The global warming treaty known as the Kyoto Protocol is politically dead in the United States, but the treaty’s most extreme supporters haven’t given up their fantasy of creating a socialist global economy through controls on energy use.
Instead, they’ve merely switched tactics to achieve that dubious aim–and I’m not referring to dopey movies like “The Day After Tomorrow.” The new tactic is to pressure publicly owned corporations into taking steps to reduce carbon dioxide emissions–essentially committing to private Kyoto protocols on a corporation-by-corporation basis.
Buying in to Big Firms
The sort of pressure employed by the global warming activists is not the usual one of forcing corporate managements to cave in under the threat of bad publicity. Instead, the activists are becoming shareholders of publicly owned companies, attempting to steer corporate policy under the guise of being owners. During 2003, such activist-shareholders filed resolutions with more than 25 companies, urging the companies to take action to reduce greenhouse gas emissions.
None of the resolutions came close to passing, but in some cases they did achieve significant shareholder support, such as the 32 percent tally at ChevronTexaco; 27 percent at American Electric Power, the largest U.S. generator of coal-fired electric power; 23 percent at General Electric; and 21 percent at ExxonMobil.
In response to such pressure, American Electric Power announced in February 2004 that it would assess and report to shareholders on the risks of its greenhouse emissions and impact of efforts to reduce those discharges. Another major coal-burning utility, Cinergy Corp., also acceded to demands from state and church pension funds that it report on greenhouse emissions and other environmental matters. And 40 or so large corporations–including Dupont, IBM and Boeing–had already caved in to the activists by joining the Pew Center on Global Climate Change. BP has taken to labeling its primary product, oil, a “necessary evil” in television commercials.
Pressure on corporations to take action on global warming is also coming from something called the Carbon Disclosure Project–87 institutional investors managing $9 trillion in assets. The project has asked 500 large companies to disclose their “carbon risks” and plans for mitigating the problem. Global warming activists also have marshaled pension funds with about $800 billion under management to lobby the U.S. Securities and Exchange Commission to force publicly owned companies to disclose on their balance sheets financial risks related to global warming.
Taking Power Over Corporate Policy
Even more frightening is the activists’ move toward the ultimate corporate takeover. Surfing the wave of bad publicity related to corporations like Enron and WorldCom, activists are lobbying the SEC to propose a rule that would allow minority shareholders to nominate directors to corporate boards.
Although corporate shareholders have the right to vote for directors on corporate boards, the process of nominating those directors has traditionally been an internal corporate process not involving the shareholders. The activists hope that if they can get their candidates nominated, they will get them elected through a shareholder voting method called “cumulative voting,” a process designed to ensure that minority shareholders can elect their candidates.
The activists don’t plan to stop there. Ultimately, they would like to see that controlling majorities of the directors on the boards of publicly owned corporations are “independent”–that is, have no ties to corporate management. Ties to activists, of course, would be allowed.
Most corporations seem entirely unaware of what the activists are up to. Of the 690 public comments received by the SEC regarding the proposal to allow minority shareholders to nominate directors, only 10 were from corporations and corporate executives. The vast majority came from activists and their supporters in favor of the proposal.
Opponents of the Kyoto Protocol have learned how to respond quickly to earlier tactics of the treaty’s supporters. For example, United for Jobs, a project of the National Black Chamber of Commerce, the Small Business Survival Committee, and the United Seniors Association, lampooned the release of “The Day After Tomorrow” with a mock movie poster titled “The Day After Kyoto,” featuring Depression-era unemployment lines.
Fearing the disastrous economic ramifications of a global warming treaty, President Bush withdrew the U.S. from the Kyoto Protocol in 2001. No global warming legislation has ever been seriously considered by Congress. The proposal of Senators John McCain (R-Arizona) and Joe Lieberman (D-Connecticut) to cap U.S. greenhouse gas emissions at 2000 levels by 2010 and create an emissions trading system is not likely to go anywhere either.
Politicians of both parties widely agree that the junk science-fueled Kyoto Protocol would be an economic suicide capsule. Though environmental activists have failed to advance their agenda through scientific and political debate in the public policy arena, they haven’t quit. They’ve just changed pressure points.
Steven Milloy is the publisher of JunkScience.com and author of Junk Science Judo: Self-Defense Against Health Scares and Scams(Cato Institute, 2001). His email address is [email protected].
