Ben Franta, author of the recent article in Environmental Politics, “Weaponizing Economics: Big Oil and Climate Policy” (Open Access), answers some questions.
1. How did you become interested in the ways in which concentrated economic interests have responded to the climate threat? What was the particular impetus for this article?
The impetus for this particular article was, like many research studies, serendipitous. About four years ago, I was examining the history of the American Petroleum Institute (API), the main trade association for the US oil and gas industry, and its activities related to climate change. I didn’t know where to start, so I began looking through old news records: I’d search online news databases for all records mentioning the API and climate change (or global warming or other variations) and then sort them in chronological order and read them. This would give me thousands of articles spanning the late 1980s to the present.
Although time-consuming, I found this to be a helpful process for seeing how the petroleum industry (as represented by the API) communicated to the public about climate change, how its positions and talking points shifted over time, and the reasons for those shifts. The oil and gas trade journals were often particularly helpful in describing the industry’s positions, activities, and fears regarding climate action, with detailed information and quotes from industry leaders and insiders. Although this method of historical research only reveals information recorded somewhere in the news record (in contrast to private corporate documents), I still find it quite helpful when trying to get the historical lay of the land on an issue that’s new to me. It’s also a straightforward and reproducible methodology, which I like.
In any case, I was reading these articles for days on end and noticed that the API kept quoting the same economists, such as David Montgomery, who for many years worked for the economic consulting firm Charles River Associates. To me this suggested there was a relatively small “stable” of economists the industry would use to promote its message, similar to the relatively small number of scientists the industry relied on to sell the idea that climate science was uncertain (as described brilliantly by Naomi Oreskes, Erik Conway, and others). Indeed, often in the news record, I’d see the scientific and economic talking points paired together by the industry (e.g., the science is uncertain, and it’s too expensive to act now). I thought this was a new element of the industry’s strategy that had not yet been fully appreciated.
Around the same time, President Trump announced he would be withdrawing the US from the Paris climate agreement and in his speech cited a bunch of economic statistics on how bad the agreement would purportedly be for the US. I looked up the study he cited, and it was written by the same people I’d been seeing in the historical record from decades earlier. I was shocked, because I hadn’t realized these economists were still active or that the strategy was still in use. I realized this was not just an historical issue but a present one as well.
I then wrote an article in The Guardian about the use of these economists, funded by industry, to help block climate policy for decades, with the US withdrawal from the Paris Agreement being but the latest example. I thought it was important for people to know so that the strategy could no longer continue undetected. After that article was published, Paul Bernstein, one of the economists I’d mentioned, got in touch with me. I have to give him a great deal of credit. He was very helpful in verifying my description of the economists’ modeling approach and explaining the context of their work. He spoke to me knowing he might take criticism from various quarters, and he did it anyway. In my mind, we need more people like him, who worked directly or indirectly for the fossil fuel industry over the years, to come forward and share their experiences.
That’s the story of this particular article. Stepping back a bit, I’m a PhD student in history at Stanford University in California, where broadly I study the history of the fossil fuel industry’s activities related to climate change, including its internal knowledge, public communications, and lobbying strategies. I’ve long been interested in climate change, but most of my background before coming to history was in science. Like many scientists, I assumed climate change was primarily a technical problem, and I went to do a PhD in applied physics at Harvard University, doing experimental research on next generation solar cells and more broadly studying climate science and policy. As I learned more about the problem, however, I began to see the bottleneck to progress as being primarily political rather than technical. Hence after graduating I decided to do a second PhD in order to do research on the political dimensions, and I also did a JD at Stanford Law School since climate is also increasingly becoming a matter of litigation.
As a side note, the relative lack of political investigation and analysis on climate, I believe, is part of the reason why so little progress has been made over the past three decades. When I was at Harvard, we were taught that climate change is inherently a “wicked” or “complex” problem, not amenable to straightforward description or solution, and that was why progress was slower than hoped. There was no political analysis to speak of: no examination of vested interests, money, power, or influence. The closest thing to political analysis was general blame placed on uneducated climate deniers for not being enlightened enough to believe in climate change. But we didn’t ask why climate denial exists or study the powerful interests supporting it. The policy professors advocating for a carbon tax generally didn’t bother with how to pass a carbon tax. And in fact, much of the climate policy work done at Harvard is funded by the oil and gas industry. The fact that this isn’t seen as a conflict of interest is a perfect reflection — and perhaps a cause — of the apolitical ideology that dominated at Harvard and still does in many institutions today. The New York Times, for instance, only recently began running in-depth investigative pieces of the fossil fuel industry’s attempts to keep climate policy at bay. They’re very good articles, but there’s a broader question of why this sort of analysis was not occurring decades earlier. Why, for decades, has it primarily been activist organizations, a few intrepid journalists, and some environmental groups (the ones that haven’t made alliances with the fossil fuel industry) who have examined the role of vested interests in climate policy? It’s even more curious when one considers the mountain of empirical evidence showing the activities of those interests and the commonsense notion that one of the world’s largest and most sophisticated industries would mobilize to preserve its business.
Environmental sociologist Robert Brulle, who’s done some of the foundational work in this area, calls what I experienced at Harvard the “post-political ideology.” It’s the idea that climate change isn’t political, and it serves a political function by distracting attention away from the ways in which it is political. On a practical level, if we misdiagnose the disease, it becomes hard to cure.
2. In the article you look at the way that economic modelling by a particular organisation – Charles Rivers Associates “played a key role, helping to undermine carbon pricing, international climate agreements, and other climate policies from the early 1990s onward”. Were there equivalent organisations in Europe and elsewhere, providing such modelling?
It’s a great question, and I don’t fully know yet. There were other consulting firms in the US who did similar work for the fossil fuel industry, such as Wharton Econometric Forecasting Associates. Perhaps even more important, various climate economics groups in American universities are funded by the fossil fuel industry and use similar modeling methods as Charles River Associates did. For example, the Energy Modeling Forum at Stanford University, which Charles River Associates participated in, is heavily funded by the fossil fuel industry. And in 2007, its director was one of three people to set up the Integrated Assessment Modeling Consortium, a global organization of climate modelers that feeds directly into the Intergovernmental Panel on Climate Change (IPCC). Various IPCC authors have connections to the fossil fuel industry as well. So there’s a very important question, that we’re just beginning to address through research, of the fossil fuel industry’ influence over climate economics at all levels. This becomes more concerning when one recalls that much of the influence, and potential bias, is through what modeling paradigms are used, rather than tweaking of individual answers.
3. Kate Aronoff, in her book “Overheated: How Capitalism Broke the Planet – And How We Fight Back”, argues that it is the creation of a “common sense” (to go slightly Gramscian) around neoliberalism, more than climate denialism per se, that has, historically, been the main blockage to climate action. Do you agree with her assessment?
Kate Aronoff is one of my role models. She’s a hero of mine because not only is her work bold, deeply researched, and often visionary, but she’s been doing it since before it was as mainstream as it is today. I think she’s right, and I’ll offer a few thoughts that I hope are responsive to this idea.
The first is that it’s easy to become obsessed with “denial” per se as a line of demarcation. There is nothing wrong with addressing climate denial, of course. But denial is also just one method of delaying meaningful action, along with appeals to economics, a need for “more research,” promises of future technological salvation, incrementalism to nowhere, false solutions, and more. A world without climate denial can still fail to stop climate change. The Democratic Party in the US is an interesting example, where climate denial is anathema but actions within the corporate-friendly core of the party have been wholly inadequate and sometimes harmful (such as the promotion of oil and gas production during the Obama administration). In short, focusing on denial sets too low of a standard for judging actions. It’s not enough merely to believe that climate change is real: one has to actually do something about it. For the past 20 years or so, the main line from the fossil fuel industry hasn’t been classic climate denial but rather other tactics that allow the industry to influence and ultimately slow down the replacement of fossil fuels. Ultimately, it is delay we are up against rather than denial per se.
The second thought regards the role of neoliberal ideology in perpetuating that delay. There’s a lot to be said about neoliberalism and I don’t consider myself an expert on it. But I’ll just note that the belief that markets self-optimize seems to play a significant role in promoting and justifying a perpetuation of the status quo, which in this case is based on fossil fuels. The former Charles River Associate consultant Paul Bernstein expressed it well when he said, “[if you] require people to do something they’re not doing now,  it’s going to come at a cost.” The assumption in that statement is that whatever people are doing currently is optimal.
There is actually a fascinating history behind that idea, which of course is an assumption, not a result. In his book Against Mechanism, historian of economics Philip Mirowski shows that neoclassical economics was developed in the late 19th century as a conscious imitation of physics, which at that time was focused on predicting the behavior of physical systems using mathematical equilibrium techniques. Just as a physical system would spontaneously minimize its potential energy, an unrestrained market, these economists conjectured, would find its own equilibrium, which was defined as optimal (i.e., the market would maximize utility of some kind). Of course, there’s nothing wrong with sciences borrowing ideas from each other. The problem was that the thing free markets purportedly optimized — some kind of utility — could not be measured, in contrast to energy in physics (which is defined in terms of observable quantities). This meant that neoclassical economics looked scientific (it was now highly mathematical and looked a lot like physics) but was fundamentally untestable. Nonetheless, the aura of science gave the field credibility and opponents of government regulation a powerful tool. Interestingly, new fields of physics, like quantum mechanics, were developed when 19th-century theories failed to explain new observations. But such falsification wasn’t possible for neoclassical economics.
Today, of course, the assumption that markets self-optimize — and so an unregulated market means better optimization — is alive and well. It undergirds the models being used to inform (or defeat) climate policy, for one thing. And of course it is an assumption that is biased against regulation, since the starting presumption is that, except for some clear market failure, the status quo is optimal. It therefore is a useful paradigm for those seeking to perpetuate or justify the status quo. It also creeps into our basic views about the world and the future: we might think that things can’t be that bad, because the self-optimizing market wouldn’t allow that, and if things do start to get bad, then the market will correct it. This is an old concept, similar to what Voltaire ridiculed in Candide, where even in the face of atrocity, cruelty, and greed, the young Candide is told by his highly educated professor that according to scientific philosophy, we live in the best of all possible worlds, so things really aren’t that bad and in fact are pretty great. That comparison might seem like a stretch at first, but consider that there’s about as much evidence for market optimality as there is for Leibnizian optimism (the idea that we live in the best of all possible worlds). In both instances the philosophies are used to justify the exercise of power and the status quo. There’s long been a market for those who can make the actions of the powerful appear natural, justified, or inevitable.
Of course, missing from neoclassical economics in general is a consideration of politics. Even if a market equilibrates in some manner, what does it mean to be optimal? Optimal for whom and by what measure? The pretense that politics aren’t important — which in fact helps the politically powerful by allowing them to avoid scrutiny and challenge — is a commonality between neoliberalism and the post-political ideology of climate I mentioned earlier. They are highly compatible worldviews.
4. You write that “further attention is needed on the role of economists and particular economic paradigms, doctrines, and models within climate politics and the perpetuation of fossil fuels.” Given that there are now battles being fought of various “Green New Deals”, what sorts of actions do you expect the Charles Rivers Associates of the future to engage in?
This is a great and important question. The Green New Deal concept represents, in a sense, a rejection of the post-political and neoliberal ideologies that have failed to address — and in fact worsened — the climate crisis for decades. The Green New Deal seems to say, “We are going to replace fossil fuels as rapidly as possible using all means at our disposal, we are going to do so intentionally, and we are going to do it justly.” Of course, there is more to it than that, and there are multiple visions of what a Green New Deal should mean, but to me it seems this is at least part of its fundamental essence.
Note the differences between the Green New Deal concept and the post-political, neoliberal approach. The Green New Deal is unabashedly a political project; it looks squarely at the fossil fuel industry; it prioritizes speed and effectiveness over vague notions like optimality (consider for how long economists have been arguing over the “optimal” carbon price, while the climate situation deteriorates). The Green New Deal says, “Enough. We’re going to do this.”
I think the fossil fuel industry is probably terrified of the Green New Deal paradigm. Which makes sense, because it’s an existential threat to the industry. So I anticipate a well-resourced counter-response that is proportionate to the perceived threat at any given time. One part of the industry’s strategy may be to keep Green New Dealers out of the Democratic Party by supporting relatively neoliberal or corporate-friendly Democrats in primaries. Another strategy will likely be to offer an industry-supported alternative to make the Green New Deal go away, which we already saw with the Baker-Shultz Plan in 2017. That plan, which was developed in a fossil-fuel-industry-funded consortium, called for a fairly low carbon price in exchange for repealing essentially all other climate policies and would have also given the fossil fuel industry immunity from climate change lawsuits. That plan was pushed heavily in opposition to the Green New Deal as the latter gained steam under Representative Ocasio-Cortez and others.
“I expect … study after study claiming the industry’s proposals reduce emissions much faster and more cheaply than the Green New Deal proposals…”
Today the industry-backed plan is still being promoted to the Biden administration and new Congress, so it might be a fairly permanent fixture.
I expect the Charles River Associates of the future to produce study after study claiming the industry’s proposals reduce emissions much faster and more cheaply than Green New Deal proposals. The public and lawmakers will probably be fed these conclusions from multiple angles without being aware of the industry’s involvement. The Baker-Shultz Plan itself is a great example of this deceptive technique, rarely mentioning the fossil fuel industry’s involvement in its creation and instead adopting the names of two Republican politicians (who never showed much interest in stopping climate change before now).
The broader problem, however, is that the paradigm used by Charles River Associates is used by many climate economists in academia and elsewhere (who too are often industry funded). The idea that a carbon price is superior to, and mutually exclusive with, all other approaches to addressing climate change is a tenet of faith for many economists today. Therefore it is not enough to isolate one consulting firm or another. The faulty economic approaches that contribute to the perpetuation of fossil fuels, and are used to block effective actions, at some point have to be challenged head-on. There needs to be a much bigger discussion of this issue, and much more scrutiny, because the future of Earth quite literally depends on it.
[questions by Marc Hudson, social media editor of the journal]