The Billionaire War Heats Up

The richest people in America are turning on one another—over climate change.

Tom Steyer.
Tom Steyer introduces a panel during the National Clean Energy Summit 6.0 at the Mandalay Bay Convention Center on Aug. 13, 2013, in Las Vegas.

Photo by Isaac Brekken/Getty Images for National Clean Energy Summit 6.0

Move over, Al Gore. There’s a new wealthy environmentalist whom conservatives love to hate. If you haven’t heard of him yet, meet Tom Steyer.

In the past, environmental leaders like Gore have often struggled to deliver a message that resonated: They’re too caught up in the stratosphere, living lives of excess that make it easy for critics to cry hypocrisy. Gore, for one, has been much maligned for his use of private jets.

At a Democratic Party fundraising dinner earlier this year, Gore called Steyer “Mr. Tipping Point,” according to Politico. During the dinner, Steyer “talked about the importance ‘of climate as the issue of our times, the need to act politically’ and ‘how social change requires using climate as a winning issue in campaigns.’ ”

At first glance, that kind of talk is unexpected from one of the richest men in America. Steyer would be the first to admit it. In a biographical post on his super PAC’s website labeled “accountability,” Steyer says “climate change has not always been on my radar.” In 2012, after founding Farallon Capital Management and running it for more than 25 years (amassing a billion-dollar fortune in the process), he left his post to work on global warming full time.

As the Washington Post reported last year, to reduce his footprint (which is probably still pretty big), Steyer chooses to take the red eye. He doesn’t shy away from the occasional environmental campaign rally, but he’s not about to guilt trip you for not switching out your light bulbs, either. His target is much bigger: the American political process itself.

In response to his efforts to make global warming a major political issue in the runup to the 2014 midterm elections, Steyer is fast drawing the ire of the political landscape’s resident oil-money billionaires, the Koch brothers. Their talking point is simple: Tom Steyer is one of us, so lefties should demonize him, too. As Slate’s David Weigel wrote, “Republicans are trying to Koch-ify Tom Steyer in just five or six months.”

Ever since February, when Steyer announced a $100 million campaign to fight climate change, critics have been eager to pick at anything that may tarnish his green label. Steyer’s campaign—$50 million of his own, and $50 million from his super PAC, NextGen Climate—is primarily meant to encourage action on global warming.

(Update, July 17, 6:15 p.m.: ​On Wednesday, Politico reported that Steyer’s super PAC was having trouble meeting its fundraising goals, with only $1.2 million collected so far.)

But most of Steyer’s money came as a result of investments he made at the helm of a diversified hedge fund. Some of those investments were in the fossil fuel industry.

Earlier this month, a front-page New York Times piece alleged Steyer’s firm made investments in the global coal industry under his watch that dwarf what he’s pledged to spend campaigning for action on climate change. An excerpt:

The New York Times examined the operations of coal-mining companies in which Farallon invested or to which it lent money during Mr. Steyer’s stewardship, which coincided with growing demand and prices for coal. Together, those mines have increased their annual production by about 70 million tons since they received money from the hedge fund, according to corporate records, government data and interviews with industry experts.

That is more than the amount of coal consumed annually by Britain.

The New York Times notes that “conservative groups and blogs are scouring Mr. Steyer’s business record. One blog, Power Line, has written extensively about Farallon’s work in the coal industry.” What the Times doesn’t note is that Power Line is led by John Hinderaker, who is a partner in a law firm that, according to a 2011 ThinkProgress report, counts fossil fuel conglomerate Koch Industries as a major client. As of Thursday, his firm’s website lists the status of a case representing Koch Industries as “ongoing.” (Hinderaker didn’t respond to my request for comment.)

In the April 20, 2014, Power Line blog post that the Times links to, Hinderaker writes:

Today, [Steyer] is a bitter opponent of fossil fuels, especially coal. That fits with his current economic interests: banning coal-fired power plants will boost the value of his solar projects. But it was not always thus. In fact, Steyer owes his fortune in large part to the fact that he has been one of the world’s largest financers of coal projects. Tom Steyer was for coal before he was against it.

But Steyer doesn’t dispute that he “was for coal before he was against it.” In an op-ed in Politico on Monday, Steyer explained his about-face from hedge fund capitalist to environmental crusader, in an attempt to set the record straight:

[I]t’s true—Farallon did make fossil fuel investments under my watch. But the more I learned about the energy and climate problems we currently face, the more I realized I had to change my life. I concluded that the best way to align my work with my beliefs was to make a real change—leaving my role managing a firm with investments across the industrial spectrum, and instead joining in the global effort to find a solution to climate change once and for all.

Steyer says that he’s completely divested his personal holdings from the fossil fuel industry as of June 30, though certainly that won’t stop the right from claiming that he’s being hypocritical. But that’s missing the point. It’s not Steyer’s dollars (or even the source of those dollars) that will make the biggest difference but his example of putting his money where his mouth is. In his Politico piece, he offers an incredibly personal description of his epiphany and his decision to dedicate himself to tackling global warming on behalf of his children’s generation. Steyer has done something that’s still far too unusual: He’s admitting he was wrong on climate change and that he wants to rectify it. It’s that kind of honesty that we’ll all need to embrace if we’re to face the steep climb of remaking the global economy into one that isn’t tied to carbon with a full head of steam (or, electrons, as the case may be).

Meanwhile, in a world where money defines political clout, most billionaires aren’t as eager to ruffle the status quo. The few who are stand out. Last month, Steyer joined billionaire former New York City Mayor Michael Bloomberg and near-billionaire former Goldman Sachs CEO and Treasury Secretary Henry Paulson to release a high-profile report on the economic effects of climate change in the United States. That report called for the leaders of the business community to address the growing specter of climate change out of their own self-interest: to avoid economic risk. With their billions in annual revenue as part of the fossil fuel industry, the Koch brothers may want to take note.

It’s going to take a rethink of the status quo at every level of society to consider this problem solved. As Steyer admits in his Politico op-ed, “climate change is bigger than any one person.” But despite being just one person, Steyer has made himself a pretty big platform, starting right at the top.

This article is part of Future Tense, a collaboration among Arizona State University, the New America Foundation, and Slate. Future Tense explores the ways emerging technologies affect society, policy, and culture. To read more, visit the Future Tense blog and the Future Tense home page. You can also follow us on Twitter.