The Climate-Industrial Complex

An emailed link I received the other day led to a fascinating article featuring a truly eyebrow-raising statistic. According to the Center for Public Integrity the number of companies and groups now lobbying the US Congress on the subject of climate change has passed the 1,000 mark with room to spare, standing at 1,150 as of the second quarter of 2009. Now, in one sense that figure shouldn't surprise anyone; the pending legislation on greenhouse gas emissions would affect nearly everyone in America, directly or indirectly, and it would be remarkable if numerous firms and organizations didn't want to help shape the rules that will govern our future emissions. But let's not kid ourselves. There's more than altruism behind such activity, and the last few Congresses have encouraged it with an approach that turns important legislation such as this into a potential bonanza for favored sectors and groups. In addition to its primary economy-revamping aspects, the climate bill puts hundreds of billions of dollars in tax credits, subsidies, and direct research, development and deployment investment up for grabs, while levying massive sums to pay for it all. Deft lobbying could yield huge rewards or savings.

Browsing through the search function on the Center for Public Integrity climate change site turned up a fascinating array of companies and groups lobbying the Congress on this issue. Traditional energy firms are well represented, including both resource/refining companies and a large number of electricity suppliers and their trade associations. In a sign of the growing strength of the renewable energy sector the list includes not just the expected alphabet soup of "trades" such as AWEA, ACORE, RFA, and SEIA, but also individual biofuel, wind, solar, fuel cell, and synthetic fuels companies. If this fight drags out, or the SEC follows through on threats to force companies to disclose their potential climate change liabilities, the list of participants seems likely to grow even longer.

Nor is it just industrial concerns seeking to protect their interests or capture a piece of the new pie; organizations ranging from AARP to the Water Research Foundation and including, of all things, the National Turfgrass Federation want to be heard on this issue. Then we have agricultural interests, who as the article describes achieved a very valuable save for the ethanol industry in the House at the climax of the Waxman-Markey negotiations. If you're interested in seeing who else is represented and how much they've put into this fight, I encourage you to browse this useful database and its pre-set reports.

I don't blame companies for chasing the plums that Congress is offering. There's too much at stake for many to eschew that pursuit on principle. I do wonder, however, whether this could possibly be the best way to embark on what looks like the most important change in our economy in the last several decades. The outcome now rests with the US Senate. If it is willing to challenge the House over a distorted system for allocating free emission allowances, and the agricultural lobby on requiring corn ethanol to demonstrate that it actually improves global greenhouse gas emissions, compared to petroleum-derived fuels, while rationalizing a plethora of marginally-related provisions, then we might get a climate bill that puts a price on emissions without contorting the economy more than the minimum amount necessary to achieve that end. Otherwise, we will end up with legislation that will tell us more about which sectors and groups wielded the most influence in Washington, DC this year than about how best to cut emissions.

Note: Energy Outlook will be on vacation for the next week or so. New postings should resume on 7/21/09.