Get on Board: California Mean to Corporations

Martha Walden

California has a reputation for regulating the businesses within its borders more than other states. Corporations complain and threaten to move to Texas, even though California often uses such market-friendly strategies when it comes to getting businesses to lower its greenhouse gas [GHG] emissions that we’re behind schedule to meet our 2030 targets.

Now we have two more proposed bills for corporations to complain about. SB 253 wants to make approximately 5,300 U.S. corporations operating within state borders document their GHGs every year—including from supply chains and from consumers using their products. Many corporations have become adept at portraying themselves as champions of the climate. To listen to them you’d think their CEOs lie awake all night thinking about how to reduce their emissions even further. California wants them to tell the truth, which is not very nice.

The other bill, SB 261, would require more than ten thousand companies to report the climate-related financial risks to their operations, including shareholder value, supply chains, safety loans and other vulnerabilities. Both of these bills have passed in the Senate and are now undergoing Assembly scrutiny. You can call Jim Wood to express your support at (916) 319-2002.

Granted, these requirements aren’t so simply satisfied, especially SB 261. Corporations would have to hire people to do complicated things, and the state would have to check their calculations. The California Chamber of Commerce and other industry consortiums say that the potential for misinformation is high. But misinformation is already high, and this bill is an attempt to get accurate data as we teeter on the brink of climate catastrophe.

It doesn’t help that budget woes have led Governor Newsom to cut funding for clean energy and mass transit. He says he has no choice. However, fifty-one environmental organizations, including and Union of Concerned Scientists, have sent him a message with a radical idea. Instead of slashing climate programs, how about slashing subsidies for fossil fuels? This idea has support from an unlikely source: the World Bank.

According to Axel van Trotsenburg, senior managing director of the World Bank, there is plenty of  money to invest in climate solutions, but “it’s just in the wrong places . . . . If we could repurpose the trillions of dollars being spent on wasteful subsidies and put these to better, greener uses, we could together address many of the planet’s most pressing challenges.” These sentences come from a recent World Bank report, Detox Development: Repurposing Environmentally Harmful Subsidies. It estimates that harmful subsidies amount to at least $7.25 trillion worldwide each year. Of this amount, $1.25 trillion is direct financial aid. The rest comes in implicit subsidies such as taxing certain industries at a lower rate than others. Another common example is taxpayers paying for the messes and damage done to the environment by irresponsible industries. 

Chevron, the third-richest corporation based in California, posted $35.5 billion in profit in 2022. Meanwhile, methane floods into the atmosphere from abandoned oil wells all over California. Fixing the problem would cost more than $21 billion, and the current expectation is that taxpayers will foot the bill.

Now that the World Bank is on the side of the wild-eyed radicals who think it’s inappropriate to keep subsidizing doom, maybe something will change. We can always hope.