Bush faces pressure on carbon emissions

By Caroline Daniel in Washington

Ten of the biggest US companies, including Alcoa, GenElectric and Lehman Brothers, will today pile pressure on President George W. Bush to take more aggressive action on climate change. They will him to embrace a system of mandatory caps on greenhouse gas emissions designed to cut them by up to 30 percent over the next 15 years.

Underlining the depth of concern, nine chief executives, including Jeffrey Immelt of General Electric, Richard Fuld of Lehman Brothers and Jim Rogers of Duke Energy, will attend the launch of the report from the US Climate Action Partnership, a coalition of 10 companies and several environmental groups.

Alain Belda, chairman of Alcoa, will warn that “addressing climate change involves risks and costs. But much greater is the risk of failing to act. I am convinced that we can build a global plan of action on climate change in ways that create more economic opportunities than risks.” Mr Fuld will call on industries “to address the tremendous challenge of global climate change”.

The intervention comes ahead of Mr Bush’s State of the Union speech tomorrow when he will make a clearer link between the demands of energy security and the environment. The White House has consistently opposed moves to introduce a federal cap-and-trade system similar to that in place in Europe to cap greenhouse gas emissions and allow companies to trade their quotas.

The high-profile corporate engagement is the latest sign of the shift in Washington on energy policy where Democrats have forced climate change policy to the center of the political agenda. Already there are at least 10 bills circulating in the Senate that would impose mandatory caps on emissions.

“What has happened now, is that companies have concluded it is not ‘if’ but ‘what’ in terms of a carbon regime,” said Daniel Yergin, chairman of Cambridge Energy Research Associates (Cera). A recent Cera survey of electric utility chief executives and finance directors found that 85 per cent expected mandated restrictions within 10 years.

US corporate interest has been driven by sell interest, and concern about the patch-work of regulations initiated by states in the absence of a federal program. The Uscap report follows a report last month from the Energy Security Leadership Council, a coalition of 16 business leaders and retired generals. It called for a 4 per cent annual rise in the fuel economy standard for vehicles, more drilling and new tax incentives for renewable fuels, Herb Kelbeher, chairman of Southwest Airlines and a member of the council, told the Financial Times: “I would like to see the president advocate both for more stringent standards for conservation and for more drilling and production in the US.”

He added: “I’m somewhat of a latecomer. Two to three years ago I wasn’t preoccupied with these issues but I have become more sensitive to them, especially our oil dependency, and become a crusader from a patriotic standpoint.”