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Monday, August 09, 2021
Whose fault is climate change?
Politicians in the US Senate are proposing the "Polluters Pay Climate Fund Act", which would fine major oil companies as Shell, ExxonMobil and Chevron for a total of $300 billion as punishment for having caused global warming. That seems like a cheap political stunt to me. So, let's have a look at the issue.
First of all, I do agree with previous legislation that fined tobacco companies for having hid lung cancer risk from their customers. The new legislation tries to paint the actions of oil companies in the same way. Is that justified? That burning petrol produces carbon dioxide has been known since the 18th century. Arrhenius first calculated the greenhouse effect of carbon dioxide in 1896. With the legislation specifically mentioning the time period from 2000 to 2019, it would be very hard to argue by anyone that he couldn't possibly have known in 2000 that using petrol could lead to global warming. The Intergovernmental Panel on Climate Change exists since 1988. The United Nations Framework Convention on Climate Change was in 1992. While some people still deny climate change exist, I don't think a viable claim can be made that customers were misled by oil companies.
The second problem is that oil companies themselves emit only about 10% of the carbon dioxide that their customers emit when using their products. If you decide to buy a plane ticket, who is responsible for the carbon dioxide emitted? Saying that the fault lies exclusively with the company that sold the kerosene is a bit of a stretch. What about the airline company? What about the individual booking a flight? The same applies to cars: Is ExxonMobil responsible that you are driving a Hummer instead of a Prius? Or that you drive a lot instead of taking a bike?
The third problem is a rather fundamental one that applies whenever somebody is trying to punish a company: Who exactly is being hurt by that punishment? A lot of the CEOs and decision makers of companies like ExxonMobil have changed over the last 20 years. Any punitive tax is not hurting them, but hurting the shareholders. And ExxonMobil is known as a "widows and orphans stock", a low risk investment being held by many people with little investment knowledge. A lot of the money that ExxonMobil would be forced to pay would ultimately come out of the pockets of ordinary citizens, who hold those shares via pension funds and the like. You can tax a company out of existence, so the current shareholders (not the ones that held the shares at the time the implied bad behavior happened) would be wiped out. If the tax doesn't destroy the company, the company then needs to find the money somewhere, in this case by raising gas prices. Which again would be paid by ordinary folks.
I think that we all to some degree are responsible for climate change. It is a consequence of our living standards, and the way that we power it. Punishing any individual or organization for it is basically only an exercise in public anger management, and serves no real purpose. Why punish oil companies, but not coal companies? How about the emissions of other industries, like cement and steel? Carbon dioxide emissions are so integral to all economic activities everybody does, that pointing out individual culprits can never work. It is a societal shared responsibility.
What can work, but is politically difficult, is punishing everybody *starting from now*, for their future carbon dioxide emissions. That would require a carbon tax. And that would, justifiably, make everything from gasoline to flight tickets somewhat more expensive, in proportion to the emissions caused. However, people like cheap flights and cheap gas. A politician who tells you that you can keep your cheap flights and your cheap gas, because he is going to find *somebody else* to pay for climate change is just lying to you.
- posted by Tobold @ 12:11 PM Permanent Link
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> Any punitive tax is not hurting them, but hurting the shareholders.
Isn't it more likely that aby such tax would be passed to the customers, by rising the prices? So yes, in the end it will hurt the customers, and more so those that drive Hummers than those that drive Priuses.
In the European Union there is a relatively high gas tax - the mandated minimum is €0.36 per liter ($1.61 per gallon), but in Western Europe countries it can be twice as that. (Source: https://taxfoundation.org/gas-taxes-europe-2019)
In US the federal gas tax is quite low: $0.184/gallon, but individual states can set their own tax rates, for example California has one of the highest: $0.533, while Alaska is the lowest: $0.0895. (Source: https://worldpopulationreview.com/state-rankings/gas-taxes-by-state)
Maybe, especially in the current political climate in US, it is easier to try to tax directly the oil companies, rather than trying to directly raise the customer taxes, especially on levels comparable to Europe.
> While some people still deny climate change exist, I don't think a viable claim can be made that customers were misled by oil companies.
According to surveys, between 10% and 15% of the population in US deny climate change. And there is a large number of elected officials who also deny it, and are getting substantial contributions from the oil companies.
Isn't it more likely that aby such tax would be passed to the customers, by rising the prices? So yes, in the end it will hurt the customers, and more so those that drive Hummers than those that drive Priuses.
In the European Union there is a relatively high gas tax - the mandated minimum is €0.36 per liter ($1.61 per gallon), but in Western Europe countries it can be twice as that. (Source: https://taxfoundation.org/gas-taxes-europe-2019)
In US the federal gas tax is quite low: $0.184/gallon, but individual states can set their own tax rates, for example California has one of the highest: $0.533, while Alaska is the lowest: $0.0895. (Source: https://worldpopulationreview.com/state-rankings/gas-taxes-by-state)
Maybe, especially in the current political climate in US, it is easier to try to tax directly the oil companies, rather than trying to directly raise the customer taxes, especially on levels comparable to Europe.
> While some people still deny climate change exist, I don't think a viable claim can be made that customers were misled by oil companies.
According to surveys, between 10% and 15% of the population in US deny climate change. And there is a large number of elected officials who also deny it, and are getting substantial contributions from the oil companies.
What if I told you that the major oil companies were in possession of scientific data in the early 80s that indicated that they knew the impact that their industry was having on the environment and, with the knowledge, went all out funding political candidates in the US and EU that passed legislation to solidify the hold of oil on our economies, funded any research that might possibly refute the facts as they knew them, ran marketing campaigns to push the "individual responsibility" narrative for environmentalism, all while trying to hide the research they had and suppress or discredit any additional research that agreed with their own internal conclusions?
Google is a tool. Use it.
Google is a tool. Use it.
I googled, and I found your information right next to Pizzagate and the surprising truth that Earth is in reality flat. You're right, we should absolutely believe everything we can Google, and not rely on outdated sources of information, like scientific journals. In which global warming was described way before the 80's. Maybe that is the "secret scientific data" those oil companies had?
@Tobold
By "right next" you mean for example these articles on Wikipedia?
https://en.wikipedia.org/wiki/ExxonMobil_climate_change_controversy
https://en.wikipedia.org/wiki/Pizzagate_conspiracy_theory
By "right next" you mean for example these articles on Wikipedia?
https://en.wikipedia.org/wiki/ExxonMobil_climate_change_controversy
https://en.wikipedia.org/wiki/Pizzagate_conspiracy_theory
@Tobold
As you mention scientific journals, is Scientific American one or not?
https://www.scientificamerican.com/article/exxon-knew-about-climate-change-almost-40-years-ago/
As you mention scientific journals, is Scientific American one or not?
https://www.scientificamerican.com/article/exxon-knew-about-climate-change-almost-40-years-ago/
If the companies are forced to raise prices on oil-based products, that will reduce demand and drive innovation into alternatives, which would likely reduce the amount of greenhouse gases being emitted. So, sounds like a great plan to me.
@Tobold
Do you trust BBC reporting?
But this isn't just about Exxon's past actions. In the same year as the Levine presentation, 1989, many energy companies and fossil fuel dependent industries came together to form the Global Climate Coalition, which aggressively lobbied US politicians and media.
Then in 1991, the trade body that represents electrical companies in the US, the Edison Electric Institute, created a campaign called the Information Council for the Environment (ICE) which aimed to "Reposition global warming as theory (not fact)". Some details of the campaign were leaked to the New York Times.
"They ran advertising campaigns designed to undermine public support, cherry picking the data to say, 'Well if the world is warming up, why is Kentucky getting colder?' They asked rhetorical questions designed to create confusion, to create doubt," argued Naomi Oreskes.
But suppose the "conspiracy" angle is too much for you, and "[no] viable claim can be made that customers were misled by oil companies." Under that thesis... what do you suppose the oil companies have been up to this whole time? To what end where they spending their millions of dollars in lobbying? Everyone knew burning oil leads to climate change, and yet the oil companies... did what? Slow down? Or did they speed up, drilling more, selling more, pushing more product that they knew (by your own admission!) was destroying the Earth?
Oh, and two minor things.
1) 78% of Republicans, as of May 2020, still believe climate change is man-made.
2) The push of "personal responsibility" for climate change (and recycling for that matter) came from these same companies trying to shift blame and distract from their own culpability and lobbying efforts.
To an extent, I can't blame them too much. They are doing what companies do: maximize profits at the literal expense of anyone else. This is how the world ends: unfettered capitalism externalizing all costs and generating value for shareholders until the world boils. The role of government in this case is to control and direct this nightmare engine in more useful ways. A carbon tax would be the simplest solution, but sometimes you need a wave a sledgehammer to get companies' attention.
See also: car industry move towards electric vehicles. You'll notice how the brands on-board with the switch have a competitive advantage, and the ones that aren't on-board made bad bets. That is what you have to do: get them to fight each other, instead of just buying politicians and getting out that way.
Do you trust BBC reporting?
But this isn't just about Exxon's past actions. In the same year as the Levine presentation, 1989, many energy companies and fossil fuel dependent industries came together to form the Global Climate Coalition, which aggressively lobbied US politicians and media.
Then in 1991, the trade body that represents electrical companies in the US, the Edison Electric Institute, created a campaign called the Information Council for the Environment (ICE) which aimed to "Reposition global warming as theory (not fact)". Some details of the campaign were leaked to the New York Times.
"They ran advertising campaigns designed to undermine public support, cherry picking the data to say, 'Well if the world is warming up, why is Kentucky getting colder?' They asked rhetorical questions designed to create confusion, to create doubt," argued Naomi Oreskes.
But suppose the "conspiracy" angle is too much for you, and "[no] viable claim can be made that customers were misled by oil companies." Under that thesis... what do you suppose the oil companies have been up to this whole time? To what end where they spending their millions of dollars in lobbying? Everyone knew burning oil leads to climate change, and yet the oil companies... did what? Slow down? Or did they speed up, drilling more, selling more, pushing more product that they knew (by your own admission!) was destroying the Earth?
Oh, and two minor things.
1) 78% of Republicans, as of May 2020, still believe climate change is man-made.
2) The push of "personal responsibility" for climate change (and recycling for that matter) came from these same companies trying to shift blame and distract from their own culpability and lobbying efforts.
To an extent, I can't blame them too much. They are doing what companies do: maximize profits at the literal expense of anyone else. This is how the world ends: unfettered capitalism externalizing all costs and generating value for shareholders until the world boils. The role of government in this case is to control and direct this nightmare engine in more useful ways. A carbon tax would be the simplest solution, but sometimes you need a wave a sledgehammer to get companies' attention.
See also: car industry move towards electric vehicles. You'll notice how the brands on-board with the switch have a competitive advantage, and the ones that aren't on-board made bad bets. That is what you have to do: get them to fight each other, instead of just buying politicians and getting out that way.
I don't say that ExxonMobile didn't know about climate change 40 years ago. I am saying that the scientific world in general knew about climate change 40 years ago. This was *not* privileged information that was *only* known to oil companies and they somehow kept that information from the rest of the world. Everybody who wanted to could know this, politicians did know this. And they knew that in order to stop it, they would need to slow down economic growth. And decided against that, in order to get re-elected. Yes, sure, every company that has emissions lobbied against being taxed for their emissions. But that is hardly a sinister conspiracy with corrupt politicians. It's like Coca Cola lobbying against limits to sugar in soft drinks, all part of the business.
The simple proof that climate change can't be only because of oil companies is the fact that half of CO2 emissions come from coal, not oil. Transport only makes up 29% of US CO2 emissions. In order for your conspiracy theory to work, you not only need all oil companies to collude, but also all electricity companies, agriculture, and most of heavy industry. Have you ever worked in a large company? I can assure you that the large majority of managers in large companies are complete idiots (think of Dilbert's pointy headed boss) who wouldn't be able to plan and execute a large conspiracy if their life depended on it. Everybody knew about global warming, and chose to ignore the problem. Like we choose to ignore that the food we eat is bad for us.
In economics the problem is called Tragedy of the Commons. Everybody knows that their actions is hurting the common good, but for each individual actor (which includes consumers as well as companies), it is still better to keep hurting the common good, rather than taking a personal disadvantage for the sake of everybody. This does *not* require some sinister conspiracy. I was already around in 1980, I already knew about global warming, but the only political discussion taking place at the time was about energy independence and peak oil. Most of us believed that oil would run out way before the poles melted.
And sorry, if you personally drive a Hummer, that is *your* responsibility. Not the fault of the company that sells you the fuel for it.
The simple proof that climate change can't be only because of oil companies is the fact that half of CO2 emissions come from coal, not oil. Transport only makes up 29% of US CO2 emissions. In order for your conspiracy theory to work, you not only need all oil companies to collude, but also all electricity companies, agriculture, and most of heavy industry. Have you ever worked in a large company? I can assure you that the large majority of managers in large companies are complete idiots (think of Dilbert's pointy headed boss) who wouldn't be able to plan and execute a large conspiracy if their life depended on it. Everybody knew about global warming, and chose to ignore the problem. Like we choose to ignore that the food we eat is bad for us.
In economics the problem is called Tragedy of the Commons. Everybody knows that their actions is hurting the common good, but for each individual actor (which includes consumers as well as companies), it is still better to keep hurting the common good, rather than taking a personal disadvantage for the sake of everybody. This does *not* require some sinister conspiracy. I was already around in 1980, I already knew about global warming, but the only political discussion taking place at the time was about energy independence and peak oil. Most of us believed that oil would run out way before the poles melted.
And sorry, if you personally drive a Hummer, that is *your* responsibility. Not the fault of the company that sells you the fuel for it.
It's always hard to know what politicians are really trying to do other than to "score points", it seems they are less likely to have our best interest as the main motivator than to have their own. Looking at a large and complicated topic like global warming and then carving out a small piece and placing blame doesn't actually make them wrong but at the same time it's not "right" it's pretty myopic. I also wonder if they are just trying to claw back some of the tax breaks that they gave throughout the years.
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