Corporate concern on climate rises

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

from the May 16, 2007 edition

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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.

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