Kill the Oil Companies Before They Kill Us
There is a new U.N. report on climate change. Its warnings are very, very dire. It is time that the public comes to terms with the choice we face: keep fossil fuels in the ground, or face doom. Oil companies, like it or not, must be forced to change or be killed.
The latest report, from the Intergovernmental Panel on Climate Change, represents the very latest summary of the available science, and it leaves very little room for dispute. The oceans are warming; ice is melting; the oceans are rising; extreme weather is increasing, plant and animal species are dying off at a rapid pace, and large swaths of the earth, particularly those occupied by the poor, will face increasing risks of flooding, food shortages, and other climate-driven disasters. This is all almost certainly caused by man-made carbon emissions, and it will continue to get worse as we emit more carbon.
Let's focus now on what can be done. We are already fucked, to a large degree. But we are not fucked as bad as we will be fucked, if we do not stop pumping more and more carbon into our atmosphere. ("Many aspects of climate change and associated impacts will continue for centuries, even if anthropogenic emissions of greenhouse gases are stopped. The risks of abrupt or irreversible changes increase as the magnitude of the warming increases.") We are like a smoker who already has emphysema, but might avoid fatal lung cancer if we can stop right now. What can be done? The stated goal of various governments who state goals is to try to limit warming to another two degrees Celsius, which would require very sharp actions to reverse the ongoing trends of increasing carbon emissions worldwide. It would mean giving our world a carbon "budget" that would, at current rates, be used up in just three decades. Clearly, we need to act fast to bring carbon emissions under control if we want to have any hope of staying under this carbon budget and avoiding the worst type of climate catastrophe. So what are we doing? From the New York Times:
Yet energy companies have booked coal and petroleum reserves equal to several times that amount, and they are spending some $600 billion a year to find more. Utilities and oil companies continue to build coal-fired power plants and refineries, and governments are spending another $600 billion or so directly subsidizing the consumption of fossil fuels.
By contrast, the report found, less than $400 billion a year is being spent around the world to reduce emissions or otherwise cope with climate change. That is a small fraction of the revenue spent on fossil fuels — it is less, for example, than the revenue of a single American oil company, ExxonMobil.
Oil companies, like all big corporations, operate on a short-term profit motive. There are powerful shareholders who expect profits to be maximized each and every year. Oil companies will never, ever act to meaningfully reduce their own profits by forsaking hundreds of billions of dollars worth of fossil fuels that they have already laid claim to. Oil companies will continue emitting as much carbon as they are allowed to as long as there is money to be made in doing so. Protests and public PR campaigns to demonize oil companies will not work. You cannot demonize an oil company any more than you can demonize a robot. It is built for a purpose, and that is what it does. If we want to avoid climate change catastrophe, then a whole lot of fossil fuels must stay in the ground. Even though everyone knows we must do this, oil companies will not do it—"Exxon and Chevron last week reaffirmed plans to boost output by 2017."
Can we simply pass a law to keep all that carbon from being released? I doubt it. What we can do is to make it economically irrational to destroy the earth by searching for and drilling for and pumping and shipping and refining and selling and burning fossil fuels. We can destroy the business model of oil companies, through government action. First, we can take away those $600 billion in subsidies—subsidies for our own demise. Then, we can put a tax on carbon that will make the oil business as it exists today untenable.
Activists are now calling for the U.N. to take action on ways to enforce our remaining global "carbon budget." That would be great. To date, though, the U.N. has not inspired much confidence as a governing body able to enforce rules necessary to the protection of life on this planet. One hopes that world governments come together and act rationally in our collective self-interest. The problem is that time is short. By the time the major powers of the world actually agree to hard rules that could limit carbon emissions even while potentially costing us all money in the short term, it could very well be too late to stay under that carbon budget.
We need a carbon tax. Europe needs a carbon tax. China needs a carbon tax. Everyone needs a carbon tax. It is okay for us to lead the way. We're still the most powerful nation on earth, and we have the most money. Why wouldn't we lead the way? I attended the huge climate march in New York City in September. It was inspiring. But even hundreds of thousands of people yelling and waving signs will not change the behavior of an oil company. What will change that behavior is a carbon tax. When there is more money to be made in clean energy than in dirty energy, we will find ways to use clean energy. When taking fossil fuels out of the ground becomes too expensive to make a profit on, it will stop. This is what activists should focus their energy on.
Humans are bad at not killing themselves in the long run if it's profitable in the short run to do so.