Follow the money in the climate change debate

Maine Today

Wednesday, January 24, 2007

The United States "can and must" take prompt comprehensive action to reduce emissions of climate-changing pollution.

So sayeth an unusual and refreshing group of global warming converts -- 10 CEOs who lead some the country's biggest corporations, including Alcoa, General Electric, BP America, Caterpillar, Dupont and Duke Energy.

They're not talking voluntary action here, either, but a mandatory, cap-and-trade system with limits set by the federal government.

Monday's announcement by the newly formed U.S. Climate Action Partnership sets a politically inconvenient benchmark for President Bush on the eve of his sixth State of the Union address.

It also highlights that the focus of the climate change debate is shifting from politics to economics. And the money is leaving lawmakers in its wake.

Financial pressure is forcing major players in the energy industry to fundamentally rethink how they're doing business. Many see global warming regulations as inevitable and are trying to avoid the future costs and liabilities associated with facilities that emit high levels of carbon dioxide.

Plans for a host of coal plants across the west have either been scrapped or are dying on the vine. Some companies, like Minneapolis-based Xcel Energy, are switching their focus to coal gasification, which allows carbon to be sequestered from the waste stream.

San Diego-based Sempra Energy not only killed plans to build coal plants in Nevada and New Mexico that would have supplied 2,000 megawatts of energy, it decided to get out of the coal business altogether.

Sempra's decision was driven in part by one of two laws recently signed by Republican Gov. Arnold Schwarzenegger.

The first sets up a greenhouse gas cap-and-trade system. The second, the one Sempra reacted to, prohibits any utility in the state from contracting for power with a plant that fails to meet state CO2 emission standards.

While the U.S. Climate Change Action Partnership's call may be startling in its candor, it represents a solid middle ground in the evolving argument over how to address climate change.

The United States now knows enough about climate change to justify action, the group said. And acting sooner rather than later will preserve valuable response options, provide greater certainty to industry and reduce the impacts of a changing climate on the economy.

The plan endorsed by the group calls for slowing the growth of carbon dioxide emissions over the next five years followed by cuts that reduce pollution levels by 10 to 30 percent from today's levels in the subsequent decade.

By contrast, President Bush is expected to call for a 20 percent reduction in gasoline usage over the next 10 years by sharply increasing the mix of renewable fuels like ethanol and by increasing economy standards for passenger cars.

That's a good start: Burning less fuel is the cheapest way to reduce greenhouse gas emissions from the transportation sector, which accounts for about 33 percent of U.S. energy-related greenhouse gas pollution.
But it's not nearly enough.

Although the U.S. Climate Action Partnership also includes four environmental organizations, it's not like the greenies kidnapped the CEOs and brainwashed them in some incense-fogged ashram. The clear strains of enlightened self-interest can be heard in their call to action.

The CEOs said they were motivated in part by strong but unlinked state efforts that have been led, often enough, by Republicans. (California's cap-and-trade market follows the northeastern states' Regional Greenhouse Gas Initiative, which was launched by Gov. George Pataki, R-N.Y.) A coordinated national plan would avert a quilt of potentially conflicting state regulations.

"That was a catalyst for us," Caterpillar CEO Jim Owens told the San Jose Mercury News. "It's not very efficient to have states doing different things. We need a national policy."

The CEOs also see a profitable upside to the changing energy paradigm. Like other challenges the country has faced, climate change will create opportunities for companies that are willing to adapt by becoming more efficient and investing in new technologies.

Innovation will lead to increased U.S. competitiveness, increased energy security and an improved balance of trade.

"We believe that a national mandatory policy on climate change will provide the basis for the United States to assert world leadership in environmental and energy technology innovation, a national characteristic for which the U.S. has no rival," their report says.

Who can argue with that?

Theo Stein is an editorial writer for the Portland Press Herald/Maine Sunday Telegram and can be contacted at 791-6481 or: tstein@pressherald.com