The Exxon Climate “Victory”

Ten days ago, the President of the United States decided to withdraw from the international Paris Accords. And in typical Trumpian fashion, the news overshadowed all other climate change news that occurred during that time.

But just one day before the President’s announcement, ExxonMobil held its Annual Meeting of Shareholders in Dallas, Texas. Of the thirteen shareholder proposals that were submitted for consideration, the twelfth was a proposition that the firm publish an annual assessment of its ability to meet the Paris Accord’s climate change targets. Exxon management formally recommended that its shareholders vote down the proposal.

But guess what? The shareholders voted to approve it! New York State Comptroller Thomas DiNapoli, who played a key role in the battle, proclaimed that “this is an unprecedented victory for investors in the fight to ensure a smooth transition to a low carbon economy.”

Is it actually a victory, though? Feel free to skim the original proposal on pages 62 and 63 of the Meeting Materials. Then skim Exxon’s formal recommendation on pages 63 and 64. Is it clear to you what DiNapoli and his supporters actually gained from the vote?

In essence, their proposal asked the firm to publicly disclose the impact of the Paris Accords on Exxon’s portfolio of energy assets. It then provided a fair amount of descriptive detail about what they have in mind.

Then Exxon responded that it already publishes equivalent information for public use. In turn, it also provided a fair amount of descriptive detail about the content of its publications, even though it didn’t address the proposal on a point-by-point basis.

So what was the outcome of this legal process? On the one hand, the shareholders of Exxon have approved a proposal to require the firm to disclose meaningful climate change information to the public. But on the other hand, Exxon has asserted that it already does so.

Given the President’s announcement about Paris, it is certainly understandable if environmentalists believe that any victory warrants a celebration. Nevertheless, if this truly represents “an unprecedented victory … in the fight (for) a low carbon economy,” they’re in for a very long fight.

Paris Unbound

Why would the United States, a nation that claims to be “the world’s leader in environmental protection,” withdraw from a global forum that would showcase its impressive success?

Is it because its President doesn’t really believe that the United States leads the world in environmental protection? That’s not a plausible explanation. President Trump made that statement very convincingly when he announced his decision to withdraw from the Paris Accord. He then elaborated by saying:

“The United States, under the Trump Administration, will continue to be the cleanest and most environmentally friendly country on Earth. We’ll be the cleanest. We’re going to have the cleanest air. We’re going to have the cleanest water. We will be environmentally friendly …”

So why would he withdraw? Is it because the Agreement would legally bind the United States to economically disadvantageous obligations? He did make those claims, but he also referred to those very constraints as non-binding in nature.

Oddly enough, “non-binding” wasn’t the word that Republican Senator Mike Lee of Utah employed to explain why he supported President Trump’s withdrawal decision. To the contrary, Lee said that “… we can’t give excessive, unfettered power to a president to act alone, to bind an entire country to a set of principles, a set of rules that the president … makes.”

Lee was actually referring to former President Obama and not President Trump. He was arguing that Obama inappropriately signed the Paris agreement, and bound the United States to its terms, without the approval of the Republican Congress. According to Lee, “… we have to get back to the fact that this power, the power to enter into binding international agreements, this is a shared power.”

Clearly, there is a fundamental contradiction between Lee’s description of the Paris pact as binding and Trump’s description of it as non-binding. And making this contradiction even more confusing is the fact that the European Commission — which strongly supports the Paris Accord — also refers to it as a legally binding agreement.

So which is correct? Does the Paris agreement bind its signatory nations to its terms? If it does, then even a nation that considers itself “the world’s leader in environmental protection” may feel justified in withdrawing if those binding requirements are onerous in nature.

The answer to this question can be found in the European Commission’s description of the Agreement. Apparently, the Paris Accord binds all nations to set long-term goals, to report to each other on their progress, to strengthen their societies, and to acknowledge the need to cooperate with the international community. But it contains no verification, enforcement, or punishment mechanisms at all.

In other words, the Paris Accord only binds nations to act in good faith while attempting to reduce their greenhouse gas emissions. It doesn’t otherwise bind any one to any particular course of action. That’s why many experts refer to each nation’s greenhouse gas reduction goal as a “… voluntary pledge to reduce emissions …”

With this in mind, let’s return to our central question. On PBS NewsHour, Senator Lee proudly promised that the United States “… will proceed … as a global leader in environmental regulation. We are a global leader in the rule of law. We have brought down emissions in this country through our legal system and through technological innovation.”

So why would America walk away from an international forum that would recognize its success? A pact that isn’t legally binding in any meaningful sense, other than the sense that it binds the United States to continue to try to maintain its position as a global leader?

If the true underlying rationale for withdrawal is not legally motivated, or economically motivated, or environmentally motivated, it may well be politically motivated. In other words, America’s toxic political system may be the driving force behind its President’s decision to “unbind” the nation from the non-binding Paris Accords.