Obama Will Approve Keystone — What Then? An Energy And Innovation Agenda Both Sides Could Support

Submitted by Bill Shireman

By Bill Shireman

Environmentalists hope President Obama will kill the Keystone XL pipeline. But privately, many expect to lose this battle. They worry: what’s next for the movement?

Win or lose, the next step needs to include a bold left-to-right alliance that unites the two halves of the sustainability movement: economic and social/environmental sustainability.

Conservatives are right: as a nation, we are out of money and deep in debt. Progressives are also right: we cannot pay off our debt by extracting it from the poor, the middle class, or the environment. But because the political process leaves them no other choice, the solution each offers makes the problems worse.

Drill And Spend No Solutions

The right’s solution is to drill baby drill – and liquidate our ecological capital. The left’s solution is to spend baby spend – and liquidate our financial capital. The solution of vested interests – corporations, unions, professionals, governments – is to do both. They like both the right and left agendas – more drilling and more spending. 

The combination of drill-and-spend just reinforces yesterday. It locks in status quo interests. That’s because the past has powerful lobbyists, but the future has almost none.

In Washington D.C., right now, there are probably 10,000 meetings happening, where advocates are figuring out how to play the left and right against each other, to get one little policy advanced. They play the left and right against each other all the time – it’s second nature. Here’s how they do it.

Manipulating The Partisan Agenda

To hook the right, they play the conservative narrative: government power is running amuck. We need free enterprise to save us. Here’s how you can support free enterprise: oppose these mandates, and support these giveaways. 

To hook the left, they play the progressive narrative: corporate power is running amuck. We need democratic government to save us. Here’s how you can support democratic government: support these handouts and these mandates.

But there is a big difference between private enterprise and entrenched corporate power. And there is a big difference between democracy and entrenched government power. 

The left thinks this is all done by Charles Koch and a small powerful group of corporate conspirators. The right thinks it’s all a plot by George Soros and big government socialist conspirators. But it’s not.  It’s done by us – not as a whole, but in all our parts.

Parts of us are represented really well in D.C.  The companies, unions, professional and governmental groups that we work for or depend on – these parts of us are all well represented.

The gun lobby is the most visible to play the game right now. To hook the extreme right, they play the “government is taking over” narrative – and attach that fear to even the most sensible ideas, like background checks. To hook the left, they give them an alternative corporate demon: video game manufacturers.   

But the same game is played by “good guys” and “bad guys” in every field – associations of teachers, doctors, nurses, hospitals, energy, finance, insurance, homebuilders, veterans, lawyers, consumers – hundreds of groups, all representing us – pieces of us – legitimate interests. 

The base on the left and right don’t intend for this. But because they are fighting each other, this is what they get.

Future 500 And The Innovation Agenda

Now, we’re not saying we shouldn’t ever drill, and we shouldn’t ever spend.  If we’re smart in how we do it, we’ll be drilling and spending for hundreds of years. But what we need to do even more is to innovate – to actually create value.

Drilling and spending are both ways to liquidate value, and spend our wealth. They are okay, only if we are also restoring that wealth and well being, banking it.  That takes not just conservation but also innovation.

Future 500 is engaging business, social and environmental stakeholders, to craft a very simple agenda for doing that. We call it The Innovation Agenda: seven policies that, according to McKinsey Global Institute and others, would pay off both our ecological and economic debts, and restore genuine, economically and environmentally sustainable growth. 

The policies are not yet politically realistic. But they, or something like them, will be, because over time, the necessary always becomes possible. Barriers to change ultimately fall, sometimes in time, sometimes too late. 

The Question Is: When Will We Be Ready?

We believe we’re ready right now. Our polls show there is a plurality on the left and the right – and even within the corporate, labor, professional, and government sectors – who support these changes.  But the institutions that represent these parts of us are often slow moving.

These interests need to be able to come together across institutional and ideological borders, to work together. That is why Future 500 is helping to bring them together, behind a seven-part Innovation Agenda:

1. Set a National Innovation Goal: Increase the productivity of energy, materials, and carbon by four per cent, every year.

2. Stop Taxing Jobs and Prosperity: Cut payroll and income taxes on both individuals and corporations.

3. Wind Down Resource Subsidies: Shift to real prices for energy, water, and food. This won’t increase real prices – it will reduce them.

4. Drive Radical Efficiency: Especially through information, telecommunications, and smart materials – which can deliver ten-fold gains.

5. Tax Pollution, Not Prosperity: Put a price on fossil fuel pollution, set at the rate that will drive the four percent annual resource productivity gain. Make the net cost zero by cutting taxes on prosperity in various forms: payroll, income, and profits.

6. Use Border Adjustments to Cut Taxes More: Apply the same price on pollution to imported goods – including oil imports – so the price on domestic pollution does not inadvertently subsidize China, Venezuela, or Iran. Use 100 percent of the proceeds to cut other taxes.

Finding the Political Will To Succeed

An agenda like this could drive a resource revolution in the U.S., based on McKinsey data. As other nations follow our lead, it could help the world meet 30 percent of its total resource needs in 2030, and cut projected oil demand by up to 27 million barrels a day, reducing global climate risk.

The bad news is that to achieve these gains, we need a massive increase in one extremely scarce resource: political courage and collaboration. Government and its industrial-era partners on the right and left must unwind more than $1 trillion in global subsidies that supersize energy, agriculture, water, and other resource consumption beyond sustainable levels.

That investment will pay off nicely. McKinsey projects a $3.7 trillion annual gain in global prosperity, through a combination of a $30 per ton carbon price and removing key subsidies. From 70 percent to 90 percent of the productivity investments have an internal rate of return of over 10 percent.

But it won’t happen now. In the marketplace, low prices on quality products generate the fastest sales. In politics, the opposite is true. The best policies – the ones that cost little and accomplish much – don’t sell as quickly as the expensive ones, those that pass money around to a long list of dependents. The political process deadlocks. In deadlock, the status quo has the advantage in power.

But there is a way out.

Boosting the Business Lobby For Change

That brings us to Innovation Agenda Number 7:  Business and NGO’s need to lobby for the future. 

Specifically, corporate leaders need to break open their government affairs silos. Right now, the purpose of government affairs is to insulate operations from potential effects of legislation or regulation. This is the biggest driver of anti-corporate activism on the planet. It ties the company so fundamentally to the past that, over time, it sets it up for collapse.

Activists need to change their practices too. They have been too shy about pressing companies to collaborate to change public policy. Activists have the capacity to motivate companies to advocate policy that is good for the public. Companies don’t fear the capacity of activists to pass federal legislation. They do fear their capacity to spoil consumer acceptance of their brands. Activists should use this power, with integrity. 

Inside corporate America, there is wide understanding that the political system is broken, and that corporate government affairs practices are part of the reason. But internal politics make it difficult to change. More than one executive has asked me to help activists encourage companies to make their political and operational commitments consistent – to use their political power to create a level playing field in which social responsibility is consistent with profitability.

It is time for corporate and NGO leaders to engage on a higher plane. As former global Shell chairman Mark Moody Stuart said, CEOs and environmentalists need to walk into Congressional offices together, and place their joint proposals on the desks.

If politicians won’t lead, we need to.

The past and present are well-represented in Washington D.C. and all state capitals. But the future is not. It needs a good lobbyist, and a powerful coalition that crosses all the borders, and represents us whole: business, labor, professionals, government – not as we are, but as we can be, together.