Polluter bailouts and lobbying during Covid-19 pandemic
Polluting industries around the world are using the coronavirus pandemic to gain billions of dollars in bailouts and to weaken and delay environmental protections.
The moves have been described as dangerous and irresponsible by senior figures. They say the unprecedented sums of money being committed to the global recovery are a historic opportunity to tackle the climate crisis, but such action has not been taken to date.
Fossil fuels
The fossil fuel industry, which already benefits from a $5tn-a-year subsidy, according to the IMF, has had the biggest wins during the coronavirus pandemic in the US and Canada.
The controversial Keystone XL pipeline to transport tar sands oil from Canada to the US got the go-ahead, with $5bn in financial support from the Alberta government. US president Donald Trump called the move “GREAT news”. Other pipelines continued construction despite the lockdown.
To “alleviate financial hardship” to the US fossil fuel industry, Trump directed the Strategic Petroleum Reserve to be filled to its maximum capacity.
The US Environmental Protection Agency (EPA) issued a sweeping suspension of its enforcement of environmental laws, three days after a request from the American Petroleum Institute, and extended the period that the more polluting winter gasoline can be sold.
Three US states passed laws criminalising fossil fuel protests – South Dakota, Kentucky and West Virginia.
Republican senators asked the US federal government to “reduce, delay or suspend” taxes due on oil, gas and coal, while the National Mining Association lobbied to cut $220m in taxes intended to support coal miners affected by black lung disease.
In China, as the worst impacts of the virus outbreak passed, there was a surge in permits for new coal-fired power plants. From 1 to 18 March, more coal-fired capacity was approved than in the whole of 2019. In South Korea, the major coal plant builder Doosan Heavy Industries got a $825m government bailout; green groups say the company was in deep financial trouble before the pandemic. In Australia, lobbyists welcomed the South Australia government’s move to defer taxes and other commitments to oil and gas explorers.
Renewable energy
In the US, assistance for the green energy sector was not included in the $2tn support package on 26 March, three days after 24 rightwing thinktanks, including the Competitive Enterprise Institute, said they were “deeply disturbed” by possibility of funding for “unreliable ‘green’ energy programs”. However, New York state did pass new laws to speed up clean energy projects.
In Brazil, the energy regulator has indefinitely postponed green power auctions scheduled for 2020 and in South Africa, the state-owned power giant Eskom, which relies heavily on coal, said it will cut the wind power it had committed to buy.
Motor industry
In the US, theEPA finalised its rollback of Obama-era rules that made cars less polluting. In the EU, lobby groups argued for a delay in emissions reduction laws, although VW, BMW and Daimler say they are aiming to comply regardless of the virus crisis.
Aviation
A leaked letter from the International Air Transport Association describes its “aggressive” lobbying approach and includes a call for relief from corporate taxes, sales taxes, employer-paid payroll taxes and passenger ticket taxes.
In the US, aviation got a $60bn bailout package and the suspension of many taxes. In the UK, major carrier easyJet got a £600m soft loan, weeks after its biggest shareholder received almost £60m in dividends.
Farming
In the EU, the farmers’ association Copa-Cogeca called for a further postponement of the “farm to fork” strategy, which is aimed at making agriculture less polluting. The call is backed by the rightwing EPP bloc, the largest group in the European parliament.
In Germany, its farming lobby pushed for an easing of environmental standards, particularly those restricting fertiliser use, which are intended to reduce pollution. In the US, the American Farm Bureau Federation and the National Cattlemen’s Beef Association lobbied heavily and won a $23.5bn bailout package. Agricultural pollution is the cause of a huge “dead zone” in the Gulf of Mexico.
Plastics and chemicals
In the US, the plastic industry lobbied to remove bans on single-use plastic bags, citing hygiene concerns, and saw bans lifted in Maine, New Hampshire, Oregon and Massachusetts. The EPA also weakened the Toxic Substances Control Act for many chemical and petrochemical manufacturers.
In the EU, plastic industry lobbyists asked the European commission to postpone implementation of the singleuse plastic directive, intended to cut plastic pollution. However, the commission rejected this call. In England, a ban on plastic straws, stirrers and cotton buds that was due in April has been postponed.
Timber
In Indonesia, the trade ministry revoked rules requiring basic certification that wood exports were legally produced in response to lobbying from the furniture and logging industries, according to campaign group Mighty Earth.
Green shoots
The Covid-19 crisis has seen some backing for a sustainable recovery and rejections of polluter lobbying. G20 finance ministers committed to an “environmentally sustainable and inclusive recovery” and EU leaders backed “measures necessary to get back to a normal functioning of our societies and economies and to sustainable growth”.
The European commission has not delayed its consultation on a new green finance strategy and is now considering imposing new requirements on firms to reduce the risk of biodiversity loss and pandemics. This is despite coal-heavy states including Poland and the Czech Republic urging the bloc to abandon its Green Deal plan and emissions trading scheme.
In France, the government has approved 288 wind and solar energy projects and has relaxed deadlines and cancelled a planned withdrawal of rooftop solar subsidies. Germany rejected calls to ease the planned shutdown of its coal industry, while in Canada prime minister Justin Trudeau rejected the call from Albertan companies to postpone an increase in the federal carbon tax.
The fallout from the pandemic is also delaying a number of big fossil fuel projects, from LNG terminals in Australia to coal plants in Indonesia.