Finding a silver lining in greenhouse gases

By BRIAN FALLOW

Some of the world's largest corporations are taking a proactive approach to the issue of global warming, and finding it a financially rewarding experience.

That is the message from Eileen Claussen, president of the Washington-based Pew Centre on Global Climate Change and a former senior US environmental official, who is in New Zealand this week as a guest of the Government and BP.

BP is one of 37 Fortune 500 companies affiliated to the Pew Centre. Collectively they employ more than two million people (slightly more than the New Zealand economy does) and include such familiar names as Shell, Toyota, Rio Tinto, Intel, IBM, Boeing, Lockheed Martin, TransAlta and Alcoa.

"Of the 37 companies affiliated to the Pew Centre, 20 have targets, most of which are much more ambitious than, say, the US Kyoto target [which was to cut emissions to 7 per cent below 1990 levels]," Claussen says.

"DuPont's objective is to reduce greenhouse gas emission to 65 per cent below 1990 levels by 2010.

"BP has already met its target, which was 10 per cent below 1990 levels by 2010, and now it intends to maintain that cap even though it expects to grow quite a bit by then."

The companies are convinced there will eventually be a global system for controlling greenhouse gas emissions, Claussen says. "They want to take this opportunity before it is put in place to experiment and figure out what works. Because they think there is going to be a global system, they would like a place at the table in deciding what that system should look like, and they have decided the best way to do that is to start taking action themselves."

Another motive is to position themselves for likely changes in their markets 20-40 years ahead, so they can take advantage of the commercial opportunities implicit in the kind of industrial revolution which tackling climate change will require.

"They know this issue is not going to go away and they would rather be part of the solution than part of the problem," Claussen says.

"While they originally expected it would cost them something to meet these targets, it has turned out that that is not the case for any of them. They all thought they were relatively energy efficient and would have to spend money to reduce emissions - process changes and so on. But none of them was as efficient as they thought and they have been able to reduce their energy use, which is good for the bottom line."

If it is wrong to see "big business" as a phalanx of opposition to progress on climate change, it is equally simplistic to see the United States in terms of monolithic indifference to the issue.

While Claussen is not sanguine about the chances of President George W. Bush changing his business-as-usual policy, she points to initiatives at state government level and to increased interest in the climate change issue on Capitol Hill.

The Senate, which a few years ago voted 95-nil not to have a bar of the Kyoto Protocol, has passed a measure which affirms the need for a binding international agreement, including the US.

Another requires the administration to do some serious planning to move towards the ultimate goal of the 1992 Rio convention - stabilising greenhouse gas concentrations in the atmosphere.

Another would establish a national system for tracking and reporting emissions. That's an important first step, Claussen says. "Once you start reporting what your emissions are, you start to think about ways to reduce them. We have seen this work with toxic emissions, that once people had to report we saw some astonishing reductions in emissions."

The Bush Administration has said it will develop rules to ensure companies which voluntarily reduce their emissions receive appropriate credit towards mandatory measures that might later be put in place.

Meanwhile, state governments have adopted or are considering different measures to reduce emissions. Texas, for instance, requires 3 per cent of electricity generated to be from renewable sources, while in California a measure limiting carbon dioxide emission from vehicles has passed the state legislature, despite opposition from carmakers, and awaits the governor's signature.

"We will learn a lot about which kinds of approaches work and which don't," Claussen says. "And because there is a variety of approaches industry will look to the national government for a uniform approach, because nothing drives industry crazier than 50 different regimes in 50 different states."

Although opinion polling suggests climate change is not a high priority issue among Americans, Claussen believes the science will drive policymakers to act.

"The more science we see the clearer it becomes this is a genuinely serious problem. We can't afford to say, 'There's a lot of uncertainty here, let's just delay until we have more certainty'."

Because of the inertia in the climate system and the long lags between anything we do to reduce emissions and any good it does, delay is a risky option. "The uncertainty cuts both ways. It could turn out to be much better than we anticipate, but it could just as easily turn out to be much worse."

It is not good enough to let technological change proceed at its own pace without the added spur of a mechanism such as the Kyoto Protocol designed to drive up consumer prices to the level at which clean technologies become commercially viable.

"You can't wait. You need some strong signal from governments to say, 'This is what we have to do and we need to get there in half the time it would otherwise take'."

Claussen does not detect any appetite in Washington for the Kyoto Protocol with the target the US negotiated in 1997.

"That said, we are beginning to see real interest in reducing emissions."

Pew Centre on Climate Change

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