While voters, businesses, and politicians are calling for carbon regulation, exactly what that regulation would look like is far from decided.

Carbon taxes and cap-and-trade systems are the two most-cited proposals for cutting carbon dioxide (CO2), a major contributor to global warming. Supporters argue over which plan would be the most efficient method of cutting emissions while allowing for flexibility in the economy.

A carbon tax is a tax levied on CO2 emissions. Those who favor a carbon tax say it will drive innovations and technologies that allow for the same amount of work to be done with less pollution, and decrease the demand for products that are dirtier and thus more expensive. Critics point out that a tax would have a harsher impact on the poor, while others argue that carbon tax revenues could be used to lower other taxes, like income taxes or payroll taxes.

A carbon tax also makes many elected officials nervous: New taxes, fees, or whatever you want to call them, are rarely popular with voters. One notable supporter of carbon taxes — although he’s not running for office anymore — is Al Gore. He has promoted a carbon tax in addition to implementing a cap-and-trade program.

A cap-and-trade system requires an overall cut in emissions. Companies that cut emissions further than required are issued permits that they can then sell to companies that can’t or won’t cut emissions far enough.

Promoters of cap-and-trade say that the system provides an incentive — rather than a heavy-handed tax approach — to cut emissions because companies can sell the excess permits. It also requires a definitive limit on emissions, while some are afraid that a carbon tax would simply drive companies to pay the fines, pass the increase along to consumers, and keep on polluting. Companies like GE, DuPont, Duke Energy, and Toyota back a cap-and-trade policy, as do many environmental groups and labor unions. Presidential candidates like Hillary Clinton, John McCain, and Barack Obama also prefer it.

This fall, Congress could see a slew of measures to cut CO2. Senators Joe Lieberman (I-CT) and John Warner (R-VA) are planning to propose a cap-and-trade bill. Representative John Dingell (D-MI) is expected to introduce a carbon tax proposal — not in the hopes of actually passing it, but rather just to show how unpopular such a tax would be.

San Francisco Chronicle
Wall Street Journal, via Environmental Economics

Two large U.S. corporations have announced commitments to solar power.

Costco – the giant discount retailer – is installing its first solar array on the Kailua-Kona store in Hawaii. A 680-kilowatt solar electric system – big enough to power about 111 Hawaiian homes – will be installed by REC Solar of San Luis Obispo, CA. It’s expected to be completed in the next five or six weeks.

The Kailua-Kona store may save up to a one-third of its electricity costs by producing its own energy from the sun. Costco has more solar planned for other stores, mostly in Hawaii and in California.

A Safeway store in Dublin, CA has started generating electricity from its own solar panels, and the company plans to install systems on 23 of its stores – enough to power about 20 percent of a stores’ average energy use. That’s enough to avoid over 10 million pounds of carbon dioxide emissions (CO2) – a major contributor to global warming.

Efficiency is another part of Safeway’s plan: Since 2005, super-efficient refrigeration systems and LED lights have been installed that have allowed the company’s stores to do the same amount of work using less energy.

Companies may be scrambling to expand their green credentials, but they’re also moving forward because of ample incentives from the states. In Hawaii, commercial photovoltaic systems are eligible for credits of up to $500,000 and net metering laws are in place that allow companies to offset electric bills with surplus power put back on the electric grid. Additionally, the federal government offers a 30 percent tax credit.

Local, state, and national incentives for renewable energy will continue to drive business to do the right thing by making it economically sensible to do so. That, combined with a better brand reputation among consumers and investors, may drive even more companies to choose greener options.

GreenBiz.com
Seattle Post-Intelligencer

Also on GO:

Google Flips The Switch On Largest Corporate Solar Installation In U.S.

Wal-Mart Launching Solar Power Pilot Program

States continue to take the lead in cutting global warming pollution and more may soon follow, spurred by a federal judge’s ruling last week that Vermont can set stricter vehicle emissions standards — stricter than what the federal government requires.

Furthermore, the widespread state action on auto emissions could persuade the government to enact nationwide fuel efficiency laws, rather than leave a patchwork of state regulations for automakers to work around.

The Christian Science Monitor took a look at what’s happening across the U.S., and predicted some ramifications of the Vermont case:

• The Environmental Protection Agency (EPA) may be prompted to grant California a waiver from the Clean Air Act. This would allow California, along with Vermont and the 10 other states with identical laws, to begin enforcing emission requirements for cars sold in their states.

• Six additional states – Arizona, Florida, New Mexico, Utah, Illinois, and Minnesota – may proceed with their own emissions requirements. All together, the 18 states that have vehicle emission laws or that are exploring them make up about half the U.S. auto market.

• Congress may have to reconsider new fuel-efficiency standards it’s currently weighing (which are not as demanding as Vermont’s). Or they could mandate a tougher federal requirement (more of a long-shot, I’d say).

• Federal judges in two similar cases brought by the auto industry in California and Rhode Island could dismiss those cases if they determine the industry has had its day in court and further proceedings would be redundant.

Groups like the Natural Resources Defense Council, the Sierra Club, and Environmental Defense were party to the Vermont lawsuit, and are optimistic that the judge’s ruling will spur other states to action. The auto industry promised to stricter regulations.

The 12 states with emissions laws already on the books could cut up to 100 million tons each year. Overall U.S. emissions from cars and light trucks total about 1.5 billion tons per year.

Christian Science Monitor
Cybercast News Service

The cost of doing green business in Silicon Valley could soon be increasing. The demand for renewable energy credits (RECs) is outpacing the amount of land needed to provide clean energy, and so prices for RECs may be on the rise.

The purchase of a renewable energy credit generally represents one megawatt hour of renewable energy. Although the clean electricity can’t be routed from the wind turbine directly to the business, the investment allows for more renewable energy to built and displace the energy needed from dirty fossil fuels. Many companies and individuals buy RECs in order to make up for, or “offset,” their unavoidable pollution (driving, manufacturing, etc).

In Silicon Valley, the big buyers of RECs include Cisco Systems, Applied Materials, and Yahoo!. The latter just signed up for 1.6 million kilowatt hours of green power costing $24,000 and meeting about 6.5 percent of Yahoo’s Santa Clara energy requirement. The RECs are purchased from Silicon Valley Power, the city-owned utility of Santa Clara.

The increase in REC purchases across the country – the most recent data from the Department of Energy shows sales doubling in 2005 – may affect places like Silicon Valley in the near future. Renewable energy producers will need to get more creative in their search for land for the solar power and wind power systems. Dan Kalafatas, president and Chief Operating Officer of 3 Degrees, the San Francisco-based energy marketing company from which Silicon Valley Power buys its renewable energy credits, noted, “The best sites have been tapped. The long-term fundamental demand will raise prices."

California law says that utilities have to increase their renewable energy use by 2010, so this problem isn’t going away. Efficiency will be key here: while it’s exciting that the demand for green power is increasing, running efficient businesses and households must be the first step, and will help cut the need for energy across the board.

Green Options’ Green Life Guide
San Jose Business Journal

A recent study found that the clean energy industry is the fastest-growing sector in Massachusetts, easily beating out behemoths like financial services, healthcare, and communications.

The Massachusetts Clean Energy Census was published by the Massachusetts Technology Collaborative, a quasi-public agency that runs a renewable energy trust fund of green power projects. The study found that clean energy industry had a 26 percent increase in jobs and now accounts for more than 14,000 jobs in the state. Those jobs are expected to grow three times faster than any other major industry, adding about 3,000 jobs in 2007. The next biggest increase was in the scientific, technical, and management services sector with an increase of 5.4 percent.

Three hundred and two companies, government agencies, and university research centers responded to the survey. Those in the renewable energy category said they will increase staff by an average of 30 percent in the next 12 months, while the energy efficiency sector will add an average of 25 percent more employees.

High fossil fuels costs and venture capital funding are contributing to the strong clean energy performance, as well as politicians and a public wanting action on global warming emissions.

However, the report also points out that the industry is still very young: of the 255 companies surveyed, 103 had annual revenues of less than $1 million. Most companies focus on selling their products to other companies within New England to speed up sales cycles. But this may result in limited growth if companies are passing up opportunities in faster growing and larger markets.

Governor Deval Patrick, Senate President Therese Murray, and House Speaker Salvatore F. DiMasi agreed last month that by 2010, Massachusetts should offset all of its growth in electricity demand with increased efficiency.

The survey defined “renewable energy” as including solar power, biofuels, wind power, wave systems, solar-assisted fuel cells, and all fuel cell companies, although the study recognizes that fuel cell production may be powered by fossil fuels.

Business Journals
Climate Ark
Massachusetts Clean Energy Census

The big news this week was that the U.S. House passed an energy bill that for the first time included a federal renewable energy standard (RES). This RES – an amendment to the energy bill sponsored by Representatives Tom Udall (D-NM) and Todd Platts (R-PA) – requires utilities to get 15 percent of their power from renewables by the year 2020. Other components of the House energy bill include:

• Moving $16 billion in tax incentives away from oil companies and putting it towards renewable energy.
• New energy efficiency standards for appliances and building codes.
• The creation of a Solar Energy Industries Research and Promotion Board to raise national awareness of solar energy options. The program would be funded completely by a portion of solar industry revenues, with no appropriations authorized.
• A modified 4-year extension of the wind power Production Tax Credit (PTC) that limits the credit to 35 percent of wind project costs.

Not in the bill is an increase in the Corporate Average Fuel Economy (CAFÉ) standards (a.k.a. “fuel efficiency”) that was a hot topic as the session came to a close. By avoiding a vote on CAFE standards, Democrats avoid public in-fighting with fellow Dems from auto industry states, notably Commerce Committee Chairman John Dingell (D-MI).

The Senate already approved an increase in fuel efficiency back in June, which will be just another piece of the Senate bill to be reconciled with the House version in conference committee this fall. In addition, the White House has threatened to veto any legislation containing a renewable energy standard.

Renewable Energy Access
The Sietch Blog
Yahoo News

Besides the Udall-Platts amendment to the House energy bill that calls for a federal renewable energy standard (requiring 20 percent of our energy to come from renewables by 2020), another progressive energy bill may up for a vote this week.

It’s far reaching – both in terms of what it would do for the country, and that actually passing it may be a bit of a reach.

Representative Edward Markey (D-MA) has authored a bill that increases the Corporate Average Fuel Economy (CAFÉ) standards (a.k.a. “fuel efficiency”) to 35 miles per gallon (mpg) by 2018. Currently the requirement is 27.5 mpg – and that number has hardly changed in more than 10 years.

Unlike the current requirement, however, Markey’s proposed standard does not have a lower mpg rate for most pickups and SUVs. The Senate’s 35 mpg version that passed earlier this summer also didn’t distinguish between cars and pickups/SUVs. The Senate bill was strongly opposed by the auto industry and lawmakers from states with auto factories.

On the other hand, Reps. Baron Hill (D-IN) and Lee Terry (R-NE) have a bill requiring cars to have a 35 mpg standard and trucks to reach 32 mpg by 2022. This version is supported by automakers.

CNN reports that speculation is swirling over what will happen in the House. If neither of these fuel efficiency proposals makes it to the House floor, then the House will work off the Senate’s version – which is stronger than the Hill-Terry proposal. So in the end, the House may not vote on fuel efficiency standards at all, thus avoiding the gamble that the Hill-Terry bill passes and guaranteeing that the Senate version heads to conference committee.

Or, is a perfect bill the enemy of a good bill in this case? If there’s a piece of legislation, supported by automakers, that gets us to 35 mpg for cars and 32 mpg for trucks by 2022, should we pass it in 2007 in lieu of waiting for perhaps another bill and another vote in 2008? Or, are we setting the bar too low altogether?

CNN
National Public Radio

A large, old, rich, and impressive group of businesses leaders has called for more action to slow global warming.

The Business Roundtable is an association of CEOs of 160 U.S. companies with $4.5 trillion in annual revenues, more than 10 million employees, and makes up nearly one-third of the total value of the U.S. stock market. They lobby lawmakers on issues like jobs, healthcare, and trade. And last week they released a statement on one of the hottest of issues: global warming.

The Business Rountable’s Climate Change Statement acknowledges that although its members – such as ExxonMobil, General Electric, DuPont, and State Farm Insurance – have varying views on how exactly to address global warming, they do agree on some essential elements:

• More companies should make cutting emissions a priority and report publicly on their progress.
• Energy efficiency should be increased 25 percent.
• Any legislative or regulatory framework must stimulate private sector innovation and investment, as well as consumer awareness of new technologies.
• Increase research and development in new low-emissions technologies.
• Investment in climate science must continue at a high level “so that we can better understand and predict the magnitude and timing of future warming of the planet."
• Policies should be flexible enough to realign timelines with the development of new technologies, price spikes, or economic competitive imbalance.
• Consider different policy tools, including cap-and-trade, carbon taxes, or energy standards.
• Any policy solution should be economy-wide and not impact a particular industry sector, technology, or geographic region.
• Maximize access to limited feedstock and energy supplies (for example, figure out carbon capture and sequestration so coal could be burned with less emissions).
• Adopt a global framework where all major emitting countries (specifically including China, Brazil, and India) are committed to reduction goals.

I’m a bit wary of parts of this list. It reminds me of the discussion I and other bloggers had with Exxon’s Vice President of External Affairs back in January, where it seemed like a perfect global warming solution was the enemy of a good global warming solution. I wonder, if a solution doesn’t include a commitment by China, India, and Brazil, is the U.S. still supposed to stand still and do nothing? It sounds like it…

The fact that so many businesses – to varying degrees of seriousness – are talking about global warming solutions is encouraging. The Sierra Club dismissed the Rountable’s statement as an atempt to appear sensitive while seeking to ensure that new regulations accomodate its members. Well, of course they want new regulations to accomodate them. That shouldn’t surprise anyone. But where can we find common ground? All of us should be open to ideas and reasonable compromise, but also make sure we’re not fiddling while the clock is ticking.

Business Roundtable

Reuters

A survey released earlier this summer found that while 82 percent of senior technology leaders from companies around the world “closely” monitor the global warming issue, most (65 percent) do not have a defined energy strategy for it.

The “Return on Environment” study included interviews of 420 senior business decision-makers from the U.S., U.K., Canada, and China who worked for companies with revenues the equivalent of US$100 million or more.

Despite over half of respondents reporting that they don’t have a defined energy strategy, 77 percent believe there is a need to create some sort of chief energy officer position to develop, implement, and manage a company’s return on investment in clean energy technology and sustainable business practices.

Joe Paluska of the international communications firm that performed the survey, Hill & Knowlton, said in a statement:

“Despite the hype, few companies are plotting a measurable action plan to drive return on environment…We expect reputation, risk and return to suffer until companies really stand up and take charge and industry as a whole sets the standard for measuring return on environment.”

Perhaps that will soon change. The New York Times recently profiled several global companies that have implemented a position solely dedicated to linking sustainability and efficiency with a better bottom line (and who are promoting it like crazy).

General Motors’ vice president for environment, energy, and safety policy, Elizabeth A. Lowery, says that ensuring credibility is a priority of her position. She explains that she “toned down” broad statements and claims that were part of GM’s “Live Green Go Yellow” campaign and added more facts (thanks – facts are good).

At DuPont, Linda Fisher is the chief sustainability officer. She says her job is to ensure that the company never overstates the “greenness” of its items. She’s helping to develop a scorecard that researchers can use to determine whether their work will actually produce products that are smarter for the environment.

Those who have been on the greener side for a longer period of time are divided over these new efforts. While greenwashing is a rightful concern, others are cautiously optimistic that corporations are finally making the connection that efficiency and sustainability can go hand-in-hand with profits.

Most importantly, consumers are making the connection too.

Hill & Knowlton
New York Times
Wikipedia

Cross posted at Maria Energia 

They may not have been rocking out at Live Earth, but business leaders from 150 companies around the world – including 30 Fortune Global 500 ones - have called for action on global warming.

The leaders signed a declaration at the United Nations Global Compact Leaders Summit, committing themselves to cutting carbon dioxide (CO2) emissions from their products and services and to report annually on their progress. They also called on governments to agree as soon as possible on measures to secure climate market mechanisms for after 2012, when the Kyoto Protocol expires.

But don’t presume that global warming is necessarily seen as a threat to businesses. On the contrary, many view the problem as an enormous opportunity for innovation, profits, as well as saving the planet and its people. So noted the executive director of the UN Environment Program, Achim Steiner:

"In terms of global warming and climate change, the key to rapid progress is in part premised upon getting markets and, by implication, businesses to become not skeptics and doubters and therefore brakes on progress, but rather catalysts, innovators and multipliers for a transition to a more energy efficient economy.”

Companies aren’t about to go gangbusters on energy innovation and carbon-cutting technology without some stable rules and policies, however. Mindy S. Lubber is the president of Ceres, a coalition of investors and environmental groups that work with companies to address issues like global warming. She explained on WorldChanging.com:

“…investors tend to weight their equity portfolios towards companies focused on succeeding in stable and predictable markets, not on those gambling on doubtful, uncertain regulatory landscapes. The current lack of a coherent, comprehensive U.S. strategy for addressing climate change is hindering the ability of American businesses to invest and innovate…And that means we need – some businesses will argue, they crave – a national climate change policy with specific, mandatory limits on carbon emissions.”

Many companies around the globe have begun to tackle global warming but can and want to do more. Although each of us can screw in a CFL bulb or drive a fuel-efficient car, we will see the swiftest action on global warming when government sets the rules of the CO2 market and businesses - and their consumers - fully take advantage of those opportunities.

CSR Wire
Voice of America
WorldChanging.com