Why Big Carbon Fights So Hard
It's the Great Carbon Bubble
by Bill McKibben
If we could see the world with a particularly illuminating set of spectacles, one of its most prominent features at the moment would be a giant carbon bubble, whose bursting someday will make the housing bubble of 2007 look like a lark. As yet — as we shall see — it’s unfortunately largely invisible to us.
It’s no secret where the “invisibility” comes from: the fossil-fuel industry pays for it. Writers like Naomi Oreskes have made this case with such overwhelming power that no one even really tries denying it any more. The open question is why the industry persists in denial in the face of an endless body of fact showing climate change is the greatest danger we’ve ever faced.
Why doesn’t it fold the way the tobacco industry eventually did? Why doesn’t it invest its riches in things like solar panels and so profit handsomely from the next generation of energy? As it happens, the answer is more interesting than you might think.
Part of it’s simple enough: The giant energy companies are making so much money right now that they can’t stop gorging themselves. ExxonMobil, year after year, pulls in more money than any company in history. Chevron’s not far behind. Everyone in the business is swimming in money.
Still, they could theoretically invest all that cash in new clean technology or research and development for the same. As it happens, though, they’ve got a deeper problem, one that’s become clear only in the last few years. Put briefly: Their value is largely based on fossil-fuel reserves that won’t be burned if we ever take global warming seriously.
When I talk about a carbon bubble, this is what I mean. Here are some of the relevant numbers, courtesy of the Capital Institute: We’re already seeing widespread climate disruption, but if we want to avoid utter, civilization-shaking disaster, many scientists have pointed to a 2 degrees C (3.6 degrees F) rise in global temperatures as the most we could possibly deal with.
If we spew 565 gigatons more carbon into the atmosphere, we’ll quite possibly go right past that reddest of red lines. But the oil companies, private and state-owned, have current reserves on the books equivalent to 2,795 gigatons — five times more than we can ever safely burn. It has to stay in the ground.
Put another way, in ecological terms it would be extremely prudent to write off $20 trillion worth of those reserves. In economic terms, of course, it would be a disaster, first and foremost for shareholders and executives of companies like ExxonMobil (and people in places like Venezuela).
If you run an oil company, this sort of write-off is the disastrous future staring you in the face as soon as climate change is taken as seriously as it should be, and that’s far scarier than drought and flood. It’s why you’ll do anything — including fund an endless campaigns of lies — to avoid coming to terms with its reality. So instead, we simply charge ahead. To take just one example, last month the boss of the U.S. Chamber of Commerce, Thomas Donohue, called for burning all the country’s newly discovered coal, gas, and oil — believed to be 1,800 gigatons worth of carbon from our nation alone.
What he and the rest of the energy-industrial elite are denying, in other words, is that the business models at the center of our economy are in the deepest possible conflict with physics and chemistry. The carbon bubble that looms over our world needs to be deflated soon. As with our fiscal crisis, failure to do so will cause enormous pain — pain, in fact, almost beyond imagining. After all, if you think banks are too big to fail, consider the climate as a whole and imagine the nature of the bailout that would face us when that bubble finally bursts.
Unfortunately, it won’t burst by itself — not in time, anyway. The fossil-fuel companies, with their heavily funded denialism and their record campaign contributions, have been able to keep at bay even the tamest efforts at reining in carbon emissions. With each passing day, they’re leveraging us deeper into an unpayable carbon debt — and with each passing day, they’re raking in unimaginable returns. ExxonMobil last week reported its 2011 profits at $41 billion, the second-highest of all time. Do you wonder who owns the record? That would be ExxonMobil in 2008 at $45 billion.
Telling the truth about climate change would require pulling away the biggest punch bowl in history, right when the party is in full swing. That’s why the fight is so pitched. That’s why those of us battling for the future need to raise our game. And it’s why the view of Earth from our satellites, however beautiful from a distance, is likely to become ever harder to recognize as our home planet.
Bill McKibben is founder of 350.org and Schumann Distinguished Professor at Middlebury College in Vermont. The above is an adapted version of his full-length article on Grist.