Climate change exposes sharp divides in US industry (News Feature)

By Chris Cermak Oct 16, 2009, 0:48 GMT

Washington - US companies are struggling to speak with one voice both on the threat posed by global warming and how to deal with climate change.

With the US Congress locked in a testy battle over the necessity and cost of curbing the emissions blamed for global warming, the issue has exposed similar rifts within the US business community.

The dispute bubbled to the surface in recent weeks. A number of companies - computer giant Apple among the highest-profile - withdrew from the powerful US Chamber of Commerce over its opposition to federal legislation that would curb greenhouse-gas emissions.

Others that have pulled their support for the chamber, which has some 3 million members, include shoemaker Nike and energy firms Exelon and PG&E. Duke Energy has left the National Association of Manufacturers, another industry group that opposes federal caps.

The spat is part of a wider debate within the business community over the costs of climate action, the importance of tackling global warming and how to encourage a shift from dirtier fossil fuels to renewable energies.

For many companies, the writing is on the wall. With many US states poised to adopt carbon curbs if Congress doesn't act, they argue that a uniform, national limit on emissions would be better than a patchwork of regulations. Businesses may as well get on board.

More than 20 firms have joined a separate association of businesses and environmental groups called the US Climate Action Partnership. They include General Electric, Royal Dutch Shell, ConocoPhillips, BP America and the three main US carmakers.

Jorma Ollila, chairman of oil giant Shell, said Thursday in Washington that companies failing to adapt to future threats like climate change 'will not be around for the long haul.'

'The age of easy oil is over, and in a carbon constrained world we need to find alternatives,' said Ollila, who chairs another business lobby called the World Business Council for Sustainable Development. 'We need effective carbon markets and a price on carbon.'

The Chamber of Commerce has strongly opposed climate legislation that was passed by the US House of Representatives earlier this year and is currently being debated in the Senate.

The bill would create a cap-and-trade system that effectively puts a price on emissions by allowing cleaner and dirtier companies to trade pollution permits. The system already exists in Europe, and Japan's new government announced similar plans last month.

Critics say the measure will stifle economic growth and shift businesses to developing countries that have yet to impose hard pollution caps. Supporters argue that a shift toward renewables is necessary and will boost the economy by creating 'green jobs.'

Both sides wrangled over comments Wednesday by Douglas Elmendorf, director of the non-partisan Congressional Budget Office (CBO), who testified that cap-and-trade legislation will come at 'some cost to the economy.'

Ehlendorf said he expected the climate bill would reduce economic growth by 0.25 to 0.75 per cent by 2020. Many workers would lose jobs in the shift from fossil fuels like coal and oil to renewable technologies like wind and solar, though he said the overall effect on employment would probably be negligible.

Thomas Donohue, president of the Chamber of Commerce, argues that the bill imposes an undue burden on the US economy. Any cap on pollution should only come with similar action by emerging powers like China. The US and China emit nearly half of the world's greenhouse gases.

Shell remains part of the Chamber, but Ollila said the two sides had a clear 'disagreement.' Businesses have to be 'part of the solution' and should work more closely with governments to find ways to boost incentives for renewable energy.

It will be the job of companies to put forward the 'business voice' when world governments hold a December summit in Copenhagen to thrash out a new global climate treaty, Ollila said.

The question remains: which voice will be heard?