Why IT > Climate advocacy
ICT vs Fossil Fuels: Who is leading the New Industrial Revolution?
ICT companies have a central role to play in the creation of an entirely new platform of how we produce, deliver and use energy.
Just as the power of the internet has made millions of new video producers, journalists, and authors, ICT energy technologies have the potential to create a decentralized system of energy production, paving the way for a significant increase in renewable energy and putting the end consumers in better command of their electricity use.
Such a dynamic new energy platform has the potential for unlocking tremendous energy savings and the creation of thousands of new clean energy companies, significantly reducing pollution while creating millions of new jobs.
Energy Revolution vs Orderly Transition?
The scientific urgency of climate change demands that we need a clean energy revolution, not a slow transition. Changing the status quo will require strong government leadership and transformative new policies to drive the shift to a low carbon energy economy. While the recent surge in smart grid technology and ICT-electric utility partnerships are an important beginning, simply making the current dirty energy platform smarter or more modern is not enough to reach the level of reductions needed. We need a revolution in how we produce and consume energy.
The good news for the IT companies, a revolution not only provides for a healthy planet, but tremendous business opportunities, but it will require strong government leadership to make it happen. This story is one quite familiar to the IT industry, which itself benefited from the adoption of strong government standards to allow the industry to grow beyond the domain of a select few companies to become a new platform of entrepreneurial innovation and job creation.
Match Up: ICT vs Energy Companies
The shift to an ICT enabled low carbon energy system is not going to happen without a fight. As we have seen with the other sectors that have been transformed by ICT technologies, long standing business models have been laid to waste (e.g. music, newspaper, land-line telephone).
Differently from the other sectors the IT industry has transformed, the energy sector is the much larger, more entrenched, and far more politically powerful. Fossil fuel energy companies have benefitted enormously from the status quo, and are at best interested in a slow transition in order to maximize their profits and investments (i.e. electric utilities), and at worst willing to fight to the death any policies that would significantly reduce demand for their primary product (ie:oil and coal companies).
The biggest battleground for a clean energy revolution is being fought this year in in the U.S. Congress, where the level of reductions adopted not only set the level of transformation in the United States, but also have a direct impact on the goals being set this December in Copenhagen.
While big energy companies are long known for their ability to wield political power in Washington, D.C., the political power of ICT companies has increased significantly in the past 10 years, as its economic footprint has grown dramatically and political donations have increased. Though fossil fuel companies are more powerful politically in terms of dollars to U.S. political system, ICT companies can provide some of the strongest evidence of how environmental performance is also good business, as highlighted by ICT companies occupying 9 of the top 20 slots in Newsweek's Fortune 500 Green Index.
| Key Companies | Employees | Annual Revenue | Fortune 500 Rank | Newsweek "Green" Rank |
| Cisco Systems HP IBM Microsoft | 66,000 20,000 321,000 398,000 91,000 | $39,540M $21,795M $118,364M $103,630M 60,420M | 57 117 9 13 35 | 12 79 1 5 31 |
| Duke Excelon FPL PG&E | 18,000 19,000 14,000 21,000 | $13,212M $18,859M $16,410M $14,628M | 204 134 154 176 | 490 329 447 66 |
| AEP Chevron Exxon Mobile Southern Company | 21,000 66,000 104,000 26,000 | $14,442M $263,159M $442,851M $17,127 | 180 3 1 149 | 494 371 395 492 |
Round 1: House of Representatives Climate & Energy Legislation
U.S. President George W. Bush steadfastly opposed any attempt at the national level to put mandatory controls on greenhouse gas emissions, or to put a price on carbon pollution. But as mandatory climate legislation was set as a top priority of the Obama Administration, passage of mandatory climate legislation was finally possible.
The legislative debate started with strong potential for setting a meaningful standard for reducing greenhouse gas pollution and kickstarting an economy wide transformation of the U.S. energy system from production to consumption. Yet despite ICT industry analysis that identified putting a price on carbon was an essential policy change in order to spur innovation and drive the deployment of "smart" energy technologies, US ICT companies did not use their political influence and access to demand stronger government the targets and energy standards needed to drive the clean energy revolution analysis.
| Lobbying Expense 09 | Campaign Contribution 2008 | Energy Lobbying Reports | ACES Lobbying Reports | |
| Cisco Systems HP IBM Microsoft | $1.2M
$3.3M $2.7M $4.4M $5.7M | 1.4M 1.6M 1.1M 1.1M 3.3M | 1 8 2 2 1 | 0 1 2 1 2 |
| Duke Excelon FPL PG&E | $4.6M
$3.6M $2.5M $5.3M | $685k 1.3M $879K $385K | 14 6 10 4 | 5 4 3 3 |
| Exxon Mobile Southern Company Chevron US Chamber of Commerce |
$20.7M
$10M $15.5M $65.2M | $1.4M $1.1M $1.1M .... | 11 25 12 4 | 7 9 4 3 |
Note: Lobby Figures are through 3Q 2009. Everything else is just through 2Q 2009
With the exception of Google, ICT companies at best only weighed in on narrow areas of the legislative battle, such as standards for appliance efficiency and the smart grid, but were silent on fundamental question of the pollution reduction targets, which help define how soon and how ambitious the transformation will be. By comparison, major companies in the fossil fuel industry along with the US Chamber of Commerce were leading the charge to kill the legislation.
In absence of a strong clean energy business voice, the policy debate was instead framed by the utilities and other large polluters who want a slow transition that will largely persevere their market share. The American Clean Energy and Security Act (ACES, H.R. 2454) which ultimately passed the U.S. House was substantially weakened, and would at best push a slow transition, not drive the price on carbon pollution that would drive a revolutionary demand for clean energy technologies, and at worse delay such a transition for another 10 years.
Related: Detailed scoring of IT companies' climate advocacy
Round 2: U.S. Senate Climate Legislation
Perhaps after seeing what happened in Round 1, there has been some increased political advocacy by ICT companies in the lead up to the introduction of climate and energy legislation in the U.S. Senate, but the efforts still pale in comparison to that of the energy companies, who remain "all-in" to define the policies in way that will benefit their bottom line.
The CEO's of many key energy companies have spoken passionately on the need for climate solutions, but ultimately what they advocate for is a slow transition with continued centralized energy production, not a clean tech revolution.
The Senate debate is a critical opportunity for ICT CEOs to step forward and put their political influence behind strong targets and clear standards that will deliver the clean energy economy.
Signs of Splits within Business Community
One important development since the debate in the U.S. House in the spring has been increasing signs of a more visible split in the U.S. business community, including among different energy sectors. This has been driven in part by the egregious efforts by the U.S. Chamber of Commerce, who has been leading the effort to block the Obama administration or the U.S. Congress from taking action to address global warming. This has prompted several corporations, including several utilities to either resign or rebuke the Chamber's climate advocacy.
Despite a clear difference between the most ICT companies climate policy and that of the U.S. Chamber, Apple Computer is the only ICT company who has made it crystal clear that they do not represent their views on the issue, and resigned their membership.
Learn more about the campaign, more ways that you can get involved, and how to stay informed.