Co-authored by David Loehwing, director, Sustainability Research, Pax World Investments
The politics of climate change are a lot like the politics of gun control. If, as public opinion polls show, 90 percent of Americans want gun control, why does Congress fail to deliver it? Similarly, polls show 87 percent of Americans want the government to make clean energy a priority, 70 percent want climate policy to be a priority, and 59 percent want the U.S. to reduce greenhouse gas (GHG) emissions even if other nations do not. Yet, our national policy mechanisms stall efforts to respond to these citizens because special interests, particularly fossil fuel interests, hold back Congress.
Polls show that increasing numbers of Americans believe climate change is real and that something should be done. Just before President Obama's first election, expectations were high that Congress would pass legislation limiting GHG emissions. At least one global warming bill emerged from Senate committee in 2007. Then after the election, the House of Representatives passed the Waxman-Markey American Clean Energy and Security bill (H.R. 2454) in 2009. Financial analysts talked about the costs of carbon emissions, often anticipating imminent regulatory action.
The momentum crashed to a halt in July 2010. Sen. Harry Reid pulled legislation when myriad objections could not be resolved. There was plenty of culpability to go around in this failure, but much of it can be laid at the door of fossil fuel companies and electric utilities that oppose any emissions regulation at all.
Lobbying expenditures of electric utilities, oil and gas companies and coal mining companies ratcheted up significantly in 2008 and 2009, peaking for many in 2010. H.R. 2454, which would have instituted a cap and trade system for GHG emissions, ranked fifth highest among all issues on which lobbying was conducted during the 111th Congress. Companies spent more than half a billion dollars to kill climate legislation and support offshore drilling in 2010, according to author and climate change expert Joe Romm. The U.S. Chamber of Commerce and the Edison Electric Institute, which represents investor-owned utilities, were significant players in exerting political pressure against legislation limiting GHG emissions, Romm reported.
The Union of Concerned Scientists reported in 2012 that even corporations that professed concern about climate change often spend considerable sums behind the scenes to block legislation aimed at reducing emissions.
The U.S. Supreme Court's Citizens United decision removed most limitations from corporate campaign contributions. Unfortunately, Citizens United does not require disclosure. Despite the more than half a million letters to the U.S. Securities and Exchange Commission (SEC), mostly supporting a petition that the agency require transparency on political spending, there is no law and no regulation requiring corporations to report their political spending. Corporate spending (often called dues) on nonprofit organizations is seldom disclosed. The Chamber of Commerce spent more than $16 million on politics in 2013, dwarfing that of most corporations.
We may very well be facing the catastrophic consequences of a more tempestuous planet. Yet the companies whose emissions are responsible for much of that tempest continue to urge policymakers to reject regulation, without much obligation to tell anyone about it. Climate change costs the government, insurers and other businesses, and citizens billions of dollars. Those costs are predicted to rise as the climate warms. We recently crossed the 400 parts per million (ppm) threshold of atmospheric carbon dioxide (CO2) concentration, fast approaching 450 ppm, the United Nation's targeted upper limit for CO2.
One of the many things needed to stop the runaway climate train before it rolls off the cliff is to make corporations more accountable for their actions -- in this case, their political actions aimed at stopping a sensible climate policy. The government is accountable to all citizens, not just business interests, and it is supposed to take a long-term view of social welfare and economic development.
It is time for us to take back the political process while there is still time to avoid catastrophic climate change. In 2012, almost one-third of all shareholder proposals filed were on political contributions. Pax World has filed or co-filed several shareholder proposals over many years, including two for the proxy season of 2013, asking companies to be more transparent about their political expenses.
It is entirely appropriate that corporate interests should be taken into account while making policy. Recall that government should have the interests of all its citizens at heart. Understand also that sunshine and accountability are the bedrock of our political system. It is time to have those as well. The SEC should require corporations to publicly disclose all their political spending: not just campaign contributions, but also lobbying expenses, which often dwarf campaign contributions, and contributions to nonprofits, which often dwarf lobbying expenses.