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Exxon Tries to Talk Good Game, While Still Funding Climate Deniers

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Irma Omerhodzic

By Elliott Negin

ExxonMobil executives repeatedly claim their company supports a federal carbon tax and the Paris climate agreement. The company's checkbook ledger, however, tells a far different story.

Thursday, the company released its annual list of its "public information and policy research" grantees, which shows that it spent $1.65 million in 2016 on a dozen think tanks, advocacy groups and associations that contest climate science and oppose both the Paris accord and a carbon tax—the very policies the company professes to endorse. Last year's outlay boosted the total of the company's expenditures on climate disinformation over the last two decades to $34.6 million.


Chamber of Horrors

Most of ExxonMobil's spending on denier groups last year—87 percent—went to four organizations: the U.S. Chamber of Commerce, American Enterprise Institute, Manhattan Institute and American Legislative Exchange Council (ALEC).

ExxonMobil gave more than half of last year's kitty—a cool $1 million—to the chamber, which provided President Trump with a key, but fraudulent, rationale for pulling out of the Paris agreement. Parroting a recent report funded by the chamber and the American Council for Capital Formation―which received $1.78 million from ExxonMobil between 2000 and 2015—Trump claimed that over the next several decades the accord would cost the U.S. economy nearly $3 trillion and, by 2040, eliminate 6.5 million industrial sector jobs.

The Associated Press (AP), Politifact and The Washington Post fact checked the speech and arrived at similar conclusions: The chamber and American Council for Capital Formation cooked the books.

"The study makes worst-case assumptions that may inflate the cost of meeting U.S. targets under the Paris accord while largely ignoring the economic benefits to U.S. businesses from building and operating renewable energy projects," AP reporters Michael Biescker and Paul Wiseman pointed out. "Academic studies have found that increased environmental regulation doesn't actually have much impact on employment. Jobs lost at polluting companies tend to be offset by new jobs in green technology."

The chamber, which has a long history of denying climate science, made similar dire warnings about job losses in a 2014 report analyzing the Obama administration's Clean Power Plan. That report used flawed assumptions to magnify the carbon rule's cost and exaggerate job losses and, like its recent report on the Paris agreement, didn't factor in the carbon rule's considerable benefits.

The Market Will Take Care of It

The next biggest ExxonMobil grant last year—$235,000—went to the American Enterprise Institute, which had already received $4.1 million from the company between 1998 and 2015. American Enterprise Institute economist Benjamin Zycher addresses climate issues more than anyone else these days at the free-market think tank, and his views are diametrically opposed to ExxonMobil's professed positions. He disputes the conclusions of mainstream climate science, insists that a carbon tax would be "ineffective," and calls the Paris agreement an "absurdity."

Zycher's colleague Mark Thiessen, a former speechwriter for President George W. Bush, is also no fan of the international accord. In a June 2 essay, he cited numbers from the Chamber's discredited report and maintained that "our emissions will arguably decline faster because of Trump's withdrawal—because our free market economy will be stronger and more innovative without it."

Wind Energy Blows

The Manhattan Institute, which received $705,000 from ExxonMobil between 2006 and 2015, pulled in another $135,000 from the company last year. Staffers there aren't too keen on the carbon tax or the Paris agreement, either. Senior Fellow Oren Cass, who previously worked at Mitt Romney's old firm Bain & Company, calls the accord a "fraud" and argues that a carbon tax would be "bad for the country" and "bad for the economy."

Another senior fellow at the libertarian think tank, Robert Bryce, previously worked as a newspaper reporter and for the Institute for Energy Research, a former ExxonMobil grantee that is largely underwritten by the Koch brothers. A self-styled agnostic about climate change, Bryce regularly attacks renewable energy. He especially loves to bash wind, carping about the industry's temporary federal tax breaks over the last 20 years and its threat to birds. Never mind that the oil and gas industry received an average of $4.86 billion a year (in 2010 dollars) in permanent federal subsidies between 1918 and 2009 (that continue to today), or that oil and gas industry fluid waste pits kill roughly three times more birds a year than wind turbines. Bryce never mentions either of those salient facts.

Not-So-Smart ALEC

Between 2006 and 2015, ExxonMobil gave $600,000 to the American Legislative Council, a secretive lobby group that drafts sample corporate-friendly legislation for state lawmakers. Last year, the oil company gave ALEC another $76,500.

Does ALEC also oppose a carbon tax and the Paris accord? You bet.

In 2013, ALEC drafted a sample resolution for state legislators to reject "all federal and state efforts to establish a carbon tax on fuels for electricity and transportation." More recently, the director of ALEC's Energy, Environment and Agriculture Task Force slammed the Paris agreement as a "bad deal" for America. "The Paris agreement is little more than an effort by the previous president to lend some international legitimacy to his destructive regulatory campaign against affordable domestic energy," Kenneth Stein, a former legislative aide to Sen. Ted Cruz, wrote in May 25 essay on ALEC's website. "As has been seen in any number of U.S. industries, regulation and rule making stifle progress and innovation—much more so when the regulations become part of an international treaty regime."

Why bother with a carbon tax or an international carbon-reduction agreement if, as ALEC erroneously maintains, scientists haven't determined the role human activity plays in global warming? "Climate change is a historical phenomenon," its website states, "and the debate will continue on the significance of natural and anthropogenic contributions."

More than 100 corporations have quit ALEC for a number of reasons, notably its scientifically indefensible position on climate change. Those companies include a number of energy sector heavyweights, including American Electric Power, BP, ConocoPhillips and Shell. But not ExxonMobil.

Meet the New Boss ...

The fact that ExxonMobil's grantees contradict the company's avowed positions on climate science and policy should come as no surprise. Its funding pattern in Congress is analogous. Over the years, the company has consistently rewarded legislators who reject mainstream climate science and vote against carbon tax resolutions by funding their reelection campaigns. Half of the nearly $1.45 million it spent on candidates in the 2016 election cycle, for example, went to 81 climate science deniers in the House and 24 in the Senate. And 18 of the 22 senators who sent a letter to President Trump urging him to abandon the Paris agreement collectively received $371,000 in campaign contributions from ExxonMobil between 2011 and 2016.

Rex Tillerson began playing this game soon after he became the company's CEO in 2006. In January 2007, the Union of Concerned Scientists published a report documenting that between 1998 and 2005, ExxonMobil had spent at least $16 million on a network of more than 40 anti-regulation groups to manufacture doubt about climate science. A week after its release, Tillerson acknowledged that his company had a PR problem. "We recognize that we need to soften our public image," he said, according to a January 10 story in Greenwire, a trade publication. "It is something we are working on."

Ten years later, ExxonMobil's PR offensive continues. Publicly, company officials repeatedly assure the news media and the general public they have seen the light. Climate change is indeed real and we need to address it. At the same time, however, ExxonMobil is still bankrolling climate disinformation groups and deniers in Congress to stymie government action.

In January, Darren Woods, who has been working for ExxonMobil since 1992, replaced Tillerson as CEO. So far, he's the same as the old boss. His inaugural blog post, which champions natural gas as "powerful tool" to reduce carbon emissions and stresses the challenge of "managing the risks of climate change" while meeting growing worldwide energy demand, could have easily been written by Tillerson. And, like his predecessor, Woods dutifully reiterated ExxonMobil's nominal support for a revenue-neutral carbon tax and the Paris agreement. But until the company stops funding climate science denier groups and the members of Congress standing in the way, it will remain a major obstacle to saving the planet from the worst consequences of climate change.

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The huge surge this year in Amazon deforestation is leading some European countries to think twice about LeoFFreitas / Moment / Getty Images

By Sue Branford and Thais Borges

Ola Elvestrun, Norway's environment minister, announced Thursday that it is freezing its contributions to the Amazon Fund, and will no longer be transferring €300 million ($33.2 million) to Brazil. In a press release, the Norwegian embassy in Brazil stated:

Given the present circumstances, Norway does not have either the legal or the technical basis for making its annual contribution to the Amazon Fund.

Brazilian President Jair Bolsonaro reacted with sarcasm to Norway's decision, which had been widely expected. After an official event, he commented: "Isn't Norway the country that kills whales at the North Pole? Doesn't it also produce oil? It has no basis for telling us what to do. It should give the money to Angela Merkel [the German Chancellor] to reforest Germany."

According to its website, the Amazon Fund is a "REDD+ mechanism created to raise donations for non-reimbursable investments in efforts to prevent, monitor and combat deforestation, as well as to promote the preservation and sustainable use in the Brazilian Amazon." The bulk of funding comes from Norway and Germany.

The annual transfer of funds from developed world donors to the Amazon Fund depends on a report from the Fund's technical committee. This committee meets after the National Institute of Space Research, which gathers official Amazon deforestation data, publishes its annual report with the definitive figures for deforestation in the previous year.

But this year the Amazon Fund's technical committee, along with its steering committee, COFA, were abolished by the Bolsonaro government on 11 April as part of a sweeping move to dissolve some 600 bodies, most of which had NGO involvement. The Bolsonaro government views NGO work in Brazil as a conspiracy to undermine Brazil's sovereignty.

The Brazilian government then demanded far-reaching changes in the way the fund is managed, as documented in a previous article. As a result, the Amazon Fund's technical committee has been unable to meet; Norway says it therefore cannot continue making donations without a favorable report from the committee.

Archer Daniels Midland soy silos in Mato Grosso along the BR-163 highway, where Amazon rainforest has largely been replaced by soy destined for the EU, UK, China and other international markets.

Thaís Borges.

An Uncertain Future

The Amazon Fund was announced during the 2007 United Nations Climate Change Conference in Bali, during a period when environmentalists were alarmed at the rocketing rate of deforestation in the Brazilian Amazon. It was created as a way of encouraging Brazil to continue bringing down the rate of forest conversion to pastures and croplands.

Government agencies, such as IBAMA, Brazil's environmental agency, and NGOs shared Amazon Fund donations. IBAMA used the money primarily to enforce deforestation laws, while the NGOs oversaw projects to support sustainable communities and livelihoods in the Amazon.

There has been some controversy as to whether the Fund has actually achieved its goals: in the three years before the deal, the rate of deforestation fell dramatically but, after money from the Fund started pouring into the Amazon, the rate remained fairly stationary until 2014, when it began to rise once again. But, in general, the international donors have been pleased with the Fund's performance, and until the Bolsonaro government came to office, the program was expected to continue indefinitely.

Norway has been the main donor (94 percent) to the Amazon Fund, followed by Germany (5 percent), and Brazil's state-owned oil company, Petrobrás (1 percent). Over the past 11 years, the Norwegians have made, by far, the biggest contribution: R$3.2 billion ($855 million) out of the total of R$3.4 billion ($903 million).

Up till now the Fund has approved 103 projects, with the dispersal of R$1.8 billion ($478 million). These projects will not be affected by Norway's funding freeze because the donors have already provided the funding and the Brazilian Development Bank is contractually obliged to disburse the money until the end of the projects. But there are another 54 projects, currently being analyzed, whose future is far less secure.

One of the projects left stranded by the dissolution of the Fund's committees is Projeto Frutificar, which should be a three-year project, with a budget of R$29 million ($7.3 million), for the production of açai and cacao by 1,000 small-scale farmers in the states of Amapá and Pará. The project was drawn up by the Brazilian NGO IPAM (Institute of Environmental research in Amazonia).

Paulo Moutinho, an IPAM researcher, told Globo newspaper: "Our program was ready to go when the [Brazilian] government asked for changes in the Fund. It's now stuck in the BNDES. Without funding from Norway, we don't know what will happen to it."

Norway is not the only European nation to be reconsidering the way it funds environmental projects in Brazil. Germany has many environmental projects in the Latin American country, apart from its small contribution to the Amazon Fund, and is deeply concerned about the way the rate of deforestation has been soaring this year.

The German environment ministry told Mongabay that its minister, Svenja Schulze, had decided to put financial support for forest and biodiversity projects in Brazil on hold, with €35 million ($39 million) for various projects now frozen.

The ministry explained why: "The Brazilian government's policy in the Amazon raises doubts whether a consistent reduction in deforestation rates is still being pursued. Only when clarity is restored, can project collaboration be continued."

Bauxite mines in Paragominas, Brazil. The Bolsonaro administration is urging new laws that would allow large-scale mining within Brazil's indigenous reserves.

Hydro / Halvor Molland / Flickr

Alternative Amazon Funding

Although there will certainly be disruption in the short-term as a result of the paralysis in the Amazon Fund, the governors of Brazil's Amazon states, which rely on international funding for their environmental projects, are already scrambling to create alternative channels.

In a press release issued yesterday Helder Barbalho, the governor of Pará, the state with the highest number of projects financed by the Fund, said that he will do all he can to maintain and increase his state partnership with Norway.

Barbalho had announced earlier that his state would be receiving €12.5 million ($11.1 million) to run deforestation monitoring centers in five regions of Pará. Barbalho said: "The state governments' monitoring systems are recording a high level of deforestation in Pará, as in the other Amazon states. The money will be made available to those who want to help [the Pará government reduce deforestation] without this being seen as international intervention."

Amazonas state has funding partnerships with Germany and is negotiating deals with France. "I am talking with countries, mainly European, that are interested in investing in projects in the Amazon," said Amazonas governor Wilson Miranda Lima. "It is important to look at Amazônia, not only from the point of view of conservation, but also — and this is even more important — from the point of view of its citizens. It's impossible to preserve Amazônia if its inhabitants are poor."

Signing of the EU-Mercusor Latin American trading agreement earlier this year. The pact still needs to be ratified.

Council of Hemispheric Affairs

Looming International Difficulties

The Bolsonaro government's perceived reluctance to take effective measures to curb deforestation may in the longer-term lead to a far more serious problem than the paralysis of the Amazon Fund.

In June, the European Union and Mercosur, the South American trade bloc, reached an agreement to create the largest trading bloc in the world. If all goes ahead as planned, the pact would account for a quarter of the world's economy, involving 780 million people, and remove import tariffs on 90 percent of the goods traded between the two blocs. The Brazilian government has predicted that the deal will lead to an increase of almost $100 billion in Brazilian exports, particularly agricultural products, by 2035.

But the huge surge this year in Amazon deforestation is leading some European countries to think twice about ratifying the deal. In an interview with Mongabay, the German environment ministry made it very clear that Germany is very worried about events in the Amazon: "We are deeply concerned given the pace of destruction in Brazil … The Amazon Forest is vital for the atmospheric circulation and considered as one of the tipping points of the climate system."

The ministry stated that, for the trade deal to go ahead, Brazil must carry out its commitment under the Paris Climate agreement to reduce its greenhouse gas emissions by 43 percent below the 2005 level by 2030. The German environment ministry said: If the trade deal is to go ahead, "It is necessary that Brazil is effectively implementing its climate change objectives adopted under the [Paris] Agreement. It is precisely this commitment that is expressly confirmed in the text of the EU-Mercosur Free Trade Agreement."

Blairo Maggi, Brazil agriculture minister under the Temer administration, and a major shareholder in Amaggi, the largest Brazilian-owned commodities trading company, has said very little in public since Bolsonaro came to power; he's been "in a voluntary retreat," as he puts it. But Maggi is so concerned about the damage Bolsonaro's off the cuff remarks and policies are doing to international relationships he decided to speak out earlier this week.

Former Brazil Agriculture Minister Blairo Maggi, who has broken a self-imposed silence to criticize the Bolsonaro government, saying that its rhetoric and policies could threaten Brazil's international commodities trade.

Senado Federal / Visualhunt / CC BY

Maggi, a ruralista who strongly supports agribusiness, told the newspaper, Valor Econômico, that, even if the European Union doesn't get to the point of tearing up a deal that has taken 20 years to negotiate, there could be long delays. "These environmental confusions could create a situation in which the EU says that Brazil isn't sticking to the rules." Maggi speculated. "France doesn't want the deal and perhaps it is taking advantage of the situation to tear it up. Or the deal could take much longer to ratify — three, five years."

Such a delay could have severe repercussions for Brazil's struggling economy which relies heavily on its commodities trade with the EU. Analysists say that Bolsonaro's fears over such an outcome could be one reason for his recently announced October meeting with Chinese President Xi Jinping, another key trading partner.

Maggi is worried about another, even more alarming, potential consequence of Bolsonaro's failure to stem illegal deforestation — Brazil could be hit by a boycott by its foreign customers. "I don't buy this idea that the world needs Brazil … We are only a player and, worse still, replaceable." Maggi warns, "As an exporter, I'm telling you: things are getting very difficult. Brazil has been saying for years that it is possible to produce and preserve, but with this [Bolsonaro administration] rhetoric, we are going back to square one … We could find markets closed to us."

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