Article Excerpt

Wall Street Journal

Corporate Social Concerns:Are They Good Citizenship,Or a Rip-Off for Investors?

December 6, 2005

MS. HOGUE writes: The world will have to grapple with energy efficiency and energy consumption in a real way if we are to achieve goals of poverty alleviation and ecologically sound energy sources. We appreciate the bank policies that create incentives for energy efficient mortgages allowing customers to take advantage of the cost savings associated with efficiency. Yet we have to be honest that the U.S. consuming 25% of the world's energy while housing only 5% of the world's population is not valid model for replication. These resources are finite.

Even Exxon Mobil recognizes that peak oil is a reality; oil will run out. It is not "if," but "how" we will transition to a renewable energy economy. This economy will necessarily embrace efficiency models as well as a level playing field that enables real competition for all energy sources, rather than favoring the fossil fuel industry to the tune of billions a year.

What is exciting are the opportunities offered by this transition. Leading thinkers, like writer Ross Gelbspan and economist Eban Goodstein, have identified that with anticipation and planning; the coming energy transition will create new jobs and stimulate the economy. Perhaps more importantly, renewable energy sources can put control of energy sources back in the hands of national and local populations.

It is time to smash the myth that fossil-fuel extraction benefits local populations. MNCs, like Shell, Chevron, Exxon have been operating in resource rich (oil, timber, minerals) countries for decades, yet large scale extraction projects are strongly linked to higher poverty rates and increasing national debt that robs key resources better used for education, health care, and building local economies. Even the World Bank's Extractive Industry Review recommended no more funding for fossil-fuel projects because it runs directly counter to the goals of poverty alleviation. Look at Ecuador, look at Nigeria, look at the Congo.

MR. SMITH writes: As always in these discussions, the issue of transition is important but whether we should rely on politicians to make these u-turns or consumers and suppliers is the better issue. Government has already wasted vast sums in seeking energy alternatives, in seeking "energy independence." I was at EPA when the Synfuels programs began to absorb its billions of taxpayer dollars -- years later it produced a few barrels of oil.

GE and Exxon Mobil, for that matter, invest large sums to ensure that they'll be prepared regardless of which outcome emerges. That is intelligent but they need not disparage the existing technologies that are producing great good for mankind now.

I once joked that the thoughtful "responsible citizens" of California had elected to cease their reliance on the horrible energy sources of hydropower, fossil fuel and nuclear -- all of which were terribly environmentally destructive. California, they decided, would rely on electricity instead. If American firms are forced into economic production and distribution and marketing programs that will please RAN, NOW, the AFL-CIO or Amnesty International, there won't be much economy left.

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