“We know the challenges that tomorrow will bring are the greatest of our lifetime: two wars, a planet in peril, the worst financial crisis in a century,” the newly elected president Barack Obama said in 2008 during his victory speech in Grant Park, Chicago, Illinois.
“The road ahead will be long. Our climb will be steep. We may not get there in one year or even in one term. But, America, I have never been more hopeful than I am tonight that we will get there,” he told the assembled public. “I promise you, we as a people will get there.”
Obama was in his own inimitable style promising to meet the challenge of climate change – while acknowledging that the resistance of the oil monopolies dominating the American energy market would be fierce.
Beyond Dispute
The end of the election campaign and the security of four years in office did not result in the new president dropping his commitment to climate action. His address to a global warming event held by Arnold Schwarzenegger, the Republican governor of California, was characteristically bombastic.
“The science is beyond dispute and the facts are clear. Sea levels are rising. Coastlines are shrinking. We’ve seen record drought, spreading famine, and storms that are growing stronger with each passing hurricane season… Denial is no longer an acceptable response. The stakes are too high. The consequences, too serious.”
But the president on taking office would make two strategic decisions – and prove himself to be a pragmatist and a technocrat. Despite what he said during his victory address he would seriously underestimate the intransigence and effectiveness of his opposition.
Obama’s solution for climate change was “cap and trade”. The government would set the maximum permissible emissions of carbon to prevent runaway climate change. It would then issue pollution permits, which could be traded on the open market for ready cash.
Cap and trade was intended to be a smart, cost-effective mechanism. Above all, it did not pose a threat to the neoliberal, free market ideology now dominant in the Treasury, the Federal Reserve, the economics departments of US universities and international financial institutions.
Pollution Limits
Friedrich von Hayek, considered by many to have been the intellectual inspiration for American and European neoliberalism, had explicitly argued that legal limits on pollution may prove necessary to protect private property.
He wrote in 1944: “Nor can certain harmful effects of deforestation, or of some methods of farming, or of the smoke and noise of factories, be confined to the owner of property in question or to those who are willing to submit to the damage for an agreed compensation. In such instances we must find some substitute for the regulation by the price mechanism.”
He would also very likely have been satisfied with the cap and trade approach. The market would set the price for carbon. Companies would decide whether to use their credits, or whether to reduce carbon emissions and sell their permits for a profit.
Above all, cap and trade was supposed to reduce the risk of government interference in the economy rendering regulation and direct control of the use of fossil fuels while also saving tax dollars otherwise spent on enforcement.
Carbon Cap
Obama asked for a “cap on carbon pollution” to “save our planet from the ravages of climate change” during his first address as president to a joint session of the US Congress in February 2009.
Cap and trade was supported by some of the oil majors, and also wrong-footed those who opposed the legislation. It should have been supported by Republicans as a free market solution. It should, therefore, have been the path of least resistance.
As Steve Coll observed in his trailblazing corporate biography, Private Empire: ExxonMobil and American Power: “The greatest obstacle facing Obama on climate regulation as he prepared for inauguration, then, was hardly ExxonMobil. With Chevron and Shell in the cap-and-trade lobbying coalition, the oil industry had been split and weakened as a lobbying force on climate policy.”
Indeed, cap and trade could in fact be a major boon for monopoly interests dominating a market. The scheme would include a ‘grandfather’ system where companies already emitting huge amounts of carbon would be given free permits so they would not be forced out of business. Monopolies could also theoretically buy up vast amounts of permits, creating a barrier to entry for start-up rivals.
Climate Meeting
The second strategic decision of the president was to rely on the progression and success of legislation, rather than appealing to the American public and building national support for climate action. It seems the approach was not to scare the Republican horses by rabble rising and building alliances with environmentalists and campaigners.
Betsy Taylor, the president of Breakthrough Strategies & Solutions, Bill McKibben from 350.org and Erich Pica, the president of the US Friends of the Earth Action, were among the elite environmental campaigners invited to the White House by the president on 26th March 2009.
They were audacious enough to hope the meeting would be the beginning of a new era of climate action. The president, they understood, had been gifted perhaps the most important window of opportunity to drive climate legislation through the labyrinthine political process.
Obama was basking in the honeymoon of election victory. His Democrat Party controlled both houses of Congress. And the United Nations Conference of the Parties meeting due to take place in Copenhagen later that year meant climate change was at the top of the global political agenda.
But, as the newspapers reported, any hopes of a revived climate campaign were quickly dashed against the rocks of political pragmatism.
The president’s advisors had decided the best way to deliver climate legislation was to downplay the threat of climate change – Obama would stop using the phrase in public.
Financial Collapse
The unprecedented era of free market dominance had ended with the worst economic crisis since the Wall Street crash of 1929. The American public wanted to hear about jobs, and security. Climate action began to sound like even more unemployment.
Obama was represented at the meeting by Carol Browner, an energy and climate adviser, Nancy Sutley, from the Council on Environmental Quality, and Van Jones, his green jobs adviser. They distributed a strategy document which could be summed up with a single cliché: don’t rock the boat.
Taylor said after the meeting: “It was in the context of the financial collapse. With everyone struggling, how do we connect with the public and build political support when everyone’s mind was on the very scary economy?
“What was communicated in the presentation was: ‘This is what you talk about, and don’t talk about climate change’… I took away an absolutely clear understanding that we should focus on clean energy jobs and the potential of a clean energy economy rather than the threat of climate change.”
The environmentalists were not universally persuaded by this highly strategic play. “I thought it was a mistake and I told them,” said McKibben.
“All I said was sooner or later you are going to have to talk about this in terms of climate change. Because if you want people to make the big changes that are required by the science then you are going to have to explain to people why that is necessary, and why it’s such a huge problem.”
Passing Legislation
The president had bet the house – his ability to deliver on his promise to prevent catastrophic climate change – on cap and trade legislation.
The American Clean Energy and Security Act was passed in the House of Representatives by a majority of just seven votes (219 to 212) in June 2009. The advocates for the bill in the Senate had come from across the political spectrum, with support from the Republican, Democrat and Independent Democrat representatives.
The oil and gas industries spent $44.5 million lobbying in the first three months of 2009 – 48 percent more than 2008. And much of this cash was spent opposing cap and trade. A Columbia Journalism School report also asserted: “The fossil fuel industry spent $76.1 million on negative advertising between January 1 and April 27.”
The opposition – political and industrial – had gone into overdrive. And Charles Koch and Koch Industries were once more pulling strings and signing cheques. FreedomWorks and Americans for Prosperity, both beneficiaries of Koch largesse, attacked the cap and trade legislation.
Carroll Muffett, Greenpeace USA Deputy Campaigns Director, issued a stark warning the day before the proposed legislation – known as the Waxman-Markey Bill – went before the Senate.
“Yet another fleet of industry lobbyists has weakened the bill even more, and further widened the gap between what Waxman-Markey does and what science demands,” she said in a statement.
“Despite President Obama’s assurance that he would enact strong, science-based legislation, we are now watching him put his full support behind a bill that chooses politics over science, elevates industry interests over national interest, and shows the significant limitations of what this Congress believes is possible.
“As it comes to the floor, the Waxman-Markey Bill sets emission reduction targets far lower than science demands, then undermines even those targets with massive offsets.
“The giveaways and preferences in the bill will actually spur a new generation of nuclear and coal-fired power plants to the detriment of real energy solutions.
“To support such a bill is to abandon the real leadership that is called for at this pivotal moment in history. We simply no longer have the time for legislation this weak.”
Opportunity Lost
The American Clean Energy and Securities Act was in the end defeated in the Senate. And an historic opportunity for the leader of the “free world” to protect this “planet in peril” was lost.
As Rolling Stone reported under the headline, Climate Bill R.I.P, the White House switched its attention to health, assuming that victory for Obamacare would leave the president’s team free by 2010 to return to the climate wars.
“It’s a shame, because the window really was 2009,” Eric Pooley, author of The Climate War told the magazine. “It wasn’t going to be easy, but if you don’t even try, you’re not going to get it done – and they didn’t even try.”
Photo: Wikimedia Commons
