Why Climate Change Denial Still Exists In The U.S.
So Obama is talking about all of this with the global warming and a lot of it's a hoax. It's a hoax. The scientific community has refuted the deniers for decades, pointing to the basic facts over and over again. Yet climate change denial remains more widespread in the U.S.
today than almost anywhere else in the world. Here's the problem. You think the earth is not warming right now? So did you notice a few years ago? Wait, do you think the earth is not warming? Climate has always changed, but you can't distinguish mankind's contribution from natural variability. I asked the chair, you know what this is? It's a snowball. So it's very, very cold out.
How did we get to this point? Climate change now represents two different powerful strands that come together. One is money and the other is ideology. The oil and gas industry has spent billions lobbying against regulations and supporting organizations that question climate science. But experts say that this blatant corporate self-interest would not have been so influential were it not for a powerful libertarian strain in U.S. politics. The oil companies really played into ideas of American exceptionalism, individual success, anti-government, anti-regulation stuff. It became near impossible now for conservatives to embrace climate action any more than you'd expect to see a conservative embrace pro-choice policies or gun control or tax increases.
Instead, some American politicians deny that climate change exists, while others question the severity of its impact, say we can't afford to address it, or ignore the issue altogether. All this still, even as oil companies now publicly admit that climate change demands action. At Shell, our ambition is to be a net-zero emissions energy business by 2050 or sooner. As cynical as many are about these feel good industry statements, the new tone is responding to a real shift among the general public and shareholders alike, who increasingly view climate change as a major threat and fossil fuels as a poor investment. The S&P 500 energy sector, comprised of the United States' largest oil and gas companies, has been the worst performer in the index over the past decade, as investors anticipate a green energy future.
But the deniers aren't going down without a fight, as funding continues to pour into think tanks and ad agencies who either promote denial or prop up fossil fuels. There's still a very dedicated team of foundations, libertarian foundations, who will fund this forever. I don't think they're changing their mindset on it at all.
So as the public, and arguably corporations, do change, what does the climate denial landscape look like today? Who exactly still funds this? And why is denial mainly a U.S. problem? It's well documented that the oil industry, like the tobacco companies of the 1950s, privately knew about the dangers of its product, while publicly working for decades to see doubt about the science. In the 1970s and 80s, some oil and gas companies were actively engaged in climate research. In 1977, a senior scientist at Exxon informed management that burning fossil fuels was likely causing climate change.
And in 1988, a report from Shell acknowledged oil's major impact on emissions and global warming. That same year, NASA climate scientist James Hansen testified before Congress, saying he was 99 percent certain that the effects of man-made climate change were already detectable. The thing that really changed the situation was when climate change went from being a prediction to being a fact. The Intergovernmental Panel on Climate Change formed. The first international treaty was adopted. But the industry had changed its tune, questioning the science that it had once pioneered and making common cause with conservative and libertarian think tanks that promoted free market economics and thus opposed fossil fuel regulations on ideological grounds.
So by the early 1990s, there's already a well-developed network that includes the Cato Institute, The American Enterprise Institute, later The Heartland Institute and major fossil fuel corporations that are working together to prevent the United States from signing onto the Kyoto Protocol. The Kyoto Protocol set legally binding emissions targets for industrialized countries. But though the United States signed on in 1998, it was never ratified by Congress. Corporate interests really ramped up their spending on this. From the oil industry to the auto industry, utilities, coal interests, mining interests, anything you can think of that uses a lot of energy and pollutes a lot, was in lockstep opposing the international treaty and opposing domestic policies.
Between 1998 and 2017, ExxonMobil gave over 36 million dollars in traceable funding to think tanks and other organizations that promoted climate denial or obstructed climate action. This was supplemented by funding from conservative philanthropies like the Koch Family Foundations, which donated over 123 million to similar organizations over the same period of time. But it wasn't only the billionaire brothers. Bob Brulle, a professor at Drexel University, found that between 2003 and 2010, the Scaife, Bradley, Howard, Pope, Searle and Templeton Foundations all gave over 20 million dollars too. Everyone, the oil majors, wealthy donors and think tanks relied heavily on the research of a few contrarian scientists with strong industry ties.
While it's impossible to know everyone's motives in this saga, it certainly seems that industry was focused on protecting its investments in oil and gas. Some politicians though, saw increased fossil fuel production as key to American energy independence, while many ideological think tanks and individuals truly believed that the science was debatable. This includes Jerry Taylor, who worked at the libertarian Cato Institute for 23 years before leaving to found the Niskanen Center after changing his position on climate change.
Generally speaking, everyone that I knew back when I was a climate skeptic were honestly persuaded that climate change was a wildly overblown concern that is being used by the left to destroy Western capitalism. This I think, explains more of the right's hostility to climate action than a naked story of enjoying checks being cut by the American Petroleum Institute. But Taylor says he has not been able to make any converts out of his former colleagues. It's awful difficult to convince somebody of an idea that would cost them their jobs were they to embrace it.
So where does that leave the U.S. today? It's the largest producer of oil and natural gas and has been for most of the past decade. So in many ways, the fight is still the same, with the same players and the same economic and partisan motives. After 30 years, i t's kind of a self-perpetuating ecosystem. You know, it's almost like they don't need to try as hard anymore. Although many red states have seen significant growth in renewable energy, Republican and battleground states like Texas and Pennsylvania still produce the majority of oil and natural gas.
This makes it politically difficult for conservative governors and representatives to support regulations that could put the nation's 1.2 million fossil fuel jobs in jeopardy. Thus, since 1990, over two thirds of the oil and gas industry's political contributions have gone to Republicans. The oil industry pollutes, significantly. Because basically what he's saying is he is going to destroy the oil industry. Will you remember that Texas? Will you remember that Pennsylvania? A couple key things have changed, though.
As the evidence that climate change is happening and that it's a serious problem has gotten stronger, t he money funding climate denial has gotten harder and harder to trace. Wealthy donors, industry groups or anyone who doesn't want to be publicly associated with organizations trafficking in climate denial can anonymously give to an intermediary organization who will then write a check to whatever group the donor wants, c limate-related or not. Donors Trust, which is also nicknamed the Dark Money ATM machine, they started doing, it's sort of third party funding.
And a lot of the key denial organizations started using Donors Trust more and more, especially in the late 2000s. From 2011 to 2013, a Guardian investigation found that Donors Trust and its affiliated group, Donors Capital Fund, directed 125 million dollars to groups engaged in climate denial and obstructionism, close to half of the fund's total grantmaking over this three year period. ExxonMobil, Chevron and BP all said that they have no record of donating to either Donors Trust or Donors Capital Fund. But the money is certainly flowing in from somewhere. In 2018, the last year for which data is available, funding to these two organizations hit an all-time high, as they received nearly 200 million dollars in contributions and grants.
While we don't know how much of that is going to denial organizations today, some experts predict that it's still a priority. Organizations like The Heartland Institute and Competitive Enterprise Institute, the CO2 Coalition, those organizations have not gone bankrupt. They have increased their funding and their staffing of this issue. But the second major shift in the United States' climate denial landscape is that the domestic oil industry has moved away from the libertarian think tanks and no longer publicly contradicts the scientific consensus on climate change. Both ExxonMobil and Chevron even say they support a carbon tax, though they still participate in trade groups and back politicians that oppose it. A spokesperson for Chevron told CNBC that, "We believe
climate change is real and caused by human activity, including the use of some of our products." And ExxonMobil said that they "Advocate for policies that promote cost-effective, market-based solutions to address the risks of climate change." In ads and on its website, Exxon touts its investments in emissions reductions and alternative fuels. ExxonMobil is growing algae for biofuels.
The Exxon algae ad, they've spent like 60 million dollars on this ad over the past five years. And the impressions that they calculate are in the billions of eyeballs that have seen it. But despite what the ads portray, oil and gas companies actually spend just a tiny fraction of their budgets on clean energy. Between 2010 and 2018, Chevron spent 0.23 percent of its capex on low-carbon investments, while ExxonMobil spent 0.22 percent.
When you look at the financials, it's less than one percent of any capital is being invested in anything other than fossil fuel development. I think it's like 90 percent of their advertising budget is advertising this like less than one percent of what they do. Chevron told CNBC that it plans to spend 300 million dollars in 2021 to "advance the energy transition", which the company says includes investments in renewable natural gas, carbon abatement, renewable power and low-carbon venture capital. It's not nothing, but it is small change for an oil giant.
Chevron's 2019 revenue topped 139 billion, while ExxonMobil's topped 255 billion. And according to InfluenceMap, a nonprofit that analyzes how corporations impact climate policy and legislation, ExxonMobil, Chevron, Shell, BP and Total together have spent over one billion dollars on climate-related advertising and lobbying since the Paris Agreement. But considering what's at stake, that one billion easily pays off. The U.S. government is estimated by the IMF to give fossil fuel subsidies of 650 billion dollars a year.
Intended to incentivize domestic energy production, encourage exploration of new coal, oil and gas d eposits and lower the price of fuel, energy subsidies are as old as the U.S. itself. But now that renewable alternatives exist, many say it's time to phase out fossil fuel subsidies.
The industry meanwhile, has donated millions of dollars to candidates who support their continuation. So this is money they spend to enable that to continue. They would spend double, triple, ten times that amount if they needed to to achieve those results. But they just don't need to spend that money.
And if you actually read their annual reports, their business plans, their plan is to continue to explore for new finds, which means their plan is to commit us to continue to use oil and gas for at least half a century, if not longer. You cannot plan for a future where we will still be developing more oil, gas and coal 50 years from now and say that you accept the scientific evidence. Those two things just don't fit together. Free market, anti-regulatory sentiment, combined with vast oil and gas resources may have made American pundits, politicians and citizens uniquely susceptible to climate denial. But the U.S. is certainly not the only place in the world where the deniers and skeptics have an outsize influence on policy.
Even as wildfires have ripped through Australia, the country has a notoriously fossil fuel-friendly prime minister and is one of the world's leading coal exporters. That's probably the most outrageous denial outside the U.S., is Australia. The coal industry is heavily into getting politicians elected who are deniers. This is coal. Don't be afraid. Don't be scared. The Treasurer knows the rule on props.
So on this side of the House, Mr. Speaker, you will not find a fear of coal any more than you'll find a fear of wind. And lately, Morrison has promised that Australia's covid recovery plan will rely heavily on expanding the use of natural gas. They had all these social media influencers who were talking about how much they love cooking with gas stoves . And it was part of a like, paid campaign kind of thing.
As for Europe, home to major oil companies like BP, Shell and Total, there's traditionally been less overt climate change denialism, at least in part because the continent just has less fossil fuels, and thus fewer industry jobs. The oil and gas resources are not present in Europe, so the employment issue is not there. Groups like Shell, BP, and Total, most of their activity for production is outside of Europe. What's more, there's just not as much cultural opposition to industry regulation in general. Most people in France or Germany or Italy would say that, of course the government has a role to play in the marketplace. And in most places in the world, this is taken for granted as obviously true. However, as nationalist and populist parties become more powerful
throughout the EU, they're increasingly questioning the science and severity of climate change, at a time when Europe is crafting legislation intended to cut emissions 55 percent by 2030, putting it on a path to achieve carbon neutrality by 2050. It remains to be seen how much influence these far-right parties will have, but for the time being, European oil majors have at least been doing more than their U.S. counterparts. Two European majors, BP and Shell, actually announced to investors, we're writing down massive chunks of our reserves because of climate and decline in demand due to climate, amongst other things. So that is more than just words.
That's actually a financial statement that they don't believe in the long-term viability of oil. Indeed, BP has announced that it will cut its oil and gas production 40 percent by 2030 and increase its annual investment in low-carbon energy to five billion dollars. BP, Shell and Total are all aiming for net-zero emissions by 2050 and already allocate a much greater portion of their budget to green energy than the American majors.
So there's tremendous pressure on the U.S. industry for them to say, why are you different ? How come all of these European oil majors are saying this and you're just not. And then that's sort of the beginning of the end for the companies, when they admit we don't have a future in our main business. With the industry now grappling with the fact that real climate action is needed, the tides are definitely changing. And while government policies are clearly necessary, the market is also responding to the reality of the climate crisis. Even before the coronavirus caused a total collapse in oil prices, fossil fuel companies represented a mere four percent of the S&P 500's value, a four-decade low. Last year, ExxonMobil fell out of the S&P's top 10
largest stocks, meaning that for the first time ever, there's no oil companies in the index's top 10. Then this year, Exxon was dropped from the Dow Jones Industrial Average, replaced by Salesforce. Renewables on the other hand, had a much more resilient 2020, representing nearly 90 percent of new, global electricity generation. And BlackRock, the world's largest asset manager, announced that it will divest from companies deriving over 25 percent of their revenue from thermal coal and create new funds focused on sustainable investing. CEOs know that lots of people won't buy their stocks unless they take sustainability seriously. Many investors, especially the younger ones, need to hear a company's stance on these issues.
And if they don't like it, they'll dump the stock or they'll never touch it. With major companies pledging to curb their emissions, i nvestors increasingly see oil and gas companies as a bad long-term bet. I'm about trying to make you money.
And the honest truth is, I don't think I can help you make money in the oil and gas stocks anymore. Outside of the markets, the current wave of litigation against oil and gas companies could also hasten a shift in both public perception and policy. There are currently 24 active suits against the oil companies in different counties, cities and states in the U.S.
Any one of them could be a couple billion dollars. The premise of many of the suits filed by cities and counties is that oil and gas companies knowingly sold a harmful product to the public and should be financially responsible for the damages caused. So far, none have been successful.
Many are tied up in jurisdictional battles as judges differ on whether they belong in state or federal court. Others have been dismissed on the grounds that the issue should be resolved by Congress, not the courts. But just one win could be huge. If even one of those lawsuits wins, regardless of what happens in American politics, that's a game changer. Because if the oil sector really had to compensate people for the damages that they're incurring because of climate change, that would transform things dramatically. Alternatively, Taylor thinks Washington may offer the industry liability protection on the grounds that oil and gas companies agree to a deal on climate action.
Either way, he believes there is bipartisan interest in climate legislation, but worries that right now Republicans still see it as too politically risky to support. You know, you'd be surprised at how many people in the GOP, actually elected members of Congress and the Senate, who either dismiss or act as if they're not particularly interested in climate change, but who privately quite are. But they're not sure where the political window of opportunity is for them to act and what sort of policy vehicle they should be driving. For his part, Taylor hopes that conservatives and liberals alike will embrace market-oriented approaches like a carbon tax. President-elect Joe Biden has previously expressed support for this, but has since released a two trillion dollar clean energy and infrastructure plan that's more focused on a green and equitable economic recovery, without explicitly mentioning putting a price on carbon.
Either way though, Biden's plan is the boldest yet. The Biden administration climate platform is the strongest ever by a U.S. president by far. We are in a very different place than we were four or eight or 12 years ago. Today, 60 percent of Americans view climate change as a major threat to the country, and about two thirds say the government should be doing more to address it. The main question now is how, and if, the industry will respond. Will the CEOs of major oil and gas companies continue to
deny not only scientific reality but market reality? And ride their companies right into bankruptcy and into the grave, which is what happened in the coal sector? Or will they decide that if they want to survive, they're going to have to compete with new energy technologies and new energy services?