Dear John Watson, CEO of Chevron:
I'm the one who asked you about global warming at the Council on Foreign Relations last week. I accused you of being in denial. I'm afraid your answer proved it.
I pointed out that three recent reports warned we are headed for 4 to 6 degree centigrade warming over the next century -- from those radicals at PricewaterhouseCoopers, The International Energy Agency and the World Bank. This is what your industry business model is threatening us with, a future that UK climate scientist Kevin Anderson has called "incompatible with an organized global community." It will make coastlines unstable for generations as seas rise, bring the price of food beyond the reach of the world's poor, create even stronger storms, droughts, wildfires and floods -- all while wrecking the global economy. And it is happening now.
If you need a reminder, you can watch our exchange here.
Your answer? We have no choice but to keep burning all the fossil fuels to avoid returning to the Stone Age. China and India are doing it so we will too (sounds like what a five-year-old would say). There is no alternative technology, so we have no choice but to advance towards collective suicide. Such foresight and leadership!
But none of it is true.
What will return us to the Stone Age is burning all your reserves, and those of the other fossil fuel companies. That isn't politics -- its physics, as burning them will warm the earth beyond anything civilization has known.
Meanwhile, as the experts at McKinsey, the Rocky Mountain Institute and many others have shown, we can move towards an almost carbon-free energy system over the next 30 to 40 years at either zero net cost (McKinsey) or a $5 trillion dollar net present value savings to the economy (rmi.org). We have almost all the technologies needed, and as they scale they are coming down in price rapidly. Wind and solar are competitive in many places now, and soon won't need subsidies (when will you give up yours?). With a smart grid, solar and wind can scale to at least 50% of our energy needs even before storage becomes more affordable, which it will. The new Tesla electric sedan gets 300 miles on a charge, and those prices will fall as volume rises too. Why isn't Chevron leading us into this survivable and profitable world?
We can also save at least 40 percent of the energy we use just by making systems efficient, without sacrifice and with enormous savings, especially in buildings. This would end the recession and put millions to work. Why aren't you leading this?
As for other countries, they are getting far ahead of us. Germany now gets 26 percent of its power from renewables and forecasts doubling that by 2025. At times last spring, 60 percent of all German electricity was renewable in Europe's strongest economy, growing by 3 percent yearly. Germany is now installing over 7 gigawatts of solar each year -- that's 7 nuclear power plants worth at peak power. In India the Reserve Bank concluded that new coal plants make no economic sense, India cancelled plans for 42 GW of coal and Tata, the largest power company, announced it would no longer build anything but renewables. Coal still dominates in China, but things are changing -- it leads the world in renewables, with installed windpower doubling every year. Last month the Party Congress announced a "revolution in energy production and consumption," words they don't use lightly over there.
Do you really want these countries to beat the U.S. for the technologies and jobs of the next era? Is that "maximizing shareholder value?" Is scorching the earth?
I suggest that sticking with fossil energy business as usual and 4 to 6 degree warming is probably the worst business mistake ever made. Instead, you should become an energy service company leading the inevitable transition to a low carbon economy. It's inevitable that people will demand this. As the weather worsens, those whose products are causing the warming will become social and economic pariahs. You will be regulated and restricted to death. Remember the tobacco lawsuits? Small potatoes compared to what you will face. As Bill McKibben has suggested, perhaps our recent New York storm should be renamed "Hurricane Chevron."
To change the climate for business, and rescue your legacy, you should support a slowly rising carbon fee, 100 percent of which is rebated to consumers per capita. This will level the energy playing field and make renewables and efficiency much more affordable by pricing your products for their true cost to society. Then you can make the money on renewables you claim you can't now.
Lastly, Mr. Watson, in addition to denial and deception when it comes to climate, your comments on the lawsuit against you for your oil spills in Ecuador are yet another terrible example for our children. You can complain about lawyers all you want, but it won't hide the contamination still poisoning water, fishing grounds and habitat in the Amazon, all clearly captured on the documentary you mentioned. Clean up your mess in the Amazon, and join us in cleaning up the mess we've made of our climate.
David Fenton is CEO of Fenton, the social change communications firm www.fenton.com