from masterresource
Author: Robert Bradley Jr.
This week, a Hall of Shame business memo turns a quarter of a century old. The document was written by Enron lobbyist John Palmisano in Kyoto, Japan, on December 12, 1997, following the signing of the Kyoto Protocol agreement.
Global green planners are ecstatic; Somehow, anywaythe world has begun an irreversible process of climate control (and industrial and land use control). But the Kyoto Protocol predictably failed, the 2015 Paris climate agreement is in jeopardy, and the recent failure at COP27 makes prospects for COP28 look bleak.
Palmisano's memo cited the benefits of pioneering a “green” Enron. In fact, Anlon has at least six profit centers related to CO2 pricing, and seven if CO2 is capped and traded. The story of Enron as a darling of left-wing environmentalists has been told widely elsewhere.
this washington post This memo was broken shortly after Enron collapsed, showing that Enron was “[Enron] The chairman worked with the Clinton White House to push the company's agenda. In fact, as Jeremy Leggett said in “The Hydrocarbon Industry,” Enron was “the company most responsible for triggering the greenhouse civil war in the hydrocarbon industry.” carbon war (Penguin: 1999), p. 17. 204.
The Kyoto Protocol's expiration dates of 2008 to 2012 have long since passed (see here and here). But Palmisano’s memo survives today as a classic in the history of political capitalism.
—————————
arriveStarring: Terry Thorne / Joe Schillings / Cynthia Sandhull / Jeff Keeler / Fiona Grant / Hap Boyd / Bill Schoff / Dan Barger / Tom Carney / Linda G Lemons/Bruce Strahm/Mike Terrazo/Rob Bradley/Jim O'Neal/John Hardy
from: John Palmisano
date: December 12, 1997
Topic: The impact of the Kyoto climate change agreement and what happened
This memo summarizes the impact of the agreement reached in Kyoto. It also describes what I am doing and provides some observations.
Influence
If implemented, the agreement would do more to boost Enron's business than almost any other regulatory move outside of restructuring the energy and natural gas industries in Europe and the United States. The potential for increased natural gas sales and additional demand for regenerative technologies is huge. In addition, a carbon emissions trading system will be established. Although the trading system will be implemented in 2008, I am sure that the trade reduction will start in 1-2 years. Finally, Enron had direct business opportunities that stemmed directly from the agreement.
On the policy front: There will be a number of national and international conferences related to various aspects of the agreement. I think the importance of this year in developing all aspects of the agreement cannot be overstated.
Three issues of particular importance to Enron were: (1) emissions trading rules, (2) joint implementation rules within Annex 1, and (3) rules for the proposed Clean Energy Fund, which promised to dwarf the Global Environment Facility ) as a fund for wind, solar and power plant retrofits.
On the business side: Over the next year, organizations will be fiercely positioning themselves to gain early leads in various carbon trading businesses.
The recognition of joint implementation in Annex 1 was exactly what I had been lobbying for, and it looks like we won.
Clean development will be the mechanism for funding renewable energy projects. Once again, we won. (Promote the inclusion of natural gas combustion as preferential technology in the fund.)
The recognition of emissions trading is another win for us.
Points of Agreement
Thirty-eight developed countries were required to reduce greenhouse gas emissions to 1990 levels or below by 2012.
The US emission reduction targets are 7%, the EU 8%, and Japan 6%; therefore, it is impossible (or at least credible) for Congress to say that the US is at a relative disadvantage relative to its major trading partners or competitors because of EU and Japanese controls The goal is higher and more “carbon-emitting”.
Includes six gases (CO2, CH4, N2O, HFC, PFC and SF6).
Emissions trading is also included. The details of the international system will be worked out in 1998.
These include the Clean Development Fund. The fund will allow emissions offsets from projects in developing countries.
Annex 1 includes joint implementation by developed countries and transition economies. This means that Enron's projects in Russia, Bulgaria, Romania or other Eastern countries could be monetized in part by capturing the carbon emission reductions and selling them back to the United States or other Western countries.
While I don't have the final version of the protocol, I do have the first and second versions. The latest version is not available on the World Wide Web.
what am i involved in
I gave three speeches on behalf of Enron and won awards. Presentations covered emissions trading, energy efficiency/renewable energy and the role of business in promoting clean energy outcomes. The award, presented by the Climate Institute, was presented to Ken Lay and Enron for their work advancing clean energy solutions to climate change. Other recipients include Danish MP and Energy and Environment Minister Sven Okun, and British MP and former Environment Minister John Gummer.
I'd met Gummer and Okun a few times before, and they were delighted to hear Enron being praised so much. (Gumer and I spoke together last Saturday, our third time on the podium together. He is a man who remains influential in Britain and Europe, and someone Enron might want to cultivate.)
I also attended a press conference.
Observations
I believe it is impossible to separate electricity restructuring from climate change as domestic political issues. The government has said it believes the two issues are intertwined.
This connection was underscored by comments from Trigen President Tom Kasten at yesterday's White House press conference, in which he supported the climate change deal and its link to restructuring. His remarks must be clarified by the White House.
These comments are fully consistent with all other signals from the government's climate change team.
Through its participation in climate change initiatives, Enron now has good standing with many “green” interest organizations, including Greenpeace, WWF, Natural Resources Defense Council, German Watch, US Climate Action Network, European Climate Action Network, OzonAction, World Resources Institute and WorldWatch. This position should be increasingly cultivated and exploited (monetized).
(By the way, many times I heard Enron mentioned in glowing terms. Such praise went something like this: “Other companies should be like Enron and look for 21Yingshi Opportunity of the Century” or “Progressive companies like Enron were…” or “Enron's success in trading electricity and sulfur dioxide demonstrated the viability of market-based energy and environmental programs.”)
Developing countries have gained substantial negotiating power. The shift in negotiating power to India, Brazil, China and the Group of 77 has been gradual and obvious.
The EU negotiates as a whole. Until two years ago, they negotiated as separate countries. Although individual national interests still exist, the EU retains significant power when working together. It is this cohesion that has led to stricter protocols.
The EU representatives asked me to provide input on the agreement in order to oppose some positions supported by some US representatives. In particular, the United States advocates not enacting carbon emissions trading rules because the rules will “inhibit trading.” My position is that rules defining who owns which reductions, how reductions are traded, how reductions are tracked, and liability rules will help facilitate transactions because the rules give buyers and sellers more confidence in the merchandise.
While some companies and industry associations continue to criticize developing countries for not taking more action, no company has been willing to specify the issue. As with any company, they hide behind the umbrella of industry associations. I think this shield will be pierced soon. I believe some companies will soon push the boundaries of what developing countries should do more. It is weak in terms of fairness and suicidal in terms of commercial interests in these countries.
For representatives of the environmental NGO community and developing countries, increasingly ugly trends have become apparent. They argue that the debate over developing country participation is a thinly veiled repetition of the fear-mongering of the early twentieth century, which was characterized by the so-called “yellow peril” or invasion of the United States by Asian peoples.
Developing country representatives see the carbon lobby's argument that the U.S. will lose markets to developing countries as hollow and racist – they argue the U.S. imports energy-intensive auto products from Japan and Germany, which are high-cost sources of energy. regions), while economic growth in developing countries is driven by local growth or Western industries that require low-cost labor, low-cost land, or the flexibility to allow new factories.
Enron should not engage in any such controversy because it would damage our credibility with developing countries, nongovernmental organizations, and developed country governments.
I was supposed to get a copy of the agreement today.
Next year will be a very intense one, as the structure of the agreement is in place, business opportunities are being identified, emissions trading rules will be developed, and the identification, financing and management of joint execution projects will also be important.
Last but not least, Terry, if you remember, I predicted that by 2010 we would get a 5% reduction; by 2012 we were getting 7%. I predict there will be business opportunities within 18 months. I expect that this agreement will have a very significant impact on the energy sector in the OECD and transition economies and will accelerate the development of renewable energy markets in developing countries.
This Agreement Will Be Good for Enron Stock!
Relevant
