The majority of the American climate activists attending the 2015 United Nations Climate Change Conference this week in Paris tend to have one thing in common: they all drive the VW Jetta Wagon TDI, which is the “it” automobile for their group. The Jetta gets 49 MPG, which is better than many hybrids, and it also has a German drive. It was praised by Automobile and Driver magazine as a “green” car that even car enthusiasts might like. Due to its cult reputation among environmentalists, it was difficult to find one for years, even in the classified advertisements.
Now we are aware that the car was not green. The automobile’s claimed low emissions were a hoax committed by VW engineers who programmed the software to reduce emissions during testing but then allowed them to increase in actual driving. This is how the car acquired its high fuel economy.
The entire concept of “green business” is based on the supposition that businesses are honest with us, that they desire to solve the social or environmental issues they take on, and that we can believe what they say about their methods and goods. What should I do now? a concerned TDI owner recently enquired to one of us.
The truth about VW, along with recent revelations about Exxon-long Mobil’s history of lying about their understanding of climate change and BP’s failure to understand “Beyond Petroleum,” spell the end of the old idea of green business, the notion that a significant portion of the environmental fix might come from the business world. That outcome was not necessary.
We both grew up in a green-business movement that supported the idea that a coalition of organisations, including the government, people, nonprofits, and, most importantly, businesses, would be able to solve the most serious issue of our time, climate change. One of us wrote the business-focused book Getting Green Done. The business community’s involvement was justified on the grounds that businesses have the necessary knowledge, tools, drive, and flexibility to execute changes on a global scale. The majority of the top 100 economic engines in the world are corporations rather than governments. A lot could happen rapidly if we could channel the profit motive in a green direction.
But something unexpected occurred en route to the parade. It might have begun with BP. The Deepwater Horizon accident in 2010 demonstrated that not only had BP not advanced past petroleum, but also that John Browne, the company’s previous CEO and the man behind the beyond petroleum campaign, never received internal buy-in for his ideas. By the time of Deepwater, BP was looking to sell its assets in solar and wind energy, as well as drilling in more challenging, deeper sites. It was out that they also had a shocking safety record.
More recently, we learned what those who were familiar with the matter had long suspected: that while Exxon-Mobil publicly argued that climate science was insufficiently established to support a move away from fossil fuels, in secret, the company was aware of the research and using it to plan expanded operations in the thawing Arctic. Exxon-Mobil was never expected to lead the march in renewable energy, but the concealment and deception were nevertheless surprising.
Many proponents of green business reached their breaking point when cool VW admitted to manipulating emissions tests. It soon became apparent that the notion of business leading the way was incorrect because, as customers, we cannot believe what businesses say. It is just in the nature of corporations to internalise profit and externalise costs, much like the scorpion who offers the frog a ride over the river before stinging him and killing them both.
That is the sentiment embodied in the Paris “brandalism” campaign. About 600 posters were put up as part of that campaign, which aimed to expose corporate hypocrisy in supporting climate change. One of these was a spoof Air France advertisement that read: “Tackling Climate Change? Obviously not. We’re an airline,” along with a neat, VW-inspired advertisement that features a Jetta and reads, “We’re sorry that we got caught. We’re attempting to convince you that we care about the environment now that we’ve been discovered.
In actuality, voluntary business greening initiatives don’t scale up and aren’t consequently climate solutions. Although a recent UK report argues against the effectiveness of voluntary steps, 400 ppm of CO2 in the atmosphere ought to plenty to demonstrate the point. The market mechanisms that were viewed as a business-friendly means to limit emissions have also fallen short; in Europe, largely as a result of being defanged by the corporate lobby, and in the United States, fully as a result of being derailed at the federal level. With no effective regulation of greenhouse gas emissions and no market-based controls, we are now practically left with nothing.
The California Air Resources Board (CARB), which confirmed the fraud, and the Environmental Protection Agency (EPA), which did its duty, followed up, and issued a letter of noncompliance are the heroes of the VW story, who are not employed by the private sector. They are an academic engineer funded by a small non-profit who discovered the fraud. Although it has become fashionable in recent years to decry the EPA’s overreach and regulation in general for inhibiting innovation, the truth is that if the CARB and EPA hadn’t been doing their jobs, VW would still be engaging in dishonesty.
Since Rio, the landmark Earth Summit in 1992 that launched the global dialogue on climate change, the private sector has had two decades to develop technological innovation or to demonstrate the strength of its voice and influence in order to address this issue. But that simply hasn’t taken place. It’s time to cease relying on hope as a tactic. We must admit what we should have known all along: government will continue to perform the ugly work of protecting the environment because even the most well-intentioned wolf cannot be a shepherd.
The companies that grasp this harsh reality are the ones we admire. In a recent White House promise, 81 companies—including GE and Apple—asked for a robust accord in Paris. More than 1,000 businesses have signed the Business for Innovative Climate and Energy Policy (BICEP) declaration, stating that combating climate change through governmental processes is “the correct thing to do,” according to CERES (The Coalition for Environmentally Responsible Economies).
Of course, companies’ actions with teeth frequently undermine these kinds of toothless declarations. For instance, Shell Oil has publicly stated the need for sensible climate regulations even though it had backed the American Legislative Exchange Council (ALEC), an organisation that attempts to thwart them. Due to ALEC’s position on climate change, Shell later severed connections with the organisation. However, each statement regarding the necessity for regulatory frameworks to address emissions dispels the notion that the market would be able to solve climate change.
Not just making a pledge will do. You must also battle for that vow, something that even forward-thinking firms have typically been unwilling to do. Instead of tacitly accepting anti-climate voices like Americans for Prosperity, which is currently opposed to a carbon tax in Massachusetts, business might isolate and marginalise them. CEOs might write opinion pieces about the urgent need for climate action, as The North Face’s CEO just did.
Our new message to executives is to give policy makers the tools they need to accomplish their jobs. Let them perform their job while you focus on yours.
*Editor’s note: We have amended this article from its original version to clarify that the Rio conference took place 20 years ago and that Shell Oil severed its links with ALEC in August 2015.