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Tuesday, September 26, 2006

Will Big Oil Suffer the Same Fate as Big Tobacco?

Bad news for big tobacco.

R.J. Reynolds Tobacco Company said Monday it will appeal a federal judge's decision to grant class action status to tens of millions of "light cigarette" smokers for a potential $200 billion lawsuit against tobacco companies.

RJR said it will ask the 2nd U.S. Circuit Court of Appeals for a stay of all proceedings in the case pending an appellate review.

U.S. District Judge Jack Weinstein in Brooklyn made the ruling on a 2004 lawsuit that alleges Philip Morris, R.J. Reynolds Tobacco, Lorillard Tobacco and other defendants duped smokers.

Of course they duped smokers. The tobacco industry has already lost $195,918,675,920 in settlements to states over its deceptive advertising and suppression of data that showed that tobacco use was inarguably linked to cancer. If this suit's successful, the tobacco industry will have lost more than $400 billion because of their denial of smoking's health effects.

So you'd assume that covering up the problems caused by your products would be seen as a bad business practice. Tobacco companies sat on evidence that showed a link to cancer and lied about their product. That turned out to be a big money loser.

So, let's turn our attention to another problem.

Associated Press:

The planet's temperature has climbed to levels not seen in thousands of years, warming that has begun to affect plants and animals, researchers report in Tuesday's issue of Proceedings of the National Academy of Sciences.

The Earth has been warming at a rate of 0.36 degree Fahrenheit per decade for the last 30 years, according to the research team led by James Hansen of
NASA's Goddard Institute for Space Studies in New York.

That brings the overall temperature to the warmest in the current interglacial period, which began about 12,000 years ago.

What does this have to do with tobacco lawsuits? Another industry is engaged in the same sort of PR coverup that cost the tobacco industry billions. Worse, it's the same bunch of idiots doing the same thing again.

Some people never learn.

The Guardian, excerpting George Monbiot's book, Heat:

ExxonMobil is the world's most profitable corporation. Its sales now amount to more than $1bn a day. It makes most of this money from oil, and has more to lose than any other company from efforts to tackle climate change. To safeguard its profits, ExxonMobil needs to sow doubt about whether serious action needs to be taken on climate change. But there are difficulties: it must confront a scientific consensus as strong as that which maintains that smoking causes lung cancer or that HIV causes Aids. So what's its strategy?

The website, using data found in the company's official documents, lists 124 organisations that have taken money from the company or work closely with those that have. These organisations take a consistent line on climate change: that the science is contradictory, the scientists are split, environmentalists are charlatans, liars or lunatics, and if governments took action to prevent global warming, they would be endangering the global economy for no good reason. The findings these organisations dislike are labelled "junk science". The findings they welcome are labelled "sound science".


All this is now well known to climate scientists and environmentalists. But what I have discovered while researching this issue is that the corporate funding of lobby groups denying that manmade climate change is taking place was initiated not by Exxon, or by any other firm directly involved in the fossil fuel industry. It was started by the tobacco company Philip Morris.

Allow me to blow my own horn. I wrote about this back in July, before the book came out, in a post titled Who's Paid to Deny Global Warming? The Same People Who Told You Smoking was Good for You:

I've made the comparison before - these 'experts' are doing the same thing with global warming that they did with tobacco. In 1993, lobbyist Steven Milloy called and EPA report linking cancer to second hand smoke 'a joke'. When a concurring 1997 study was published by the British Medical Journal, Milloy said, "it remains a joke today."

Today, Milloy is still in the same business, with a different product. Milloy runs the ironically named, where he doles out unhealthy heaping helpings of disinformation. As a paid advocate for ExxonMobil, it's not extremely surprising. He's also a columnist and frequent pundit on FOX News. (More on Milloy at is often referred to as a source by global warming 'skeptics'.

Call me "Scoop".

It's not a surprise that Milloy's still in the same business. As I wrote in July, Milloy's "an adjunct scholar at the libertarian Cato Institute - so there's probably some randian free market moonyism going on there as well. Anyone who's spent time with a hardcore objectivist will know what I'm talking about. These guys are basically members of a secular cult."

What's surprising is that another industry would look at Milloy's work for the tobacco industry -- with the huge settlements that were the result -- and say, "Now there's a good idea!"

The problem, to my mind at least, is that corporations don't do a lot of long term thinking. They think in terms of profit, obviously, and that thinking limits them to quarters and years, not decades. Better to take a huge hit way off in the future than take even the smallest cut in profits today. The future is entirely suppositional and, hey, the board members may not even be working in the industry anymore when the crap hits the fan. Let the poor chumps living in the future take the hit.

But global climate change is much more consequential than tobacco. The tobacco settlements were limited only by the number of smokers. How broad could a global warming class action suit be, since every person on Earth is affected? If tobacco's responsibility is hundreds of billions of dollars, how much will a universal lie cost?

We need to stop thinking these people are geniuses. Clearly, they aren't. When you dedicate your entire life to one thing, you tend to get really good at it. CEO's are often described as visionaries, but that description should be modified; they are tunnel visionaries. They're totally incapable of -- or worse, unwilling to -- see beyond what's good for them and the numbers that'll be in the Wall Street Journal tomorrow.

But, one way or another, this is going to cost them. Making the same expensive mistake that someone else has made before you is not what brilliant people do. Learning from your own mistakes is good, but learning from someone else's is better.


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