican and Democratic parties took climate change seriously. But this attitude quickly diverged. Since the 1990s, the energy sector has heavily financed conservative candidates who have pushed its interests and helped to reduce regulations on the fossil fuel industry. This has enabled the expansion of fossil fuel production and escalated CO2 emissions to dangerous levels.

The industry’s power in shaping policy plays out in examples like the coalition of 19 Republican state attorneys general and coal companies suing to block the Environmental Protection Agency from regulating greenhouse gas emissions from power plants.

At the same time that the energy sector has sought to influence policies on climate change, it has also worked to undermine the public’s understanding of climate science. For instance, records show ExxonMobil participated in a widespread climate-science denial campaign for years, spending more than US$30 million on lobbyists, think tanks and researchers to promote climate-science skepticism. These efforts continue today. A 2019 report found the five largest oil companies had spent over $1 billion on misleading climate-related lobbying and branding campaigns over the previous three years.

The energy industry has in effect captured the democratic political process and prevented enactment of effective climate policies.

Corporate interests have also fueled a surge in well-financed antidemocratic leaders who are willing to stall and even dismantle existing climate policies and regulations. These political leaders’ tactics have escalated public health crises, and in some cases, human rights abuses.

Brazil, Australia and the US

Many deeply antidemocratic governments are tied to oil, gas and other extractive industries that are driving climate change, including Russia, Saudi Arabia, Iran, Iraq and China.

In “Global Burning,” I explore how three leaders of traditionally democratic countries – Jair Bolsonaro of Brazil, Scott Morrison of Australia and Donald Trump in the U.S. – came to power on anti-environment and nationalist platforms appealing to an extreme-right populist base and extractive corporations that are driving climate change. While the political landscape of each country is different, the three leaders have important commonalities.

Bolsonaro, Morrison and Trump all depend on extractive corporations to fund electoral campaigns and keep them in office or, in the case of Trump, get reelected.

For instance, Bolsonaro’s power depends on support from a powerful right-wing association of landowners and farmers called the União Democrática Ruralista, or UDR. This association reflects the interests of foreign investors and specifically the multibillion-dollar mining and agribusiness sectors. Bolsonaro promised that if elected in 2019, he would dismantle environmental protections and open, in the name of economic progress, industrial-scale soybean production and cattle grazing in the Amazon rainforest. Both contribute to climate change and deforestation in a fragile region considered crucial for keeping carbon out of the atmosphere.

Bolsonaro, Morrison and Trump are all openly skeptical of climate science. Not surprisingly, all have ignored, weakened or dismantled environmental protection regulations. In Brazil, that led to accelerated deforestation and large swaths of Amazon rainforest burning.

In Australia, Morrison’s government ignored widespread public and scientific opposition and opened the controversial Adani Carmichael mine, one of the largest coal mines in the world. The mine will impact public health and the climate and threatens the Great Barrier Reef as temperatures rise and ports are expanded along the coast.

Trump withdrew the U.S. from the Paris climate agreement – a move opposed by a majority of Americans – rolled back over 100 laws meant to protect the environment and opened national parks to fossil fuel drilling and mining.

Notably, all three leaders have worked, sometimes together, against international efforts to stop climate change. At the United Nations climate talks in Spain in 2019, Costa Rica’s minister for environment and energy at the time, Carlos Manuel Rodriguez, blamed Brazil, Australia and the U.S. for blocking efforts to tackle climate injustice linked to global warming.

Brazil, Australia and the U.S. are not unique in these responses to climate change. Around the world, there have been similar convergences of antidemocratic leaders who are financed by extractive corporations and who implement anti-environment laws and policies that defend corporate profits. New to the current moment is that these leaders openly use state power against their own citizens to secure corporate land grabs to build dams, lay pipelines, dig mines and log forests.

For example, Trump supported the deployment of the National Guard to disperse Native Americans and environmental activists protesting the Dakota Access Pipeline, a project that he had personally been invested in. His administration also proposed harsher penalties for pipeline protesters that echoed legislation promoted by the American Legislative Exchange Council, whose members include lawmakers and lobbyists for the oil industry. Several Republican-led states enacted similar anti-protest laws.

Under Bolsonaro, Brazil has changed laws in ways that embolden land grabbers to push small farmers and Indigenous people off their land in the rainforest.

What can people do about it?

Fortunately, there is a lot that people can do to protect democracy and the climate.

Replacing fossil fuels with renewable energy and reducing the destruction of forests can cut greenhouse gas emissions. The biggest obstacles, a recent U.N. climate report noted, are national leaders who are unwilling to regulate fossil fuel corporations, reduce greenhouse gas emissions or plan for renewable energy production.

The path forward, as I see it, involves voters pushing back on the global trend toward authoritarianism, as Slovenia did in April 2022, and pushing forward on replacing fossil fuels with renewable energy. People can reclaim their democratic rights and vote out anti-environment governments whose power depends on prioritizing extractive capitalism over the best interests of their citizens and our collective humanity.

Eve Darian-Smith, Professor of Global and International Studies, University of California, Irvine

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Business, Climate Solutions, News, Observation, Politics

Climate Movement Hails ‘Mind-Blowing’ $40 Trillion in Fossil Fuel Divestment Pledges

Above: Photo Collage / Lynxotic

“Institutions around the world must step up now and commit to joining the divest-invest movement before it is too late—for them, for the economy, and for the world.”

Over the past decade, nearly 1,500 investors and institutions controlling almost $40 trillion in assets have committed to divesting from fossil fuels—a remarkable achievement that climate campaigners applauded Tuesday, while warning that further commitments and action remain crucial.

“Divestment has helped rub much of the shine off what was once the planet’s dominant industry. If money talks, $40 trillion makes a lot of noise.”

“Amidst a depressing era in the race against climate change—with killer fires and titanic storms, political stalemate, and corporate greenwashing—the fossil fuel divestment movement is a source for tremendous optimism,” states a new report—entitled Invest-Divest 2021: A Decade of Progress Toward a Just Climate Future—published Tuesday.

“Ten years in, the divestment movement has grown to become a major global influence on energy policy,” the publication continues. “There are now 1,485 institutions publicly committed to at least some form of fossil fuel divestment, representing an enormous $39.2 trillion of assets under management. That’s as if the two biggest economies in the world, the United States and China, combined, chose to divest from fossil fuels.”

The paper—a joint effort between the Institute for Energy Economics and Financial Analysis, Stand.earth, C40, and the Wallace Global Fund—comes on the eve of the United Nations Climate Conference in Glasgow, and notes that the divestment movement “has grown so large that it is now helping hold fossil fuel companies accountable for the true cost of their unregulated carbon pollution.”

The report continues:

Since the movement’s first summary report in 2014, the amount of total assets publicly committed to divestment has grown by over 75,000%. The number of institutional commitments to divestment has grown by 720% in that time, including a 49% increase in just the three years since the movement’s most recent report. The true amount of money being pulled out from fossil fuels is almost certainly larger since not all divestment commitments are made public.

The movement has now expanded far beyond its origins as a student-driven effort on college campuses. Divestment campaigners now target cities, states, foundations, banks, investment firms, and any player who participates in the global investment pool.

“Major new divestment commitments from iconic institutions have arrived in a rush over just a few months in late 2021,” the report notes, “including Harvard University, Dutch and Canadian pension fund giants PME and CDPQ, French public bank La Banque Postale, the U.S. city of Baltimore, and the Ford and MacArthur Foundations.”

Underscoring the paper’s assertion, ABP, Europe’s largest pension fund announced Tuesday that it would stop investing in fossil fuel producers.

“Divestment remains a critical strategy for the climate movement,” the publication states. “It must be combined with an accelerated push for investment in a just transition to a clean, renewable energy future if the world is to avoid a future of worsening human injustice and irreversible ecological damage. Financial arguments against divest-invest no longer hold water.”

Bill McKibben, co-founder of the climate action group 350.org, wrote in a Tuesday New York Times op-ed that “divestment has helped rub much of the shine off what was once the planet’s dominant industry. If money talks, $40 trillion makes a lot of noise.”

“This movement will keep growing, and keep depriving Big Oil of both its social license and its access to easy capital,” McKibben said in a separate statement introducing the new report.

The report’s authors contend that institutional investors must agree to three principles “if they want to be on the right side of history and humanity”:

  • Immediately and publicly commit to fully divesting from and stopping all financing of coal, oil, and gas companies and assets;
  • Immediately invest at least 5% of their assets in climate solutions, doubling to 10% by 2030—including investments in renewable energy systems, universal energy access, and a just transition for communities and workers—while holding companies accountable to respecting Indigenous and other human rights and environmental standards; and
  • Adopting net-zero plans that both immediately cut investments in fossil fuels and ensure that all other assets in their portfolio develop transition plans that reduce absolute emissions by 50% before 2030.

“Institutional investors everywhere are beginning to come to terms with the danger that fossil fuels pose to their investment portfolios, their communities, and their constituencies,” the report states. “This realization is important but it is not enough. Institutions around the world must step up now and commit to joining the divest-invest movement before it is too late—for them, for the economy, and for the world.”

“Societies, economies, and the climate are all changing,” the paper concludes. “The financial world will have to change with them.” 

Rev. Lennox Yearwood Jr., president and CEO of Hip Hop Caucus, said in a statement that “the climate crisis is here, and so are climate solutions. We know communities of color are disproportionately impacted by the climate crisis here in the U.S. and across the world. In order to create a just future, we must divest from fossil fuels and invest in communities on the frontlines of the climate crisis.”

“It is not enough to divest from only some fossil fuels or with only some of your portfolio—all investors must immediately divest all fossil fuels from all of their portfolio, while investing in climate solutions.”

Yearwood added that “over 10 years the divest-invest movement has become one of the most powerful global forces in a just transition to a clean energy future.”

Ellen Dorsey, executive director of the Wallace Global Fund, said that “the activist-driven divestment movement has yielded unprecedented and historic results in moving tens of trillions of dollars out of the industry driving the climate crises and exposing its failing business model.”

“But investors need to do more,” she argued. “It is not enough to divest from only some fossil fuels or with only some of your portfolio—all investors must immediately divest all fossil fuels from all of their portfolio, while investing in climate solutions with at least 5% of their portfolios, scaling to 10% rapidly.”

“Mission investors have a unique role to play to ensure the energy transition is a just one and that all people have access to safe, clean and affordable energy by 2030,” Dorsey added. “To do anything less does not address the scale or pace of this climate crisis.”

Originally published on Common Dreams by BRETT WILKINS and republished under a Creative Commons License (CC BY-NC-ND 3.0)

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