The Role of Business Deregulation in Climate Catastrophes

The influence of corporate money in politics enables the lack of precautions necessary for companies to properly face climate change.


Matt Howard / Unsplash

Here is Klamath National Forest, in Yreka, California, on fire during last year’s forest fires that swept the state. PG&E faces criminal charges due to their electrical network causing 5 out of the 10 most destructive fires in the state of California.

When a major environmental catastrophe occurs, climate change’s effects are often cited as the catalyst. While that is almost certainly the case, these events are not entirely out of our control, as legislation can regulate business practices to mitigate the negative impacts of climate change on the environment. Over the past few years, however, profit’s influence has prevented some politicians from regulating corporations to the extent required to keep citizens safe.

If you recall the mass power outages due to snowstorms in Texas, you may remember a talking point used by prominent Republicans: it was all a result of wind turbines freezing over. Not only that, but implementing Congresswoman Alexandria Ocasio-Cortez’s Green New Deal would only exacerbate the problem in the future. 

This is hardly the case, as wind turbines generate only 20% of Texas’ total electricity and only 10% in the winter, with the combination of natural gas, coal, making up around 70%. The state was particularly hit hard by the storm because it is the only state in the continental U.S. with its own power grid, which is run by Electric Reliability Council of Texas (ERCOT), meaning that it could not use energy from other grids. 

The grid’s independence meant that it did not have any federal oversight. This is key because the Texas pipelines and gas wells were not winterized (prepared for the cold weather) as much as the grids of northern states. ERCOT reported that “thermal sources, such as coal, gas and nuclear, lost nearly twice as much power due to the cold [instead of] renewable energy sources, which contributed to just 13% of the power outages.” 

A different common talking point was that it was a once in a generation level snowstorm. However, there was a severe cold spell in the state in 2021, as well as temperatures classified as frigid in 1983, 1989, 2003, 2006, 2008, and 2010, which proves this point as false.

One of the worst results of the disaster was the tremendous energy bills that Texans had to pay for a problem caused by the negligence of their own energy provider. The financial structure of the energy industry in Texas emphasizes profits for high ranking officials, rather than preparation for the growing threat of climate change.

Another company whose lack of adequate regulation has led to disaster is PG&E, a prominent gas and power company in California. They currently face their third set of criminal charges due to their electrical network causing some of the west’s worst wildfires, including 5 out of the 10 most destructive fires in the state of California. There is no doubt about the company’s culpability, as they recently saw felony convictions. 

One New York Times article stated, “Regulators have found that in many fires, PG&E violated state law or could have done more to make its equipment safer.” The  article said according to a report put out by the California Public Utilities Commission, PG&E broke the state’s rules by collecting more gas and transmission revenues than it was allowed to by $224 million dollars in 2012, two years after a gas pipeline explosion in San Bruno. Despite this, the company spent $93 million less than its authorized budget from 1997 and 2000 on capital spending, operations, and maintenance. Their profit could have been a tremendous help in improving their equipment, which would reduce the amount of disasters, as well as the money they have to pay out after as a result.

So far, they have paid out billions of dollars to companies and citizens due to their own equipment causing the disasters, with a different New York Times article stating that “regulators have said it has often been very poorly maintained.” The company filed for bankruptcy in January 2019 as a result, but were able to get out of it after a deal with California’s Governor, Gavin Newsom in March 2019.

Now the solution seems simple: lawmakers create stricter regulations on large companies to improve their equipment and punish them harshly if they refuse to do so. However, the answer is much less cut and dried. The reason these corporations can act with impunity is because of their political donations. 

According to WGRZ, a news station in Buffalo affiliated with NBC, PG&E donated $208,400 to Newsom’s latest reelection campaign, as well as money to 8 out of every 10 lawmakers in the state. Now for the record, Newsom said, “If the suggestion is somehow I’m influenced by that, you’re wrong.” However, in March of 2020, he made a deal with the company to emerge from bankruptcy and passed bill AB 1054, which protects monopolies in the power industry from any financial trouble after they start wildfires, even after their continued ineptitude has led to some of the worst wildfires in history.

Texas Governor Greg Abbott is not guilt-free either, as he has received over $26 million in contributions from the oil and gas industry, which he continuously deregulates at the expense of his citizens’ lives. Despite the overwhelming evidence that the energy industry was at fault for the mass power shortage in Texas, he chose to scapegoat green energy instead of his own incompetence.

“Occurrences like the California Wildfires and the Texas snowstorm have devastating effects on others, and the severity of these occurrences will only grow in the future unless something is done about it,” said Alvina Rahman ’23. 

Multiple environmental disasters within the past 15 years have been the result of the negligence of large corporations, who keep an inordinate amount of profits for their high ranking officials instead of improving their goods and services. They are barely punished for their actions by legislation because they donate large sums of money to politicians who are supposed to serve the people.

This relationship shows that the profit motive is too strong for some of these businesses to act adequately for the impending threat of climate catastrophes. I believe that these companies should be unable to donate to politicians, who in turn should only receive money from small donors and act forcefully to prevent large corporations from causing future harm. 

 “Occurrences like the California Wildfires and the Texas snowstorm have devastating effects on others, and the severity of these occurrences will only grow in the future unless something is done about it,” said Alvina Rahman ’23.