It’s been a remarkable few days for the U.S. Chamber of Commerce, the 3 million-member business federation that says it spends more money on lobbying than any other organization in the U.S.
When the Chamber recently took a strong stance against federal policy and other legislative proposals that will regulate greenhouse emissions, it forced several companies to quit the Chamber in protest. These companies, including <a id="p.d4" title="companies from PG&E, to Apple and have all left saying the Chamber's positioning is at odds with their corporate policies large California utility PG&E and Apple, argue the Chamber's stance is archaic and incompatible with their views.
Because he's been dragged into the news, the Chamber's president Tom Donohue is getting more scrutiny. And it turns out that he serves on the board of Union Pacific Railroad. That's significant for two reasons. First, the railroad is heavily dependent on the business of transporting coal for its revenues and has admitted it could be adversely affected by the legislation:
“We May Be Affected by Climate Change and Market or Regulatory Responses to Climate Change…Restrictions, caps, taxes, or other controls on emissions of greenhouse gasses, including diesel exhaust, could significantly increase our operating costs…[and] could also affect our customers…[which could] reduce the amount of traffic we handle and have a material adverse effect on our results of operations, financial condition, and liquidity.”
As board member of Pacific Union, Donohue (left) is barred from “any conduct or activities that are inconsistent with the Company’s best interests.”
Second, the Railroad has paid him about $5 million worth of compensation for being on the board since 1998. All of this and more is being documented really well by the National Resource Defense Council’s Peter Altman.
VentureBeat’s Camille Ricketts today wrote a follow-up piece about the Donohue’s response to the Chamber defections, which is in part to blame the companies for grandstanding or not entirely understanding its policy. The Chamber is not backing down from its position.
Why is this relevant for Silicon Valley and innovation? Well, first, the science about climate change is undisputed. A survey of more than 900 scientific peer review articles on climate change found that not one conflicted with the United Nations’ IPCC’s conclusion that the world is getting hotter and that the vast majority of the effect is caused by human carbon emissions. U.S. Government agencies have said that to avoid environmental catastrophe within the next century, we, as a world, desperately need to cut carbon emissions.
Second, to push for this change, the Obama Administration has already started to pump $4 billion of stimulus funding into Smart Grid technologies. The proposed cap and trade legislation — a more ambitious law that could be passed by the end of this year — will help bolster investments into green companies even further. By imposing limits on greenhouse gases, and creating a floor price on the cost of carbon, it will force a more aggressive transition to renewable sources of energy such as solar or wind. A whole new energy infrastructure will be needed. That’s one reason why VC investments in the sector during the third quarter exceeded investments in all other sectors, including IT and biotech. Indeed, that’s why we’re holding our GreenBeat conference next month on the Smart Grid. Former Vice President Al Gore, leading Silicon Valley investor John Doerr, and executives from Cisco, PG&E and other executives are all speaking (We’re also inviting the top innovative startups and other companies to partake in a competition).
All of this comes as hundreds of green energy company executives and investors flew to Washington this week to urge congress to pass the climate change bill. Among them was Kleiner Perkins’ Doerr. During a Q&A session in Washington, Energy Secretary Steven Chu reportedly cited a congressional Budget office estimate that the House bill would boost energy costs for the average household by roughly the equivalent of a postage stamp each day — a mere 44 cents.
Back to the Chamber’s stance. There’s no way around seeing it as astonishingly hypocritical. On the one hand, it argues that it supports climate change legislation, if done correctly, and that the reason it is against the current House Waxman-Markey bill is because that proposal isn’t strong enough. But if you go into the details of the Chamber’s arguments, you won’t find any convincing counter-proposal. It’s clearly obfuscating. Again, Altman of the NRDC is documenting this: The Chamber doesn’t really see warming as a problem. The Chamber argues that a “warming of even 3ºC in the next 100 years would, on balance, be beneficial to humans” because of fewer cold-related deaths in winter months (see p. 38). Note some of the other excerpts of its comments to the Environmental Protection Agency:
- “The increased use of air conditioning will mitigate many of the effects cited by EPA….” (p.1)
- “Overall, there is strong evidence that populations can acclimatize to warmer climates via a range of behavioral, physiological, and technological adaptations” (p. 4)
- “The evidence when considered together suggests potential increases in temperature as the result of climate change will not pose an endangerment to public health… ” (p. 14)
- “The U.S. health care system has effectively dealt with many of the reported climate sensitive diseases for a long time, and will continue to respond effectively.” (p. 39)
This is really scary. The Chamber is arguing that the earth can withstand global warming when it really has no idea that this is true. In fact, it can be argued just as easily that unprecedented warming could possibly trigger an irreversible process of heating and change that builds on itself and whacks the earth’s ecosystem out of balance.
How does the Chamber really justify holding to such a radical position? VentureBeat has called the Chamber several times for comment since Tuesday (its site has no email), but the Chamber has not responded. Sen. Richard Durbin, the Senate Majority Whip, is now asking questions about Donahue’s board memberships.
Notably, the San Jose (Calif.) Chamber of Commerce is still mulling its position. A call to the group for comment yielded no response. We also called the California Chamber of Commerce. A spokeswoman Christine Haddon said: “We’ve taken a totally different position (than the U.S. Chamber),” adding that while the state Chamber originally opposed California’s legislation AB32, that legislation is now law and so the Chamber is embracing it in order to be able to better influence how it is implemented.
Now, the interesting question is who is next to break ranks from the U.S. Chamber. Yesterday, Microsoft (which is offering Hohm, a home energy management product) said the Chamber no longer represents its views. That comes a few days after General Electric, the largest corporate player in the country in the energy industry, also took the stance. This is significant: When you lose the utilities and the largest grid vendors, you’re looking very shaky.
It’s tragic that such an influential group as the Chamber would resist such important change. It’s time for urgent action, and the move by Apple and PG&E is very encouraging that some big companies see a way that proactive policy on climate change doesn’t necessarily have to be bad for business. One PG&E executive, who requested anonymity, put it this way: “You can stick your head in the sand, and have stuff done to you, and lose while you do nothing. Or you can embrace change, and take a role in shaping policy.” PG&E’s chief executive Peter Darbee, the executive continued, “has a deep conviction that climate change is real, and we have a moral responsibility — that things can be done that aren’t anti-competitive. To be sure things get done in a constructive way, you need to be part of the dialog.”