'Woke Capitalism' Discriminates Against Fossil Fuels, Conservative Lawmakers Say

Last week, a group of conservative state lawmakers and industry representatives voted to support model legislation that paints green initiatives as the newest front of a “woke” culture war that discriminates unfairly against fossil fuels, The New Republic reported. 

An email sent by the American Legislative Exchange Council (ALEC) and obtained and first reported by Center for Media and Democracy investigative reporter Alex Kotch sheds some light on the draft legislation’s backstory, describing how the policy was constructed to "fight back against woke capitalism" by protecting the fossil fuel industry.

"Major banks and investment firms are colluding to deny lending and investment in fossil fuel companies, using their market power to force companies to make 'green' investments," the email reads. "This model bill proposes a strategy in which states use their collective economic purchasing power to counter the rise of politically motivated and discriminatory investing practices."

ALEC is an influential, successful, and shadowy conservative group. It forgoes traditional lobbying by offering pre-written bills to politicians that more closely resemble the interests of corporations than constituents. In 2019, a two year investigation by USA Today, The Arizona Republic, and the Center for Public Integrity found at least 10,000 such bills were introduced nationwide since 2011 and well over 2,100 of them were signed into law.

ALEC’s model helped pass bills nationwide banning schools from teaching "critical race theory"—which they weren’t—and frame it as an anti-anti-racist conspiracy discriminating against white people—which it isn’t. Now, the group is now busy at work inventing its next boogeyman—“critical energy theory”—and bills to fight the coming discrimination against the fossil fuel industry, which in 2020 was able to wrangle $5.9 trillion worth of government subsidies. 

At its core the model legislation, named the Energy Discrimination Elimmination Act, "prohibits companies that boycott fossil fuels from receiving state contracts and pension investments." ALEC warns of a grand conspiracy afoot: not only are banks "increasingly denying financing to creditworthy fossil energy companies," but institutional investors are "divesting from fossil energy companies and pressuring corporations to commit to the goal of the Paris Agreement" while large investment firms are "colluding to force fossil energy companies to cannibalize their existing businesses. To that end, "energy producing states" must fight back and cut ties with any companies that are "attacking the industries that substantially contribute to their state budgets."

As Kate Arnoff reported for The New Republic, the financial sector has been “eager to take advantage of investor interest in indistinctly green-tinged asset classes and for public spending on climate to grease the wheels for (i.e., “de-risk”) their involvement in infrastructure that will be critical to the twenty-first century.” 

A bill resembling this draft legislation—itself inspired by anti-BDS laws that ALEC was previously involved in pushing—has already popped up in Texas, empowering states to track any and every firm that boycotts energy companies.

What is motivating this shift in tactics is not some desire to start fossil fuel struggle sessions—though those would be nice—nor is it even climate policy, which has been gutted at each step of negotiations for Biden’s infrastructure bill. Rather, it’s the simple fact that market forces alone will likely render trillions of dollars worth of fossil fuel assets and investments “stranded” or worthless. 

Some firms, such as investment managers BlackRock, are trying to slowly “green” $7 trillion worth of assets or fossil fuel producers. Other firms may be less eager to leave behind fossil fuels: at a 2019 workshop put together by Shell, one geoscientist told NYMag that “We don’t plan to lose money.” In that piece, author Malcolm Harris recounts how the geoscientist explained that “one of the ways Shell incorporates climate change into its calculations is that when it looks to develop a new fuel source, it tries to figure out how much it’ll be able to sell it off for when the company transitions out of fossil energy—when the reputational costs start to exceed the returns.”

The invocation of brain-poisoned culture war tactics in the fight between fossil fuels and a better climate is jarring at first, but ultimately, it makes perfect sense. These lawmakers are doing exactly what they always have: buying time for capitalists to profit off of climate change by helping some develop fossil fuel sources while others help investors divest from them.