Good Slate piece: How Big Oil Gave Up On the Climate

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How Big Oil Gave Up On the Climate

Five years ago Shell was ready to fight global warming. Now it’s rooting for it.
By Will Oremus
 
The Arctic Challenger in December 2012, before being towed away for the second round of testing for what Shell Oil refers to as their "fourth line" of defense against a well blowout in the Beaufort and Chukchi Seas in the Alaskan Arctic.
Shell calls for action on climate change while exploring the Arctic for oil.

Photo courtesy TJ Guiton/Creative Commons

Big oil companies believe in climate change. How could they not? Already, the melting Arctic is opening up new shipping lanes that could allow them to tap into vast deposits of oil and natural gas. Despite a string of setbacks, Royal Dutch Shell has poured $6 billion into Arctic drilling and still calls it the company’s “most attractive single opportunity for the future.”

Coverage of climate change tends to focus on the losers, of whom there are likely to be very many. The world’s poor, especially, are apt to find themselves starved, swamped, or parched as seas inundate cities and droughts turn farmland into desert. But this is not the primary subject of McKenzie Funk’s fascinating and troubling new book,Windfall. Instead, Funk travels the world to meet the winners—the entrepreneurs, charlatans, and multinational corporations that are devising ingenious ways to make a buck amid the coming chaos.

For true believers in the free market, Funk points out, there are two possible responses to climate change. The first is to deny it. This is becoming ever more awkward, however, as the evidence piles up. The second response is to profit from it. The free market, these new libertarians argue, will provide the perfect incentive for forward-thinking businesses to find new ways to adapt to a hotter and more turbulent world. So while the politicians are arguing over whether climate change is real, a growing number of businesses are betting hard that it is—and getting rich as they’re proved right.

One problem, Funk finds: The people in a position to profit or protect themselves from climate change are, by and large, those who are already well-off. And the “fixes” they’re coming up with tend to come at the expense of those most vulnerable. As Funk puts it, “The hardest truth about climate change is that it is not equally bad for everyone.”

Among those for whom it is not as bad:

  • Mining and agricultural companies in Greenland, where retreating glaciers are revealing vast deposits of precious minerals and warming temperatures have already lengthened the agricultural season by three weeks
  • Israeli water-desalination companies, which are now selling snow to desperate ski resorts in the Alps
  • The former CIA analyst-turned-“climate investor” who is buying up water rights in the American West and Australia and watching their value skyrocket
  • High-end private firefighters for AIG who scamper around protecting the mansions of individual millionaires in the Los Angeles suburbs as their neighbors’ homes burn
  • The Ayn Rand-quoting former Wall Street trader who’s wooing Sudanese warlords and speculating in African farmland, whose value rises when climate change leads to food shortages

And then there’s Shell. Multinational businesses have a reputation for either denying or downplaying climate change. In fact, Shell has been preparing for it for decades. The company’s business depends on being able to anticipate and respond quickly to seismic shifts in the energy market. So it employs a team of big-thinking futurists, called scenario planners, to keep it a step ahead.

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