Should we Pay Exxon to Leave Oil in the Ground?

This article is the second in a series that compares today’s fight for climate solutions with the successful movement to abolish slavery in the nineteenth century. Read the first installment, “The Fight against Climate Change Must Become the New Abolitionism.”

Recently, Congress considered whether African Americans should receive financial compensation for centuries of slavery and nearly 160 years of discrimination after emancipation.

Though seven out of ten Americans overall, and about half of blacks, oppose the idea, an increasingly large minority thinks that it’s time for the United States to consider righting a long-time moral wrong from the past and correcting economic inequalities today at the same time.

In the past, compensation was a successful strategy to improve the lot of Africans and their descendants in the New World. But this was a very different type of compensation than the reparations to African Americans that activists including actor Danny Glover and writer Ta-Nehisi Coates have asked Congress to consider.

In the past, it was enslavers, not the enslaved, who got the compensation.

As morally repugnant as it sounds to reward the very people whom abolitionists of the day referred to as “man stealers” for their crimes against enslaved people, paying slave capitalists to release their property rights in humans led to a peaceful and orderly emancipation of enslaved people in the 1830s in the British Empire.

By contrast, without any agreement to compensate slave masters in the American South, the United States had to wait another thirty years to free all of its slaves, and then only at the end of a bayonet in a bloody Civil War.

This history of slavery compensation in the past offers a way forward on climate change today, according to an investment advisor specializing in the environment.

When it comes to fighting the climate crisis, time is running out. Any way to speed up progress and break the logjam over abolishing carbon pollution is worth considering, especially if it’s an idea that’s succeeded against great odds in the past.

Emancipation Faster and without War

Paying fossil fuel companies to leave most of their remaining reserves of oil, coal and natural gas in the ground may be necessary to avert climate apocalypse, argues Richard Barker of Iona Capital.

Otherwise, if dirty energy companies stand to lose trillions of dollars in wealth, they will continue fight the abolition of fossil fuels tooth and nail. And we’ve seen where that has gotten us — despite thirty years of activism, the world’s nations have failed to stop the increase of greenhouse gas pollution and dangerous climate heating.

That’s largely because oil, gas and coal companies have successfully used their political power and influence to stop governments from taking serious action on climate, especially in the United States, as documented by authors including Ross Gelbspan and Naomi Oreskes.

Barker looks to history for his model of carbon abolition today: the gradual, compensated emancipation of slaves in the British Empire starting in 1833.

Less well known in the United States than the emancipation of enslaved people by Abraham Lincoln and the Union Army in the Civil War, and completed after the war by passage of the Thirteenth Amendment abolishing slavery in 1865, the British approach offers key lessons for American climate activists today.

After decades of campaigning by British abolitionists such as William Wilberforce capped off by a frightening slave revolt in Jamaica starting on Christmas 1831, the British government came up with a plan to end slavery in the West Indies and elsewhere in the empire by paying slaveowners about half the market value of each enslaved person.

Additional compensation came in the form of a mandatory “apprenticeship” program, requiring enslaved workers to toil unpaid for another few years for their masters before enjoying full freedom.

After taking both of those benefits together as compensation, slaveowners wound up taking a loss of about 20% on the value of their property in enslaved workers according to Barker’s calculations.

Ed Atkinson of Citizens’ Climate Lobby in the UK also makes the argument for compensating fossil fuel companies based on the precedent of British compensated abolition. That compensation didn’t come cheap. The government had to pay 46,000 British slave owners a total of £20 million, representing 5% of Britain’s GDP at the time.

Talk about a serious commitment: slave compensation turned out to be “the largest “bailout” in British history until the bailout of the banks in 2009,” as Atkinson puts it. His Majesty’s Government financed compensation payments with a loan for £15 million, a debt that was only fully paid back in 2015.

But Atkinson thinks the benefit was well worth the money, since compensation helped neutralize political opposition from powerful people in society. “The British upper class were those benefiting from exploiting the misery of slaves and were also those able to exercise power in Parliament…this extended down to many in the middle class as well.”

Atkinson applies the same principle to climate action:

In order to introduce robust action to address climate change, we must overcome the vested interests of the fossil fuel multinationals, the lobbyists, even the SUV owners and the frequent flyers.  [Abolition in] 1833 informs us that this can be done…[the Citizens’ Climate Lobby] policy of Fee and Dividend is well suited because it does not outlaw the SUV owner or oil boss in the same way that slave investors were treated sensitively in the 1830s.

Investment advisor Barker agrees that paying owners to free slaves was a good deal for not just for slaveowners but also for enslaved people and for the whole British economy.

To start with, compensation made abolition possible politically and accomplished a goal for which abolitionists had been fighting for half a century.

As a side benefit, compensated abolition wound up boosting the whole British economy. Deprived of opportunities to grow their sugar plantations in the West Indies, the slave-owning class wound up investing its compensation payments into new opportunities at home. These included the railroads and factories that wound up making Britain the leader of the Industrial Revolution. Wealth in slaves turned into much greater wealth in machines and commerce.

(Barker fails to mention that all not money from slave compensation payments went into investments in newfangled technologies. Some British investment continued to go into slavery, no longer in the West Indies, but after 1833 in the cotton-boom states of Alabama, Mississippi and Louisiana.)

Three decades later across the Atlantic, tensions between North and South over the Peculiar Institution would explode into the shots fired at Fort Sumter and four years of war that would pit Americans against each other and cost more than 700,000 lives.

In addition to death and destruction, if you do the math on the financial cost of the Civil War, you discover that the price to liberate each enslaved person in America at the end of the war in 1865 was 17 times higher than the British had to pay in the 1830s, Barker explains.

So, it paid dividends both financially and politically for Britain to compensate its slave owners in the 19th century. This means it might also be a good investment today to pay fossil fuel companies to stop adding to greenhouse pollution. As Barker puts it,

Finally, and unpalatably for some, we may need to pay compensation to the world’s polluters, to take those polluting assets out and allow the new sustainable technologies to take their place.

Endless Carbon War or Peaceful Settlement

Barker warns that if we fail to succeed in abolishing fossil fuels, the world may face a crisis of weather, politics and the economy in the future as bad as the U.S. Civil War was in the 1860s.

This conclusion is hard to argue with. But it’s also hard to accept.

When I think of abolition in the past, my sympathies are with Lincoln and abolitionists who pushed him like William Lloyd Garrison and Frederick Douglass to abolish slavery without paying slaveowners a dime. After all, it’s just what they deserved.

It’s hard to shed any tears for the planters of the Old South, though uncompensated emancipation may have cost them $10 trillion in today’s money.

Obviously, in the absence of any promise of compensation, that kind of money goes a long way towards explaining why slaveowners fought so hard to keep slavery going. Thus, in the absence of compensation, the need for a war to forcibly separate slaveowners from what they considered to be their property.

Today, proponents for reparations to African Americans like Glover and Coates are right that our nation owes a great debt to black Americans for slavery and for unfair treatment after slavery, right up to the present day. Morally and economically, compensation to victims of slavery seems like an idea worth considering.

Moving over to the climate crisis, my heart is with carbon abolitionists like Al Gore, Bill McKibben, and Naomi Klein against the greedy oil-holders who run ExxonMobil and the complacent investors who leave their money in Exxon stock as the company’s product continues to destroy the climate.

Yet, as a practical matter, Barker may have a point. Climate activists can continue to butt heads with Exxon for the next fifty years. We can try to make them pay, in every sense, for decades of pollution and lies.

Those of us in the climate movement can continue to stand on the moral high ground, even as the low ground at our coasts slips beneath the waves of rising seas and the American heartland heats up beyond all human endurance.

Is it worth considering paying Exxon to stop polluting instead?

— Erik Curren, author of The Solar Patriot