OAKLAND, CA — With the chorus of business leaders calling for comprehensive climate rules appearing to grow louder, the face of potential legislation continues shifting as Congressional leaders work to build bipartisan support.
CEOs from some of the nation's largest companies expressed their desire last week for an end to the uncertainty surrounding the future of U.S. climate change policy. At the Wall Street Journal's Eco:Nomics conference in Santa Barbara, for example, the heads of Royal Dutch Shell Plc, American Electric Power Co., FPL Group and Rio Tinto threw their support behind comprehensive climate legislation that would give them the assurances needed to guide long-term investment decisions.
"We need this done, America needs to lead the world," AEP CEO Michael Morris said Thursday, Reuters reported.
A poll of Fortune 500 senior executives found about half felt the lack of clarity on climate legislation was putting the U.S. at a competitive disadvantage. Nearly three-quarters said climate change would play an important role in their decision-making within the next five years.
John W. Rowe, Exelon Chairman and CEO, on Saturday publicly declared his preference for climate legislation over EPA regulation as a means to address climate change, although some senators are moving to block or postpone EPA action.
"We are moving inexorably toward a low-carbon society but in unproductive and uneconomic fits and starts," Rowe in a keynote speech (PDF). "Approaches that put a price on carbon emissions, such as cap-and-trade, remain the only solutions to our energy and climate challenges that give us cleaner, more secure energy while minimizing the costs to consumers and putting more people to work."
Also last week, Avista, Calpine, Deutsche Bank, Pacific Gas and Electric, Recycled Energy Development and Warner Music joined American Businesses for Clean Energy (ABCE), a nonprofit group whose membership has swelled to more than 2,400 since its inception in November.
ABCE's mission is simple: to show support for Congressional action that would boost support for clean energy and reduce greenhouse gas emissions. The uncertainty is causing the U.S. to lose ground, while other major economies move rapidly toward clean energy, according to Kevin Parker, global head of asset management at new ABCE member Deutsche Bank Asset Management.
"Germany and China are now far ahead of the U.S. in the number of jobs created and the amount of investment in clean energy," Parker said during a conference call with reporters last Wednesday.
The lesson is simple: "The U.S. is putting itself at a severe competitive disadvantage," Parker said, adding that the U.S. is "acting against its own economic interests."
Big Oil also threw its support behind a bill, but its preferred emissions-reducing mechanism would be a carbon tax for the sector, rather than an economy-wide cap-and-trade program that would potentially treat it unfairly, ClimateWire reported.
Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.), and Joseph Lieberman (I-Conn.) are said to be giving the recommendations serious consideration and are reportedly moving toward a cap-and-trade program that would exclude the oil industry, which would see a fee or tax. The debate between a carbon tax and cap-and-trade is not new; supporters argue a carbon tax would be simpler and more transparent than a complicated cap-and-trade plan, while opponents counter that a cap-and-trade program fixes and lowers the amount of emissions -- which is the ultimate goal -- while a carbon tax fixes the price.
"They say a carbon tax is too politically sensitive and that it is easier and more expedient to support a cap-and-trade approach because the public will never figure out where it's hitting them," Exxon CEO Rex Tillerson told the Economic Club of Washington last October, ClimateWire reported. "They'll just know they hurt somewhere in their pocketbook. I disagree with this assessment. I believe the American people want climate policy to be transparent, honest and effective."
Business leaders are also longing for clarity on the methods by which they should be measuring their carbon footprints. Executives meeting in London recently called for a common method for measuring and reporting greenhouse gas emissions that would allow for easier comparison across companies.
Carbon tax or not, climate legislation certainty could also bring clarity to the types of methodologies companies would use to measure and report greenhouse gas emissions.
"Doing a comparison within a sector is fraught with difficulty," Ben Murray, director of London-based Carbon Smart, told Environmental Finance. "We are a long way from having data to compare businesses."
While the Greenhouse Gas Protocol and ISO 16064 standard can be considered "de facto" methodologies, the British lobby group Confederation of British Industry is promotion the creation of a common approach.
Image CC licensed by Flickr user richardmasoner.