I’ve talked a lot here about companies’ positions on climate change and how they do or don’t agree with other statements and actions companies take—from alignment with their trade group’s position, to looking at how they talk about their own climate risks, to taking a broader look at all company actions to help or inhibit progress on addressing climate change.
Peabody Energy, which relies significantly on coal production, has made conflicting statements on how the EPA Clean Power Plan will affect its business, telling investors not to worry but telling the courts the rule will devastate them. Photo: Wikipedia
One point seems to be consistent. Companies and their trade groups have a well-earned reputation for crying wolf when faced with new limits on pollution, and that’s especially true for the fossil fuel industry. But how do we know if such cost claims are exaggerated?
Legal experts suggest that one way to assess the validity of companies’ claims about new regulations is to compare the over-the-top statements they make in public policy debates to the more nuanced information they share with investors through the U.S. Securities and Exchange Commission (SEC). Upcoming legal challenges to the EPA Clean Power Plan provide an opportunity to put this approach to the test, and find ways to overcome its limits.
Carbon producers challenge the EPA Clean Power Plan
On April 16, the U.S. Court of Appeals for the District of Columbia is scheduled to hear oral arguments in Murray Energy Corp v. U.S. Environmental Protection Agency. Murray Energy wants the court to put the kibosh on the Clean Power Plan, EPA’s first-ever limits on carbon emissions from existing power plants, before the new regulations are even finalized.
Siding with Murray Energy is Peabody Energy, the American Coalition for Clean Coal Electricity, the National Mining Association, American Fuel & Petrochemical Manufacturers (AFPM), Independent Petroleum Association of America, and the U.S. Chamber of Commerce, among others. Together, these groups represent some of the world’s largest producers of carbon emissions and are arguably the largest disseminators of disinformation about climate science and policy.
Discrepancies in Peabody Energy’s story
As revealed in Greenwire last month, Peabody Energy recently changed its tune by acknowledging climate change related risks in its 2014 SEC filings. As I told the article author, such a stark discrepancy between this acceptance of the science and Peabody’s long record of climate contrarian talking points was eyebrow-raising. Peabody is acknowledging the reality and risks of climate change in one place, while continuing to attack the scientific consensus that climate change is real and poses a threat.
In addition to climate-reality-accepting SEC filings, Peabody’s official position on the Clean Power Plan, which is available on the company’s website, states that “The proposed rules will have no immediate impact on coal use.”
Yet, in the lawsuit filings referenced above, Peabody Energy’s legal team argues that “the mere pendency of the Proposed Rule causes harm to Peabody” and “weakens the nation’s power grid by pressuring existing power plants to shut down.”
So while the company tells its shareholders that the Clean Power Plan is no big deal, it’s telling the courts how devastating it will be to their business and the entire power industry. Clearly, there are some inconsistencies in Peabody’s story here.
The facts do matter
Murray Energy and the trade groups participating in the legal case echo this language of financial harms in the briefs they filed. (Note: the “facts” found in amicus briefs have been found to influence court opinions, even when these claims are unsubstantiated by credible evidence or rely on “dodgy data.”)
The EPA’s regulatory impact analysis found the climate and health benefits of the Clean Power Plan will far outweigh the costs, and that the resulting investments in energy efficiency will ultimately generate savings on electricity bills. Strikingly, the trade groups’ brief cites the EPA’s analysis on the costs of complying with the Clean Power Plan, but conveniently ignores the EPA’s findings on the benefits and savings.
A need for greater transparency around corporate climate actions
Because of the lack of transparency around trade group political activity, we don’t yet know exactly whose views the trade groups represent in the court. But despite a quiet corporate America, we do know that Google and some 223 other companies do publicly support the EPA efforts to combat climate change.
As I’ve said before, what we need is greater transparency around companies and their political activities, particularly when it comes to their relationship with their trade groups. The SEC should require greater disclosure from public companies, as more than one million people have called on the agency to do.
The EPA Clean Power Plan is a way to help limit the emissions that cause climate change and encourage a transition to low carbon energy; we all deserve to know who is trying to block it.
Correction: The original version of this post stated the number of companies supporting EPA efforts to combat climate change as 500; the correct number is 223.