June 24, 2019

Time To Wake Up: Corporate America Engages

Now it is time not just to wake up but to get to work.

Madam President, one of the things I have noticed over the years that I have given these climate speeches is that corporate engagement on climate change has been one-sided, let’s just say. It is clear who my adversaries have been–Big Oil, the coal lobby, the Koch brothers, and some very powerful corporate trade associations–the American Petroleum Institute, the National Association of Manufacturers, and the most powerful of all, the U.S. Chamber of Commerce, so-called. In my view, it is more properly called the U.S. Chamber of Carbon. These adversaries have managed a big-money campaign, first, to sow doubt about or outright deny climate change and, second, to block action in Congress and Federal agencies to limit carbon pollution.

The International Monetary Fund just estimated fossil fuel subsidies in the United States at $650 billion for 2015. Yes, that is “billion” with a “b.” When you are defending that kind of subsidy, you spare no expense, which explains the millions of dollars spent by the fossil fuel industry and its trade group cronies in opposing climate bills, in supporting phony climate denial front groups, and in funding election attacks against candidates who might try to limit carbon pollution.

While the fossil fuel industry has been running roughshod around Washington, the rest of corporate America has sat on its hands. Even companies with gauzy website offerings on climate and strong sustainability policies within the company have done virtually nothing to support climate action in Congress. I could name names, but that would make it a very long speech because, basically, everybody in corporate America has been absent here.

There are, at long last, signs that corporate America is waking up to the climate fight it has been losing in Washington. When and if corporate America finally engages in the serious support of climate action, Congress will, once again, spring to life. After a 10-year drought, we could again see bipartisan legislation to reduce carbon pollution.

Why this new spurt of corporate engagement on climate change?

Look at the avalanche of warnings about the financial risks climate change poses to the global economy. In just the last few months, here are some of the warnings: 34 central banks, including Canada’s, France’s, and England’s; a group of major reinsurers; the Federal Reserve Bank of San Francisco; the investment giant BlackRock; EPA economists and scientists; the Urban Land Institute; the investment advisory firm Mercer; the European Central Bank; and the investment advisory firm Sarasin & Partners. All have separately warned about climate change’s tanking the economy.

There are agricultural as well as financial warnings. In April, the big food companies–Danone, Mars, Nestle, and Unilever–announced that they would begin advocating for Federal action on climate change. They see the risk climate change poses to the world’s agricultural and water supplies.

Their preferred solution? A price on carbon: Establish an ambitious carbon pricing system that sends a clear signal to the marketplace to reduce economy-wide greenhouse gas emissions aligned with the Paris Agreement goal to keep global temperature increase well below 2-degrees centigrade. An appropriate carbon pricing structure should be transparent in how prices are set, equitable in how revenue is appropriated to mitigate costs on the most vulnerable communities, and built to ensure our global competitiveness. I fully agree.

Following on those food companies’ heels, Microsoft announced that it, too, would begin advocating in Congress for Federal climate action. It joined the Climate Leadership Council–a group of economists, policymakers, businesses, and environmental groups–formed in 2017, to advance a price on carbon. Like the food companies, Microsoft sees a Federal price on carbon as the best policy to tackle climate change.

Then, in May, 13 more companies announced the CEO Climate Dialogue to advocate for climate action. Once again, these companies declared that they supported a price on carbon: An economy-wide price on carbon is the best way to use the power of the market to achieve carbon reduction goals, in a simple, coherent and efficient manner. We desire to do this at the least cost to the economy and households. Markets will also spur innovation, and create and preserve quality jobs in a growing low-carbon economy.

Note that last sentence: “Markets will also spur innovation, and create and preserve quality jobs in a growing low-carbon economy.”

One of the weird things about all of the remorseless opposition to climate action out of the U.S. Chamber of Commerce and the National Association of Manufacturers is that there is a heck of a lot of commerce and a heck of a lot of manufacturing in climate change solutions. So why are they so against them? It is an anomaly but not the only anomaly in climate denial.

Republican colleagues who wax poetic about the free market seem not to notice this massive $650 billion subsidy for carbon pollution. That is a big thing not to notice if you are serious about the free market. The last gasp of climate obstruction here in Congress is to talk about innovation as the magic climate solution. Here is the rub: Without a clear market signal in the form of a price on carbon, there will be little incentive to innovate. How do you innovate away a $650 billion annual subsidy? How does the market work to reduce carbon pollution when carbon pollution is free? Innovations like carbon capture and storage aren’t cheap. There is not much of a business case for these innovations–it is hard to see the revenue proposition–unless we put a price on carbon. Then innovation happens.

Am I wrong about market theory?

Let’s go to Milton Friedman, the Nobel Prize-winning patron saint of market theory. He was unambiguous about pricing pollution.

He was asked: Was there a case for the government to do something about pollution? He responded: Yes, there’s a case for the government to do something. There’s always a case for the government to do something about it . . . when what two people do affects a third party [ . . . ] But the question is, What’s the best way to do it? And the best way to do it is not to have bureaucrats Washington write rules and regulations. . . . The way to do it is to impose a tax on the cost of the pollutants . . . and make an incentive for . . . manufacturers and for consumers to keep down the amount of pollution.

So, yes, putting a price on pollution to give an incentive to innovation is core free market principle.

I happen to share that faith in the power of the market to drive innovation when the market is working. But it is not going to happen when the market is distorted by a $650 billion subsidy.

That is why I filed a carbon pricing bill to help correct that fossil fuel subsidy and balance the market, so those principles can go to work.

At the end of May, 75 companies came to Capitol Hill to advocate for carbon pricing. Together, those companies operate in all 50 States, have annual revenues over $2.5 trillion, and have a market value of nearly $2.5 trillion.

 These companies met with dozens of lawmakers, both Democrats and Republicans, to make the case for a price on carbon–that it is the commonsense policy to dramatically reduce carbon pollution, drive the transition to a low carbon economy, and grow jobs and the economy. There is enormous economic and scientific support for that argument. There is little opposition to that argument or at least little opposition that can’t be traced back to the mischief of the fossil fuel industry and its front groups. I hope my colleagues listened.

I also hope that other companies join in and help the American business community make climate action a Washington, DC, priority. It can’t just be talk. The fossil fuel industry isn’t going to just walk away from a $650 billion annual subsidy. To offset the millions spent by the fossil fuel bandits defending their license to pollute for free is going to require some real effort on the part of corporate America.

It is also going to take corporate America getting control over the U.S. Chamber of Commerce and the National Association of Manufacturers. The watchdog group InfluenceMap has analyzed business associations around the world. They found that the Chamber and NAM–the National Association of Manufacturers–are the worst–the worst–the most obstructive when it comes to climate action. Here they are, rock bottom: U.S. Chamber of Commerce, National Association of Manufacturers–tail end of the worst.

Why? Why are the Chamber and NAM the worst? If the majority of large companies in America support climate action, why do these two trade associations remain so opposed? Why are they the worst?

I strongly recommend that if you are a corporate member of one of these two organizations–if you are a corporate member of the U.S. Chamber of Commerce, if you are a corporate member of the National Association of Manufacturers–that you demand an audit–that you demand an audit of these trade associations’ funding because here is what I expect you will find: You will find that while they had you out on the front porch as a prop for the neighbors to see, they were in the back room, secretly pocketing big money from fossil fuel interests to stop climate legislation. My belief is that the fossil fuel industry has given both the Chamber and NAM so much money that those two organizations have chumped–chumped–their member organizations by ignoring their views on climate in order to keep the money pouring in secretly from the fossil fuel industry.

The members are in a position to find out. Ask. Demand an audit. Find out if you have been chumped by the organizations you support.

This trade association obstruction by the U.S. Chamber of Commerce and the National Association of Manufacturers has to change, but it will not until these trade associations’ member companies demand a stop to the obstruction and demand real support for carbon pricing.

Let me close with a word of warning. The alarms are ringing loudly. As one scientist recently said: “The ocean is screaming.” Financial crises loom. Our failure over the last three decades to address the climate crisis is a black mark against both our democracy and our system of free market capitalism. Creepy-crawly political subservience to fossil fuel interests has degraded American democracy, and free market capitalism is conspicuously failing to meet the climate challenge. That can change, but it has to change fast.

More than three decades ago, Representative Claudine Schneider and Senator John Chafee, both Republicans from Rhode Island, introduced comprehensive legislation to address climate change–from Republicans, three decades ago. Since then, the fossil fuel industry’s campaign to obstruct climate progress has succeeded, but at a terrible price. Every day that we fail to address our climate crisis is a day that we mortgage our children’s and our grandchildren’s futures.

Through these long decades, the good guys in corporate America have been conspicuously absent. This recent activity makes me optimistic–optimistic that the business community seems to be finally stepping up and optimistic that bipartisanship can be restored.

Eyes are beginning to flutter open around here. Now it is time not just to wake up but to get to work.

I yield the floor.