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?
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