From Big Oil to Big Green by Marco Grasso Book Summary

From Big Oil to Big Green, Holding the Oil Industry to Account for the Climate Crisis by Marco Grasso

Recommendation

Big Oil must step up and take responsibility for the climate crisis threatening life on Earth today, argues political geography professor Marco Grasso. He urges the oil and gas industry to embrace decarbonization and make reparations, while making a moral case for climate justice. Grasso critiques Big Oil for denying the correlation between fossil fuels and climate change while it knowingly caused harm and garnered trillions in profits. It’s time to label fossil fuels a “harmful product,” such as tobacco or asbestos, he says, while urging Big Oil to embrace green energy.

Take-Aways

• Big Oil must take accountability for climate change and make amends.
• Major international oil companies (IOCs) knew about the harmful impact of fossil fuels, yet did nothing.
• Scientific evidence shows fossil fuels are a “harmful product,” such as tobacco or asbestos.
• Those with power and influence can fight the harmful impacts of climate change by committing to six tasks.
• Big Oil evades responsibility by creating false narratives to justify its activities.
• The oil industry must make reparations and embrace decarbonization.
• Big Oil faces investor pressure to prioritize sustainability.
• Solar and wind power could transform the energy industry and meet global demand.

From Big Oil to Big Green Book Summary

Big Oil must take accountability for climate change and make amends.

Oil is the main global fuel and energy source that people use in consumer products, ranging from toothpaste to smartphones, medicines and even lip gloss. Global dependence on oil contributes to the rise of greenhouse gases, as fossil fuel combustion releases billions of tons of the greenhouse gas carbon dioxide into the atmosphere each year. An increase in atmospheric greenhouse gases has triggered extreme weather and climate catastrophes, including droughts, floods, heat waves and melting glaciers, and fuels the extinction of one-sixth of the Earth’s species.

“Business as usual is showing its cracks, starting to appear obsolete, moribund. The kind of snail’s pace, incremental progress the oil companies tout could prove too little, too late.”

By deliberately stoking global demand for fossil fuels and denying their impacts, Big Oil plays a central role in creating an unsustainable carbon-dependent socioeconomic system. The oil industry spent 99.2% of its total energy budget investing in fossil fuels in 2019, and only 0.8% investing in carbon capture, storage and renewables. Solutions to the climate crisis require a collaborative, coordinated global effort between accountable governments and industry leaders, and require Big Oil to take accountability and make reparations for the harm it caused. 

Major IOCs knew about the harmful impact of fossil fuels, yet did nothing.

Those holding Big Oil accountable should attend to these “morally relevant facts”:

• Awareness – Oil industry leaders were aware of the negative impact their products had on the environment, but hid this information from shareholders, the public and stakeholders. Companies such as Shell and ExxonMobil had the internal technical and scientific expertise available to understand the harmful impact of burning fossil fuels.
• Behavior – Despite having this awareness, Big Oil didn’t make the changes needed to reduce harm. The five biggest integrated oil and gas companies (IOCs) – BP, ExxonMobil, Chevron, TotalEnergies and Shell – only invested 3% of their capital expenditure into low carbon technologies, investing the remainder – $110.5 billion – into oil and gas in 2019.
• Capacity – The biggest IOCs hold patents to several green technologies that could reduce carbon emissions, but don’t take advantage of them.
• Denial – Oil industry leaders launched major campaigns of denial. For example, Exxon funded contradictory research after its scientists demonstrated a link between climate change and fossil fuel combustion.
• Enrichment – Big Oil companies saw huge profits from their environmentally destructive activities. BP, Exxon, Chevron and Shell amassed profits of $1,991 trillion between 1990 and 2019.

Scientific evidence shows fossil fuels are a “harmful product,” such as tobacco or asbestos.

Government regulators should label fossil fuels as harmful products, given the scientifically proven detrimental impact they have on the Earth and its systems. As Big Tobacco and companies creating lead or asbestos publicly accepted the harmfulness of their products when the scientific evidence became irrefutable, Big Oil must do the same. A 2018 United Nations Panel of Experts report suggests that climate activists’ and civil society’s demands on IOCs – that they make reparations for past environmental harm and stop producing fossil fuels – align with the human right to live in a healthy environment.

“Like companies trading in tobacco, asbestos or lead-based paint, Big Oil should assume some form of responsibility and countenance any related duties stemming from its involvement in dealing in a harmful product.”

The UN special rapporteur on extreme poverty and human rights holds that fossil fuel companies that impede climate change action engage in violation of human rights. Climate change ravages socioeconomic and natural systems, threatening human life. Climate change harms communities by reducing crop yields and increasing global conflict as people compete for resources. Big Oil has an obligation to financially invest in righting its wrongs.

Those with power and influence can fight the harmful impacts of climate change by committing to six tasks.

Governments, academic institutions and international bodies must prioritize six tasks:

1. Establish a legal framework – Relevant authorities (international governing bodies) must establish a political and legal framework with which to hold Big Oil accountable and demand change.
2. Enact enforcement mechanisms – National entities, perhaps with international guidance from organizations such as the UN Framework Convention on Climate Change, the World Trade Organization and the Global Environmental Facility, must coordinate enforcement efforts.
3. Make “(dis)incentivization” efforts – Global governments can embrace strategies that steer companies and consumers away from using fossil fuels, which could include cutting subsidies or charging consumers for the actual costs of carbon. Governments can create clean energy incentives for consumers and producers.
4. Enable change – Universities, research bodies and innovation agencies must coordinate efforts with international organizations and political authorities to conduct the innovation, research and knowledge needed to enable the transition to a low-carbon energy system.
5. Spread practices and norms – Those with charisma and influence – intellectuals, activists, religious leaders and people in communications – should promote the benefits of a low-carbon lifestyle, transforming the norms surrounding acceptable energy use.
6. Resist climate change deniers – Science journalists and advocacy groups must counter misinformation with research that accurately describes the links between Big Oil and the climate crisis.

Big Oil evades responsibility by creating false narratives to justify its activities.

The oil industry contends with challenges to its market dominance, as the renewable energy industry grows and consumers increasingly purchase electric vehicles. ExxonMobil expressed concerns in its 2019 Energy Outlook, that investors may lose interest in its assets because peak oil use has passed. Many oil and gas companies seem to be accepting the inevitability of transitioning to low-carbon energy sources. Yet when facing pressure from media and consumers to back green initiatives and make reparations, many oil companies refuse. Shell CEO Ben van Beurden, for example, declared that people could reach a climate target of no more than a 1.5°C increase in atmospheric temperature by planting trees over an area as large as the Amazon rain forest – an impossible idea designed to spin the media and public in Shell’s favor.

“Big Oil’s deceptive narratives have succeeded in framing the question of climate change as one of individual consumption-based responsibility, thus preventing the general public from understanding that the climate crisis is a structural problem largely driven by the oil industry’s denial, misinformation, lobbying, and disablement of climate policy and legislation.”

Oil and gas companies make three false arguments when advocating for fossil fuels: They claim that activities related to fossil fuels have benefited society; they say consumers, not companies, are responsible for carbon emissions; and they insist they act in accordance with the law, and aren’t in the wrong. 

But you can’t posit that something has benefited society while ignoring its costs to society. Otherwise, you might champion the pre-Civil War cotton industry as an engine of economic growth, while ignoring that this industry depended on human enslavement. Consumers alone cannot bear the moral weight of the climate catastrophe because they have far less information about the negative impacts of oil consumption than producers possess. Individual consumer emissions comprise a small share of total emissions worldwide; and companies have a moral obligation to consider all the stakeholders their actions affect.

The oil industry must make reparations and embrace decarbonization.

Literature on climate ethics justifies the demand for reparations from Big Oil using three different arguments: The “beneficiary pays principle (BPP)” holds that those who benefit most from a harmful activity have a moral imperative to make financial reparations to those harmed most. The “polluter pays principle” holds that those responsible for pollution should take actions to rectify it. And the “ability to pay principle (APP)” holds that the proportion agents should pay to solve a collective problem should derive from their wealth and capacity to pay. 

“From a pragmatic perspective, Big Oil’s wealth and power means the industry is actually able to financially rectify – at least – a substantial and morally relevant part of the harm done.”

Not all agents – whether IOCs or state-owned oil and gas companies (NOCs) – contributed equally to the crisis or have equal means of making reparations. Rank companies’ culpability by assessing factors such as the extent to which they funded, shaped and orchestrated climate-change denial campaigns.

Big Oil faces investor pressure to prioritize sustainability.

Global finance could force Big Oil to address climate change. Investors are increasingly aware of the risk climate change poses and are shifting investments into green ventures. Climate change jeopardizes the stability of the financial system. If left unchecked, global warming could trigger a worldwide crisis as it causes extreme, unpredictable weather events that damage property and disrupt trade. The asset management firm BlackRock, for example, estimates that climate change will trigger losses of nearly $4 trillion, disrupting the American financial system. The oil industry will face extinction if low-carbon and green energy initiatives replace it, but will also face extinction if unchecked climate change destabilizes the global economy. Big Oil must take both scenarios into account and embrace transformation. 

“Divestment is an effective strategy for destabilizing Big Oil through the erosion of its material power.”

Investors may end their support of oil companies, if they deem oil reserves to be environmentally unsustainable and write off such assets as unusable. Central Banks are making efforts to align with these new realities. For example, a global central bank coalition and supervisory body, The Network for Greening the Financial System, urges members to collect data to gauge climate risks and prioritize sustainability in their portfolios.

Following the Paris Agreement, the world’s largest banks still allocated $3.8 trillion toward financing oil and gas companies. Social movements can destabilize Big Oil by exerting pressure on institutions to divest their assets connected to fossil fuel companies and publicly pressure Big Oil to make the low-carbon transition.

Solar and wind power could transform the energy industry and meet global demand.

Consider two moral principles when embracing the low-carbon transition: The “principle of proportionality” holds that societies must strive to reasonably balance actions and consequences. The “principle of sufficiency” demands that everyone ought to have the means to subsist at a certain level and have access to the basic social, economic and environmental conditions that make life possible. Big Oil must transition to Big Green while protecting the livelihoods of the communities and workers within the industry’s value chain.

“By baking reliance on their products into the recipe and practicing the idolatry of growth, Big Oil has created a Ponzi scheme that has been running for the past 150 years whereby future economic and environmental stability is sacrificed for the immediate riches of the few for a couple more generations.”

Solar energy offers a sliver of hope as the cheapest form of electricity in history. Wind and solar capacity will likely surpass that of natural gas by 2023 and coal by 2024. Leveraging the power of solar energy is feasible, as it only requires 0.3% of global available land – less than fossil fuels currently use – and technology can capture 100 times the current global energy demand using wind and solar power. Big Oil must embrace the inevitable evolution of energy by transforming into Big Green and creating a new, sustainable economic system.

About the Author

Political geography professor with the University of Milano-Bicocca’s Department of Sociology and Social Research Marco Grasso is the global environment outlook expert (GEO) for the United Nations Environment Programme (UNEP).