I'm guessing long-term Climateer Investing readers didn't.
And I'm also guessing that CI readers know (if for no other reason than our hectoring) of the work of Professor Bruce Yandle:
The continuing relevance of the bootlegger-and-Baptist model
"Here is the essence of the theory: durable social regulation evolves when it is demanded by both of two distinctly different groups. “Baptists” point to the moral high ground and give vital and vocal endorsement of laudable public benefits promised by a desired regulation. Baptists flourish when their moral message forms a visible foundation for political action. “Bootleggers” are much less visible but no less vital. Bootleggers, who expect to profit from the very regulatory restrictions desired by Baptists, grease the political machinery with some of their expected proceeds.and Professor Anne Kreuger, former World Bank Chief Economist (and a couple dozen other awards, prizes and positions):
They are simply in it for the money."
"Until 1974, the term 'rent seeking' did not exist. This term was invented in 1974 by Anne Kreuger in an excellent paper published in the American Economic Review."See also "Greenwashing".*
From "The Fundamentals of Rent Seeking" by Gordon Tullock in "The Locke Luminary" vol.1, no.2
"Rent seeking occurs when an individual, organization, or firm seeks to make money by manipulating the economic environment rather than by making a profit through trade and production of wealth."
In short it is taking someone's money by gaming the government. The taken are usually the consumer or the taxpayer.
- Rent-seeking behavior (From: "A Glossary of Political Economy Terms" [Auburn University])
- The expenditure of resources in order to bring about an uncompensated transfer of goods or services from another person or persons to one's self as the result of a “favorable” decision on some public policy. The term seems to have been coined (or at least popularized in contemporary political economy) by the economist Gordon Tullock. Examples of rent-seeking behavior would include all of the various ways by which individuals or groups lobby government for taxing, spending and regulatory policies that confer financial benefits or other special advantages upon them at the expense of the taxpayers or of consumers or of other groups or individuals with which the beneficiaries may be in economic competition.
General Electric’s decision to buy Britain’s Wellstream Holdings PLC is clearly about securing a spot for itself in Brazil’s booming deepwater oil industry.
But it also offers an interesting counterpoint to GE’s own carefully groomed public energy persona.
For the past few years, GE has been busy prying open business opportunities in green energy. As part of the push, it created a separate R&D clean-tech unit called Ecomagination, slapping a bright green GE logo on the enterprise to visually drive home the point.*Greenwashing:
The company is now deep into wind power (turbines), it’s a huge proponent of electric vehicles (recharging stations), and a major player in the developing a “smart” energy grid (smart meters) — programs that also happen to be backed by billions of dollars in government stimulus funding.
So why is GE (GE 17.48, -0.22, -1.22%) plunking down $1.3 billion to buy Wellstream Holdngs (UK:WSM 788.00, +2.50, +0.32%) , a company that makes pipeline and other equipment for the offshore oil industry? Read about the GE-Wellstream deal.
Wellstream is an interesting choice because much of its operations and revenue are in Brazil, a country that’s emerging as a global energy powerhouse because of its rich offshore oil fields, surplus of sugar-based ethanol fuels and extensive hydropower. GE simply wants to be in the mix.
The oil component of that mix is certainly looking more attractive than it did when GE launched Ecomagination a couple of years ago, before the Great Recession.
GE couldn’t at the time have seen just how deep the recession would be, or what impact it would have on budgets aimed at “going green.” They also couldn’t have foreseen how the Cancun Climate Change Summit, which wrapped up this weekend, would end up being about as toothless as COP15, the Copenhagen climate change summit a year ago.
A major recession and an international stalemate over imposing stricter carbon controls are not helping GE’s green technology sales. And who knows how long government stimuli are going to last, especially given the results of the mid-term elections here at home.
By buying Wellstream, GE is doing what all conglomerates do. It’s diversifying. It’s also plunking down a big chunk of cash to make sure it’s got a piece of the action in the overseas offshore oil industry. That might not sound very green to an environmentalist, but given the current economic climate, it simply sounds like GE hedging its bet.
Greenwashing is the unjustified appropriation of environmental virtue by a company, an industry, a government or even a non-government organization to sell a product, a policy or to try and rehabilitate their standing with the public and decision makers after being embroiled in controversy.All from our June 2007 post "Eco-Hypocrisy Corporate Style II":
As we look at corporate eco-hypocrisy I am going to refer to a few concepts from economics and the green movement, "Bootleggers and Baptists", rent-seeking and greenwashing....