June 23, 2010
By Eileen Claussen and Jim Rogers
This op-ed first appeared in Politico.
Passing a meaningful energy and climate bill this year will be challenging — but not impossible.
It’s time for all of us — politicians, business leaders and environmentalists — to put wishful thinking aside, establish realistic goals and develop a consensus for legislation that can be passed this year.
If that means capping emissions from the utility sector first — so be it. There is growing consensus in the electric utility industry to act now, so let’s move forward.
Duke Energy and other electric utilities are already scheduled to retire and replace virtually all coal and other large power plants with cleaner and more efficient technologies by 2050.
A clear and predictable federal energy and climate policy can accelerate these projects and put private capital to work more rapidly. It can also create millions of jobs.
This would not only reduce greenhouse gas emissions but would also reduce sulfur dioxide, nitrogen oxide and mercury emissions, which contribute to acid rain, smog and other health issues. That would improve air quality across the board.
At Duke Energy, approximately 6,000 people are now working on designing and building more advanced power plants. That’s quite an economic stimulus.
When their work is done, permanent jobs would be created, municipal and county tax collections would increase and old and inefficient power plants would be shut down.
With the right signal from Washington, the company can by 2020 close roughly 4,000 megawatts of coal plants more than 45 years old.
This action will drive greater use of cleaner, domestic energy sources that will enhance our nation’s security and limit pollution.
Sensible policy should include incentives for new emissions-free nuclear power, renewable energy and carbon capture and storage for coal plants. It must also clarify federal emissions regulations so electric utilities can shift to cleaner and more efficient power plants without the uncertainty of patchwork regulatory approaches and the threat of litigation.
Electric utilities have some of the strongest balance sheets in industry. They can now borrow private capital at historically low rates. For example, over the past 2½ years, Duke Energy has borrowed $8 billion at an average rate of less than 5.5 percent.
This means lower long-term costs to electric consumers — with no increase in the national debt and deficit.
But this will all take time. We need to be willing to adopt the three C’s: commitment, collaboration and compromise.
Commitment: We have to be in this together — for the long haul. Good energy and climate policies will allow the electric utility industry to make sound investment decisions.
Electric utilities may be willing to go first. But they are not going to be willing to go alone.
Collaboration: All successful environmental legislation has been predicated on a collaborative and bipartisan approach. The 1990 Clean Air Act amendments, designed to reduce acid rain, urban air pollution and toxic air emissions, passed the House by a 401-21 vote and the Senate by a 89-11 vote.
That process of working together to find common ground among diverse stakeholders is what we need now.
Compromise: Collaboration succeeds only when there’s a real spirit of compromise. That’s why it is the cornerstone of our democracy. There must be give-and-take at every decision point.
Current clean energy and climate legislation is not an all-or-nothing proposition. It’s a work in progress that can begin our transition to a clean energy future. We need to look past our differences and act where there is agreement.
It’s time to get started.
Eileen Claussen is president of the Pew Center on Global Climate Change. Jim Rogers is chairman, president and CEO of Duke Energy.
June 17, 2010
Contact: Tom Steinfeldt, 703-516-4146
New Analysis Shows Broad Business Support for National Clean Energy and Climate Legislation
Pew Center on Global Climate Change Explains the Business Case for Action
Washington, D.C. – An unprecedented number of businesses are supporting passage of clean energy and climate legislation, a development that greatly improves the chances of a meaningful bill advancing through Congress this year. In a new analysis, the Pew Center on Global Climate Change examines the factors driving this business support and finds that leaders from a diverse collection of industries believe passing clean energy and climate change legislation is better for the economy and their businesses than maintaining the federal policy stalemate.
“A growing number of companies – both major corporations and small businesses – are calling on Congress to pass clean energy and climate legislation this year,” said Eileen Claussen, President of the Pew Center on Global Climate Change. “Putting a price on carbon will provide the business community the certainty it needs to innovate, drive the creation of new jobs, and stimulate economic growth. We have an opportunity this year to put in place the foundation for a more secure energy future for the United States.”
In The Business Case for Climate Legislation, the Pew Center identifies three key reasons why leading companies have decided that legislation to limit greenhouse gas (GHG) emissions is good for their industries.
- The need for regulatory certainty
- The economic opportunities arising from climate solutions
- The reputational benefits of supporting public policies that combat climate change
Companies supporting federal clean energy and climate legislation have made a simple determination: the presence of a coherent national policy is better for the economy and their business than the status quo. Put another way, the absence of clear regulatory rules of the road creates uncertainty, which restricts sustained economic growth and is an obstacle to the development of new markets and business opportunities.
Without effective legislation, the U.S. risks missing huge economic opportunities in the hundred-billion-dollar global clean energy technology market, according to the Pew Center analysis. These opportunities will instead fall to foreign competitors like China and European countries. Thus, a growing number of U.S. businesses have made the decision that clean energy and climate legislation is the right approach for our economic and environmental future.
The Business Case for Climate Legislation can be accessed online at http://www.c2es.org/publications/brief/business-case-for-climate-legislation.
For more information about global climate change and the activities of the Pew Center, visit www.c2es.org.
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The Pew Center on Global Climate Change was established in May 1998 as a non-profit, non-partisan, and independent organization dedicated to providing credible information, straight answers, and innovative solutions in the effort to address global climate change. The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.
In recent years, leading businesses have emerged as some of the strongest advocates for passage of national climate and energy legislation that mandates reductions in greenhouse gas (GHG) emissions. While many have cheered this business engagement, others have been left confused and at times suspicious of why businesses would support such a policy.
In many ways, the confusion is understandable. Environmental politics in this country have often pitted business interests against environmental advocates in a binary struggle over the need for new or more stringent regulations. But today, major corporations cutting across a range of industries are allying themselves with nongovernmental organizations (NGOs), unions, national security hawks, and even religious groups to urge enactment of legislation that requires reductions in GHG emissions. To some observers on the left and the right, business backing for new legislation is a foreign, if not completely counterintuitive, concept, and the strange bedfellows of the climate change issue have left many scratching their heads.
This is partly because climate change is not strictly an environmental issue. Instead, it is a multi-faceted problem, encompassing national security, international diplomacy, and most crucially for business, economic policy. On a fundamental level, the companies supporting climate and energy legislation have made a simple determination: the presence of a coherent national policy is better for the economy and their business than the status quo. Put another way, the absence of such a policy creates uncertainty, which is a hindrance to sustained economic growth and an obstacle to the development of new markets and business opportunities.
This brief lays out the business case for national climate and energy policy, and explains why leading companies have decided that legislation that limits GHG emissions is good for their industries. While the details of individual companies’ policy positions will vary based on their own specific circumstances, broadly speaking there are three main reasons businesses support legislation that addresses climate change:
The need for regulatory certainty. Most companies understand that some form of climate policy is inevitable, but they do not know exactly what it will look like or what will be required of them. Today, when businesses look to the horizon they see an uneasy mix of evolving state and regional climate programs and burgeoning U.S. Environmental Protection Agency (EPA) regulations. It is unclear how these policy initiatives will unfold and interact with one another. This creates uncertainty, which hobbles business planning, especially for industries, such as electric utilities, that build and operate long-lived, capital-intensive assets. A clear, long-term, legislative framework for reducing GHG emissions would alleviate much of this uncertainty, allowing for more intelligent business planning.
The economic opportunities arising from climate solutions. Clean energy is projected to be one of the great global growth industries of the 21st century. Policy support can accelerate growth in these industries, and help U.S. companies compete against foreign firms that are quickly establishing dominant positions in these important markets.
The reputational benefits of supporting public policies that combat climate change. Customers, shareholders, employees, and other stakeholders are increasingly pushing companies to demonstrate social responsibility and environmental stewardship. For many companies, support for mandatory policies that promote clean energy, improve energy efficiency, and reduce GHG emissions has become an important plank in their broader corporate social responsibility (CSR) agendas.
Some companies are driven by all three of these reasons, while others are compelled by just one or two of them. Regardless of the specific reasons, one thing is clear: more companies today support climate legislation than ever before. Companies that make everything from computer chips to potato chips, search engines to jet engines, rubber tires to rubber soles, have publicly stated their support for legislation that caps carbon dioxide (CO2) emissions (see “Leadership Ad” for a list of some of these companies). Trade associations representing electric utilities and auto manufacturers are on record supporting national climate policy. The remainder of this brief provides additional detail on why this is the case.
Listening to opponents of clean energy and climate legislation and their predictions of American economic ruin if we try to reduce greenhouse gas pollution, you could scarcely imagine that even one business would be crazy enough to support energy and climate policy. Yet today, a group of 60 leading organizations and businesses representing over $1.2 trillion in revenue and over 1 million American employees sent a letter to the President and the Senate proving that idea wrong. These groups collectively said:
“The time to act is now. The U.S. needs a comprehensive energy and climate policy that will get us back on track by creating American jobs in the new, low-carbon economy…We face a critical moment that will determine whether we will be able to unleash homegrown American innovation or remain stuck in the economic status quo. Much as the transcontinental railroad ushered in an unprecedented era of expansion, innovation and economic growth, the transition to a diversified clean energy economy offers extraordinary opportunities for environmental and economic rewards. Americans need and deserve a comprehensive energy and climate policy and we urge you to take action without delay…It’s time for Democrats and Republicans to unite behind bipartisan, national energy and climate legislation that increases our security, limits emissions, and protects our environment while preserving and creating American jobs.”
Download the report (pdf)
The Case for Action: Creating a Clean Energy Future
The United States needs strong action now to reduce the risks of climate change, strengthen our energy independence, protect our national security, and create new jobs and economic opportunities. The Pew Center on Global Climate Change believes that the case for action has never been stronger. With a strong energy and climate policy the United States can lead the 21st century clean energy economy.
Our corporate energy efficiency conference opened by answering the big question: What actions should businesses take to reduce energy use?
- Don't just set goals, set big hairy audacious ones even if you may not know exactly how to achieve them, asserted PepsiCo.
- Efficiency is done better together – you have to get all your business units moving forward on efficiency, advised IBM.
- Make the data visible – quarterly scorecards on efficiency measures lead to shared knowledge, clear measures against goals and the ability to hold leaders accountable and reward those who deliver results, suggested Dow Chemical.
- Show them the money – you need to show everyone from the board room to the boiler room that energy efficiency is good for business, stressed Toyota.
So how do you do all this? The solutions-oriented conference provided answers through panels covering the various components of corporate energy efficiency.
The conference marked the launch of our recent report, "From Shop Floor to Top Floor: Best Business Practices in Energy Efficiency" authored by William Prindle, Vice President of ICF International. Held April 6-7 in Chicago, the two-day conference brought together a diverse audience, including representatives of numerous companies with products ranging from software to soft drinks.
The conference was kicked off with presentations from six companies whose best practices in energy efficiency were highlighted in the report's case studies (Best Buy, Dow Chemical, IBM, PepsiCo, Toyota, and UTC). Subsequent panels examined issues such as overcoming financial barriers in pursuing energy efficiency projects, gaining senior level support for energy efficiency, engaging employees, suppliers and customers in energy efficiency efforts, and the challenges of gathering and reporting energy efficiency data.
In every panel session there was an abundance of questions, and lively discussions spilled out into the hallways during breaks. Panelists discussing financial barriers to energy efficiency were asked about building a financial case for employee engagement programs, PACE financing, and tradable energy efficiency certificates. Attendees had panelists pondering the idea of a best-of-the-best list within the joint U.S. DOE/U.S. EPA ENERGY STAR program and how to include supply chain efficiency metrics in labeling. How to keep employees engaged in energy efficiency measures and bringing suppliers into the fold were other key questions asked of conference panelists.
While the discussions mostly focused on what companies can do to be more energy efficient, the broader issue of climate change was not far from everyone's minds. Former Senator John Warner, a keynote speaker, was asked about the right message that would get Congress moving on climate change legislation. And keynotes John Rowe, CEO and Chairman of Exelon, and our President Eileen Claussen both noted that policy that puts a price on greenhouse gas emissions is essential to moving the United States to a low-carbon economy and addressing climate change.
Videos and presentations from the conference are available on our Web site.
Aisha Husain is an Energy Efficiency Fellow.
ATLANTA, GA — Companies that meet United Parcel Service's new green standards for responsible packaging can ship their goods with a label attesting to that fact under an assessment program the carrier introduces today. Read full article.
A group of nearly 50 companies and organizations, including the Center, sent President Obama a letter this month asking the Administration to lead the way to providing all consumers access to their energy information. The April 5 letter calls for giving consumers access to this information via devices such as computers and phones; making it easier for them to monitor and manage their energy use.
With timely and actionable information on energy consumption, households and businesses can avoid inefficiencies that drive up consumer costs and greenhouse gas emissions. Through its Make an Impact program, we also works to weave sustainability and energy efficiency into the fabric of its partners’ corporate culture. The program provides accessible information to employees and their communities on ways to reduce energy use, lower their carbon footprint, and save money. These savings can be significant: If every U.S. household saved 15% on its energy use by 2020, GHG savings would be equivalent to taking 35 million cars off the road and would save consumers $46 billion on their energy bills each year.
Hoping to promote greater energy efficiency and to jump-start the nascent market for consumer energy monitoring technology, a group of 45 major companies and organizations -- including AT&T, GE, Google, Intel, and various advocacy, investment, and trade organizations -- on Monday asked President Obama in an open letter to promote greater consumer access to energy usage data. Read full article.
From factory floors to corporate boardrooms, energy efficiency is top of mind for a growing number of businesses and their employees. Leading companies are pioneering new energy efficiency strategies that result in greater productivity, robust financial savings, and a lower carbon footprint. Today, we released a major study that examines key practices of a diverse collection of corporations at the vanguard of innovative energy efficiency solutions.
The report, From Shop Floor to Top Floor: Best Business Practices in Energy Efficiency, features insights from detailed research and analysis collected over nearly two years. The study represents the centerpiece of our Corporate Energy Efficiency Conference next week in Chicago.