Climate Change: Why Many Companies Want National Regulation

Dec. 5, 2002
While the nation braced for an early-winter cold snap, there were growing signs that the debate over what to do about global warming was heating up.
  • Facing criticism from home and abroad over the pace of the president's policy, at an early December conference on climate change Bush administration officials signaled they might speed up consideration of a more aggressive approach;
  • Several bills that would regulate greenhouse gas (GHG) emissions may soon be introduced in Congress;
  • Environmental groups' strategy of pressing states to take action to mitigate climate change appears to be succeeding;
  • A group of electric generating companies is now lobbying for a national approach to the problem of climate change.

Environmental groups and the foundations that support them have decided to push for legislation outside of Washington, D.C., according to Michael Bradley, executive director of the Clean Energy Group (CEG), an organization representing nine electric generating companies that operate in 30 states. "That way they create havoc and chaos for companies, and as a result more and more companies are looking for a uniform national solution."

The Pew Center on Global Climate Change recently released a report that features case studies of nine states that have taken action to mitigate climate change.

"Having a patchwork approach to GHG creates a lot of transaction expenses for national companies that have to deal with those differing regulations," said Bradley. "But more importantly, our preference is for GHG emissions trading, and without a national strategy we can't create a consistent market for this."

Last year, President George W. Bush set a climate policy that relies on voluntary measures by industries until 2012. He said that before taking stronger measures, more research was needed to establish the environmental risks of warming. But the president has also accepted findings by a panel of American experts that most of the global warming in recent decades has been caused by human activity.

The electric generating industry alone accounts for one-third of all GHG emissions in the United States, according to Bradley, and current congressional legislation targets the sector for this reason.

Members of CEG believe national regulation of carbon dioxide is inevitable in any case, and thinks regulatory certainty is better for business because it enables decision-makers to understand the requirements of new rules before investing in new power generating equipment. Bradley likened the current situation with GHG to acid rain in the 1980s. States in the Northeast complained about the problem, and eventually Congress was forced to act, imposing a "cap and trade" program that CEG now favors for GHG emissions.

For now, the administration continues to emphasize more climate research. A final research plan for the next four years is to be released in April.

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