“THIS AGREEMENT WILL BE BENEFITS FOR ENRON STOCKS!! (Enron’s Kyoto Memo turns 25) – Watts Up With That?
By Robert Bradley Jr. — December 12, 2022
This week, a Hall of Shame business memo turns a quarter of a century old. December 12, 1997, it was written from Kyoto, Japan, by lobbyist Enron John Palmisano in the glory of the Kyoto Protocol agreement.
Global green planners were excited that, By some way, By some way, the world has embarked on an irreversible process of climate control (and therefore industrial and land use control). But Kyoto has failed, and the 2015 Paris climate accord is precarious, with COP27 recent failure makes the outlook for COP28 bleak.
Palmisano’s memo cites benefits for ‘green’ first goer Enron. Enron, in fact, no less six profit centers tied to carbon dioxide (CO2) pricing–and seven if CO2 is capped and traded. The story of Enron as the darling of leftist environmentalists was well told other places.
The Washington Post broke the memo shortly after Enron’s demise, showing that Enron was hardly a capitalist, free-market company in the “[Enron] the president pushed the corporate agenda with the Clinton White House.” Indeed, Enron is “the company most responsible for sparking a greenhouse gas civil war in the hydrocarbon business,” as Jeremy Leggett put it in carbon war (Acute: 1999), p. 204.
The Kyoto Protocol has expired from 2008–2012 (see here and here). But Palmisano’s memo, a classic in the history of political capitalism, persists.
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Arrive: Terry Thorn, Joe Hillings, Cynthia Sandherr, Jeff Keeler, Fiona Grant, Hap Boyd, Bill Shoff, Dan Badger, Tom Kearney, Lynda Clemmons, Bruce Stram, Mike Terraso, Rob Bradley, Jim O’Neill, John Hardy
Are from: John Palmisano
Day: December 12, 1997
Subject: Meaning of the Kyoto Climate Change Agreement & What Happened
This memo summarizes the meaning of the agreement reached in Kyoto and also describes what I am doing and makes some observations.
Implications
If executed, the deal will boost Enron’s business more than almost any other regulatory initiative beyond restructuring the energy and natural gas industries in Europe and the United States. The potential for additional gas sales and additional demand for renewable technology is huge. In addition, a carbon emissions trading system will be developed. While the trading system will be implemented in 2008, I am sure the cut will start trading in 1-2 years. Finally, Enron had immediate business opportunities that stemmed directly from the deal.
On the policy front: There will be a lot of international and country-specific meetings regarding every aspect of this agreement. I don’t think it’s possible to overestimate the importance of this year in shaping every aspect of the deal.
Three issues of particular importance to Enron are: (1) rules governing emissions trading, (2) rules governing general performance in Annex-1, and (3) proposed clean energy fund management rules (promising to reduce GEF as a wind, solar and energy plant conversion fund.)
On the business front: In the coming year, organizations will be strongly positioned to gain early leadership in many areas of the carbon trading business.
The joint execution confirmation in Appendix-1 is exactly what I lobbied for and it looks like we won.
Clean development is a funding mechanism for renewable projects. Again, we won. (We need to push the inclusion of natural gas burning on the list of fund-funded technologies.)
Endorsing emissions trading is another win for us.
Highlights of the Agreement
38 developed countries are required to reduce their greenhouse gas emissions to or below 1990 levels by 2012.
The reduction target of the United States is 7%, the European Union is 8% and Japan is 6%; therefore, it is not possible (or at least reliably) that Congress can say that the United States is at a disadvantage relative to its major trading partners or competitors because the EU and Japan have higher control targets and have more “carbon emissions”. leaner” than us.
Six gases are included (CO2, CH4, N2O, HFCs, PFCs, and SF6).
Emissions trading is included. Details of an international system to be developed by 1998.
A “clean development fund” is included. The fund will enable offsetting emissions from projects in developing countries.
Common implementation for Annex-1, including developed countries and economies in transition. This means that Enron’s projects in Russia, Bulgaria, Romania or other eastern countries can be monetized, in part, by obtaining reduced carbon for resale in the US or other Western countries.
Although I do not have the final version of the agreement, I do have the first and second versions. The latest version is not available on the worldwide web.
What I Participated in
I gave three speeches and received the award on behalf of Enron. Speeches covered emissions trading, efficient/renewable energy and the role of business in promoting clean energy outcomes. The award comes from the Climate Institute and goes to Ken Lay and Enron for our work promoting clean energy solutions to climate change. The other recipients are Sven Auken, MP and Minister of Energy and Environment in Denmark, and MP and former Environment Secretary of the United Kingdom, John Gummer.
I’ve met Gummer and Auken a few times before, and they’re happy to have so much praise from Enron. (I gave a speech to Gummer last Saturday and it was our third time standing on the podium together. He is someone who still retains considerable influence in the UK and Europe and whom Enron has. may want to cultivate.)
I also participated in a press conference.
observe
I think it will be impossible to separate the restructuring of the power sector from climate change as a domestic political issue. The administration has signaled its view that the two issues are intertwined.
At yesterday’s White House press conference, this connection was underscored by comments from Tom Kasten, President of the Trigen Group, who spoke in favor of the climate change agreement and its nexus it with restructuring. His remarks had to be deleted by the White House.
These comments are entirely in line with every other signal from the Administration’s climate change team.
Through our involvement with climate change initiatives, Enron now has excellent qualifications with many “green” interests including Greenpeace, WWF, NRDC, GermanWatch, Action Network US Climate, European Climate Action Network, Ozone Action, WRI and Worldwatch. This position should be increasingly cultivated and capitalized (monetized).
(In parentheses, I’ve repeatedly heard people refer to Enron in flashy terms. Compliments like these: “Other companies should be like Enron, look for 21.”st business opportunity of the century” or “Progressive companies like Enron are…” Or “Evidence of the viability of market-based energy and environmental programs is Enron’s success in business. energy and SO2.”)
Developing countries have gained considerable negotiating power. The shift of negotiating power to India, Brazil, China and the G-77 was gradual and obvious.
The EU negotiates as a group. Until two years ago, they were negotiating as individual countries. While there are still individual national interests, the EU retains considerable power when it comes to working together. It was this cohesion that led to a tighter agreement.
The EU delegates asked me to comment on the agreement to oppose some of the positions espoused by some US delegates. The United States, in particular, favors having no rules governing the trade in carbon emissions because the rules would “impede trade.” It is my view that the rules that define who owns which discounts, how the discounts are traded, how they are tracked, and the rules of liability should help drive trading because the rules rules help both buyers and sellers have more confidence in the goods.
While some companies and trade associations continue to criticize developing countries for not doing more, none wanted to be specific on the issue. As with any company, they will be hiding under the shield of a trade association. I think that barrier will be penetrated soon. I believe some companies will soon break the boundaries that developing countries should do more. It is an equity weakness and suicide in terms of their commercial interests in these countries.
An increasingly ugly trend has become apparent to the environmental NGO community and delegates from developing countries. They see the argument for developing countries’ participation as a thinly disguised recycling of the early 20th century fear characterized by the so-called “yellow risk” or invasion of the United States. States of Asian peoples.
Developing-country delegates viewed the carbon lobby’s argument that the United States would lose its market to developing countries as empty and racist—they considered energy-intensive imports Imports into the United States come from Japan and Germany for automobiles (and these are high-cost energy commodities). regions), while economic growth in developing countries is driven by local growth or Western industries that require low labor costs, low land costs, or allow flexibility for new factory.
Enron should not get involved in any debate like this because it damages our reputation with developing countries, NGOs and developed country governments.
I should have a copy of the agreement today.
Next year will be very intensive as the structure of the agreement exists, business opportunities are being identified, rules governing emissions trading will be developed, and the identification, funding and management of the emissions trading activities will be developed. JI project will be very important.
One last point, Terry, if you remember, I was predicting a deal that would bring a 5% reduction in 2010; we got 7% in 2012. Now I predict ratification within 3 years. I predict business opportunities within 18 months. I predict this agreement will have a huge impact on the energy sector in the OECD and transition economies, and will boost renewable energy markets in developing countries.
This deal will be good for Enron stock!!
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