by Naomi Klein
Geographer Bram Büscher coined the term “liquid nature” to refer to what these market mechanisms are doing to the natural world. As he describes it, the trees, meadows, and mountains lose their intrinsic, place-based meaning and become deracinated, virtual commodities in a global trading system. The carbon-sequestering potential of biotic life is virtually poured into polluting industries like gas into a car’s tank, allowing them to keep on emitting. Once absorbed into this system, a pristine forest may look as lush and alive as ever, but it has actually become an extension of a dirty power plant on the other side of the planet, attached by invisible financial transactions. Polluting smoke may not be billowing from the tops of its trees but it may as well be, since the trees that have been designated as carbon offsets are now allowing that pollution to take place elsewhere.73
The mantra of the early ecologists was “everything is connected”—every tree a part of an intricate web of life. The mantra of the corporate-partnered conservationists, in sharp contrast, may as well be “everything is disconnected,” since they have successfully constructed a new economy in which the tree is not a tree but rather a carbon sink used by people thousands of miles away to appease our consciences and maintain our levels of economic growth.
But the biggest problem with this approach is that carbon markets have failed even on their own terms, as markets. In Europe, the problems began with the decision to entice companies and countries to join the market by handing out a huge number of cheap carbon permits. When the economic crisis hit a few years later, it caused production and consumption to contract and emissions to drop on their own. That meant the new emissions market was drowning in excess permits, which in turn caused the price of carbon to drop dramatically (in 2013, a ton of carbon was trading for less than €4, compared to the target price of €20). That left little incentive to shift away from dirty energy or to buy carbon credits. Which helps explain why, in 2012, coal’s share of the U.K.’s electricity production rose by more than 30 percent, while in Germany, as we have already seen, emissions from coal went up despite the country’s rapid embrace of renewable power. Meanwhile, the United Nations Clean Development Mechanism has fared even worse: indeed it has “essentially collapsed,” in the words of a report commissioned by the U.N. itself. “Weak emissions targets and the economic downturn in wealthy nations resulted in a 99 percent decline in carbon credit prices between 2008 and 2013,” explains Oscar Reyes, an expert on climate finance at the Institute for Policy Studies.74
This is a particularly extreme example of the boom-and-bust cycle of markets, which are volatile and high-risk by nature. And that’s the central flaw with this so-called solution: it is simply too risky, and time is too short, for us to put our collective fate in such an inconstant and unreliable force. John Kerry has likened the threat of climate change to a “weapon of mass destruction,” and it’s a fair analogy.75 But if climate change poses risks on par with nuclear war, then why are we not responding with the seriousness that that comparison implies? Why aren’t we ordering companies to stop putting our future at risk, instead of bribing and cajoling them? Why are we gambling?
Tired of this time wasting, in February 2013, more than 130 environmental and economic justice groups called for the abolition of the largest carbon-trading system in the world, the EU’s Emissions Trading System (ETS), in order “to make room for climate measures that work.” The declaration stated that, seven years into this experiment, “The ETS has not reduced greenhouse gas emissions . . . the worst polluters have had little to no obligation to cut emissions at source. Indeed, offset projects have resulted in an increase of emissions worldwide: even conservative sources estimate that between 1/3 and 2/3 of carbon credits bought into the ETS ‘do not represent real carbon reductions.’ ”76
The system has also allowed power companies and others to pass on the cost of compliance to their consumers, especially in the early years of the market, leading to a 2008 estimate by Point Carbon of windfall profits between $32 and $99 billion for electric utilities in the U.K., Germany, Spain, Italy, and Poland over a span of just five years. One report found airline companies raked in a windfall of up to $1.8 billion in their first year on the market in 2012. In short, rather than getting the polluters to pay for the mess they have created—a basic principle of environmental justice—taxpayers and ratepayers have heaped cash on them and for a scheme that hasn’t even worked.77
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In the context of the European debacle, the fact that the U.S. Senate failed to pass climate legislation in 2009 should not be seen, as it often is, as the climate movement’s greatest defeat, but rather as a narrowly dodged bullet. The cap-and-trade bills under consideration in the U.S. House and Senate in Obama’s first term would have repeated all the errors of the European and U.N. emission trading systems, and then added some new ones of their own.
Both laws were based on proposals crafted by a coalition put together by the Environmental Defense Fund’s Fred Krupp, which had brought large polluters (General Electric, Dow Chemical, Alcoa, ConocoPhillips, BP, Shell, the coal giant Duke Energy, DuPont, and many more) together with a handful of Big Green groups (The Nature Conservancy, the National Wildlife Federation, the Natural Resources Defense Council, the World Resources Institute, and what was then called the Pew Center on Global Climate Change). Known as the United States Climate Action Partnership (USCAP), the coalition had been guided by the familiar defeatist logic that there is no point trying to take on the big emitters directly so it’s better to try to get them onside with a plan laden with corporate handouts and loopholes.78
The deal that ultimately emerged out of USCAP—touted as a historic compromise between greens and industry—handed out enough free allowances to cover 90 percent of emissions from energy utilities, including coal plants, meaning they could keep on emitting that amount and pay no price at all. “We’re not going to get a better deal,” Duke Energy’s then CEO Jim Rogers boasted. “Ninety percent is terrific.” Congressman Rick Boucher, a Democrat representing coal-rich southwestern Virginia, gushed that the bill had so many giveaways that it “ushered in a new golden age of coal.”79
These “free allowances” to burn or trade carbon were, in essence, bribes. As solar entrepreneur Jigar Shah put it: “When you look at these companies that were in USCAP, they were not interested in regulating carbon. They were interested in a huge amount of wealth being transferred to their companies in exchange for their vote on climate change.”80 Needless to say, a deal that made fossil fuel interests this happy would have brought us nowhere near the deep cuts to our greenhouse gas emissions that scientists tell us are required to have a good chance of keeping warming below 2 degrees Celsius. And yet the green groups in USCAP didn’t merely stand back and let the corporations in a direct conflict of interest write U.S. climate policy—they actively recruited them to do so.
And the saddest irony in all this pandering is that it still wasn’t enough for the polluters. Working with USCAP to help draft climate legislation was, for many of the big corporate players who joined the coalition, a hedge. In 2007, when the coalition was formed, climate legislation looked extremely likely, and these companies wanted to be sure that whatever bill passed Congress was riddled with enough loopholes to be essentially meaningless—a classic Beltway strategy. They also knew that getting behind cap-and-trade was the best way of blocking the worrying prospect of a newly elected president using the Environmental Protection Agency (EPA) to put firm limits on the amount of carbon companies could emit. In fact, Waxman-Markey, the primary piece of climate legislation based on the coalition’s blueprint, specifically barred the EPA from regulating carbon from many major pollution sources, including coal-fired power plants. Michael Parr, senior manager of government affairs at DuPont, summarized the corporate strategy succinctly: “You’re either at the table or on the menu.”81
The problem for Fred Krupp and his colleagues was that these companies were sitting at plenty of other tables at the same time.
Many continued to be members of the American Petroleum Institute, the National Association of Manufacturers, and the U.S. Chamber of Commerce—all of which actively opposed climate legislation. When Barack Obama took office in January 2009, it looked like the corporate hard-liners were going to lose. But then, in the summer of 2009, with USCAP still trying to push cap-and-trade through the U.S. Senate, the political climate abruptly shifted. The economy was still deeply troubled, Obama’s popularity was tanking, and a new political force came to centerstage. Flush with oil money from the Koch brothers and pumped up by Fox News, the Tea Party stormed town-hall meetings across the country, shouting about how Obama’s health- care reform was part of a sinister plan to turn the United States into an Islamic/Nazi/socialist utopia. In short order, the president started sending signals that he was reluctant to pick another major legislative fight.82
That’s when many of the key corporate members of USCAP began to realize that they now had a solid chance of scuttling climate legislation altogether. Caterpillar and BP dropped out of the coalition, as did ConocoPhillips, after having complained of “unrecoverable costs . . . on what is historically a low-margin business.” (ConocoPhillips revenues the year after it left USCAP totaled $66 billion, with a tidy net income of $12.4 billion.) And some of these companies didn’t just leave Krupp’s coalition of “former enemies”: by directing their formidable firepower squarely at the legislation that they had helped craft, they made it abundantly clear that they had never stopped being its enemies. ConocoPhillips, for instance, set up a dedicated webpage to encourage visitors (including its roughly thirty thousand employees) to tell legislators how much they opposed the climate bill. “Climate change legislation will result in higher direct energy costs for the typical American family,” the site warned, further claiming (outlandishly) that it “could result in a net loss of more than two million U.S. jobs each year.” As for fellow defector BP, company spokesman Ronnie Chappell explained, “The lowest-cost option for reducing emissions is the increased use of natural gas.”83
In other words, thinking they were playing a savvy inside game, Big Green was outmaneuvered on a grand scale. The environmentalists who participated in USCAP disastrously misread the political landscape. They chose a stunningly convoluted approach to tackling climate change, one that would have blocked far more effective strategies, specifically because it was more appealing to big emitters—only to discover that the most appealing climate policy to polluters remained none at all. Worse, once their corporate partners fled the coalition, they had no shortage of ammo to fire at their former friends. The climate bill was a boondoggle, they claimed (it was), filled with handouts and subsidies (absolutely), and it would pass on higher energy costs to cash-strapped consumers (likely).IX To top it all off, as pro-oil Republican congressman Joe Barton put it, “The environmental benefit is nonexistent” (as the left flank of the green movement had been saying all along).84
It was a classic double-cross, and it worked. In January 2010, the climate legislation modeled on USCAP’s proposals died in the Senate, as it deserved to—but not before it discredited the very idea of climate action in the minds of many.85
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Plenty of postmortems have been written about what the greens did wrong in the cap-and-trade fight but the hardest hitting came in a scathing report by Harvard University sociologist Theda Skocpol. She concluded that a major barrier to success was the absence of a mass movement applying pressure from below. “To counter fierce political opposition, reformers will have to build organizational networks across the country, and they will need to orchestrate sustained political efforts that stretch far beyond friendly Congressional offices, comfy boardrooms, and posh retreats.”86 As we will see, a resurgent grassroots climate movement has now arrived that is doing precisely that—and it is winning a series of startling victories against the fossil fuel sector as a result.
But old habits die hard. When the cap-and-trade fight in the U.S. Congress was finally over, with around half a billion dollars spent pushing the policy (ultimately down the drain), the man who led the pro-business revolution in the green movement offered his version of what went wrong. Fred Krupp—in a sharp gray suit, his well-styled hair now white after two and a half decades leading the Environmental Defense Fund—explained that climate legislation had failed because greens had been too hard-line, too “shrill,” and needed to be more “humble” and more bipartisan.87 In other words, compromise some more, tone it down even further, assert ideas with less confidence, and try to be even more palatable to their opponents. Never mind that that is precisely what groups like EDF have been doing since Reagan.
Fittingly enough, Krupp chose to share these pearls of wisdom during the annual Brainstorm Green session hosted by Fortune, a magazine devoted to the celebration of wealth, and sponsored by, among others, Shell Oil.88
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I. By 2011, the situation had become so surreal that Conservation International (CI) was the target of an embarrassing prank. A couple of activist/journalists posed as executives of the weapons giant Lockheed Martin and told the director of corporate relations for CI that they were looking for help greening their company’s image. Rather than cutting their emissions, they said they were thinking of sponsoring an endangered species. Without missing a beat, the CI representative was recorded helpfully suggesting a bird of prey, to make the “link with aviation.” (“We do not help companies with their image,” CI later maintained, stressing that Lockheed would have needed to undergo a “due diligence process.”)
II. After my article on the subject appeared in The Nation, The Nature Conservancy adopted a policy to “divest from companies that derive a significant percentage of their revenue from fossil fuels with the highest carbon content and will support a shift to carbon-free energy in the longer term.”
III. It’s worth keeping this history in mind when free market ideologues treat a cleaner environment as a natural stage in capitalist development. In fact it is the result of specific sets of regulations, ones that run directly counter to hard-right ideology.
IV. By the end of the 1980s, the majority of self-identified Republicans were telling pollsters that they thought there was “too little” spent protecting the environment. By 1990, the percentage of Republicans who agreed with that statement topped 70 percent.
V. Indeed the worlds of finance and Big Green would become so entangled in the years to come—between donations, board members, and partnerships—that when The Nature Conservancy needed a new CEO in 2008, it recruited not from within the nonprofit world but from Goldman Sachs. Its current director, Mark Tercek, had been working at the notorious investment bank for some twenty-five years before moving over to the NGO, where he has consistently advanced a model of conservation based on bringing ever more parts of the natural world into the market.
VI. This is one of the many ironies of the Heartlanders’ claim that greens are closet socialists. If so, then they are deep in the closet. In reality, many mainstream environmentalists bristle at the suggestion that they are part of the left at all, fearing (correctly) that such an identification would hurt their chances with foundation funders and corporate donors. Far from using climate change as a tool to alter the American way of life, many of the large environmental organizations spend their days doing everything in their power to furiously protect that way of life, at the direct expense of demanding the levels of change required by science.
VII. The Nature Conservancy, ever the envelope pusher, has been particularly enthusiastic in this regard, hiring its chief marketing officer straight from World Wrestling Entertainment and participating in the marketing frenzy that accompanied the release of Universal Pictures’ film version of The Lorax (which used Dr. Seuss’s anti-consumerism classic to hawk IHOP pancakes and Mazda SUVs). In 2012, the conservancy managed to outrage many of its female staffers by partnering with the online luxury goods retailer Gilt to promote the Sports Illustrated Swimsuit Edition (the magazine explained th
at “whether you decide to buy a bikini, surfboards or tickets to celebrate at our parties, any money you spend . . . will help The Nature Conservancy ensure we have beaches to shoot Swimsuit on for another half-century”).
VIII. Interestingly, before Nilsson got into the carbon game, he was investigated by a member of Queensland’s parliament for selling what appeared to be entirely fictional Australian real estate to unlucky marks in none other than Nauru.
IX. Heartland regular Chris Horner called the bill “crony capitalism” on the Enron model—and Horner should know, because he used to work there.
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NO MESSIAHS
The Green Billionaires Won’t Save Us
“I had always got away with breaking rules and thought this was no different. I would have got away with it as well if I hadn’t been greedy.”
—Richard Branson, on getting caught dodging taxes in the early 1970s1
“You gotta lead from the front. Nobody is going to start it from the grassroots.”
—Former New York mayor Michael Bloomberg, 20132
In his autobiography/New Age business manifesto Screw It, Let’s Do It, Richard Branson, the flamboyant founder of Virgin Group, shared the inside story of what he describes as his “Road to Damascus” conversion to the fight against climate change. It was 2006 and Al Gore, on tour with An Inconvenient Truth, came to the billionaire’s home to impress upon him the dangers of global warming, and to try to convince Branson to use Virgin Airlines as a catalyst for change.3
