Return(s) of the super-lobbyist
In January 2010, the US Supreme Court issued a ruling that set-back climate change policy for at least a decade. I wasn’t aware of this ruling at the time. I wasn’t aware of it for a long time afterwards. But the Citizens United v. Federal Election Campaign Act1 ruling changed the world.
Citizens United2 – a conservative political organisation (PAC) in the US – challenged and overturned the very important Federal Election Committee Act (FEC). Thus corporate lobbyists suddenly gained new super powers… and they weren’t slow to flex their muscles.
Freedom of speech applies to all
The FEC Act had restrained lobbying until that point on the basis that:
‘the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form… have little or no correlation to the public’s support for the corporation’s political ideas’.
This was challenged by Citizens United who argued that:
‘anti-distortion’ rationale ‘interferes with the “open marketplace of ideas” protected by the First Amendment’.
This ensured that:
‘political speech cannot be limited based on a speaker’s wealth is a necessary consequence of the premise that the First Amendment generally prohibits the suppression of political speech based on the speaker’s identity’.
In short, freedom of speech applies irrespective of a company’s wealth or size. And this trumps any attempts to curtail or regulate corporate lobbying.
Aggregation of influence
So why was this so important? Because money and influence matter (a lot).
The aggregation of organised and motivated wealth (i.e. companies with vested interests) creates a significant long-term asymmetry of influence that individuals or other groups cannot match. It allows regulated industries to influence aggressively (and distort) the media narrative on one hand, while effectively buying votes (via campaign funding) on the other.
And this can be legally done in the shadows via ‘front groups’ (i.e. think-tanks) and industry trade bodies.
Asymmetry of influence
But surely this influence cuts both ways? Unfortunately not. In the areas that matter most – such as climate policy – change is required.
And change requires significant political energy. Status quo bias, behavioural inertia, fear of change and the cashflows and sunk capital of existing industries are huge barriers to progressive policy.
The vested interest in maintaining the status quo is enormous; and so the justification of change has a very high burden of proof. Evidence must be acknowledged and accepted as fact before people and politicians are going to risk change.
Put another way, regressive policy dominates because regressive lobbyists don’t need to win the argument, they just need to sow the seeds of doubt.
Arguing with uncertain nerds
Science is by definition cautious and fastidious. Dogma on the other hand is sensationalist and exaggerated.
Why? Emotions are very powerful factors in decision-making. There is a reason why the phrase ‘fear, uncertainty and doubt’ has its own acronym (FUD). Conversely, scientific research is peer reviewed because the empirical process seeks to be objective by design.
Conviction is created by the narrowing of uncertainty over time, which can take decades. The truth is in the nuance, but nuance is rarely the defining characteristic of a tabloid headline. How often have we seen the views of a science-denying extremist being compared to a peer-reviewed expert under the guise of ‘journalistic balance’? False equivalence is not balance but is systematically portrayed as such.
“When men are most sure and arrogant they are commonly most mistaken, and have there given reins to passion, without that proper deliberation and suspense, which can alone secure them from the grossest absurdities.”
David Hume
What could be more absurd than slowing down action on climate?
Yet high-conviction untruths are just part of what the climatologist and author of The New Climate War, Michael Mann4, has called ‘the inactivist’s playbook of organised denial, deflection, distortion and doubt campaigns’. A playbook that was first used by the tobacco industry to slow regulation and controls on their cancer-causing product.
This certainty and arrogance is not random. This powerful and proven Tobacco Strategy has since been used repeatedly to stymie legislation against corporations which have vested interests in activities that have been scientifically proven to cause damage. This is covered in detail in Merchants of Doubt, by Naomi Oreskes and Erik Conway and covers environmental and social issues from Teflon and acid rain to climate change.
The problem with personal responsibility
A key trick in the inactivist’s playbook is to deflect the burden of responsibility away from corporations and towards individuals.
Individuals may feel guilty and often want to change, but lack the power to change the system and usually fall back into old habits, especially when the activities are fundamental to their daily lives (e.g. smoking, transport or food consumption).
When combined with parallel campaigns which distort the science and sow seeds of doubt, it is easy to see why personal motivation and positive action campaigns rarely gain traction.
Who has the highest return on lobbying dollars?
Technologies or companies that seek to disrupt the status quo are – by definition – likely to be smaller and less established. This means less capital and political influence.
Furthermore, emerging companies almost exclusively focus their capital on growth and don’t expend too much time trying to influence politicians. This might seem obvious, but it is not a trivial nuance.
Growth companies typically spend their time trying to make their products better. On the flip side, incumbents with strategic dilemmas (i.e. unsustainable products) are typically just trying to slow the decline.
While growth companies typically seek positive-sum outcomes, the incumbents are playing a negative-sum game. They are fighting to survive and they are usually willing to fight dirty. In this context, anything that slows the decline of their business is highly valued relative to other capital allocation decisions.
Given the influence that it affords, the returns on an invested dollar of lobbying activity has a multiplier effect that is rarely appreciated.
While $41m seems small in the context of ExxonMobil’s $178.6 billion4 of revenue in 2020, how much value can be derived from convincing two pivotal senators to vote against a carbon tax, for example?
Oil firms spend millions on climate lobbying
Misalignment of incentives
So, we know that fossil fuel companies spend lobby dollars (because they are forced to disclose some of them). And we know what they are saying publicly regarding progressive climate policy (they support it).
But when considering the short-term incentives in place for fossil fuel executives, what would you expect them to do over the next five years with regard to lobbying activities in relation to climate policy? Support a carbon tax? Support electric vehicle infrastructure? Support plastic and chemicals regulations?
US energy companies proclaim support for climate change initiatives but lobby against policy
“Never, ever, think about something else when you should be thinking about the power of incentives….. I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it. And never a year passes but I get some surprise that pushes my limit a little farther.” (Charlie Munger)
I bet old Charlie knows the answers… InfluenceMap6 (opens in a new window)
