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A Defeat for Climate Change’s Unholy Alliance

October 27, 2017

A coalition of crony capitalists and climate alarmists are fighting President Donald Trump's climate deregulatory agenda.

The howls of dissent in the United States when President Donald Trump withdrew from the Paris climate agreement on June 1 came from an unholy alliance between environmental activist groups, who argue the world is doomed if carbon dioxide emissions are not eliminated, and major American industries that emit greenhouse gases but expect to profit under the agreement.

Under the Paris agreement, nations promise to limit their emissions and are supposed to develop domestic laws to achieve those reductions. In addition, new technologies intended to improve energy efficiency or reduce carbon dioxide emissions are to be shared without charge. The supposedly voluntary agreement all but gives control of the U.S. economy to unaccountable United Nations bureaucrats while requiring the United States to donate $3 billion to the United Nations Climate Action fund by 2020, $1 billion of which former President Obama already paid from your taxes.

What is going on here?

Economist Bruce Yandle described the process in a 1983 article in Regulation magazine: “Bootleggers and Baptists: The Education of a Regulatory Economist.”

Adam Smith, in his 1787 book known as The Wealth of Nations, cautioned businesses and politicians would promote policies they say are in the public interest but which in reality promote their own interests. Yandle took this a step further, saying the public should watch out when groups with apparently naturally opposing interests support the same outcomes.

Bootleggers, Baptists, Blue Laws

Churches supported Blue Laws banning the sale of alcohol on Sunday, hoping to eliminate drinking on that sacred day and increase church attendance. Yandle, however, recognized bootleggers also supported Sunday Blue Laws, pulling political levers behind the scenes to support “dry Sundays” because it would give them a monopoly on liquor sales one day a week.

In subsequent articles and a book, Yandle expanded on his observation, describing the phenomenon as a two-pronged attack, with Baptists staking out the moral high ground, serving as the public face for regulation, while bootleggers, standing to profit from the regulatory scheme, worked in secret with the political machine, applying influence and money.

Politicians win in these situations. They pose as being motivated purely by the public interest, while promoting the interests of people with money who help them get reelected.

Crony Capitalism

The modern label for the Bootleggers and Baptists coalition is crony capitalism.

Crony capitalism is just a limited form of socialism, in which government and industry combine efforts to produce economic and political outcomes to their liking. Industry supports government regulations, purportedly to protect human health, worker safety, or the environment. Big businesses can afford to comply with these regulations, but their smaller competitors can’t. The regulations limit competition and consumer choice while increasing the costs of goods and services.

The industry and environmental lobbying groups who railed against Trump’s decision to pull out of the Paris climate agreement are a contemporary example of this unholy alliance. Environmental activists joined forces with Fortune 500 companies to impose restrictions on carbon dioxide emissions that would deprive people of natural resources necessary to improve their lives through inexpensive energy provided by coal, natural gas, and oil.

The two groups’ support for this agreement is premised on the false belief carbon dioxide harms individuals, societies, and the environment.

Some Corporations Benefit

In the summer 2017 issue of Perc Reports, Yandle describes how firms such as Microsoft, Apple, Siemens, and the Swiss multinational ABB Group expect to benefit under the Paris climate agreement. These companies are involved in software development for electric cars or improving efficiency for electrical machinery to reduce energy consumption. The restrictions imposed under the Paris agreement would not be nearly so difficult for their plants to comply with compared to the plants of their competitors, who might have to purchase technologies from them to stay in business in a carbon-restrained world.

In addition, Yandle writes, many of the Paris-driven restrictions on energy use would raise barriers to the entry of new businesses into markets these companies dominate. And to top it off, these businesses also benefit from taxpayer subsidies; government mandates for the purchase of their products; taxpayer-backed, government guaranteed low-interest loans; property tax abatements; and tax credits for those who purchase their products.

Big business wanted Trump to keep the United States in Paris so they could design the regulations in ways beneficial to them and to the detriment of their commercial competitors and the public.

Crony Capitalism, Climate Fraud

As Yandle and others have explained in detail, crony capitalism is not new, so no one should be surprised it reared its ugly head during the debate over U.S. withdrawal from the Paris agreement.

What is different this time is, for the first time, the common man had a champion, President Trump, who had the foresight to call on The Heartland Institute and others to demonstrate the truth of his argument the catastrophic anthropogenic climate change alarm is a fraud. Against the wishes of the aforementioned companies, his Secretary of State, and even his own family members, Trump recognized the irrefutable science presented to him by The Heartland Institute and allied organizations.

As evidence of the influence Heartland’s work had on Trump, Heartland President Joseph Bast was asked to be present in the Rose Garden when Trump announced the United States was pulling out of the Paris agreement. For once, the bootleggers and Baptists had been defeated, and freedom rose.

Jay Lehr, Ph.D. (jlehr@heartland.org) is science director of The Heartland Institute.

Author
Jay Lehr, Ph.D. is the science director at The Heartland Institute.
jlehr@heartland.org