Thursday, May 19, 2005

Practicing for Climate Change
It's rare that I agree with every word in a New York Times editorial, but today's is a pleasant exception. Their message to President Bush concerning climate change is spot on. The Times correctly assesses the growing concern--it's too early to call it a consensus--of business leaders and key Republican officeholders that strong action must replace voluntary programs in this area. They are also right to seize on GE's Ecomagination strategy as a sign that business sees not just constraints, but also opportunities in efforts to limit climate change.

A growing number of businesses have moved beyond seeing climate change as an "environmental issue" and now treat it as a key risk factor that they must manage. Critics who regard voluntary efforts, such as participation in the Pew Center on Global Climate Change or the Department of Energy's 1605b program, as some form of corporate social responsibility are missing the point. It's all about gaining future advantage. The companies that have signed on for these initiatives and voluntary emissions reduction targets see the likelihood of mandatory restraints and are practicing and learning now, to steal a march on their less alert competitors later.

Anyone who wonders what a mandatory greenhouse gas regime might look like need only look across the Atlantic to see one in action. Ironically, when emissions trading was first suggested during the Kyoto negotiations as a constructive, market-based approach to achieve desired cuts in emissions, it was the American delegation that sold skeptical Europeans on the idea. Who would have guessed that the EU would put our idea into effect before we do?

With Social Security reform in trouble, the President must be looking for another area in which to create his legacy. Climate change would be a great choice, and a coalition of CEOs, prominent Republicans, and evangelical leaders can provide him with the political cover he would need for such a reversal of course. In the long run, business would thank him, as would our children and grandchildren.

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