Lobbying against climate action costs billions in expected damage, study says

Researchers at the University of Chicago and the University of California Santa Barbara have published the first study to quantify the effects of lobbying in altering the likelihood of enacting climate policy. According to the one-of-a-kind study, lobbying performed by parties interested in blocking climate policy is more effective than that performed by parties interested in passing such policy.

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Virtually all climate scientists worth their salt agree that human activity is changing the climate, with potentially catastrophic consequences. The reality is so undeniable that even oil companies publicly admit that this is true (after a lot of pressure from their shareholders). Backstage, however, powerful interests with investments in fossil fuels are funneling millions in media campaigns and lobbying efforts meant to delay the clean energy transition by as much as possible.

Kyle Meng and Ashwin Rode, both economists, claim that the benefits of controlling greenhouse gases far outweigh the costs of regulation (i.e. carbon tax, cutting subsidies, etc). Oddly, climate change policies are difficult to enact, especially in the United States. In a new study, the authors published evidence that suggests that this lack of climate change may be pinned to political influences.

“There is a striking disconnect between what is needed to avoid dangerous climate change and what has actually been done to date,” Meng said in a statement. “There is an increasing concern that this lack of climate action may be due to political influences,” he added.

The study published in the journal Nature Climate Change examined the role of political lobbying in the 2009-2010 Waxman-Markey (WM Bill, also known as the American Clean Energy and Security Act. The legislation would have established a greenhouse gas cap and trade system along with various other measures to help the U.S move toward a clean energy economy. The U.S House of Representatives passed the act but the Senate never brought the bill to the floor. Many believe that the bill’s failure continues to shape climate policies today at a global level.

“Basically, without a binding U.S. climate policy, there is very little pressure for countries around the world to step up and adopt their own serious climate mitigation plans,” Meng explained.

Companies on both sides spent a staggering $700 million lobbying the bill, based on data from U.S. lobbying records. This data was fed in a model that forecasted the policy’s effect on the value of publicly listed companies, enabling the researchers to estimate which companies would stand to benefit or lose had the bill been implemented.

The results suggest that lobbying by firms expecting losses was more effective than lobbying by companies expecting gains on their stocks. The lobbying performed by the companies who stood to lose reduced the bill’s chances of passing by 13%, from 55% to 42%. As such, these lobbying efforts are responsible for $60 billion in expected climate damages.

And this sort of lobbying is obviously continuing to this day. Previously, ZME Science reported how major oil corporations spent upward $1 billion on branding and lobbying that support measures directly counter to the Paris Agreement.

“Our findings also provide a glimmer of hope by paving a path toward more politically robust climate policies,” Meng said. The authors show that the very political forces that lowered WM’s chances could have been leveraged to instead reduce political opposition. For instance, WM was a cap-and-trade bill that issued a “capped” number of emission permits which regulated companies could trade in order to comply with the policy. Some of these permits are typically allocated freely to regulated companies. If such free permits are better targeted towards oppositional firms, they may in turn reduce political opposition against the policy.

“Subtle design changes to market-based climate policies can alleviate political opposition and increase chances of adoption,” Meng said.

UPDATE: An earlier version of this story erroneously mentioned the Waxman-Markey bill date as 2009-2019.  It is, in fact, 2009-2010.

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