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Global Warming
Business Makes Cents

Petitioning for stronger environmental regulations is hardly business as usual for corporations. Then again, there is nothing “usual” about global warming. In what appears to be a promising merger of environmental progress and economic growth, major U.S. companies recently called on Congress and the Bush administration to pass regulations that would slash greenhouse-gas emissions as much as 90 percent by 2050. 

While world leaders quibble over who should do what to slow the production of greenhouse gases, industry associations and groups like the Global Roundtable on Climate Change, an international conglomerate of more than 100 companies and environmental and social organizations, are taking the lead. They represent a growing sentiment: Climate change may throw the atmosphere into a spin, but confronting this threat won’t necessarily induce economic upheaval.

“The corporate sector has moved very quickly in the last couple of years. I have been quite surprised by it myself, about how forthcoming corporate members were,” says Jeffrey Sachs, chair of the Global Roundtable and director of Columbia University’s Earth Institute. “They basically understood that there was a need for action.”

Whether CEOs are embracing their inner flower child or whether being good to the earth is good business, their bottom lines are improving. DuPont has saved $3 billion by cutting emissions 72 percent since 1991. And the conservation programs of another Global Roundtable member, Florida Power & Light, saved enough energy to delay the construction of 10 medium-size power plants. “Florida is a very sensitive state for environmental issues, and we are being very responsive to our customers,” says Randy LaBauve, FPL’s vice-president of environmental services. “I think our stockholders support that.”

Fighting regulation not only creates image problems for corporations, it can also endanger long-term business success. For starters, national companies are about to face a regulatory mishmash as states outpace the federal government in restricting emissions. And building new factories without a blueprint of laws that will control them in coming decades muddles business planning even further.
 
So now environmentalists and corporate leaders alike are requesting a set cap and price for carbon. It remains to be seen if these rules will require companies to buy or trade carbon allowances. Carbon prices may also come in the form of a fine for companies that exceed the cap. Either way the edge will go to those that are carbon-frugal within such a system and that develop new technologies.

With companies forging ahead and the public, judging from polls, recognizing the problem in growing numbers, it is the politicians who are lagging behind. A key moment will come this December, when the United States and other countries negotiate standards for after the Kyoto Protocol expires in 2012. In the meantime, the Global Roundtable is urging citizens to go to www.nextgenerationearth.org, where they can pressure politicians to pass decisive climate measures.

“This is going to be a long and difficult process,” says Sachs. “But we have to get started, or there is no way we are going to be able to get greenhouse gases down to safe limits. No way at all.”—Melissa Mahony