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Climate Change: The Business Outlook

by Joanna Klonsky
December 5, 2008

Though the incoming presidential administration has indicated its first priority will be repairing the troubled U.S. economy, President-elect Barack Obama emphasized throughout his campaign that combating climate change will also be a top agenda item. Obama plans to reduce U.S. greenhouse gases by 80 percent by 2050, and has pledged to create millions of “green jobs.” At a symposium on policy and strategies to combat climate change Tuesday, business leaders seemed to agree Obama should institute a federal cap-and-trade system for carbon emissions.

Here is a roundup of some of the main ideas presented at the event:

Former Rep. Phil Sharp (D-IN), president of Resources for the Future, a non-profit environmental research firm, said action on climate change should not be delayed due to the global economic crisis, and called specifically for a price to be imposed on carbon immediately.  “We need some greater clarity in the rules of the game, especially where new investments need to be made,” like in new power plants, assembly lines and other infrastructure, Sharp said.  He encouraged policymakers to ensure that the transition to carbon pricing is eased for low-income groups and for industries and regions that will be particularly hard hit by the change.

Vicki Arroyo, Executive Director of the Georgetown State-Federal Climate Resource Center, pointed to regional participation in greenhouse gas accords as evidence of a growing mandate for legislative action on climate change. Still, she pointed to economic turmoil and unstable gas prices as challenges to effective government action. Arroyo said it is important for the United States to “rejoin the table” in international negotiations around climate change.  She said a lack of presidential leadership has contributed to failures of climate change legislation in Congress in recent years.

Richard Saines, a partner at Chicago’s Baker and McKenzie LLP, noted evidence of an “Obama effect”—a renewed “spirit of cooperation and hopefulness” on climate change. He predicted concrete commitments from the Obama administration at the 2009 United Nations Climate Change Conference in Copenhagen.

Thomas Cushing, vice president of the Chicago Climate Exchange, a private cap-and-trade program, said the business community would benefit from a carbon price. “When there’s a price for emitting a ton of carbon, it allows industry to plan rationally for the future,” Cushing said. “One thing that companies abhor is uncertainty.”

John Rowe, Chairman and CEO of Exelon Corporation, reiterated calls for a cap-and-trade program. The CEO of a major nuclear energy company, Rowe also said he “cannot conceive” of dealing with the challenge of climate change without a “substantial number” of new nuclear plants.

The scientific evidence on climate change is conclusive, Rowe asserted. “To ignore it would be an act of blindness or arrogance.”

1 Comment

  • Posted by Brian McGuigan

    The UK has successfully passed legislation which requires it to cut emissions 80% by 2050. That result comes after year-long consultations with British business leaders – so their concerns were specifically addressed. It seems from this post that the US business community has a lot of thoughts on climate change legislation. Perhaps the British example is one to follow.