Most Republicans tend to believe the government should interfere in the free market as little as possible, and generally only to preserve life, safety or public order — never to pick winners and losers.
Republicans in the Indiana House, however, are poised to turn those principles upside-down out of sympathy for fossil fuel enterprises whose product cost and pollution output have left them disfavored by the marketplace.
House Bill 1224, set for a chamber vote Monday (Jan. 31, 2022), would prohibit the state of Indiana from contracting with any business that chooses to limit commercial relations with a business engaged in the exploration, production, use, transportation, sale or manufacturing of fossil fuel based energy, or any business doing business with fossil fuel energy companies.
That means, for example, if the measure is enacted into law, Indiana likely no longer could maintain its contract for Microsoft software on the tens of thousands of computers used by state employees because Microsoft is among the business signatories to The Climate Pledge of zero net carbon emissions by 2040.
According to the U.S. Energy Information Administration, fossil fuel consumption for energy use accounted for 92% of total human-generated carbon dioxide emissions in 2019.
As such, the only way Climate Pledge signers possibly can meet their goal is by intentionally reducing their use of fossil fuels — which the legislation defines as a "boycott" — in favor of wind, solar and other renewable energy resources that don't produce the same level of carbon emissions.
The legislation specifies the state may not enter into a contract for the purchase of supplies or services unless the contract contains a written verification from the business that it does not boycott energy companies, and will not boycott energy companies for the term of the contract.
Just among Climate Pledge signatories that would mean Indiana probably no longer could do business with Visa, Amazon, Verizon, Pepsi, IBM, Johnson Controls, Salesforce, Indianapolis-based Infosys, Unilever, Proctor & Gamble, HP, Accenture, CBRE real estate, Uber, Best Buy, and more than 200 additional national and global brands.
Republican Gov. Eric Holcomb has not taken a public position on the legislation or addressed how Indiana government will be able to function without products from these companies.
All businesses in Northwest Indiana also potentially could be barred from receiving state contracts because the businesses likely purchase their electricity from NIPSCO, whose goal of moving from 80% coal-generated power to 18% coal by 2025 could be classified as a boycott under the legislation.
In addition, the measure requires the state and the Indiana Public Retirement System to largely withdraw from the global financial marketplace, and divest from most financial companies, since many national and international banks have committed to reducing their fossil fuel use and are limiting their investments in fossil fuel companies.
The sponsor of the measure, state Rep. Ethan Manning, R-Logansport, said his goal is to send a message to big businesses and big banks that the General Assembly sets energy policy for Indiana — "not corporate boards in far-off places."
"It is my view that we cannot sit idly by and allow these companies to get away with harming Indiana energy companies, and Hoosiers themselves, by making poor decisions not based on financial returns, but on some political philosophy and pressure from activists who don't care about the reliability or affordability of energy for Hoosiers," Manning said.
A who's who of fossil fuel company lobbyists applauded Manning's proposal during a hearing Tuesday before the House Committee on Financial Institutions and Insurance, including former state Rep. Matt Bell, R-Avila, speaking on behalf of Indiana coal companies.
"Today, the fossil fuel industry is under attack. Financing is less available, it is more expensive, and it is making your constituents' energy more expensive and less reliable," Bell said.
"If this strategy of boycotting against industries based on political whims is allowed to continue what happens when financial institutions decide we don't like auto manufacturers who make cars that run on gas, or we don't like farmers who grow sugar products because, you know, obesity is a public health crisis. Are we going to allow corporate America to make those choices? Or will we make them here (at the Statehouse)? I suggest that this is the place that they should be made."
Indeed, other state lawmakers already are eager to similarly use the state's buying power as a tool to punish businesses that fail to support gun-related enterprises as proposed in House Bill 1409, which did not advance out of committee this year.
On the other hand, Shannon Anderson, director of advocacy for Earth Charter Indiana, opposed the fossil fuel measure due to its since-removed application to local governments, as well as the state.
But she noted the legislation also will impair efforts to improve Indiana's environmental sustainability, public health and equity.
"It is virtually impossible to distinguish between a boycott and a company that has a 100% clean-energy goal," Anderson said. "Why would we prohibit communities investing in local businesses that take their community care so seriously? And how will this impact Indiana creating green opportunity zones and recruiting green technology companies?
"Legislators often talk about not picking winners and losers in business. But this bill is exactly siding with a short list of specific companies over the financial interests and freedom of choice of (local) governments, the will of the local voters and the health of communities."
A similar law first was enacted last year by Texas. The American Legislative Exchange Council (ALEC), a conservative organization funded in part by fossil fuel companies that supplies proposed legislation to state lawmakers, in December endorsed a "model bill" on this topic that largely mirrors the contents of Indiana's pending measure.
Both are based on a law Indiana adopted in 2016 that requires companies doing business with the state to certify they do not support any enterprise that chooses to boycott, divest or sanction the Middle Eastern country of Israel.
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