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  • AntoineR

Thoughts on climate lobbying

(These notes were taken after attending: 'Positive' Corporate Climate Lobbying at the LSE)

What is Lobbying?

Lobbying is the transfer of information in private meetings/venues between special interest groups and public officials. (Note: “money being transferred” is not part of the definition)

  • Lobbying plays a role in forming policies. Policymakers welcome private sector feedback and “expertise of the ground”. Businesses can help design meaningful policies.

  • Lobbying also has a bad side. It's too opaque (happens behind closed doors) and there is too much asymmetry among the pool of potential lobbyists, which has a distorting effect on democratic structures.

Why would companies engage in 'positive' climate lobbying? TL;DR: Self-interest. 'Positive' climate lobbying allows to:

  • Lock-in a competitive advantage. E.g. companies having already developed a mature technology and having a deployment strategy to transition to a sustainable economic model may want to lock-in their advantageous position by engaging in positive lobbying.

  • Level the playing field. Companies leading the way in sustainability may incur frictions that can translate in higher prices. These business frictions may lead them to be penalized by investors.

  • Avoid a "cliff edge" scenario. Companies know CO2 and other greenhouse gases emissions need to be cut. Engaging proactively in the transition is a way to lower long term uncertainty.

  • Be more competitive in an increasingly tight job market, and avoid reputational damage to the brand.

Interestingly, the study of lobbying structures reveals a free rider problem.

  • Lobbying is costly, big laws generally affect lots of economic actors. Every member in a specific market has an incentive to free ride on others, i.e., let competitors pay for the cost of lobbying for the whole industry and benefit from the results

  • Large corporations are a small class of actors that have the most incentives to overcome this free rider situation. This is not good news for the climate since they generally want to set a regulatory framework and shape an economic environment that allows them to maximize their capital accumulation objectives (which are at odds with the climate agenda).

Ok, so, is there a 'good'/climate 'positive' form of lobbying? Well, it's hard to say, because:

  1. We don't always know what exactly is being lobbied for.

  2. Most companies have moved past the “climate denial” point. While not denying anymore, they may still use “delay tactics” to lobby for small transitional changes, just enough to limit damages to their brands, instead of aligning with the climate emergency we face, and taking more drastic action, like re-thinking their business models.

  3. It's hard to measure and assess climate lobbying when we don’t know yet what the best technologies are.

  4. More transparency is still needed, we don't know what happens behind closed doors.

  5. There are issues with companies doing 'positive' lobbying in some jurisdictions but lobbying against climate action in other jurisdictions.

A way to overcome these challenges is to try to benchmark policies and (visible) lobbying activity against IPCC reports to hold companies accountable. Such benchmark has been produced by the think tank InfluenceMap (see LobbyMap).

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