Tobacco has been linked to cancer. Alcohol has been linked to liver disease. And the burning of fossil fuels has been linked to climate change. What can multinational corporations do when corporate interests run counter to social wellbeing? Historically they have tried to profit from it, because there is no ethical dilemma for multinationals when it comes to profit versus social deterioration and decadence. This was especially the case when the Kyoto Protocol was negotiated. The Kyoto Protocol was the last climate change to be agreed upon by an assortment of nations, including the US, France, Germany and the United Kingdom. But what was particularly fascinating about this agreement was the heavy involvement of Enron Corporation (an American commodity MC). This article will look to analyse their involvement within the Kyoto deal, and draw comparisons with the current Paris Agreement.
Enron and Kyoto
The Kyoto Protocol was administered in 1997, to reduce greenhouse gas emissions, based on scientific evidence that man-made C02 emission was causing global warming. However without Enron the Kyoto Protocol would never have existed.
Over 30 years ago, the now defunct Enron Corporation, was the owner of the second largest natural gas pipeline in the world. It transformed itself into a commodity trader (trading in contracts and derivatives of natural gas, electricity and broadband width). In 1990, the Clean Air Act, authorised by the Environmental Protection Agency, was introduced and aimed to put a cap on how much pollutant fossil-fuel plants could emit. Enron, as stated before, had established the market for commodity trading; thus becoming the biggest trader in the EPA’s $20 billion (per year) sulphur dioxide cap-and-trade program. As a result of this, Enron’s stock precipitously started to accelerate.
*What is Emissions Trade?
Emissions trading, or cap-and-trade, is a government mandated, market based approach to controlling pollution by providing economic incentives for achieving reductions in the emissions of pollutants.*
However by the mid to late 1990’s, with Al Gore coming into office and the rise in scientific data on C02 emissions, Enron wanted to create a tradable credit system on C02 emissions. Mr Gore wanted to set up an International Environmental Regulatory System for climate change, and Enron lobbied vigorously in congress and the Clinton administration. They lobbied to get a trading system implemented under law for all C02 emissions.
From 1994-1996, The Enron Foundation contributed nearly $1 million to Climate Change Project to promote global warming theory. Enron supplied a further $1.5 million to environmental groups to support the Green movement’s campaign to bring about climate change awareness. Enron executives worked closely with the Clinton administration to create a potent scaremongering crusade. Why? The purpose was to drive up value of potential C02 emissions trades, which MC’s would have to pay to meet the cap. Christopher Horner, Enron’s director of relations with the Federal Government, claimed that the objective was to cut C02 emissions, but allow trade for emission rights.
The objective of Enron was simple: Make the most of conquering the market, and squeeze out as much capital as possible. Ken Lay, Enron’s former CEO, forecasted making billions in sales of natural gas which was to displace coal as the preferred fuel under the Kyoto deal. Lay stated that virtually being the only trader in carbon credits; potentially a trillion dollar scheme. However for this scheme to become successful they needed the US government to establish and police a global policy of decarbonisation and initiate a tax on carbon. They achieved this with their robust lobbying to the Clinton administration.
Although Enron were fighting on the side of climate change, here we see how multinational corporations dictated our fate as a society. It is also important to note that, for contextual logic, climate change being caused by humans was not a prevalent opinion in the scientific community at the time. So Enron could have been pushing forward a notion which was taking funding away from other governmental programs, for their own financial gain.
Paris vs Kyoto
The main similarity between Kyoto and Paris is the influence on multinational corporations on the agreement. The Paris Agreement looked to implemented more renewal energy sources in the world, and cool down the planet’s temperature and C02 emissions. Barack Obama signed the Paris Agreement; however President Donal Trump withdrew from any commitment this week. So the main focus will be on his administration.
The influence of Rex Tillerson, Secretary of State, on the withdrawal from the Paris Agreement was gargantuan. Tillerson, the former CEO of ExxonMobil, had an antithetical approach to Enron in dealing with climate change. Exxon, with Tillerson at the helm, worked to deny climate change vehemently. This was seen, for example, in the funding of Dr Wei-Hock Soon’s climate change denial research. Dr Soon published articles claiming the radiation from the sun was cause greenhouse gas, rather than c02 emission from humans. Dr Soon failed to disclose the collusion between Big Oil (Exxon and Koch Enterprise funded him) and his academic work, which caused an ethical and legal dilemma.
There was also infiltration on US politics by Exxon and Tillerson – this was with in the House of Representatives for Science, Space and Technology. On this committee stood various Republican senators and congressman whose election campaign was partly financed by Exxon. These representatives included Steve Stockman, Dana Rohrabacher and Larry Bucshon – all of who were financed by Exxon or other oil and gas companies. During meetings with climate change scientists, they would derail any attempts to bring forth scientific evidence that may sway climate change bills in congress.
We can see here how crony capitalism works in America, and how the results turn democracy into an oligarchy. I have showed you two examples, Enron and Exxon, who have fought for and against climate change respectively. However, is it the place of multinational corporations to decide our fate? The essence of democracy is under attack, and we are being deceived by multinational corporations and their vested financial interests. More dependency on renewal energy means less reliance on oil and gas, which means stock prices going down and less capital being generated. This simple formula obviously does not bode well for the Exxon’s of the world, so they sabotage our democracy and our planet. Do not be blinded by ignorance. Make your voice heard to your MP or Senator. Goodnight and good luck.