Corporate Power Is Stalling Climate Progress. Public Power Can Help.
June 4, 2021
By Alice Janigro, Joseph Miller
June 5 is World Environment Day, and as we advocate for climate-forward action, we must highlight how corporate power is exacerbating the climate crisis and how public power should be addressing it.
As a new Harvard study outlines, the fossil fuel industry has spent decades—and considerable skill and financial resources—shifting the narrative toward personal responsibility while absolving companies of their outsize culpability.
The fossil fuels industry is not not alone: From banks to the agricultural industry, the companies causing the vast majority of carbon emissions have largely evaded significant federal intervention. But to mitigate climate change at the scale required and support the frontline communities suffering the most, the onus cannot be on consumers. Federal investment and regulation are the necessary foundation.
Twenty fossil fuel companies are responsible for more than a third of greenhouse gas emissions since 1965, while 90 corporations are to blame for almost two-thirds since before the Industrial Revolution. Decades of deregulation driven by neoliberal economic consensus have encouraged such corporations to consolidate their political and economic power, which they wield in protecting their interests and profits. For example, while corporations publicly demonstrate their awareness of the crisis through press releases, expensive conferences, and tepid initiatives, they spend millions successfully lobbying for tax incentives and looser environmental regulations. Going even further, fossil fuel companies have actively funded climate denial, despite knowing their ongoing impact on our planet (many US states are now suing these companies for those efforts).
We cannot and should not trust corporations to fix a global crisis and forgo short-term profits; it is time for the federal government to take meaningful action.
The logical first step in shrinking federal support for fossil fuels is cutting off the $20 billion that flows to the industry in the form of government subsidies, tax breaks, and research funds.
Financial regulators have a crucial role to play in the fight against climate change, particularly as its economic impact intensifies. As Roosevelt Fellow David Arkush writes in a new report, Department of Treasury and Federal Reserve regulators have the authority and responsibility to identify and address systemic threats to the financial system—including climate change. By pursuing capital regulation and other proactive measures, they can facilitate a transition to green energy and shift allocation away from carbon-heavy activities and into sustainable alternatives. This is especially important given the massive role that the financial system plays in funding and insuring coal, oil, and gas projects.
Along with regulation, a potent antidote to outsize corporate power is the expansion of public power. Large-scale, democratically distributed green projects—from clean energy to green transit to public housing—can diminish the influence of the fossil fuel industry by providing affordable alternatives for our communities and fueling sustainable economic prosperity, all while making our communities more livable. With this, a commitment to growing worker power—uplifting labor unions, expanding public sector employment, investing in workforce training and protection—can shift the scales in our economy and accelerate a just transition away from fossil fuels.
Beyond financial regulation and public investment, we need to rid our political system of corporate influence. This requires regulating campaign finance in substantial ways, rooting out corruption, and implementing ethics reforms. Further, racial, gender, and economic inequalities fuel disparities in political power; adequate climate action will rest on building an inclusive and empowering economy and society.
A climate-forward future requires significant government intervention, not empty promises from industries with misaligned short-term incentives. To protect the planet, we need massive public investment and meaningful checks on the political and economic power of corporations.