Jul. 14, 2017

Carbon Majors

In last week’s blog I discussed the idea of economics and Schumacher’s idea of human scaled economies. The week I will focus on global economics specifically in terms of corporate exploitation of fossil fuels.

I recently became aware of a 2013 study by Richard Heede published in the peer reviewed scientific journal Climatic Change called Tracing anthropogenic carbon dioxide and methane emissions to fossil fuel and cement producers, 1854-2010. This research project took 8 yrs to complete. Here is the link to the website: http://carbonmajors.org/

The study attributes 63% of the carbon dioxide and methane emitted over the last 160 yrs to just 90 entities. Fifty are investor-owned companies such as Chevron, Peabody, Exxon Mobile, Shell and BP. Forty are state owned or government run from Saudi Arabia, China, Poland, the former Soviet Union and other countries. These companies extract crude oil, coal, natural gas and cement.

Globally, underdeveloped nations with oil reserves have suffered at the hands of these companies. The worst development outcomes--measured in poverty, inequality, and deprivation--are often found in those countries with the greatest natural resource endowments. Rather than contributing to freedom, broadly shared growth, and social peace, rich deposits of oil and minerals have often brought tyranny, misery, and insecurity to these nations. Money from oil companies consolidates the power of entrenched elites and regime supporters, sharpening income inequality and stifling political reform. The history of the oil-rich Arab Middle East has long been a case in point--with Saudi Arabia being exhibit A. Human rights issues do not keep U.S. companies from doing business with such nations. The profits are too big for these corporations to be concerned.

American oil companies figure prominently in exploiting the world’s petroleum resources. Oil company CEO’s receive excellent salaries. In 2015, Rex Tillerson, made $28,000,000 as head of Exxon Mobile. The same year the head of Chevron, J.S. Watson, made $24,000,000. These salaries are common in the petrol-chemical industry. Yet very little money is given to research for things like protecting water resources or containing oil spills. During the last BP disaster in the Gulf of Mexico, they used ineffective barriers and chemicals that make the toxins sink to the bottom of the ocean. With such huge profits, that’s all they could come up with?

Last week, I asked the question, what is enough? Are huge profits worth exploiting our natural resources, destroying the environment and upsetting local governance in underdeveloped nations? With these big corporations, the human factor seems to get lost. Profits are more important than people and communities- all so a few companies and CEO’s can get rich. The majority of earth dwellers do not reap the benefits as these 90 companies exploit our assets, our natural resources. Global rather than human-scaled economics are ruining our world.