Global warming comes to the US, in unexpected ways

March 28, 2007

Climate change is an everyday media story in the US, and companies are beginning to respond to the call the issue has on their business practice.

You know the US has officially reached the tipping point on climate change when a former vice president and presidential candidate wins an Oscar for an environmental documentary.

Climate change is a common media story, people on the street are talking about it and leading environmental organisations and multi-national corporations create the US Climate Action Partnership to engage the US government to develop a policy framework. It seems the only thing in the US, which hasn’t been affected by global warming, is the federal government.

Two years ago, the idea that this group of environmentalists and corporations would come together to develop a common agenda to reduce global warming would have seemed preposterous. A year ago people would have been a little surprised, but when the United States Climate Action Partnership issued a call to action in January, it seemed very ordinary.

The partnership (whose members include Alcoa, Caterpillar, Duke Energy, DuPont, GE, the Environmental Defense Fund, World Resource Institute and the Natural Resource Defense Council) asked for a policy framework around a mixture of stringent emission policies, incentives and flexible approaches to establish a price signal for carbon.

The group recognises that climate change and the sources of green house gas (GHG) emissions is a global problem and in order to effectively reduce the adverse effects, every major emitting country needs to reduce its emissions rates. The group identifies that the US, as a global leader, has the unique ability to influence other nations, but the US must set an example. More remarkably, the group states “…care should be taken that policies do not merely push emissions from US facilities to overseas plants, ultimately there must be an international program for addressing climate change and its impacts.”

As such, the US cannot act alone and must actively engage in the existing international climate change dialogue. Following Exxon’s financial support of groups that purposely create doubt about the science behind climate change, we have learned to question corporate motives. We wonder why these companies in the partnership care about climate change — after all many of them earn their profits out of energy usage. We would like to believe that the companies are doing it because it’s the right thing to do. But realistically we know it is driven by the market.

The group is not timid about making the business case; in fact they are quite straight forward about their business objectives. These companies are looking into the future. They want to make sure the US remains a leader in the marketplace, remains competitive and is able to manage future risks.

Among the reasons cited for more government involvement is that with the right policy framework, companies will be forced to become more efficient, new markets will be created, and research and development will be stimulated. If these companies recognise the government’s responsibility to reduce GHG emissions, what have they been doing to address their own environmental impact?

For the most part, these corporations have already taking leadership roles. All have stated goals to reduce their emissions and are working on innovative products. According to the Pew Center on Global Climate Change, DuPont has reduced emissions by 72% from 1990 levels, way ahead of its goal of 65% by 2010. The company has also addressed marketplace issues and plans to derive 25% of its business revenue from non-depletable raw materials by 2010. It is already two-thirds of the way there. Another group member, GE is also working to address its environmental practices. GE aims to reduce emissions by 1% by 2012 and the intensity of its emissions 30% by 2008 (both compared to 2004).
It is encouraging to see companies and environmental groups work together to engage with the US government. However, some suggest that the timing of this initiative is motivated by the upcoming election.

The Bush administration is likely to develop a policy framework which is skewed to the interests of the corporations, whereas there is a lot of uncertainty about the next administration and if it would indeed be as pro-business. How will corporations continue to engage their own businesses, develop products and set an example for other companies to follow? It will be even more interesting to see if a group of concerned corporations make an impact with the US government, where others have failed.

Jen Peckman is a researcher in the New York office of The Corporate Citizenship Company.