Op-eds and White Papers
American businesses, the U.S. government, and the climate change problemDeliberate consideration by the scientific community has eliminated any significant scientific consensus opposed to the conclusion that rising greenhouse gases caused primarily by human activities is warming the global atmosphere. The message of the recently-released Summary for Policymakers of the IPCC's Fourth Assessment Report makes this clear, and despite the fact that we will hear disputes about how much of a consensus the "consensus" report represents, it indisputably represents the best consensus the scientific community can offer.
Business leaders, including some in the oil and coal industries, have recognized that scientific and public opinions have coalesced and that regulations are inevitable within the planning horizon for long-term investments in R&D and infrastructure. Businesses need the government to signal the start of the race to adapt to and combat climate change. As in any free-market competition companies win or lose based on their attributes, but society as a whole wins by unleashing innovation and pragmatic management.
No policy would direct business efforts more efficiently than a price signal on carbon emissions, via a direct tax or market-based cap-and-trade system. Mandates for certain technical solutions, for example corn-based ethanol, sound like industry favoritism from an influenced government rather than a sound direction to free enterprise. The government always creates winners and losers when it steps into the market. We would urge the federal government to step carefully and follow California's lead: set the standard to be met, but do not specify which solutions must be used to meet the standard.
American businesses need to think carefully about climate change from a variety angles. The direct angles are exposure to a changing regulatory environment and -- for some businesses -- exposure to climate change itself. (Do you have a coastal manufacturing facility in a hurricane-prone area?) An example of an indirect angle includes a changing marketing environment where consumers expect or demand a "clean" profile of American businesses. In what might be seen as a mix of direct and indirect influences of climate change on business practices, the day is close upon us when American corporations will be forced to report exposure to climate change risk on their SEC and stockholder filings. Climate change is an all-encompassing problem for our society and smart corporations will see it in such terms for their business.