CEOs plead for mandatory emissions caps

[Ron Burgundy]

AP - Chief executives of 10 major corporations urged Congress on Monday to require limits on greenhouse gases this year, contending voluntary efforts to combat climate change are inadequate.

The call for immediate action came on the eve of President Bush's State of the Union address in which he is expected to reiterate that the industry on its own is making progress in curtailing the growth of heat-trapping emissions without the need of government intervention.

But the executives and leaders of four major environmental organizations said in a letter to Bush that mandatory emissions caps are needed to reduce the flow of carbon dioxide and other heat-trapping gases into the atmosphere.

"We can and must take prompt action to establish a coordinated, economy-wide market-driven approach to climate protection," the executives, part of a coalition called the U.S. Climate Action Partnership, said in a letter to the president.

The executives, representing major utilities, aluminum and chemical companies and financial institutions, said the cornerstone of climate policy should be an economy-wide emissions cap-and-trade system.

Members of the group include chief executives of Alcoa Inc., BP America Inc., DuPont Co., Caterpillar Inc., General Electric Co., and Duke Energy Corp.

At a news conference, the executives said that mandatory reductions of heat-trapping emissions can be imposed without economic harm and would lead to economic opportunities if done across the economy and with provisions to mitigate costs.

Many of the companies already have voluntarily moved to curb greenhouse emissions, they said. But the executives also said they do not believe voluntary efforts will suffice.

"It must be mandatory, so there is no doubt about our actions," said Jim Rogers, chairman of Duke Energy. "The science of global warming is clear. We know enough to act now. We must act now."

Eileen Claussen, president of the Pew Center on Global Climate Change, said the group intends to push the issue in Congress, urging lawmakers to address climate change as soon as possible. She said she expects other major corporations to join in the call.

Fred Krupp, president of Environmental Defense, a member of the alliance, called the executives' support "a game changer" in the debate over climate. "We are asking Congress to not wait for a new administration and not wait for the presidential debates," Krupp said.

In the letter, the executives urged Congress to significantly reduce greenhouse gas emissions. The legislation should cut these releases 10 percent below today's levels within a decade and at least 60 percent by 2050, according to the action plan. Releases of carbon dioxide, the principal heat-trapping gas, has been increasing an average of 1 percent a year.

At his daily briefing, White House press secretary Tony Snow dismissed any call for mandatory, economy-wide carbon caps to deal with climate. He acknowledged there's been some talk about such caps, "but they are not part of the president's proposal."

The first days of the new Democratic-controlled Congress have seen a rush of legislation introduced to address climate change, all of which have some variation of a cap-and-trade approach to dealing with climate change.

Among those pushing cap-and-trade climate bills are two leading presidential aspirants, Sens. Barack Obama (news, bio, voting record), D-Ill., and John McCain (news, bio, voting record), R-Ariz.

Essentially such a mechanism would have mandatory limits of greenhouse gas emissions, but would allow companies to trade emission credits to reduce the cost. Companies that can't meet the cap could purchase credits from those that exceed them or in some case from a government auction.

Also signing the letter to Bush were the executives of Lehman Brothers, PG&E Corp., PNM Resources, FPL Group and four leading environmental organizations.

source: http://news.yahoo.com/s/ap/20070122/ap_on_bi_ge/ceos_climate [link]

[motivez]

Wow.

The free market calling for governmental regulation. Interesting.

I like that they're being proactive about getting legislation in place to deal with this.

[avsp]

I dont really like the idea of carbon trading, ..., its open to abuse & doesnt actually solve the problem anyway.

Easier & simpler to just tax energy production at source to change behaviour.

A legally enforced cap per company might also be a good idea providing it reduces over time.

T what extent is this call driven by fears of a new trade war based around claims of unfair competion?

[Thorgrim]

It's pretty sad when the "free market" is ahead of libertarians in accepting science

[6SpeedTA95]

Originally Posted by motivez

Wow.

The free market calling for governmental regulation. Interesting.

I like that they're being proactive about getting legislation in place to deal with this.

You gotta really read between the lines on this stuff. The WSJ has run about half a dozen articles the last 10 days on this. It's interesting because many of the companies want the restrictions because it will help drive their competition out of business or at least seriously hamper their ability to compete in the near term.

[Phantom]

This seems illogical to me.

I can think of only two reasons why companies want mandatory emissions caps:

1) as 6speed wrote, it would put competitors out of business

or

2) they want government tax breaks/assistance in connection with the caps

At a news conference, the executives said that mandatory reductions of heat-trapping emissions can be imposed without economic harm and would lead to economic opportunities if done across the economy and with provisions to mitigate costs.

SOMEONE is going to get harmed by these provisions, or there would be no need for them - companies would just do it voluntarily.

[Thorgrim]

What if 90% of companies want to do it, but 10% don't? Solution, lobby Congress, they're hurting the business community by forcing people to be unequal fields

i love how people assume corporations can't possibly believe in the "global warming hoax" and it has to be some scheme or fear...maybe we should regulate the free market to prevent corporations from lobbying congress on this, is that your solution?

[Phantom]

Originally Posted by Thorgrim

What if 90% of companies want to do it, but 10% don't? Solution, lobby Congress, they're hurting the business community by forcing people to be unequal fields

i love how people assume corporations can't possibly believe in the "global warming hoax" and it has to be some scheme or fear...maybe we should regulate the free market to prevent corporations from lobbying congress on this, is that your solution?

exactly, lobby congress for it because buying carbon credits will be cheaper than competing with smaller firms

I hate the idea that corps lobby congress, because it always leads to the purest form of rent-seeking. The only reason I don't think it should be outlawed is free speech is more important than anything economic.

[Thorgrim]

Originally Posted by Phantom

exactly, lobby congress for it because buying carbon credits will be cheaper than competing with smaller firms

I hate the idea that corps lobby congress, because it always leads to the purest form of rent-seeking. The only reason I don't think it should be outlawed is free speech is more important than anything economic.

yes, it must be an evil scheme by corporations

i find your lack of faith in the private sector disappointing

[6SpeedTA95]

Originally Posted by Phantom

This seems illogical to me.

I can think of only two reasons why companies want mandatory emissions caps:

1) as 6speed wrote, it would put competitors out of business

or

2) they want government tax breaks/assistance in connection with the caps



SOMEONE is going to get harmed by these provisions, or there would be no need for them - companies would just do it voluntarily.

You have hit the nail on the head.

The articles published recently mention specifically how corporations would benefit by the undue burden being put on many other companies that are not prepared or can not prepare for quickly changing emissions requirements. This would allow them to have a substantial competitive advantage for indefinate periods of time depending on how the other (typically smaller companies) competitors in the market react.

Point two is also a point they've hammered home recently in the WSJ. These companies would then be able to get significant tax incentives to improve emissions (which I am not at all opposed to). These companies in many cases like these caps for reason 1) it makes smaller or mid size companies without as many assets and cash much more vulnerable to the government snare (aka fines) for exceeding these caps.

I have no problem with government offering tax incentives for decreased pollution but it must be structured in a way that helps guide the market and doesn't just eliminate competition for many larger companies.

[Thorgrim]

Big business pushing around smaller companies? Wow where were you guys in the wal-mart threads?

If companies want to use their assets to lobby congress, their ideas are sound in part of an attempt to help the environment, who are we to step in and regulat them?

What about those companies who are going green because it saves them money, like texas instruments, is that an evil corporate scheme as well?

[Phantom]

Originally Posted by Thorgrim

Big business pushing around smaller companies? Wow where were you guys in the wal-mart threads?

If companies want to use their assets to lobby congress, their ideas are sound in part of an attempt to help the environment, who are we to step in and regulat them?

What about those companies who are going green because it saves them money, like texas instruments, is that an evil corporate scheme as well?

Wal Mart is (usually) fair competition. These guys want to use (buy) the power of the government to wipe out competitors. There is a HUGE difference between the two. I find it hard to believe you don't recognize that difference.

[6SpeedTA95]

Originally Posted by Thorgrim

Big business pushing around smaller companies? Wow where were you guys in the wal-mart threads?

If companies want to use their assets to lobby congress, their ideas are sound in part of an attempt to help the environment, who are we to step in and regulat them?

What about those companies who are going green because it saves them money, like texas instruments, is that an evil corporate scheme as well?

Who's talking about regulating them? No one...

Many companies are going green because it saves them money and many support green initiatives because it gives them a significant competitive advantage, just like Wal Mart pushing for the min wage hike starting 5 years ago.

We're simply saying that congress needs to realize what is going on and if government is going to offer incentives and impose caps it needs to be done in a manner that is fair to all corporations.

[Thorgrim]

Having the Congress making a business idea "fair to all companies"=regulation

Let the free market deal with it, its the business community that is asking for it

[6SpeedTA95]

Originally Posted by Thorgrim

Having the Congress making a business idea "fair to all companies"=regulation

Let the free market deal with it, its the business community that is asking for it

I agree we should let the free market deal with it, but that wont happen because companies are already being taxed beyond belief. What do you think taxes, regulation, caps etc are? Its government interference with the market. If the government is going to tax these corporations at 40% then government has an obligation to make sure its policies have as little impact on the market as possible.

[Thorgrim]

Originally Posted by 6SpeedTA95

If the government is going to tax these corporations at 40% then government has an obligation to make sure its policies have as little impact on the market as possible.

Why?

Shouldn't they just listen to what the business community wants instead? Or should we censor their free speech?

[motivez]

I'm not sure I buy the idea that a level playing field is going to hamper someones ability more than someone else's.. perhaps you can provide some real world example of how this would drive a competitor out of business

[6SpeedTA95]

Originally Posted by motivez

I'm not sure I buy the idea that a level playing field is going to hamper someones ability more than someone else's.. perhaps you can provide some real world example of how this would drive a competitor out of business

Yeah it simply comes down to costs. Wal Mart has been pushing for a min wage hike because very few of their employees make min wage, if min wage goes up to 7/hr or 7.25/hr then many of their competitors will be met with increased costs. The same is true for emissions.

[Thorgrim]

People also can't compete with Wal-marts low prices, how are we going to regulate that?

[6SpeedTA95]

Originally Posted by Thorgrim

People also can't compete with Wal-marts low prices, how are we going to regulate that?

what the hell are you talking about?