Cost-of-Carbon and shifts to low-carbon economies

Enhance existing moves to reflect ‘cost of carbon’ in international agreements that lay out how the global community should transition toward low-carbon economies


By definition, powerful multinationals exert their power across multiple nations. From the general public’s point of view there is nothing inherently harmful about that, provided the goals of the multinationals are sufficiently aligned with the goals of the territories within which they operate. Consequently, as laid out already, the principle of Unelected Responsibility strongly applies to oil, energy and mining corporations (as a necessary counter to Capitalism Crises rather than Industrialization Crises). In addition, the collective actions of numerous such self-serving corporations can bring unintended consequences that no one intends. As a result, in order to minimize the causes of such Globalization Crises oil, energy and mining corporations must adopt a far more Holistic Perspective (detailed on the associated tabs) than otherwise might seem necessary.

However, for oil, energy and mining corporations the obligations – and opportunities – go further still. The main reason is that these businesses are already all heavily involved in global politics – albeit behind the scenes. And their actions or inactions sometimes impact whole nations. Such behavior is not necessarily any less democratic than, say, the machinations of the unelected representatives at the UN. But it does nevertheless carry clear risks of abuse that, if too much goes wrong as a result, threaten to create a coordinated retaliatory international backlash against the most obvious examples of ‘over-powerful corporate interests’.

To defuse this escalating risk, it is time for at least some of the covert corporate influence of oil, energy and mining to move out of the shadows of political lobby chambers and sealed boardrooms and into the openness of full legitimacy. That means taking far more of an explicit and proud lead in ensuring globally-balanced implementation of transition-strategies to a low-carbon world economy – rather than maintaining what is often viewed both inside and outside these industries as a glorified Public Relations exercise.

The detailed political actions that associated multinationals will choose to advocate from the perspective of world-governance will necessarily be complex. But at the highest level, things like deforestation can probably only be substantially reduced by means of richer countries paying for the privilege. Ecological appeals alone simply will not work. Similarly, it is the developed countries that will have to demonstrate that low-carbon economies are possible. But before they do so, developing countries will first have to commit that, once the richer countries have shown the lead, they too will follow – albeit with further compensation in the form of overseas aid for any damage arising from climate change primarily caused by the prior industrialization of the developed world.

To assist in such a transition, energy industries – as part of their realigning – must change the endemic practices of their industry. Misleading advertising (for instance about ‘clean coal’) needs to be far more strongly self-regulated – before public distrust turns to anger and multi-nation politicians impose far-stronger regulation from the outside. Similarly, utility companies must get ahead of the curve in encouraging people to reduce their energy consumption, in contrast to now when they are principally rewarded for selling more power.

And finally, the oil, energy and mining industries must be seen to be grown-up enough to take responsibility for all of their constituent-organizations. Naturally they should publicize examples of what works well in their industries. But they should also actively Name And Shame those parts of their industries that, by association, risk damaging the whole and exacerbating the threat of backlash. For example, the worst polluters (as well as the most successful improvements) – at country level and company level – need to be broadcast worldwide. Just as politicians around the world are increasingly finding, however painful the process, it ultimately works out far better to be seen to take the actions needed to get your own house in order rather than be portrayed as being dragged kicking and screaming into an ethical makeover.

Over the next handful of years there is an extraordinary opportunity for the leaders of preeminent organizations at the very center of a few crucial industries that are themselves at the inner core of Industrialization. Oil and energy suppliers and mining corporations can realign themselves so as explicitly to take a leadership role in minimizing the worst backlashes within the global systems that they genuinely understand better than anyone else. In the past, oil, energy and mining have, between them, changed the world. It is now time for their executives once again to aspire to that same goal.