Corporate Leaders Urge Carbon Dioxide Cuts

Leaders of 10 corporations and four environmental groups called on President George W. Bush and Congress to pass within one year national legislation requiring mandatory cuts in greenhouse gas emissions.

The program would be based on declining mandatory carbon dioxide emissions caps backed up by CO₂ trading among emitters. The mandatory caps would kick in under a phased schedule beginning in five years with emissions to be 100–105% of today's level; in 10 years, the cap would drop to 90–100% of current emissions; and in 15 years, the cap would be 70–90% of current levels. Further out, the corporate and environmental CEOs urged Congress to pass legislation that would cut emissions to 60–80% of current levels by 2050.

The group, called the U.S. Climate Action Partnership, also wants legislation to include greater incentives to encourage development and deployment of technologies to limit or control CO₂ emissions, such as energy-efficient technologies. But the partnership particularly focused on coal-fired power plants, which produce half the nation's electricity. It urged greater federal support and incentives for projects to capture CO₂ and sequester it underground.

At a press conference on Jan. 22 announcing the agreement, partnership speakers said that the economy could survive the cuts and that their program would lead to opportunities for business. They expressed great support for a market approach through tradable allowances but noted that the caps may hit some sectors harder than others and that additional cost control options may be needed as the program is implemented.

The partnership's 10 corporations have a market capitalization of more than $750 billion and include Alcoa, BP America, Caterpillar, Duke Energy, DuPont, FPL Group, General Electric, Lehman Brothers, PG&E, and PNM Resources. The environmental groups are Environmental Defense, Natural Resources Defense Council, Pew Center on Global Climate Change, and World Resources Institute.

The proposal notes the importance of international programs to reduce global greenhouse gas emissions and urges the U.S. to become more active and to take leadership in international negotiations. It also warns that care must be taken to ensure that U.S. companies do not move production overseas to avoid emissions restrictions at home. On the other hand, it says U.S. action should not be contingent upon similar actions in other countries.

The plan was released the day before the President's State of the Union address, which is expected to have a large energy component. The President remains opposed to mandatory greenhouse gas emissions reduction, White House officials say.

Several members of the House and Senate who support climate-change efforts voiced strong support for the agreement. Sen. Barbara Boxer (D-Calif.), head of the Environment & Public Works Committee, called the announcement "one of few moments in history when all sides come together for the common good" and promised swift action in her committee. On the House side, Speaker Nancy Pelosi (D-Calif.) said that passing global warming is a top priority of the House and that she intends to move ahead with or without support from President Bush.

The CEOs declined to respond to repeated requests to assess different pieces of recently introduced legislation. "The agreement is a 'game changer,' " says Fred Krupp, president of Environmental Defense. "It is time for both parties to come together and pass legislation now."