Ragendra K. Pachauri

Rajendra K. Pachauri

An independent investigation by a prominent international audit firm has undercut one of Texas’ arguments in a petition against federal regulation of climate-changing greenhouse gases.

And a related British newspaper article, which Texas Attorney General Greg Abbott cited as evidence that such regulation is unwarranted, has been retracted by that newspaper with an apology.

Abbott’s petition earlier this year challenged the Environmental Protection Agency’s finding that climate-changing greenhouse gases are dangerous, a legal prerequisite for the regulation of industrial emissions that the EPA is now planning to phase in.

One of the attorney general’s arguments was that the EPA’s “endangerment finding” was based largely on the conclusions of the U.N.-sponsored Intergovernmental Panel on Climate Change. The IPCC’s chairman, Rajendra K. Pachauri, “has, and certainly appears to have, several conflicts of interest,” Abbott asserted.

Abbott’s petition, rejected last month by the EPA, alleged that these conflicts of interest “indicate that the IPCC is being led toward a conclusion that climate change is a dire threat to the planet that must be reversed; a conclusion that would enrich Dr. Pachauri and the entities that employ him.”

One of the Texas petition’s footnoted sources for this claim was an article published by Britain’s Daily Telegraph last December, which dealt with Pachauri and The Energy and Resources Institute, a non-profit research organization focusing on energy, environment and sustainable development where he is director general.

Another British newspaper, The Guardian, reported Thursday, however, that accountants at the KPMG firm, in an investigative report published the same day, had concluded that Pachauri “did not abuse his position to enrich himself,” and noted that the Daily Telegraph had removed from its Web site the article cited by Abbott.

The Guardian reported that Pachauri “had come under pressure to resign following two mistakes in a 2007 IPCC report and false allegations that he had made millions of dollars from advisory roles.” (The Texas petition also argued that the mistakes supported its position that the EPA should not regulate greenhouse gases.)

This was Abbott’s assertion about Pachauri in his petition to the EPA to reconsider its endangerment finding:

The Chair of the IPCC probably has, and certainly appears to have, several conflicts of interest. For example, Dr. Pachauri is the director of The Energy and Resources Institute (“TERI”), an organization that was a awarded over $4 million in grants for research on the melting of glaciers; that research was premised on an inaccurate claim that the Endangerment Finding cited and endorsed, and which was made by TERI’s head of glaciology. Furthermore, Dr. Pachauri serves on a number of boards and maintains business interests in industries that are or will be affected by policies that are based on IPCC conclusions about climate change. TERI gained a financial interest in GloriOil, a Texas firm specializing in oil extraction technology that extends the useful life of an oil field, by granting GloriOil permission to use an oil-extraction method developed at TERI. Perhaps even more egregious is Dr. Pachauri’s employment as President of TERI-NA, a non-profit firm funded by the UN, Amoco, American defense contractors, Monsanto, and carbon traders to lobby “sensitive decision-makers in North America to developing countries’ concerns about energy and the environment.” Dr. Pachauri is also on the board of Siderian, a venture capital firm investing in sustainable technologies. He is also an adviser on renewable and sustainable energy to Credit Suisse bank and the Rockefeller Foundation. Among his other private activities related to his work as IPCC chair, Dr. Pachauri has earned hundreds of thousands of dollars in consulting fees (paid to TERI) from Deutche [sic] Bank, Credit Suisse, and Yale University.

These conflicts of interest violate the standards of conduct that the [sic] Dr. Pachauri himself has prescribed for the IPCC. In so doing, Dr. Pachauri’s conflicts of interest weaken the Endangerment Finding. Dr. Pachauri’s conflicts of interest indicate that the IPCC is being led toward a conclusion that climate change is a dire threat to the planet that must be reversed; a conclusion that would enrich Dr. Pachauri and the entities that employ him. Consequently, EPA has relied on an assessment that ensures bias and imbalance, a result that EPA claims to want to avoid.

The KPMG report, posted on The Guardian’s Web site, offered this summary of the firm’s findings on Pachauri and TERI:

Based on a review of personal financial records of Dr. Pachauri and other records of TERI provided to us for the period 1 April 2008 to 31 December 2009, we did not come across any evidence that either suggests any unexplained receipts and disbursals in Dr. Pachauri’s personal books of account or inappropriate recording of expenses/incomes pertaining to Dr. Pachauri’s advisory services in the books of account of TERI. No evidence was found that indicated personal fiduciary benefits accruing to Dr. Pachauri from his various advisory roles that would have led to a conflict of interest.

The financial emoluments received by Dr. Pachauri appeared to be consistent with the terms of his employment with TERI and terms stated in contracts with various organisations to which advisory services have been provided. It was also noted that receipts from various organisations such as companies, universities and other institutions with respect to Dr. Pachauri’s advisory services were accounted for in TERI’s records as an income.

The Daily Telegraph’s article published Dec. 20, 2009, which was cited in the Texas petition to back its charges against Pachauri and TERI, is no longer posted on the newspaper’s Web site at the address included in the petition’s footnote, though it is still accessible on the internet on sites such as this one.

Last Saturday, the Daily Telegraph posted an item on its site, headlined “Dr. Pachauri – Apology.”

On 20 December 2009 we published an article about Dr Pachauri and his business interests. It was not intended to suggest that Dr Pachauri was corrupt or abusing his position as head of the IPCC and we accept KPMG found Dr Pachauri had not made “millions of dollars” in recent years. We apologise to Dr Pachauri for any embarrassment caused.

The retracted 2009 article had included this passage:

One subject the talkative Dr Pachauri remains silent on, however, is how much money he is paid for all these important posts, which must run into millions of dollars. Not one of the bodies for which he works publishes his salary or fees, and this notably includes the UN, which refuses to reveal how much we all pay him as one of its most senior officials.

The Guardian reported Thursday that Pachauri “does not receive a salary for his work chairing the IPCC.” The article added:

The KPMG audit, completed in March, showed the allegation that Pachauri had made millions of dollars could not be further from the truth. In addition to his annual salary of £45,000 [about $70,000 now], the auditors found that in the period 1 April 2008 – 31 December 2009, Pachauri received 20,000 rupees (£278) from two national power commissions in India, on which he serves as director; 35,880 rupees (£498) for articles and lectures; and a maximum of 100,000 rupees (£1,389) in the form of royalties from his books and awards.

Any money paid as a result of work that Pachauri had done for other organisations went to TERI. The accounts also show that Pachauri also donated to the institute a lifetime achievement award from the Environment Partnership Summit – a 200,000 rupee prize he would have been entitled to keep.

Although the EPA rejected Texas’ administrative petition asking that the endangerment finding be reversed, the state still has a pending legal challenge on the same issue. In addition, state officials declared earlier this month that they would not implement the emission-limiting regulations that the EPA is scheduled to begin phasing in next January.

– Bill Dawson

Image credit: Photo by Evstafiev