By Steven Milloy
June 4, 2004
The global warming treaty known as the Kyoto protocol is politically dead in the U.S. But the treaty's left-leaning environmental extremist supporters haven't given up their fantasy of creating a socialist global economy through controls on energy use.
Rather, they've merely switched tactics to achieve that dubious aim -- and I'm not referring to making dopey movies like "The Day after Tomorrow" . The new tactic is to pressure publicly owned corporations into taking steps to reduce carbon dioxide emissions -- essentially committing to private Kyoto protocols on a corporation-by-corporation basis.
The sort of pressure employed by the global warming activists is not the usual one of forcing corporate managements to cave-in under the threat of bad publicity. Instead, the activists are becoming shareholders of publicly owned companies, attempting to steer corporate policy under the guise of being owners of the corporations. During 2003, these activist-shareholders filed resolutions with more than 25 companies urging the companies to take action to reduce greenhouse gas emissions.
None of the resolutions came close to passing, but in some cases they did achieve significant shareholder support, such as: 32 percent at ChevronTexaco; 27 percent at american Electric Power , the largest U.S. generator of coal-fired electric power; 23 percent at General Electric ; 21 percent at ExxonMobil .
In response to this pressure, american Electric Power announced in February 2004 that it would assess and report to shareholders on the risks of its greenhouse emissions and impacts of efforts to reduce those discharges. another major coal-burning utility, Cinergy Corp. , also agreed to demands from state and church pension funds that it report on greenhouse emissions and other environmental matters. and let's not forget the 40 or so large corporations -- including Dupont, IBM and Boeing -- who have already caved into the activists by joining the Pew Center on Global Climate Change. BP has even taken to labeling its primary product, oil, a "necessary evil" in television commercials.
Pressure on corporations to take action on global warming is also coming from something called the Carbon Disclosure Project -- 87 institutional investors managing $9 trillion in assets. The Project has asked 500 large companies to disclose their carbon risk and plans for mitigating the problem. Global warming activists have also marshaled pension funds with about $800 billion under management to lobby the U.S. Securities and Exchange Commission to force publicly owned companies to disclose financial risks related to global warming on their balance sheets.
Even more frightening is the activists' move toward the ultimate corporate takeover. Surfing the wave of bad publicity related to corporations like Enron and WorldCom, the activists are lobbying the SEC to propose a rule that would allow minority shareholders to nominate directors to corporate boards.
although corporate shareholders have the right to vote for directors on corporate boards, the process of nominating those directors has traditionally been an internal corporate process not involving the shareholders. The activists hope that if they can get their candidates nominated, they hope to get them elected through a shareholder voting method called "cumulative voting," a process designed to assure that minority shareholders can elect their candidates.
The activists don't plan to stop there. Ultimately, they would like to see that controlling majorities of the directors on the boards of a publicly owned corporations are "independent" -- that is, have no ties to corporate management. Ties to activists, of course, would be allowed. and perhaps the most frightening aspect of all is the lack of awareness about what the activists are up to. Of the 690 public comments received by the SEC regarding the proposal to allow minority shareholders to nominate directors, only 10 were from corporations and corporate executives. The vast majority was from activists and their supporters in favor of the proposal.
United for Jobs, a project of the National Black Chamber of Commerce , Small Business Survival Committee and the United Seniors association , lampooned the released of "The Day after Tomorrow" with a mock movie poster titled The Day after Kyoto featuring Depression-era unemployment lines. Fearing the disastrous ramifications of a global warming treaty, President Bush withdrew the U.S. from the Kyoto protocol in 2001. No global warming legislation has ever been seriously considered by Congress. The proposal of Sens. John McCain and Joe Lieberman to cap U.S. greenhouse emissions at 2000 levels by 2010, and create an emissions trading system is not likely to go anywhere either.
Even politicians -- on a bipartisan basis -- know that the junk science-fueled Kyoto protocol would be an economic suicide capsule. Though Greens have failed to advance their agenda through scientific and political debate in the public policy arena, they haven't quit. They've just changed pressure points.