Here’s the basic shape of the environmental policy debate I’ve grown pretty used to:
SOME DEMOCRATIC POLITICIAN OR BLOGGER AT THINKPROGRESS: “Conservatives oppose Environmental Regulation X because they’re shills for industry.”
ME: “Isn’t it relevant that General Electric, Duke Energy, Alcoa, and Goldman Sachs all support Regulation X.”
SOME LIBERAL WASHINGTON POST, SLATE, OR THINKPROGRESS BLOGGER: “Why does it matter who’s profiting? Stop playing guilt-by-corporate-association!” [See here, here, or here for a few examples.]
This “Shill! GE. Irrelevant!” dance is tiring for obvious reasons. But at least it gives me a chance to address why it’s important to discuss who is benefitting. I’m not just trying to defuse the “Oil Shill!” argument. I’m trying to illustrate the negative effects of the legislation, and pointing out who benefits and how can often illustrate this very well.
Today’s example comes from Alcoa’s earning statement:
Alcoa, of course, has long lobbied for stricter fuel-economy standards — and long celebrated the upward pressure these regulations impose on aluminum demand. Here was Alcoa’s CEO in 2010:
So, the neoliberal response at this point is: Good for Alcoa, if they can make money off regulations that help the planet! Environmentalism and Capitalism! What’s not to love?!
But Alcoa’s benefits have real costs. First, Aluminum car frames cost more than steel car frames. Consumers are denied the low-cost alternative when steel car frames are, effectively, taxed. But Alcoa’s role — and aluminum’s role — in the fuel-economy debate also shows us how this “environmental” legislation might not be as environmental as its supporters make it out to be.
The process of mining aluminum and getting the pure element out of the rocks is incredibly energy intensive. The currently dominant process also includes a chemical reaction which necessarily gives off very potent greenhouse gasses.
So, while it reduces a car’s pollution and GHG impact to have more aluminum in the frame, the total footprint of aluminum in a car, versus steel, is less clear. But regardless of the environmental effects of the regulations encouraging more aluminum in cars, the profit effect on Alcoa is clear.
