|
As Bush fiddles...
US corporations are no
longer sitting idly by while
US
president George Bush goes slow on climate change policy. Bush faces rising
pressure from many businesses to get his policy act together
US
president George Bush faces pressure from
UK
Prime Minister Tony Blair to join international climate change action at the
forthcoming group of industrialised nations G8 meeting in
Scotland
. But the undertow from financial interests at home is threatening to
unbalance him.
The leader of a country where money talks louder than any other interest
cannot continue to ignore the growing dissatisfaction from within the
financial community. Bush's head-in-the-sand policy on man's contribution to
global warming is no longer viable.
The momentum from pension funds, shareholder groups and several major
utilities is reaching a tipping point, said former vice-president Al Gore at
a UN summit on climate risk last month that drew the interest of hedge funds
representing trillions of dollars worth of investment business.
Carbon-constrained future
US investors are growing increasingly concerned that their dollars are being
spent unwisely, with utility decisions based on strategies that ignore the
inevitability of a carbon-constrained future (see p2). Companies that ignore
the risk are in danger of being left with millions of dollars in stranded
costs when US carbon regulation is eventually passed, said Mindy Lubber,
president of the investors coalition Ceres (see p3).
The uncertainty surrounding the science of climate change is becoming moot
as most other industrialised nations are acting on the preponderance of
evidence and facing up to their responsibility to cut greenhouse gases (GHGs).
The
US
is becoming increasingly isolated, and US hedge funds are being forced to
look abroad for opportunities to invest in the lucrative new clean energy
markets. And recent developments from key players in the business community
are signalling a change of attitude in the
US
from the bottom up. A large group of institutional investors, including the
influential
California
public employee pension fund Calpers, has pledged $1bn for clean technology
companies. General Electric has launched its "ecomagination"
initiative (see opposite). JP Morgan has taken on a GHG reduction commitment
and Ford has agreed to produce a climate change report later this year.
Climate compulsion
Utilities will soon be forced to include climate risk when evaluating their
financial position and investment decisions. The Securities and Exchange
Commission has indicated that it will take enforcement action against
companies that fail to disclose climate change exposure in their annual
filings, although not specifically required, as it forms part of its
requirement for material risk disclosure, Lubber said.
Several attorneys-general are trying to force the top five emitters in the
power sector to take the threat of climate change more seriously via a
nuisance lawsuit filed in a
New York
court. Whether the case is successful or not, it does highlight how strongly
states feel about the issue.
A group of northeastern states, for example, is bolting down the final
details of a cap-and-trade programme to come into effect in 2008, which it
hopes will serve as a catalyst for federal action. Now major cities are
getting involved, taking on Kyoto-like strategies to cut emissions at the
suggestion of the mayor of
Seattle
.
A growing group of utilities is publishing reports disclosing their exposure
to potential carbon regulation. And the recently announced merger of Duke
and Cinergy, whose chief executives have both publicly supported a stronger
federal climate change policy, will create the largest US utility and a
powerful lobbying voice.
This
article has been reproduced with permission from Argus media. It first
appeared in Argus Global Emissions Volume IV,6,June 2005.
If
you would like to try a free trial of this publication then click
here.
Back
to MZINE
|
