Atlas Does Not Shrug at Climate Change: Exxon, Rob Bradley's favorite "principled entrepreneur", embarks on $600+ million biofuels venture
A little birdy told me this story yesterday, which I think I was the first to ”Tweet”.
ExxonMobil has announced a $600+ million venture with Craig Venter’s advance genomics firm to develop fuels from algae. An Exxon scientist noted:
“the potential advantages and benefits of biofuel from algae could be significant. Among other advantages, readily available sunlight and carbon dioxide used to grow the photosynthetic algae could provide greenhouse gas mitigation benefits. Growing algae does not rely on fresh water and arable land otherwise used for food production. And lastly, algae have the potential to produce large volumes of oils that can be processed in existing refineries to manufacture fuels that are compatible with existing transportation technology and infrastructure.” “
Exxon, whose scientists contributed directly to the Intergovernmental Panel on Climate Change, has made a steady stream of policy announcements and investments related to climate change over the past five years, and Exxon CEO Rex Tillerson has specifically called for governments to establish regulatory frameworks that provide investors and consumers with incentives to find ways to reduce GHG emissions, with Exxon favoring carbon taxes over cap-and-trade policies. (Tillerson has said: “It is rare that a business lends its support to new taxes. But in this case, given the risk-management challenges we face and the alternatives under consideration, it is my judgment that a carbon tax is the best course of public policy action. And it is a judgment I hope others in the business community and beyond will come to share.”)
A recent statement by Exxon explained its climate change views as follows:
“As was recently summarized in the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC), the risks to society and ecosystems from increasing greenhouse gas (GHG) emissions are significant. Meeting the enormous energy demand growth and managing the risk of GHG emissions are the twin challenges of our time.We all must engage in the search for solutions if we are to succeed at mitigating these risks. Progress can be achieved through climate change policy frameworks that enable countries to pursue economic progress while promoting the development of technologies necessary to generate and use energy more efficiently. As the largest publicly traded international energy company, the energy ExxonMobil produces meets 2 percent of the world’s needs. We share the responsibility to take action with scientists, citizens, and governments around the world and are doing so in several substantive ways.”
(emphasis added)
As an aside, I note that despite Rob Bradley’s deep admiration for Exxon (including several posts noting Exxon`s reluctance to invest in “green” energy), Exxon has specifically stopped funding Rob Bradley‘s Institute for Energy Research and similar public policy research groups, on the grounds that these groups’ “position on climate change could divert attention from the important discussion about how the world will secure the energy required for economic growth in an environmentally responsible manner.” Does Exxon, despite an apparently strong policy disagreement with Bradley, still have his respect?

Michael, thanks for the link and for twitting it to my attention.
I`m not sure you really want to get me started, but I won`t let that get in the way.
First,
of course, it`s regrettable that those on the left and right would both
rather fight than think seriously. There`s alot of middle ground, but
you can`t get there in war of words. I`ve criticized Ron for this,
but he deserves credit for accepting climate science and expressly
acknowledging and analyzing tragedy of the commons situations.
While
I think you have found an infelicitly stated portion of his piece,
clearly he`s trying to say that social collapse in the past might be
attributable to tragedy of the commons situation (where “proper
institutions for channeling individual striving into a process of
economic growth which ultimately promotes the public interest” were not
in place).
While there are other cause of collapse – wars,
climate shifts, disasters – do you really disagree with Ron`s point
that societies are vulnerable to collapse if they don`t establish
institutions that prevent ruinous exploitation of resources?
While
Ron focusses on economic freedom and rule of law (market institutions)
as checks on tragedies of the commons, he is familiar with (and
libertarians certainly accept) traditional, community-based property
rights systems can work just fine, though increasing demand (and use by
outsiders) might swamp them, or technology might make private property
more efficient.
I think that Ron is perfectly correct to note
that property rights and market institutions in free societies are
serving to check population growth.
The chief problem, of course
is that there are huge gaps outside individual Western countries: Where
are the property rights in the atmosphere, the oceans, the tropical
forests? As a result, we are steadily destroying whatever we can get
out hands on.
The related problem is that corrupt and/or inept
governments are often in the middle of these problems: e.g., the
Newfoundland cod fishery was destroyed under Canadian government
management, West coast salmon fisheries are similarly threatened, and
tropical forests are being converted to soybeans and oil palm because
governments don`t care to protect the rights of the natives who dwell
in them.
(The way governments fail libertarians are rather
attuned to; while it may grate to hear this after the gross
mismanagement of the Bush/neocon/Republicans, perhaps even liberals can
acknowledge that they have a point, even if they don`t want to listen
to fear of “socialism” from the right.)
Finding institutions to
end destructive exploitation and manage open-access commons is a real
struggle; Bailey points in the right direction for some solutions, but
he downplays the size of the task ahead and the need for those who care
to work at solutions.
More of my thoughts here:
Too Many or Too Few People? Does the market provide an answer?
Using the State to solve common resource problems?
Mises on fixing externalities: progress along the Kuznets curve is not magic, but the result of institution-building
Regards,
Tom
June 21, 2009 6:20 AM