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Corporate concern on climate rises

More companies favor action on emissions, both for environmental and pragmatic reasons.

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Still, Mr. Cicio recognizes the political momentum for new policies. "The majority of companies have come to the political reality that Congress is very serious about taking action," he says.

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Evolution is also visible within the Bush administration, long skeptical of implementing new policies to curb greenhouse gases.

President Bush called Monday for two agencies to collaborate on new standards for auto fuel economy. The move follows a Supreme Court ruling in April that put new pressure on the White House to regulate greenhouse emissions as air pollution. Mr. Bush did not, however, lend support to the strict fuel-economy standards supported by some in Congress.

Vehicle emissions are one piece in a tapestry of potential policies.

Such ideas include:

•Research on new technologies, such as how to sequester carbon emissions to avoid their release into Earth's atmosphere.

•A cap-and-trade regime to limit emissions from power plants and industries.

•Incentives or regulations to make buildings, appliances, and vehicles more efficient.

•A "carbon tax" on fossil fuels, to create market incentives for alternatives.

The list goes on. An overall plan to stabilize greenhouse-gas emissions would have significant costs, by some estimates. But, by improving efficiency, it also has benefits.

On May 4, the International Panel on Climate Change estimated that the tab for such actions could be anywhere from negligible to high – using up perhaps 3 percent of the world's economic output in 2030.

At the high end, that's a significant price to pay for one public-policy goal. But many experts also say the economic cost of not acting could be even higher – affecting the health of the planet itself, with all its economic activity.

Even with gathering pressure for new policies, several challenges complicate the effort:

Who will win and lose? Some policies involve choices that favor some companies over others within an industry. Under cap-and-trade, for example, utilities that operate coal-burning plants would want the industry's initial emissions allowances to be based on their current output of greenhouse gases, Holmstead says. Utilities with cleaner fuel sources, by contrast, would gain an edge if the allowances were based on current output of electricity, not carbon.

Will China and India be part of the picture? Eventually, everyone agrees that any viable effort to curb global emissions will have to include action in India and China. But where some say US action, on its own, is a vital first step, others say that could simply cause jobs and emissions to move overseas. One idea: a kind of tax on goods imported from countries with poor emissions controls.

How can market forces be brought to bear? The goal of many policies is to impose a "price signal" that encourages consumers and businesses to control greenhouse gases in the most efficient ways possible.

A cap-and-trade system may be easier to impose, politically, than a new tax on carbon. But since the price of fossil fuels can fluctuate widely, some experts say that one form of carbon tax could serve a crucial purpose: setting a price floor, so that alternative energy can be nurtured by a predictable price environment.

"What do we do with a precipitous fall in gasoline prices?" asks David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.

"We've been there," he says, referring to aftermath of the 1970s oil-price shock. "Prices fell dramatically, and the [alternative energy] game was over."

Now, with oil prices relatively high, it might be a politically palatable moment to create a new price floor – using a tax that's imposed only if the market price for oil falls to the ordained floor.

On these and other issues, the lobbying promises to move into a higher gear as lawmakers press forward. This year, Mr. Semans says, Congress has already held 48 hearings on climate change.

Some analysts say a major bill, such as one imposing a cap-and-trade system, could pass Congress before the next presidential election. Others say that controversial issues involved could require several years and active involvement by the next US president.