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Climate Change Worries US Business
Yahoo News/Reuters
By Lisa Lee
January 19, 2007

NEW YORK (Reuters) - Ten major U.S. corporations are joining environmental groups to press The coalition, including Alcoa Inc., General Electric Co., DuPont Co. and Duke Energy Corp., plans to publicize its recommendations on Monday, a day ahead of the president's annual State of the Union address, the Natural Resources Defense Council said.

The group, known as the United States Climate Action Partnership, also includes Caterpillar Inc., PG&E, the FPL Group, PNM Resources Inc., BP America Inc. and Lehman Brothers Holdings Inc.

"Caterpillar believes in the need for a market-based approach to the aggressive development of current and future clean technologies that reduce emissions and sustain the environment," Chief Executive Jim Owens said in a statement.

The group will call for a nationwide limit on carbon dioxide emissions that would lead to reductions of 10 percent to 30 percent over the next 15 years, according to the Natural Resources Defense Council.

According to a draft of the principles, obtained by Reuters, the coalition would also call for a market-based emissions trading program and emission reductions from the transportation sector.

The group also plans to strongly discourage building new coal-fired power plants that cannot easily capture and store carbon dioxide emissions. Coal-fired plants produce significantly more greenhouse gases than other types of power plants.

There is currently no viable technology available to capture carbon dioxide emissions.


Few of the companies in the group have much to lose from setting limits on greenhouse emissions.

PNM Resources and Duke Energy derive a portion of their power generation from coal, but the other utilities in the group have little coal-fired generation.

And Duke Energy is positioned well for a carbon-limited world because "it is already a substantial nuclear power," said Kevin Book, senior analyst at Friedman, Billings & Ramsey.

GE is making a big push into alternative energy, with products ranging from wind turbines to solar power equipment, and Caterpillar builds diesel engines using low-emission technology.

The companies are trying to work out the rules now before the end of the Bush presidency. Many of the leading presidential candidates, both Republican and Democrat, have come out in support of some type of emission controls.

"It's choosing the devil you know over the devil you don't know," said Peter Fusaro, chairman of energy advisers Global Change Associates.

Friedman, Billings & Ramsey's Book said companies are trying to get certainty for the future and to prevent something draconian from passing.

The Democratic party retook Congress this year and party leaders indicated that the control of greenhouse gas emissions, widely blamed for global warming, would be a priority.

U.S. House Speaker Nancy Pelosi (news, bio, voting record) said on Thursday she is forming a special committee aimed at producing legislation that would diversify the nation's energy supply and cut greenhouse gas emissions.

Bush will also likely address climate change in his annual speak to Congress next week. Sources familiar with White House plans on Tuesday said Bush will call for a massive increase in U.S. ethanol usage and tweak climate-change policy, but will stop short of pushing for mandatory emissions caps.

"The companies now recognize carbon limits are coming and they want to get ahead of the game a little bit by shaping what limits will be," said Frank O'Donnell, President of Clean Air Watch in Washington, D.C., which is not part of the coalition.

Still, some business leaders believe that despite the momentum for climate-change legislation, not much will be accomplished during the next two years.

"Little will be accomplished substantively," David Parker, chief executive of the American Gas Association, a natural gas trade group, told an industry luncheon on Thursday.

(Additional reporting by Robert MacMillan, Tim Gardner, Dan Wilchins, Michael Erman, Matt Daily and Euan Rocha in New York, and Scott Malone in Boston) President George W. Bush and Congress to address climate change more rapidly.

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