Carbon Disclosures: The ‘Voluntary’ Scheme To Ban Fossil Fuels
How NGOs got a federal agency to do their bidding and make industry pay for it.
Environmental activists don’t storm the gates of power; they redecorate the interior, weaving their agenda into the fabric of institutions until resistance seems not just futile but unfashionable. Consider a few examples:
Green NGOs and the billionaires who fund them usually don’t call for outright bans on fossil fuels. They infiltrate state attorneys general offices and try to sue oil companies into bankruptcy.
They don’t lobby for censorship laws to silence their opposition; they pay media outlets to spread their ideas, allowing them to control the public discourse around environmentalism.
They don’t openly attack religion (historically a major threat to fringe environmental causes); they pay influential ministers to preach the good news of climate activism to their congregations.
Industry informs on itself
One of the most nefarious examples of this subvert-to-destroy strategy involves an NGO called CDP (formerly The Carbon Disclosure Project). Firebreak editor David Zaruk outlined the group’s lucrative business model in this article, but it works something like this: companies pay a fee and disclose their carbon emissions on an annual basis. Signatories to the CDP–major Wall Street investment houses–use that data to invest in companies that make carbon disclosures, and usually pledge to cut their emissions.
Companies that cooperate get the equivalent of an environmental merit badge and the privilege of doing business unmolested by CDP and its activist allies. Firms that refuse to participate in this Kabuki theater are threatened with reputational damage or denied capital to finance their operations, or both. Industry is effectively turned into its own enemy. Subvert to destroy.
But there’s a more serious issue with CDP. The General Services Administration (GSA), a US federal agency that manages government procurement and property, has partnered with the CDP to pressure federal contractors to report their carbon emissions. In effect, then, the CDP’s grading scheme has quietly been given the full force of federal law without anyone noticing.
The federal scheme exposed
For the past seven years, GSA has relied on CDP surveys to collect emissions-related data from companies for purposes of selecting “sustainable” contractors to supply the federal government. This part of the scheme is both simple and brilliant, because the federal government spends many billions of dollars each year procuring goods and services from the private sector. These contractors include major firms like Dell Computers, FedEx, Verizon and Pfizer—that is, companies that almost everybody does business with in some form or fashion.
By effectively requiring these companies to disclose their carbon emissions to the CDP, the government has mandated carbon emissions cuts across the US economy through the back door. Any company that wants to be a government contractor will comply with these rules, whether or not they actually get a federal contract.
As a matter of competition, any firm—government contractor or not—that can afford CDP reporting will do it, if only to slap a “disclosure badge” on their website for marketing purposes. Reporting your carbon emissions becomes standard practice across industries in short order. The GSA is refreshingly honest about this on its website:
The executive order GSA cited, signed by president Biden on May 20, 2021, is even more explicit. The purpose of this procurement scheme is to facilitate a global transition away from fossil fuels:
“… [T]he global shift away from carbon-intensive energy sources and industrial processes … presents generational opportunities to enhance U.S. competitiveness and economic growth … The failure of financial institutions to appropriately and adequately account for and measure these physical and transition risks threatens the competitiveness of U.S. companies and markets … In this effort, the Federal Government should lead by example by appropriately prioritizing Federal investments and conducting prudent fiscal management.”
FOIA’d email communications shared with The Firebreak also confirm that CDP views the GSA procurement program through the same lens. The point is to drive emissions reductions with government force:
The flowery references to “generational opportunities” and fighting the “climate crisis” sound very promising, though they obscure several critical drawbacks that come with not-so-voluntary emissions disclosures.
Hidden costs, wasted resources
One of the most significant problems is that GSA’s program costs more than the agency has previously estimated. Recall that CDP-participating companies pay fees for the privilege of disclosing their emissions data. In the US these fees range from $3,100 to $7,300 annually, and they are not factored into GSA’s cost estimates. In 2023, some 23,000 companies reported to CDP; that amounts to millions of dollars these firms are diverting away from their actual operations.
Because CDP-reporting companies are pressured to reduce their emissions, the GSA program also incentivizes industry to waste additional resources on sustainability initiatives, like marketing “green” products that serve no purpose and may actually harm their customers.
The recent controversy surrounding a cattle feed additive designed to cut methane emissions from dairy operations is a good example. The drug had to earn FDA approval before it could be marketed—a process that can cost as much as $60 million and last for eight years. The additive also increases the cost of dairy farming without providing any additional economic benefit to the farmer. Worst of all, the methane-sparing effect is negligible since agriculture’s contribution to climate change is already relatively small.
The only potential upside comes from marketing low-methane dairy products. But even that benefit is questionable since there has been an enormous public backlash against any dairy product derived from cows fed the additive.
Funding the litigation machine
The GSA program also amplifies the feedback loop we covered above: under threat of reputational damage or reduced access to capital, companies feel compelled to fund CDP’s operations via reporting fees. In turn CDP’s emissions data supports broader climate-policy activism and even litigation. Zaruk explained the cycle in his October piece:
Within a few years, the CDP managers decided to use their data and reputation to put forward an argument that most CO2 emissions come from a small number of mostly fossil fuel companies. From 2008, the CDP put its name and credibility on a project called The Carbon Majors Database directed by the Climate Accountability Institute (the anti-capitalist NGO set up by the indefatigable Naomi Oreskes). Their 2017 report examined the largest fossil fuel companies (oil, gas, coal, basic resources) to compile a list of the worst carbon emitters.
It’s no coincidence that Oreskes is a consultant to the plaintiffs' attorneys now suing the major energy companies for climate “damages.” And this brings us back to where we started. Carbon disclosures are part of a decades-long project to force a transition away from fossil fuels without explicitly mandating it, and with the enthusiastic support of industry—the sector of society that should be most eager to oppose environmentalist scheming.
Companies throughout the economy are being fooled into marketing themselves in a way that harms their bottom lines, their suppliers and their customers. It’s brilliant, incredibly executed and evil.