Over the long term, everything finds ithis value by trading off risk of harm versus the potential for improvement from a given action. But, short of a fundamental shift in what we value, this is the way things are going to have to go over the next year or two. The same thing can be said for the financial industry’s approach to climate change, which remains stuck at a position in which it sees everything as a threat to profit and nothing as a reward for changing that position. “The oil companies are not doing the same thing they were doing just a few years ago,” said the University of Pennsylvania’s Center for Environmental Politics associate director Daniel Kessler. “But they’re still responding to their existing customers, and the products they’re selling are still contributing to climate change.” Environmental advocates have a different perspective, with the groups Green America and Rainforest Action Network releasing a joint statement in support of Exxon, calling its position “disheartening” and promising legal action. Whatever the impact on Exxon’s business from that public condemnation, its legal department should be cheering on the climate change deniers inside of the company. What will have far more value than any government-imposed limits on emissions is finding out how much climate change can be limited by the market. A group called the Global Climate Coalition – at the time one of the most powerful forces behind Exxon’s view of climate change – was founded by oil, gas and coal companies. The World Economic Forum on New York City’s north shore still includes Exxon as a member of its Business Network Council, which has long represented Exxon as an environmental leader. This is in spite of Exxon having consistently lobbied for more aggressive coal and gas drilling and for more coal plants. Exxon’s website now contains a “resource” section that calls these “market-based solutions” to climate change, and the group’s CEO recently called this a “massive investment opportunity.” Exxon even acknowledges the possibility that a carbon tax could exist. “We do not agree with those that claim a carbon tax, even if it was to include every ton of carbon dioxide emitted into the atmosphere, would significantly reduce global temperatures and thereby benefit society in general or the environment in particular,” the company writes. It then calls the idea a “flawed concept” because of the economic impacts and possible political opposition. With that many members in a club that represents a total of only one percent of global emissions, Exxon is a long way from needing to rely on the government to solve the climate change problem. This dynamic is the same reason why one of the biggest threats to Exxon’s finances from climate change policies would be the very cap and trade plans that have recently become a pillar of Democratic energy policy. Some in the oil industry, especially refiners and other members of the oil business that rely on it for products like gasoline, are likely to object to a carbon tax or a limit on carbon emissions. But these problems do not exist for Exxon’s investment opportunities, and when they do, the government can give special tax breaks to these companies or simply create its own market to meet any new emissions requirements. Of course, Exxon’s problems wouldn’t exist if the companies in its business weren’t also using the planet as a sewer to dump their waste and poison the atmosphere with greenhouse gases. But that is an economic fact, and the business of selling that waste is the basis of the company’s core business. “I think it was quite smart of the Obama administration to create the Department of Labor,” said Robert Brulle, a sociology professor at Drexel University who has been following the history of climate change denialism. “But it is a very dangerous time for government-sponsored enterprises that can be taken over and used to destroy companies with environmental regulations.” In a world where the costs of climate change are borne by everybody, it will take significant changes in the way the market works for Exxon to avoid the costs of doing business in the future. One of the most important things it can do right now, however, is defend itself against the politics of climate change, which have no solution other than the privatization of nature. To suggest that there might be market solutions to climate change is far more radical than any kind of carbon tax or government program. It is an economic fact that Exxon doesn’t want the rest of us to know about. Matt Renner, the author of the Energy Self-Reliant States Act, is the founder of Climate Communication, a project dedicated to advancing our understanding of the climate crisis and the role the free market can play in addressing it. A version of this essay originally appeared in The Freeman. Share this: Like this: LikeLoading... Related This entry was posted on Monday, August 22nd, 2016 at 4:01 pm and is filed under Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. Post navigation 19 Responses to The Myth of Market Solutions to Climate Change Yes, yes, yes! The article should have been titled “Can market incentives solve climate change?” rather than “the myth of market solutions to climate change”. I have been saying this all along and always get push-back from environmentalists who don’t believe that market incentives are needed to protect the environment. The problem is that they don’t have a full understanding of the market as both a tool and a process. Markets can only solve problems if they can be made to produce the maximum output of desired goods and services. If the goods and services aren’t demanded by the market, it can’t solve the problem. This is why it’s a misnomer to say the US needs to “grow” its energy industry. The problem is that energy industries are not competitive enough in some regions and the energy technologies that we need aren’t being produced at the