Corporate AGW Betrayal

Thursday, November 05, 2015

Writing at the National Interest blog, Nicolas Loris asks why so many large corporations are so gung-ho about climate change regulations, even though they are both onerous and unpopular. The answer boils down to regulatory capture:

Big Business knows that when the deal's going down, you've got to grab a seat at the table to protect your interests. That's especially true when you know the deal will impose job-killing, growth-stunting regulations: sitting at the table, you can make sure they're crafted in a way that will damage your competitors -- domestic and international -- at least as much as they wound you.


So why are some big companies -- outfits like Walmart, Apple, Google, Costco, Bank of America, Best Buy and Coca-Cola -- lining up in support of the administration's efforts to reach an international agreement to cap and cut greenhouse gas emissions? Several reasons present themselves, none of them good for American households. Because conventional fuels produce the overwhelming majority of power for the world, a treaty forcing cuts in carbon emission will inevitably raise energy prices and the cost of doing business. If an international agreement imposes these restrictions on other countries, businesses will see it as "leveling the playing field." They will also claim that it provides them with certainty.


Another reason Big Business may support domestic and international climate regulations is that it disproportionately hurts smaller businesses. Climate regulations are one of many problematic policies harming small business growth and entrepreneurship in the United States. Big businesses that have a seat at the table can negotiate for exemptions and exclusions and can more easily manage higher energy bills.
Loris correctly interjects that, "The best way to level the playing field and create business certainty is for policymakers to reject climate regulations altogether." That said, I am leery of the general "Big" vs. "Small" (or "main street"), populist-sounding slant of this otherwise excellent post. For starters, large businesses aren't necessarily supporters of improper government meddling -- which isn't in their best interests, anyway. Likewise, there is no proper size for a government, so long as it is appropriate to its mission of protecting individual rights (and that is indeed what that government is doing). Such rhetoric appears to endorse the premise that so many of these short-sighted corporations hold, namely that life is a zero-sum game.

If, as Alex Epstein has tirelessly pointed out, there is a moral, egoistic case for fossil fuels, we must be clear about moral questions such as this article raises. Any business supporting such government action is wrong, and not just for harming competitors and customers: It is also wrong in the sense of damaging its long-term interests, appearances to the contrary.

-- CAV


Vigilis said...

re: "All regulations have the ability to create winners and losers, ..." Jim Saksa

Gus, the current government demonstrates egregious applications of the rule of law with capricious prosecutorial discretion. While political opponents are often regulatory targets, political friends benefit from predictably blind prosecutorial discretions.

Author Saksa himself not to offend the regime by sugarcoating economic threats faced by PUBLICLY OWNED "big companies -- outfits like Walmart, Apple, Google, Costco, Bank of America, Best Buy and Coca-Cola" as "regulatory."

When tacit threats of financial harm are leveled by racketeers against small, privately owned businesses the influence may rise to illegal extortion. If U.S. Government utilizes arbitrary and capricious applications of regulatory authority to attain political goals, it has broached socialism and may rise to executive tyranny.

Gus Van Horn said...


Of course, I would call any action by the government that violates individual right "egregious." That said, any unpredictability in such a misuse of government makes it even worse, by further eroding our ability to run our own lives.