U.S. corporations are increasingly calling for action on global warming, sensing a business opportunity in cutting greenhouse gases while...
U.S. corporations are increasingly calling for action on global warming, sensing a business opportunity in cutting greenhouse gases while hoping to shape regulations they think are inevitable.
At the heart of the increase in corporate advocacy on global warming is a belief that the United States is missing a golden opportunity to cash in on the burgeoning worldwide response to the threat.
Some companies are concerned that the Bush administration’s voluntary programs are too weak to encourage expanded use of cleaner technologies such as solar, wind and even nuclear power, compared to the market-based regulations now required nearly everywhere else in the developed world.
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Japan now leads the world in the development of solar-power cells, and Europe is the top producer of wind-power machinery.
Some companies are also concerned that by failing to assert leadership on global warming, the United States is allowing the European Union — and a number of states around the country — to dictate how industries are expected to conduct themselves around the world.
Other companies are concerned that global warming could affect long-term supplies of natural resources they depend on.
“We think the science is pretty compelling, and it is appropriate to take action now” to reduce global warming, said Helen Howes, vice president for environment, health and safety at Exelon, one of the nation’s largest utilities, which participated in the National Commission on Energy Policy.
“You have seen thawing in the Arctic, issues of potential rising water levels. For us, because we have a lot of nuclear plants that use a lot of cooling water, we are worried that water supplies may not be as reliable in the future.”
Shift in thinking
Bucking the Bush administration’s position that tougher rules would harm the U.S. economy, Fortune 500 companies including General Electric, Duke Energy and JPMorgan Chase in recent months have championed stronger government measures to reduce industrial releases of carbon dioxide, the main heat-trapping gas that scientists have linked to rising temperatures and sea levels.
This shift in corporate thinking was on display at a congressional hearing earlier this month, where executives from large companies including DuPont, United Technologies and Baxter International described how they were getting an early start on reducing greenhouse-gas emissions — something they think they would be required to do sooner or later.
“People increasingly will believe that greenhouse-gas emissions should be reduced and that actions should begin today to prepare for that eventuality,” James Rogers, the chairman of power generator Cinergy, told the House Science Committee. Rogers now advocates a national program to reduce greenhouse-gas emissions.
The number of companies involved remains small, but it is growing, particularly in the energy sector, and is emerging as a new dynamic in the debate over the future of America’s global-warming policies.
The United States, the world’s largest emitter of greenhouse gases, was the only major developed nation other than Australia to reject the Kyoto Protocol, an international pact to cut emissions to about 5 percent below 1990 levels by 2012.
Although their rhetoric is rife with references to protecting planet Earth, some of the corporations acknowledge that their newfound focus on global warming is driven by opportunity for profit.
Duke Energy would like to build a new nuclear-power plant, a type of electricity generation that does not emit greenhouse gases, for instance, while GE wants to expand sales of wind-power turbines and pollution-control equipment.
“We believe we can help improve the environment and make money doing it,” GE Chairman Jeffrey Immelt said last month in a speech at George Washington University that attracted widespread notice. “We see that green is green.”
Many multinational companies, which already deal with carbon-reduction regulations in other parts of the world, think it is only a matter of time before they will be required in the United States. Rather than resist the inevitable, they want to help shape new regulations in a way that will give them a competitive advantage.
In addition, some companies fear that in the absence of federal action, many cities and states, which already are proposing their own regulations, will create a hodgepodge of compliance standards across the country.
Those concerns were amplified this month, when California Gov. Arnold Schwarzenegger signed an executive order that pledges to reduce the state’s emissions by more than 80 percent in the next half-century.
“We don’t need a patchwork of inconsistent state or local regulations to complicate and increase the cost of compliance,” Duke Energy Chairman Paul Anderson said in an April speech to Charlotte, N.C., business leaders in which he surprised the electric-power industry by advocating a federal tax on the carbon content of fossil fuels. “Yet a patchwork is exactly what we are getting, due to federal inaction.”
Duke, which has announced plans to acquire Cinergy, formally proposed the levy to President Bush’s tax-reform panel in April — an approach that critics noted would penalize Duke far less than some competitors in the electricity business that depend more on coal power.
Anderson later said that he did not think such a tax would be approved while Bush was in office.
As more businesses express an openness to greenhouse-gas regulations, some politicians are attempting to seize the momentum. That is reflected in a number of amendments to the sweeping energy bill being considered by Congress that offers incentives to business.
Revised legislation by Sens. John McCain, R-Ariz., and Joe Lieberman, D-Conn., to establish firm limits on carbon-dioxide exhaust has added hundreds of millions of dollars in subsidies for nuclear power and other types of cleaner electricity sources. More companies have expressed interest in the legislation since the subsidies were added but have stopped short of supporting it.
An amendment by Sen. Jeff Bingaman, D-N.M., seeks to enact the recommendations of the National Commission on Energy Policy, a bipartisan panel of experts from business, government, environmental groups and academia that recommended a less restrictive cap on greenhouse-gas emissions than the one proposed in the McCain-Lieberman bill.
“Businesses don’t like taxes, and they don’t like uncertainty. Right now, they face a future where they will be hit with some kind of regulation on carbon, and a growing number of them are saying, if we take some actions now perhaps we can avoid stronger actions later,” said Sen. Thomas R. Carper, D-Del., who has proposed legislation to reduce carbon dioxide along with traditional smog-forming pollutants.
“There is more support for doing something than there was a year ago,” Carper said. “Will there be enough to pass one of them? Anybody’s guess right now.”
The Bush administration, which has pursued an energy policy that heavily promotes fossil fuels, has shown few signs of altering its position on climate change, however.
“Our position is very straightforward: We need to take all aggressive actions within our capabilities, as long as they further our economic growth,” said Jim Connaughton, Bush’s chief environmental adviser.
Most oil and gas companies, among the president’s biggest political benefactors, remain firmly opposed to toughening the administration’s existing policies, which promote only voluntary reductions of greenhouse gases.
The American Petroleum Institute has been lobbying against the recommendations of the National Commission on Energy Policy, which also suggested a moderated “cap and trade” system in which companies that reduced more than their share of greenhouse gases would obtain credits they could sell to others.
A similar, less restricted market is already under way in Europe, where a ton of carbon credits was recently valued at $25.
There is also far less momentum for global-warming regulations in the House than in the Senate, backers acknowledge, making passage of any legislation unlikely.
“We’re not there yet in the House, quite frankly. These businesses are way ahead of us,” said Rep. Sherwood Boehlert, R-N.Y., who supports a federal program to reduce greenhouse gases. The Bush administration stance “happens to be wrong,” he added, but he expressed optimism that it could change as dissenting businesses become more vocal.
Adviser Connaughton said that the Bush administration opposed hard limits on greenhouse-gas emissions because it believed that they would drive up energy prices, forcing manufacturers out of the country and costing Americans jobs.
He noted that more than 100 companies had pledged to reduce their greenhouse gases under the administration’s voluntary Climate Leaders program, including IBM, General Motors and Johnson & Johnson.
To more and more companies, however, the status quo is not enough.
“American industry leaders are not calling for us to adopt Kyoto, but they are growing increasingly impatient with the voluntary approach,” said William Reilly, who served as head of the Environmental Protection Agency under President George H.W. Bush and is co-chairman of the National Commission on Energy Policy.