Corporate environmental contributions: Greenwashing or worse?

Ken Silverstein posted a thought-provoking piece on Forbes.com titled Being ‘Good Neighbors’ And Staying Out Of Print Motivates Companies To Be Environmental Stewards.

The following quote stimulated me to provide a slightly different interpretation and expansion on the reasons why companies and investors large and small are often actively involved in the environmental movement.

And it’s not just the smaller retailers that want to be custodians of the environment. It’s also the multinationals, which are out front and which have said that such attention builds trust with their customers and the communities where they operate — initiatives that will continue no matter the outcomes of the U.S. elections. The steps they are taking?

While the initial moves may have been prompted by regulations or consumer demands, many companies now want to ensure that everyone up-and-down the corporate chain of command is committed to the cause — from the chief executives to the folks on the shop floor. They have determined that they are not just getting environmental benefits but also financial returns, while creating goals for which team members can strive and attain. The cost of complacency can be quite high.
(Emphasis added.)

Here’s the comment I provided on Silverstein’s article.

@Ken Silverstein

Thank you for your perceptive piece.

There is also good money to be made in creating and selling products and services that are friendly to the environment.

Unfortunately, that statement holds true whether or not the environmental friendliness of the product is real or perceived.

It can also be very good for the bottom line for corporations and investors to ingratiate themselves with the politically powerful Environmental Movement. Groups like NRDC, Sierra Club, World Wildlife Fund, Friends of the Earth, and Union of Concerned Scientists are important partners in the political struggle to ensure that governments continue to provide meaningful financial support and mandates for products like “smart grid” devices, costly but energy-efficient lighting products, electric automobiles, solar power systems and wind power generation.

Without those programs, a great deal of investment would be worth far less than it is today. Of course, even passionately dedicated environmentalists cannot survive without some income, so the lobbying partners might need some cash contributions. It’s easy for individuals to make tax exempt donations in the name of stewardship or neighborliness, but foundations can also provide a path to clean up corporate contributions.

It also beneficial to bottom lines if the “Environmentalists” can be encouraged to attack competitors under the banner of seeking to “protect” the environment. Even when the attacks don’t succeed in preventing the supposed sins of the evil competitors, they rarely fail to impose new costs and other disadvantages.

Michael Shellenberger, the founder of Environmental Progress, recently published a scorchingly hot piece that documented the deep, numerous and motivated ties between the NRD, renewable energy product corporations and natural gas interests.

http://www.environmentalprogress.org/big-news/2016/6/23/environmental-group-could-benefit-financially-from-closure-of-diablo-canyon

His piece makes one wonder if those monetary contributions had anything to do with the NRDC, FOE, A4NE and PG&E agreement to push 17,000 GWh/yr of clean electricity production capability off of California’s electricity grid. The groups have openly admitted that they want to “make room” for more [heavily subsidized or legally mandated] solar power systems, energy efficiency products and wind turbines.

Collectively the partnership of parties to the agreement have the means, motivation and opportunity to murder Diablo Canyon in the prime of its life. Not surprisingly, there are pundits (Amory Lovins, for example) who adamantly deny there was any commercial intent involved.

I’m not alleging that all parties involved in the deal, especially the rank and file members of any of the listed organizations, understand all of the implications, but Forbes readers should understand how the profit motive can lead to strategic partnerships and lucrative deals.

Of course, many will seek to dismiss me as a “conspiracy theorist.”

Experienced observers might also shrug their collective shoulders and say, “it’s just business” and “what do you expect businessmen to do when there is so much money at stake?”

When I wrote that comment, I was also influenced by my recent participation in an extended point – counterpoint discussion with Amory Lovins. The venue for that discussion was a thoughtful, reaction-provoking article on Forbes titled Closing Diablo Canyon Nuclear Plant Will Save Money And Carbon.

During my conversation with Amory, I mentioned the fact that I consider it quite important for people to know that David Brower’s first major supporter for Friends of the Earth was Robert O. Anderson, the CEO of the Atlantic Richfield Company. ARCO — before being swallowed up by BP Amoco in April, 2000 at the tail end of the huge oil and gas multinational consolidation of the 1990s — was one of the world’s largest oil and gas companies.

When active corporate leaders make donations to organizations that target their competitors, it raises a red flag for me. If the donation or support comes from a source with deep financial interests in the hydrocarbon economy and goes to an active member of the antinuclear movement, the evidence often leads me to produce another article for the “smoking gun” category here on Atomic Insights.

Amory penned a rather heated response to my statement about the Brower-Anderson connection. He didn’t like the way I assume there is was a financial motive involved in the fact that the Diablo Canyon Nuclear Power Plant was FOE’s first target in its 40-year long, world-wide antinuclear campaign.

Quoting from Lovins’s comment:

The notion that David Brower and FOE opposed nuclear energy as part of a strategy to try to triple the world oil price to help FOE donor Bob Anderson (whose notably philanthropies included the Aspen Institute) is a bizarre conspiracy theory that earns you credit for imagination but not rationality. It’s economically illiterate, inconsistent with FOE’s long and strong efforts to stop Arco’s TransAlaska Pipeline System and to get the world off oil, and a slander on the memory of two remarkable men whose energy ideas often turned out to be prophetic. FOE’s stated and actual reasons for opposing nuclear power focused on proliferation, accidents, terrorism, and wastes. All four concerns proved valid, and in the end, poor economics proved decisive.
…
The claim that I “have at least an historical conflict of interest” because I worked in the 1970s for FOE, which had a donor who led an oil company, is equally absurd and offensive. Donations to public charities, including FOE and my current employer RMI, must by law be “disinterested.”

I responded, but Amory decided that we had drifted far off of the topic of the original post, so he deleted my comment. He gave me the courtesy of explaining his decision via email.

Rod, as a favor to Forbes’s readers, and frankly to you (as I think they present you in an unfavorable light), I’m not going to post these because they’re very remote from my blog on which folks are supposed to be commenting. I probably erred in letting our exchange veer so far off course in the first place. But given my obligations to enforce both relevance and substantive and respectful dialogue, I think matters should rest where they are.

By the way, every major environmental group I know, like RMI (which is not an environmental group), supports pricing carbon and works hard to get the world off oil. The notion that any of them would oppose nuclear power in order to favor current or past oil-aligned donors is beyond bizarre.

Of course, on this post, my comment is not off topic, it is part of the topic. I’ll let readers determine if they are interesting and/or important.

I know my theories are easily dismissed. They are not intuitively obvious and require the investment of some time trying to understand how commodity markets work. The explanation requires a fundamental, multi variable understanding of how markets determine prices on a day-to-day basis.

For example, groups like FOE loudly don’t “like” fossil fuels. They engage in well-promoted actions against activities like drilling in the Arctic, building a new pipeline to add to the several that already carry oil between Canada and the US, off-shore drilling and even “keep it in the ground” by halting new leases on public land.

However, those actions seem to almost always be directed against NEW supplies, not existing supplies. Slowing the development of new supplies of any commodity product is almost always profitable for the EXISTING suppliers because it shifts the supply-demand balance into an area of higher prices by restricting supply.

That statement also applies to the commodity of transportation, the biggest financial losers when a new pipeline opens are those operating the more expensive alternatives that indicated the need for the pipeline. Burlington Northern invested huge sums of money in its oil train infrastructure. Keystone XL would reduce the value of those investments. (As it turned out, the crash in world oil prices caused by a 1-3 million barrels per day excess production made both the pipeline and the trains redundant.)

Groups like FOE, Sierra and NRDC have often promoted the notion that fossil fuels are too cheap and should be more expensive to discourage their use. However, higher priced fossil fuels not only increase profits for hydrocarbon companies, they also encourage more independent efforts to find and exploit new resources.

If FOE, NRDC and Sierra were really focused on increasing fossil fuel prices to discourage use without rewarding corporations with far higher prices and profits, they would be investing their political capital in the admittedly difficult task of adding a substantial TAX burden on fossil fuels that would put the money into the common treasury. They would be pressing hard for a carbon TAX (or FEE) with a dividend that is distributed equally to everyone with a Social Security Card. There would be no “trading” in an effective system that is designed to pay for the costs imposed on society from using our common atmosphere as a waste storage area.

In a not-so-subtle attempt to discredit me, Lovins included the following statement in one of his wordy comments. He also called my theories “economically illiterate.”

My credentials are summarized at http://www.rmi.org/Amory+Lovins+Downloadable+Bios. Yours are at http://www.forbes.com/sites/rodadams/#2226a2a7653a. Comparisons welcome.

The link he provided for me was biography page as a contributor to Forbes.com. If he had any intention of a fair comparison, he might have linked to his bio at the same site. Instead, he linked to a page at RMI that includes a number of different bios for him that have various lengths and purposes.

I gently suggested that a more fair comparison of our credentials would point to my resume, which is available in the author blurb that accompanies each of the posts that I have published on Atomic Insights.

Lovins response to that included a snide dismissal of my 39 years of academic education, formal technical training, professional experience and published work. He went on to answer a question that has been posed here on a number of occasions.

How did Lovins earn the right to call himself a physicist and the Chief Scientist of his NGO?

Thanks for your fuller credentials, Rod. I’m glad you graduated from the Naval Academy after your English degree. I’m currently a Professor of Practice at the Naval Postgraduate School and on the Chief of Naval Operations’ Advisory Board, so we doubtless have many friends in common.

Since you return at the end to my credentials as a physicist, with which you seem obsessed, a few data points are that I’ve published in peer-reviewed physics journals as noted on your website, most recently keynoting the 2014 American Institute of Physics Berkeley symposium (two papers in Procs AIP 2015); paid my way through college as a consultant experimental physicist, designing and building novel apparatus for clients at Smith College, UMass, MIT, Harvard, and a major Route 128 electronics firm, including several very high-sensitivity nuclear magnetic resonance spectrometers based on my patented equipment that won four first prizes at the 1964 National Science Fair-International and with which I discovered a new solid-state effect (J Chem Phys 42:1558 [1965]); was the experimentalist one summer at MIT Lincoln Lab working on giant Faraday rotation in europium iron garnet crystalline films for a group of theoreticians designing a magnetooptical memory system; gave the American Physical Society 2007 April meeting’s invited talks on energy efficiency and on nuclear energy; have given invited technical talks at the Aspen Center for Physics and various academic physics departments and National Labs; and was described by APS’s program as “the leading energy efficiency expert in the world”. I thought most of this was already posted on your website. May we now please return to the topic at hand?

It’s worth noting that when Lovins won four first prizes at the 1964 National Science Fair-International he was 17 years old and still a high school student. What Lovins calls a “consultant experimental physicist” sounds an awful lot like a skilled lab technician. Steve Wozniak was doing similar work at Hewlett-Packard when he and Steve Jobs created the Apple 1, but he never claimed to be a scientist. In fact, the Woz, one of the most skilled computer designers in the world, returned to college after a ten year stint at Apple to complete his undergraduate engineering degree in May 1986.

Here is my response, which Lovins chose to delete from the thread to help protect Forbes readers and my own reputation. I’ll admit that it may read like I’m bragging, but I believe it’s useful to the discussion to provide relevant factual information about my career that has no other publicly available source.

@Amory B Lovins

With regard to your accusation that I am “economically illiterate” and a conspiracy theorist because I pointed out that there was a tie between oil industry funding and Friends of the Earth actions against nuclear energy, I’ll try again. Apparently I provided a confusing impression the first time.

Friends of the Earth wasn’t founded as just a US antinuclear organization, much less just a California focused group. It sought to halt or slow nuclear energy growth around the world.

In many countries, the first target for replacement with their newly economic (Oyster Creek contract signed in 1963 was the first one declared to win against fossil fuels on an “economic basis”) option of nuclear power.

Though the US electricity production industry did not represent a huge portion of the world’s market for crude oil, when combined with the oil consumption in France, Taiwan, Japan, Germany, Belgium, the UK, and a few other smaller consumers, the electricity business was VERY important to the oil industry. Not only did it buy a lot of product, but those large steam plants burned “the bottom of the barrel” junk that didn’t have a lot of other customers.

Customers that pay money for a product that might otherwise be an expensive waste disposal problem (cracking technology was much less refined then than it is now) are valuable, important and worth protection.

Friends of the Earth did not just campaign against nuclear power plants on land. Though I cannot lay my hands on the source right now, I know that I’ve seen at least a mention or two of protests against the NS Savannah in the 1960s and early 1970s before she was laid up.

As you and I both know, the world’s ocean going fleet runs purely on oil (with a tiny supplement from natural gas, which is supplied by the same companies.) As we both also know, nuclear propulsion is a well proven technology.

Finally, I think I did not state my theory very clearly. I was not trying to say that delaying nuclear power could possibly lead to a tripling of world oil prices. What I was trying to point out was that a capable strategist who is working towards actions that might result in a tripling of prices would understand that the price increase would just be a spike and not a plateau if there was a readily available, proven alternative.

Actions to discredit and discourage the use of nuclear energy began to receive strong support from the donor class – which just happened, I guess, to include people like Robert Anderson, who was still very actively involved in selling a competitive product – in the period starting soon after the Six-Day War in 1967.

As explained in the exceptional book by F. William Engdahl titled “A Century of War: Anglo-American Oil Politics and the New World Order” the multinational petroleum industry recognized that nationalization and the use of “the oil weapon” was going to end the era of $2-$4 oil. They weren’t sure when that was going to happen, but they knew that they needed to “take the bloom off the nuclear rose” before that happened. (p.170)

The actions to discourage nuclear energy development between 1968-1974 are far too numerous to document in a blog comment. They’re more like a full chapter (maybe 2 or 3 chapters) in a book.

On another note:

For a guy who accuses me of being insulting to the point of not wanting to engage me in conversation, you tend to resort to snide remarks designed to attack my credibility.

Yes, I earned a degree in English from the US Naval Academy.

That statement sounds like I have no right to be writing on a technical subject like nuclear energy. However, my English degree was a Bachelor of Science.

That was in recognition of the fact that the USNA English major curriculum when I attended included 3 semesters of calculus, 1 semester of differential equations, 2 semesters of chemistry, two semesters of physics, a semester of thermodynamics, two semesters of electrical engineering, a semester of fluid dynamics, and an introduction to naval propulsion engineering that covered steam plants, diesel engines and gas turbines. It included two summer cruises in engineering departments, one on an old 600 lb steam boiler plant and one on a nuclear powered submarine. I earned a 3.6 GPA in that curriculum and graduated in the top 10% (just barely) in my class.

Unlike Harvard, the USNA never had any Vietnam Era draft-related incentives to introduce grade inflation.

I earned high enough marks in my technical courses to gain approval from Admiral Rickover to join his program with almost no fuss at my 45 second interview. Your way of describing my resume overlooks the fact that I completed nuclear power school (top 10% in my class) was the first in my class to qualify as EOOW at prototype, and then earned an MS in Systems Technology (with distinction) at the same Nuclear Postgraduate School where you now are a “Professor of Practice.”

Admiral DeMars sent me to be the chief engineer of the USS Von Steuben when I was just 27 years old. That SSBN had been commissioned when I was only 3. When I was detailed to the Von S, it was an old boat showing some signs of age. We earned a Green E during my first year as Engineer. (That statement will mean something to people who deeply understand the importance of NR’s close attention to putting the right people in the right place.)

Finally, you might think that there is no conflict of interest between investing in specific energy products that compete in a tough market and investing in non-profit organizations that actively seek to tilt the energy market rules to disfavor nuclear energy and provide their investments with generous subsidies. I’ll let you continue trying to explain that point of view to the American people.

Additional reading

Michael Shellenberger has published a terrific smoking gun article of his own after looking into the ties between the NRDC and the renewable energy/natural gas industry. Environmental Group Could Benefit Financially From Closure of Diablo Canyon