When a mainstream publication reports on “strange bedfellows” supporting a government regulation, you can be sure that the tryst in question is between some sort of liberal “public interest” group and a company standing to get rich off the proposed regulation — probably at the expense of consumers, taxpayers and small businesses.
Rio Tinto is a leading mining company, which is probably why the Economist reported the company’s support for a cap-and-trade scheme on climate change in a piece titled “Strange Bedfellows.”
As the U.S. Senate has taken up the climate legislation sponsored by Sens. Barbara Boxer, D-Calif., and John Kerry, D-Mass., Rio Tinto has taken to Capitol Hill to rally behind the legislation.
“Unmanaged climate change,” Rio Tinto CEO Preston Chiaro testified before Boxer’s committee recently, “is a threat to our assets, our shareholders and employees, and also to civil society and political institutions.”
This is the standard explanation offered by climate bandits: We need regulation because climate change is so real, so certain and so bad that it will hurt everybody, including us. The upshot is that Rio Tinto isn’t seeking any special favors. But, of course, it is.
Rio Tinto stands to profit in many ways from Boxer-Kerry, often in ways that provide no real benefit to consumers or the environment, while increasing costs for everyone.
In 2008, Rio Tinto mined more uranium than any company in the world, according to Chiaro. Uranium is the feedstock for nuclear power plants. Litigation and regulation have for decades blocked the expansion of nuclear power, and many companies see robust climate legislation as the way to knock down the regulatory barriers.
Nuclear power produces basically no carbon dioxide or methane, and the greenhouse gas it does produce — water vapor — is negligible in its warming impact. Being much more proven and efficient than wind, solar or other low-GHG power sources, nuclear is the natural choice in a carbon-constrained economy. So climate legislation could create more demand for Rio Tinto’s uranium business.
This profit angle is worth pointing out as another way to dispel the myth propagated by the left and the mainstream media on climate debate. Green groups and Democratic politicians paint a picture of altruistic Earth lovers battling against greedy corporate interests — and credulous, often sympathetic journalists usually adopt that narrative. In truth, there’s profit on both sides.
Of course, private profit doesn’t hurt the public — it’s often compatible with the public good. More nuke plants would mean more profit for Rio Tinto, but also probably cheaper, cleaner electricity for everybody.
But Rio Tinto also sees profit in Boxer-Kerry in ways that harm the consumer. Boxer-Kerry would add to the cost of gasoline, heating oil and electricity, and also force less efficient energy sources on American families and manufacturers while imposing new costs on taxpayers. This would drive business to Rio Tinto’s other ventures.
Rio Tinto and BP, for instance, have formed a joint venture called Hydrogen Energy, which is building plants in California, Abu Dhabi and elsewhere that aim to combine the technologies of fueling a power plant by hydrogen and pumping carbon dioxide underground in order to keep the gas out of the atmosphere. These projects are already subsidized by taxpayers, and Rio Tinto is lobbying for the additional subsidies Boxer-Kerry would provide.
If alternative energy companies like Rio Tinto believe their alternative energy technologies were really so promising, they should be willing to compete in the open market. Instead, they want subsidies and other policies that hurt market rivals providing energy sources like coal and natural gas.
Rio Tinto’s climate lobbyists include James C. Free, a former President Jimmy Carter staffer who is now a generous Democratic donor. Since 2008, Free has given more than $18,000 to Democratic politicians, including $1,000 to House Speaker Nancy Pelosi and $1,000 to the Democratic Senatorial Campaign Committee. Last cycle, he gave Boxer $1,000.
On Rio Tinto’s board of directors is Vivienne Cox, who is also a director at Climate Change Capital, a venture capital fund that invests in technologies aided by climate legislation, such as the Kerry-Boxer bill Rio Tinto is now supporting.
So there’s nothing strange about Rio Tinto getting in bed with Kerry and Boxer’s push for climate legislation. But taxpayers and consumers will be regretting it in the morning.
Timothy P. Carney is The Washington Examiner’s lobbying editor.