Political Spin and Business School Analysis

Political spin never stops, and it seems the start of the Paris climate regime negotiations has elevated it to new heights. Spin doctors are everywhere, and the sheer size of their publicity is overwhelming. Aside from Republican presidential candidates in the U.S., who seem to live on a different planet, one could think that the rest of political and economic actors are to a strong – or close to strong – degree now supporting climate actions. If one believes UBC Sauder School of Business’s own James Tansey, this holds particularly true in case of the global business community:

“So yes, the business community is more of a presence, and they’re not trying to derail the agenda – rather, they’re actively engaged in discussions. I think the show of support for government action coming from many business leaders is really important. A lot of companies seem quite open to carbon trading and carbon taxes, as evidenced last week by the fairly strong showing of support of Alberta’s new plan for carbon pricing. Corporations often prefer carbon pricing as it’s more flexible for them than other options such as more heavy-handed regulation. So that’s what they tend to push for, alongside long-term transparency as governments roll out new policies. They don’t want governments to tinker with the system once it’s in place, and modify prices on the fly, as that’s just a pain for businesses to be readjusting constantly.” 

How much vaguer can a statement get without getting the whole thing wrong? Sure, there are business leaders at the meeting. Sure, some of them are seriously interested that negotiations come to fruition, not least out of – a very legitimate – self-interest. Sure, because they don’t want governments to ‘tinker with rules’, they try to be active by articulating their interests. Does this mean they are now fighting climate change? I call this lobbying.

Tansey seems to take this as engaging in serious climate policies. Now, given the quality of the statement, there would be no need to mention this interjection at all – if not for the fact that it has been published as a UBC Media Release. Why would my university publish a piece that contains not a single fact but solely transmits a normative stance that seems not to be grounded in any research of the actual behaviour of the “business community”?

I have no idea whether Tansey’s commentary makes any difference for the way one might look at the role of the business sector in climate policies. I do know, though, that these type of interventions help muddy a solid understanding of a political process where quite a number of economic actors try hard to prevent an agreement that appeals to the smallest common-denominator. My – empirically-based – hunch is that business leaders on average belong to exactly this category. Efforts to prevent a serious unlocking from the current fossil fuel-intensive path are strong and so far overall successful if one takes the breath-taking amount of fossil fuel subsidies as an indicator. According to the International Energy Agency (IEA) subsidies for fossil fuels amounted to US$548 billion in 2013, while subsidies for renewable energy amounted to US$121 billion. Moreover, those private sectors that engage in policy tools like carbon taxes and cap-and-trade do this mainly to keep levies low and to manage generous caps. As a matter of fact, the private business sector so far only marginally engages in path-changing innovations. Rather, the trend is to maximize the sources of the existing path.

Political spin, in short, is not a business academics should engage in.