Last week’s Senate debate over Lieberman-Warner – the America’s Climate Security Act – brought to national attention an under-recognized yet rising threat to liberty and limited government: corporate America. Several of the largest corporations worked with environmental special interest groups and left-wing politicians to pass so-called “cap-and-trade” legislation to address global warming concerns.
By pushing for the legislation, these companies hoped to get revenue in the form of government subsidies plus accolades from the media for taking measures to “save the planet.” Never mind the impact on the everyday citizen, who pays for it all with higher taxes and increased energy prices, a loss of liberty, a reduced standard of living and fewer consumer choices.
Companies seeking government subsidies and tax breaks to enhance profits is not a new phenomenon. What is different is the formation of the United States Climate Action Partnership (USCAP) coalition, which combines the muscle of corporate money from disparate industries with the influence of environmental special interest groups. This coalition is an order of magnitude more powerful than individual companies looking for corporate pork. This is especially important since the bill would have created, according to the Wall Street Journal, "the most extensive government reorganization of the American economy since the 1930s."
The alliance between companies and the Left is an outgrowth of the Corporate Social Responsibility (CSR) movement, in which left-wing shareholders and special interest groups target companies to win the hearts and minds of CEOs.
The Corporate Social Responsibility movement is using climate change as a barometer to measure the “corporate responsibility” of a company. Companies who adopt the notion that man’s activity causes global warming are deemed “responsible” and given a reprieve from protests, shareholder proposals and negative publicity.
Moreover, companies that join activists in pursuing global warming-related regulations are promised a “seat at the table” to help shape legislation, while companies that resist climate change alarmism are punished.
As the social and political momentum has grown for legislative action to combat climate change, companies have developed business strategies based on government regulation of greenhouse gas emissions.
Companies with weak leaders and poor stock performance seem especially vulnerable to the temptations of the Left.
GE provides a case in point. GE’s share price has fallen during CEO Jeff Immelt’s seven-year reign. Now Immelt seeks the visible hand of government to guarantee revenue and, perhaps, protect his job.
Immelt became a leader in seeking cap-and-trade legislation to promote sales of renewable energy equipment, like wind turbines, that tap energy sources that are not cost-competitive without subsidies. GE also wants to profit by trading in the carbon dioxide market.
Immelt has used the vast resources of GE to drive his green agenda. NBC Universal – a GE-owned company – promoted an environmental theme in two weeks of programming advertised as “Green Week” and Earth Week” during the past year. In each case, “green” themes were included in the program content.
Immelt also appears to be a good lobbyist among his peers. Two GE board members, James Mulva, CEO of ConocoPhillips, and Robert Lane, CEO of Deere & Co., also have had their companies join USCAP. Mulva is particularly active in supporting cap-and-trade, although cap-and-trade has the potential to increase the cost of ConocoPhillips’ U.S.-based refineries and harm the firm’s investments in Canadian oil sands.
GE also uses its lobbying budget, which is the biggest in corporate America. Over the past few years GE has spent more than $20 million to influence elected officials. This is more than the pharmaceutical trade association spent in 2007.
Ironically, despite its social engineering aims, GE’s cap-and-trade strategy could backfire on its business. Gambling future revenue on lobbyists is a risky strategy, as the whims of elected officials and bureaucrats change like the weather.
It’s also hard to imagine how a company the size of GE would prosper given the negative impact of cap-and-trade on the overall economy. Larry Kudlow of CNBC - a GE-owned network - polled a panel of economic and financial experts on whether the cap-and-trade bill would help or harm the U.S. economy. Ten of the 12 experts said the bill would be harmful.
Over 31,000 scientists have signed a petition refuting the claim that a relationship between human activity and catastrophic change in the Earth’s climate has been proven. GE certainly has the technical capability to understand the present scientific limitations of climate science, despite the “science the settled” nonsense promoted by the U.N. and Al Gore.
In advancing Immelt’s climate change business strategy, GE is ignoring contrary scientific and economic data. While GE’s actions may make the activists in the left’s Corporate Social Responsibility movement happy, GE’s actions are irresponsible.
Perhaps the most important lesson from the debate of Lieberman-Warner is the recognition that CEOs can be as much of a risk to liberty and limited government as any left-wing politician - a development too important to ignore.
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