Thursday, December 13, 2018

Auto vs. Oil Industries on Emission Standards: Putting a Part Above the Whole

When a company or an entire industry skips over the good of the whole—the public good—in lobbying for legislation that only reflects the needs or desires of individuals (qua consumers only), the society itself (and even the Earth) is slighted and thus more at risk. For the good of the whole is more than just the cumulative needs and desires of individuals in part because the latter do not take into account the wider effects of their choices. When an individual company or industry takes this point into account and rebuffs favorable legislative proposals because they would do too much damage to society and/or the planet, social responsibility is at hand. Companies or industries that do not are thus irresponsible from the standpoint of the whole, which, through government, is justified in keeping an eye on them (especially in making transparent their efforts to influence legislation and regulation. The American auto and oil industries can be distinguished in this regard.
“When the Trump administration laid out a plan” in 2018 that would have eventually allowed “cars to emit more pollution, automakers, the obvious winners from the proposal, balked. The changes, they said, went too far even for them.”[1] Too far even for the obvious winners—an amazing statement, considering that companies and industries generally try to get as much as they can in terms of deregulation and favorable laws.
Another industry, however, fueled by the efforts of Marathon Petroleum, “was pushing for the changes all along.”[2] The campaign’s main argument “for significantly easing fuel efficiency standards” was “that the United States [was] so awash in oil” that energy conservation need no longer be a worry.[3] This statement blatantly misses the point that the standards that were in place then were also to reduce emissions of CO2 from what they would otherwise have been from entering the Earth’s atmosphere.
Interestingly, the American oil industry must have missed the memo on the continuing increases in the emissions.
In fact, 2017 saw a record amount of emissions added to the atmosphere; the Paris Accord in 2015 was already proving to have been a failure.  Issued in early October, 2018, a “landmark report” from the UN’s Intergovernmental Panel on Climate Change “paints a far more dire picture of the immediate consequences of climate change than previously thought.”[4] The report states that if “greenhouse gas emissions continue at the current rate, the atmosphere will warm up by as much as 2.7 degrees Fahrenheit (1.5 degrees Celsius) above preindustrial levels by 2040, inundating coastlines and intensifying droughts and poverty.”[5] This was the context in which the oil industry was running “a stealth campaign to roll back car emissions standards.”[6]
The industry’s rationale reduced everything to the needs and desires of individual customers with no consideration of the impact on even them, not to mention humanity—including possibly its very survival. “With oil scarcity no longer a concern,” Americans should be given a “choice in vehicles that best fit their needs,” read a draft of a letter that Marathon helped to circulate to members of Congress over the summer. Official correspondence later sent to regulators by more than a dozen lawmakers included phrases or sentences from the industry talking points, and the Trump administration’s proposed rules incorporate similar logic.”[7] Of course, that a “quarter of the world’s oil is used to power cars, and less-thirsty vehicles mean lower gasoline sales” was not missed on either Marathon or its industry as a whole.[8] But the notion of a whole apparently stopped at the industry level; externalities beyond that, even one bearing on the future of mankind, were apparently of no concern.
Marathon Petroleum even “teamed up with the American Legislative Exchange Council, a secret policy group financed by corporations as well as the Koch network, to draft legislation for states supporting the industry’s position. [The] proposed resolution, dated Sept. 18, describes [the then] current fuel-efficiency rules as ‘a relic of a disproven narrative of resource scarcity’ and [urges that ‘unelected bureaucrats’ shouldn’t dictate the cars Americans drive.”[9] The resolution’s language doubtlessly included the council’s talking points, which, in staying on the “resource scarcity” rationale for standards, neglect the obvious link between emissions and climate change. Furthermore, the smack on “unelected bureaucrats” demonstrates no regard for government as standing for the interests of the whole when externalities from cumulative individual decisions are too much from the perspective of the whole. To be sure, with industries swaying legislators and regulators in democracies, laws and regulations can indeed benefit a part at the expense of the whole, but this deplorable flaw does not negate the need to protect the whole from parts from exploiting conflicts of interest. Unlike the auto industry, the oil industry sought to exploit its conflict of interest by putting its narrow interest ahead of that of the whole where the whole supposed to be paramount—in the halls of government.
I suggest, therefore, that heightened scrutiny is warranted where a company or industry (or the business sector—still but a part of the whole) seeks to influence lawmakers, regulators, or the general public in line with the private (profit) interest. This is especially needed in a culture that is generally in line with its business sector’s values. People and government officials alike in such a culture (such as that of the U.S.A.) find it difficult to realize the need to see that such conflicts of interest are not exploited. In fact, in my book, Institutional Conflicts of Interest, I argue that a conflict of interest is inherently unethical even if it is not exploited. A few other scholars on the subject argue in contrast that if a conflict of interest is not exploited, no harm is involved, but I contend that another reason exists why arrangements or situations that include conflicts of interest are unethical. I actually met one of those scholars on the Loyola campus in Chicago, but once in his office, I found he only wanted to talk about Obama. So much for scholarly exchanges.



1. Hiroko Tabuchi, “The Oil Industry’s Covert Campaign to Rewrite American Car Emissions Rules,” The New York Times, December 13, 2018.
2. Ibid.
3. Ibid.
4. Coral Davenport, “Major Climate Report Describes a Strong Risk of Crisis as Early as 2040,” The New York Times, October 7, 2018.
5. Ibid.
6. Hiroko Tabuchi, “The Oil Industry’s Covert Campaign to Rewrite American Car Emissions Rules,” The New York Times, December 13, 2018.
7. Ibid.
8. Ibid.
9. Ibid.