Recently The New York Times published my op-ed “How Liberals Win,” in which I argued that throughout American history, liberal advancements have been mainly achieved with corporate support, and not without. For example, FDR needed corporations to establish basic workplace standards. LBJ needed them to spark a wave of environmental regulation. And Obama needed them to win health care, stimulus, Wall Street reform, higher fuel-efficiency standards, and stronger food-safety rules.
But as you surely know, I was not able to include a cap on carbon emissions on that list. And it might look at first glance that the failure of “cap-and-trade” legislation, which had a multitude of corporate compromises that made environmentalists cringe to varying degrees, debunks my case.
Soon after the bill was left for dead in the Senate, 350.org’s Bill McKibben declared, “So now we know what we didn’t before: making nice doesn’t work. It was worth a try, and I’m completely serious when I say I’m grateful they made the effort, but it didn’t even come close to working. So we better try something else … we’re going to need a movement, the one thing we haven’t had.”
Since then, McKibben has moved the environmental community to focus on blocking fossil-fuel projects like the Keystone XL oil pipeline instead of building broad coalitions, which has left out previously supportive unions as well as corporations. And Naomi Klein, in a cover piece for The Nation, took McKibben’s logic several steps further and argued that the environmental movement should merge with the Occupy movement and declare capitalism itself the enemy of the climate.
But not only does their logic fail to account for the reforms President Obama did enact by working with corporations, it also fails to recognize the real reason why the climate bill failed.
It’s not because a liberal-corporate coalition was futile. It’s because at the last minute, the coalition broke apart.
The House version of the bill, known as the American Clean Energy and Security Act (ACES), was a compromise that attracted just enough right-leaning Democrats and moderate Republicans to pass. Top environmental organizations and several Fortune 500 companies — including oil companies BP, Shell, and ConocoPhillips — forged the United States Climate Action Partnership (US-CAP), and the House “cap-and-trade” legislation drew from the principles it proposed. Furthermore, key Democratic reps fashioned compromises to assuage home-state industries.
Southwest Virginia’s Rep. Rick Boucher (D) made sure coal companies would receive subsidies to help them figure out how to capture carbon emissions, and prevent coal from being completely phased out. Michigan Rep. John Dingell (D) secured help for the auto industry to produce fuel-efficient vehicles. Minnesota Rep. Collin Peterson (D), one week after threatening to sink the bill and insisting that a warmer planet would merely help his rural district grow more corn, changed positions after winning a long delay on tougher emissions standards for ethanol production.
It may not have been pretty, but it worked. The compromises may have weakened the bill from both an environmental and cost-effectiveness standpoint. But they did not make the bill weak. The top climate scientists at Duke University concluded that if the ACES model were adopted by America and other major economies, we would likely cut enough emissions “to avoid the most serious consequences of global warming.” Center for American Progress’ Joe Romm, who argued the bill wouldn’t cut enough emissions on its own to avert a climate crisis, still defended it, saying “it takes us off of the business as usual path, which is the most important thing, and it accelerates the transition to a clean energy economy, which is the second most important thing, and it establishes a framework that can be tightened as reality and science render inevitable.” Furthermore, the Congressional Budget Office estimated the legislation would reduce the national budget deficit, with only negligible cost increases for the average household.
Beyond making sense substantively, the compromises also worked politically. Without attracting Democratic lawmakers from coal-, auto-, and agriculture-producing regions, there was no way to achieve a simple House majority. And House leaders just barely achieved that.
However, support for the bill from the corporate community was tepid. US-CAP never formally endorsed the legislation because of internal disagreements — in particular, the oil companies in the coalition were unhappy they did not receive any tailored benefits. The coal industry was never on board despite the heroic efforts from Boucher to protect them (Boucher, after serving his district for 28 years, was savaged by anonymous campaign cash for “betraying” coal, and ousted in 2010). Corporations did not lead an ad campaign in support of the bill, as the drug industry had done for healthcare reform.
House leaders had hoped that by crafting the hard compromises themselves, they would smooth the path to passage in the Senate, which typically requires a supermajority of 60 to let legislation receive a final vote. At the time, the Senate included 18 Democratic senators from the top coal-producing states, plus a few more Democrats from key oil-producing states. Failing to win their support meant failing to win a simple majority, let alone a supermajority.
Instead, the compromises the House made were ignored. Coal and oil companies lambasted the bill, while corporate supporters were not vocal. The bill was smeared as a liberal wish list that would tax everyone and destroy jobs. Several right-leaning Democratic senators panned the bill upon House passage, and it was treated as dead on arrival.
But three months after the House passed its bill, Republican Sen. Lindsey Graham (S.C.) resurrected the possibility of a carbon cap by penning a New York Times op-ed with Democratic Sen. John Kerry (Mass.), announcing a preliminary compromise that linked a cap on carbon with expanded nuclear power and oil drilling — the twin bogeymen of the environmental movement, but also corporate constituencies that had not needed to be wooed to win majority support in the House. Expansion of offshore drilling would help secure the votes of right-leaning Democratic senators in Louisiana and Virginia, at least. Graham’s support held out the possibility that some Republican senators could be enticed by the prospect of bringing federal dollars home to create nuclear industry jobs.
The biggest environmental organizations such as the Sierra Club and the Natural Resources Defense Council — which had already embraced the compromises made in the House — praised the op-ed, signaling to Senate negotiators that they would accept additional concessions on nukes and oil. As distasteful as those sources of power are to environmentalists, averting a planetary climate crisis is the No. 1 goal for all of humanity. Would it matter if there are a few more offshore oil wells, when overall greenhouse gas emissions would go down enough to save us from global warming?
Logic trumped emotion. But only to a point.
These environmental groups let Senate negotiators know they were willing to provide support for an eventual compromise that also attracted support from nuclear power companies and oil companies. However, they never communicated to their memberships that such a compromise would be necessary to win Senate passage, and that they were working diligently to achieve it.
By the spring of 2010, Sens. Kerry and Graham, along with independent Sen. Joe Lieberman (Conn.), did hammer out that compromise. They secured endorsements from some oil companies to back a bill capping carbon emissions, for the first time ever. They persuaded the main oil lobbying group, the American Petroleum Institute, to refrain from spending money attacking the bill. They made plans for a major public announcement on April 26 showing the breadth of the liberal-corporate coalition behind capping carbon — with oil company executives standing on the stage alongside environmental leaders.
Then, six days before the planned announcement, one of those oil companies in the coalition began to spill millions of barrels of oil into the Gulf of Mexico.
And everything fell apart.
The provision to increase offshore oil drilling suddenly became politically toxic, with environmentalist senators from New Jersey and Florida threatening to withdraw support. Graham withdrew his public support for the bill he helped draft, partly because it was no longer the right political moment to expand drilling. The press conference was postponed until the next month. BP and Shell still offered support, but only via written statement, because it was no longer politically advantageous to have them up on the stage.
Meanwhile, environmental groups, instead of coolly explaining to their memberships — both before and during the oil spill — that they had an ally in BP and other oil companies to pass monumental climate protection, reverted to form. They hoped to channel public anger into a teachable moment that would transform the political dynamic, reducing the need for corporate compromise. If BP could be demonized enough, the public would rise up and hesitant senators would be compelled to embrace green legislation.
The oil industry also retreated to its usual corner, spending its energies defending the practice of offshore drilling and doing nothing to advance the compromise following its unveiling.
By the end of the Gulf gusher, BP was plenty hated by the public. But the public did not connect that hatred to the need for passing the Kerry-Lieberman bill. And not one undecided senator moved to embrace it. Despite one of the biggest environmental disasters of all time, the attempt to change the political dynamic in the Senate without the assistance of the corporate community went nowhere.
After seeing the history of how liberal reforms pass when they attract corporate support — as with FDR, LBJ, and Obama — and falter when they stoke fervent opposition — as with Bill Clinton and health care, or Jimmy Carter and energy — ask yourself this question: Would things have been different if the liberal-corporate coalition held after the spill?
Instead of what proved to be a wasted effort to ramp up anger at BP and connect it to cap-and-trade, environmental groups could have offered a strategic olive branch to BP and its fellow oil companies: a negotiated package of drilling safety regulations and an even stronger oil company campaign for the Kerry-Lieberman bill, in exchange for the environmental groups vouching for BP — and not excoriating it — as serious about being part of the climate solution.
At the point of maximum negotiating leverage, environmentalists walked away from the negotiating table to chase the fantasy of a popular uprising. A clearer understanding of the history of liberal reform might have prevented this fatal mistake.
We have to get back to where we were on April 20, 2010, with a deal in hand that the broadest possible coalition — one that defuses opposition from the oil lobby — can heave over the finish line. A stronger movement can help, but only if it strategizes with that pragmatic goal in mind, and if it is prepared to seize the moment when the opportunity for a deal presents itself again.