Golden handshake and golden gun

Another knighted saint-in-the-making is spouting sanctimonious rubbish. This time it’s the former CEO of Shell.

“If the world is to end the threat from climate change, we need to produce more with less energy,” says Mark Moody Stuart in a column on the BBC website. He’s both entirely wrong, and perfectly right. Climate will continue changing and present threats, whether we produce more with less energy or not. But producing more with less energy is worth doing for its own sake. Sounds like profit to me. Okay, so far we agree.

“To address the climate challenge we need to reduce the carbon content of our energy by at least half,” he continues. But Sir Mark, that’s exactly what we’ve been doing anyway! I’m surprised you didn’t know this!

From a chapter on decarbonisation by Nebojsa Nakicenovic, in a United Nations University textbook chapter on the subject, I’ve copied this chart (note that the Y-axis doesn’t start at the origin):

And that’s where Moody Stuart goes off the rails. Claiming that he’s a great believer in consumer choice and markets, he proceeds to demand government regulation. In fact, quoted in a follow-up article, he’s quite explicit. He wants inefficient cars banned outright, and wants “very tough” efficiency standards imposed on other sectors too.

“Nobody needs a car that does 10-15mpg,” he says. So much for consumer choice.

The idea of government regulation of commerce and trade is, of course, as old as the hills. It’s usually made either by people who don’t understand commerce and trade, or by people who have a vested interest in government protection from competition.

You can bet your bottom dollar if a company or businessman lobbies for regulation, they stand to gain from it, somehow. Usually, CEOs gab about how governments should enforce their personal ideals of social or environmental consciousness only after they’ve retired. When they don’t, it’s because they have a vested business interest in regulation. They may, for example, have cornered a niche in social or environmental consciousness. Or they might feel their own company stands more to gain (or less to lose) from regulations than their competitors.

Take this Moody Stuart fellow, for example. What might his interests be? Creating a fluffy, green image for Shell? Perhaps. I know this is a huge issue for Shell (as I’m sure it is for other oil companies). Oil companies spend millions upon millions to do and say all the right things. It’s good marketing and good corporate politics. But he’s no longer CEO of Shell, and I can’t remember him being so adamant about fuel efficiency and “very tough” standards when he was actually in charge — even though it has been an issue, one way or another, since the 1970s.

But what other motives might he have? Well, let’s see. Now that he’s retired from Shell, he is a director at Accenture and a member of the Global Reporting Initiative. Now he’s suddenly demanding regulations. Guess who gets to “help” companies meet these regulations, at top-dollar hourly rates? Bingo, you guessed it: the GRI and Accenture.

I’m pretty sure there’s a benefit to Anglo-American of such regulations too. After all, Moody-Stuart is also chairman of Anglo, and he wouldn’t be demanding laws that would hurt Anglo. Perhaps it’s just that he wants other industries to be as heavily regulated as mining, to level the playing field for competition to attract capital. Or he wants to build a green and fluffy image at Anglo too. It could simply be something as crude as increasing the market (by government fiat) for profitable mining by-products to go into these fancier cars.

Just because the retired CEO of an oil company said more govenrment regulation is a good idea doesn’t mean it actually is a good idea.

Some retired CEOs waffle far too much. Perhaps they should be put out of our misery upon retirement. “Here, sir, your golden handshake, and your golden handgun. Thank you, and farewell.”

Imagine. That would profit Anglo American too.