Climate Change / Global Warming & Investing Implications

[sarals]

Industry CEOs testify for emissions limits

They get a mixed reception on Boxer's Senate committee
Zachary Coile, Chronicle Washington Bureau

Wednesday, February 14, 2007

(02-14) 04:00 PST Washington -- California Sen. Barbara Boxer enlisted the help of several Fortune 500 company executives Tuesday to argue that mandatory greenhouse gas limits won't damage the U.S. economy.

Boxer, who chairs the Senate Environment and Public Works Committee, called business leaders from PG&E, DuPont and BP America to testify before Congress about their support for economy-wide emissions limits to fight global warming.

"All these companies agree that we need to act now to enact a mandatory program to address global warming," Boxer said at the hearing.

The testimony comes at a key moment in the debate over climate change in Washington, when the fight over whether global warming is real is waning and the momentum for legislative action is growing.

Congress is so keenly interested in the topic that there were three separate climate change hearings Tuesday on Capitol Hill. But lawmakers from both parties are still conflicted about how to regulate greenhouse gases without hurting U.S. businesses and consumers.

Boxer set out to address those concerns by inviting corporate leaders who back legislative action. The executives at Tuesday's hearing were all members of the U.S. Climate Action Partnership, a coalition of 10 companies and four environmental groups that joined together last month to announce their strategy to combat global warming.

"Our organization is here because we share a view that climate change is the most pressing environmental issue of our time," said Peter Darbee, chairman and CEO of PG&E Co., California's largest gas and electric utility.

"Our economy is the world's locomotive, and (the group) believes that it's critical to get that engine pulling in the right direction on climate change."

But several top Republican senators, who oppose climate change legislation, accused the CEOs of lobbying for new regulations that could benefit their companies.

"More and more companies that wish to profit on the backs of consumers are coming out the woodwork to endorse climate proposals in hopes of forcing customers to buy their products or be penalized," said Sen. James Inhofe, R-Okla., the panel's top Republican, referring to the companies as "climate profiteers."

Critics believe a "cap-and-trade" system on carbon emissions could help companies such as PG&E, which have invested heavily in low-carbon energy sources such as natural gas, while penalizing competitors that rely on high-carbon sources such as coal. Other firms, such as BP and General Electric, have spent years developing solar and wind technologies and could benefit under rules that reward clean energy producers.

But Boxer lashed out at Republicans for criticizing companies that are investing in renewable energy technology and taking a lead role in confronting global warming.

"It's quite unfair to cast aspersions on people who actually may have come to a decision that there's a need for corporate responsibility," she said.

Darbee insisted PG&E was not lobbying to boost its profits, but to take some of the practices the company developed in California to the national level.

He noted that California has kept its energy usage flat over the last three decades -- while the nation's has risen by about 50 percent -- by investing in energy efficiency. By doing so, the state avoided having to build 24 new large power plants that would have spewed an additional 125 million tons of greenhouse gases into the atmosphere.

Darbee pointed to a recent McKinsey & Co. consultants' study that found worldwide energy usage could be cut by 50 percent over 15 years through energy efficiency. "And we can do it using today's technology," he added.

DuPont Chairman and CEO Chad Holliday said his company, which is investing in new biofuels, and other firms want to be part of the solution to global warming, but are waiting to see what Congress will do.

"We see a whole suite of technologies to solve these problems, and we think the uncertainty of what regulations will do are holding companies back," Holliday said.

Republican Sen. John Warner of Virginia, who could be a key swing vote on climate change legislation in the committee, said the testimony by corporate leaders could influence many lawmakers to reconsider their opposition to regulation.

"You've got my attention," Warner said.

E-mail Zachary Coile at [e-mail].

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/02/14/MNG9MO45TK1.DTL&type=politics