Corporate concern on climate rises
More companies favor action on emissions, both for environmental and pragmatic reasons.
American businesses have reached a new phase regarding global warming, with more CEOs focused increasingly on what steps government should take, not on whether major new policies are needed.Skip to next paragraph
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Duke Energy's Jim Rogers, for example, runs a large electric utility but supports a mandatory cap on carbon-dioxide emissions. And last week, General Motors joined a list of companies urging policies that include tighter standards on vehicle emissions and a US economy-wide cap on carbon output.
Even Big Oil has changed its tune, with ConocoPhillips shoulder to shoulder with GM in the US Climate Action Partnership, or USCAP.
All this doesn't mean that corporate America has locked arms with the environmental community. But it adds momentum to the policy discussions that are now getting under way in earnest on Capitol Hill.
Legislation will take time to crystallize. But, judging by the jockeying for position by powerful corporations, it's on the way.
"A compromise will eventually emerge," says Jeff Holmstead, a former US air-quality official now in private legal practice in Washington. But "figuring out how to do it is enormously complicated…. A huge amount is at stake."
Federal policies could emerge piece by piece, with some being relatively easy to enact. But an overhaul, anything with the potential to cap or reduce total greenhouse-gas emissions, would represent an environmental-policy push "bigger than anything that has been done," says Mr. Holmstead. The firm he has joined, Bracewell & Giuliani, works with a range of corporate clients on climate-change issues.
The shift by business has come about gradually, and for varied reasons. For one, public consensus on the science of climate change has solidified, and corporations have followed with varying degrees of commitment. Some chief executives, though, simply have "got religion" on what they see as a major threat to both ecosystems and the economy.
In addition, some companies see an entrepreneurial opportunity ahead, developing products and services to mitigate greenhouse-gas emissions.
Beyond that, many business leaders are galvanized by two forces: the desire to have a seat at the table when policy is written, and the desire for certainty about the regulatory environment. It's a pattern that has emerged on other issues in the past, especially when business sees the risk of a patchwork of state regulations.
"We've seen the movie before. There's no need to sit around and wait for the end. That's where a lot of companies are coming from now," says Truman Semans of the Pew Center on Global Climate Change in Arlington, Va. [Editor's note: The original version misstated the name of the center.]
The Pew Center supports both USCAP and another coalition called the Business Environmental Leadership Council, a group Mr. Semans directs. While not lobbying for any specific bill, both groups support concrete steps by government to reduce carbon emissions.
The membership roster doesn't look that different from the Dow Jones Industrial Average. The leadership council includes Intel, Alcoa, Whirlpool, and the electric utility PG&E. In all, the companies in this group have a market capitalization of $2.8 trillion – a sizable chunk of the roughly $50 trillion in corporate stock traded worldwide.
Among companies on record as favoring action on climate change, many are nonetheless preparing to lobby against proposed solutions that they worry could harm the economy – or their particular business. This is a delicate question that will be central to the debate.
The leading policy option, for example, would set a cap for emissions in most of the economy, and would encourage creation of a market to buy and sell the rights for those emissions.
"When Congress determines how expensive a cap-and-trade will be, it'll make it very difficult to pass," predicts Paul Cicio, who heads Industrial Energy Consumers of America, a coalition of manufacturing firms worried about policies that cap emissions before enough alternative fuels are available.