Established energy players - like utilities - have a lot to gain from cap-and-trade if they’re willing to be innovative and forward-thinking. More industry advice like this needs to be heard.
On the Environment
The latest: a decision “in the coming days.” The guess here is that he attends.
Intriguing new policy brief argues that the "green innovation machine" will be less than optimal (read: will not curb climate change) if it relies only on a carbon price-setting mechanism like cap-and-trade. The authors recommend supplementing with an aggressive program of "directed technological change" through significantly ramped up clean energy R & D subsidies implemented immediately. And they believe they have the economic proof to back up their claims.
Five environmental stories of note from the past week:
Five environmental stories of note from the past week:
Maurice Strong, Secretary General of the 1992 Rio Earth Summit, liked to joke that when world leaders gather for a major international convocation only two outcomes are possible: success . . . and real success. With the Obama Administration's negotiating team likely to go to Copenhagen in December empty-handed, the prospects for real success in tackling climate change this year are dimming.
The United States is in the driver's seat in this negotiation. In particular, if the US negotiators were to arrive in Copenhagen with a commitment to reduce greenhouse gas emissions locked in through legislation, then other nations, including the major developing countries such as China and India, would find themselves pressed to commit to emissions controls as well.
If the Congress fails to act - as now appears likely - the United
States will cede its climate change leadership role, making any
substantial progress nearly impossible.
For Copenhagen to produce a "Beyond Kyoto" climate change agreement, the principle of "common but differentiated responsibility," on which almost all past successful international environmental cooperation has been grounded, must be revived. The idea of "common" responsibility means that every nation must be part of the solution. No country can be allowed to sit on the sidelines.
"Differentiated" responsibility means that what is expected in terms of policy and resource commitments will vary depending on a nation's level of development. The United States, Europe, and other wealthy nations will need to make major cuts in greenhouse gas emissions in the coming years while the big emerging economies must agree to reduce the rate of growth in their emissions. For example, China, rather than having its emissions rise 40 - 50% in the next decade, might be asked to limit this growth to 20-25%.
But if the United States isn't willing to sign up to shoulder its share of the burden, the effort to mobilize a worldwide response to climate change cannot move forward. Outside Europe, there is little interest in taking action until the United States addresses its own emissions. More generally, the recent history of international environmental policy cooperation suggests that real success depends on not just US participation but US leadership.
Scientists tell us that the climate clock is ticking. We may have already passed the point where significant damage from global warming and the associated sea level rise, changed rainfall patterns, disruptions to agriculture, and increased intensity of hurricanes - is unavoidable. Simply put, the price for lost US leadership at this moment is very high.
Dan Esty is the Hillhouse Professor of Environmental Law and Policy at Yale University and author of the recent award-winning book, Green to Gold. He served on the US negotiating team that produced the 1992 Framework Convention on Climate Change.
Newsweek has just released its first corporate Green Rankings “scoring” 500 large American companies on their performance in responding to pollution control and natural resource management challenges. This ranking represents another step towards a more transparent world where companies know that their environmental performance is being scrutinized.
I am especially pleased to see the Newsweek rankings as well as the Carbon Disclosure Project’s latest corporate greenhouse gas emissions scorecard since the Yale Center for Environmental Law and Policy has been promoting data-driven, analytically rigorous analysis of “green” performance for more than a decade.
The Newsweek project (on which I was an advisor) compiles an impressive range of information, gathered by three of the country’s top environmental research firms, about corporate environmental results and practices. Each company’s “Green Score” reflects three components: (1) Environmental Impact, which draws from quantitative measures and modeled results covering a range of issues including greenhouse gas emissions, air pollution and water use; (2) Green Policies, which examines corporate governance and practices related to the environment; and (3) Environmental Reputation, which reflects survey data on attitudes from corporate and environmental experts.
Having a more fact-based and empirical picture of which companies are doing well – and which less so – with regard to environmental management will be of interest to a variety of stakeholders, including the communities where these companies operate as well as their customers, suppliers, and employees. Perhaps most importantly, environmental performance in general and “carbon exposure” in particular are increasingly of interest to those in the capital markets. As Congress continues to discuss climate legislation, and as the prospect of carbon charges in one form or another looms, investors have begun to ask which companies have been attentive to climate change and will therefore be advantaged in a carbon-constrained world. Likewise, they want to know which companies and industries will be relatively more burdened. The Carbon Disclosure Project’s rankings are particularly relevant in this regard.
In some important respects, the Green Rankings (and the CDP report) raise more questions than answers. But this is to be expected in a world of haphazard environmental data. Indeed, the index methodologies will be refined in the years ahead – and the picture painted will be sharpened.