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0 pointsrayiner7y ago0 comments

There is quite a bit of competition in those industries, so changes in cost get passed along quite quickly to consumers. For example, the price of crude oil has varied between $40 and $150 since 2008, but Exxon's profit margin has stayed pretty consistently between 7-10%. When costs go down, Exxon doesn't keep the surplus, it has to pass the savings onto consumers.

The implication of that is that consumers, not the oil and coal companies, were the primary beneficiaries of externalizing the costs of pollution over the past decades, in the form of having access to cheap fuel.

Put another way: Exxon last year had revenues of $240 billion, and profits of about $20 billion. If allowing pollution to be externalized means that gasoline costs half of what it should, that means Exxon's customers saved $240 billion by pollution the environment. That's more than Exxon's profits in an entire decade.

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nerdponx7y ago· 3 in thread

Thanks for the reasonable analysis.

Do you think that, if climate change research hadn't been actively suppressed by the petroleum industry, we would still be on our current usage trajectory, and Exxon still would have made their $20 bn profit this year?

rayinerOP7y ago

Yes, absolutely. Whatever they attempted to do, the petroleum industry didn't do a good job suppressing research on climate change. The UN Framework Convention on Climate Change was ratified in 1992. Being a child of the 1990s, I grew up learning about anthropogenic climate. Yet, the 1990s were the era of cheap gas and SUVs. Indeed, SUV sales were completely unphased by all the additional information coming out on climate change in the 1990s and 2000s, dipping down temporarily only in response to the Great Recession, then quickly picking back up. People are completely unwilling to alter their lifestyles to reduce CO2 emissions, except in token ways. (Perhaps that's rational, because reducing carbon emissions isn't going to do squat to avert climate change in light of the rapid industrialization of the developing world.)

We can treat the petroleum industry as scapegoats, but at the end of the day we'd be trying to divert responsibility for their selling a product that we desperately wanted.

nerdponx7y ago

I don't buy this analysis. Surely you also remember how quickly people ditched their SUV infatuations as gas prices rose after Hurricane Katrina. And you must also remember strongly politicized and partisan climate change discussions were until about a year ago.

That said, my understanding of the fossil fuel industry is that consumer automobiles only make up some small fraction of carbon emissions. I don't have a source (and I would love to see one), but I was under the impression that the majority of carbon in missions were due to commercial shipping and electricity generation. Nobody was out in the streets demanding cheaper electricity and cheaper products on Walmart shelves. Industry simply provided those things. You basically can't blame consumers for shifting consumption towards cheaper goods, that is why externalities are externalities.

Also consider this erratum from my previous post: how much ExxonMobil shareholder equity and executive compensation over the last 20 years can be attributed to lack of political will to action on carbon emissions and climate change? Surely that number is big enough to at least make a dent in the relocation task at hand.

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tstrimple7y ago

> Whatever they attempted to do, the petroleum industry didn't do a good job suppressing research on climate change.

Didn't they? Only 1/3rd of Republicans believe in anthropomorphic climate change. Does misinformation from petro companies not factor into that?

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