Business Week: The Race Against Climate Change

BATTLING CLIMATE CHANGE

The Race Against Climate Change
How top companies are reducing emissions of CO2 and other greenhouse gases


On Nov. 21 power company executives from all over the country gathered in the Pit, a spacious General Electric (GE ) auditorium in Crotonville, N.Y., to meet with GE CEO Jeffrey R. Immelt and his team. The day was overcast and cold, but the discussion was about the warming climate. At one point in the meeting, David J. Slump, GE Energy's chief marketing executive, asked for an informal vote. How many of the 30 or so utility and GE business executives thought that, once President George W. Bush was no longer in office, the U.S. would impose mandatory curbs on the emissions of carbon dioxide and other greenhouse gases linked to global warming? Four out of five of them agreed. "Forget the science debate," says Cinergy Corp. (CIN ) CEO James E. Rogers, who was at the meeting. "The regulations will change someday. And if we're not ready, we're in trouble."

The world is changing faster than anyone expected. Not only is the earth warming, bringing more intense storms and causing Arctic ice to vanish, but the political and policy landscape is being transformed even more dramatically. Already, certain industries are facing mandatory limits on emissions of carbon dioxide and other greenhouse gases in some of the 129 countries that have signed the Kyoto Protocol. This month representatives of those nations are gathering in Montreal to develop post-Kyoto plans. Meanwhile, U.S. cities and states are rushing to impose their own regulations.

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REALITY DAWNS
Adding to the pressure on CEOs, the public has largely accepted global warming as reality. And as in the case of IP, the economic logic can be compelling. Far from breaking the bank, cutting energy use and greenhouse emissions can actually fatten the bottom line and create new business opportunities, while simultaneously greening up companies' reputations. One company that has hiked its visibility on this changed landscape is GE. It formed a new Ecomagination division last May to offer everything from more efficient locomotives to advanced, low-emitting coal power plants.

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In the battle in the nation's capital, it will help that some people believe God is on the side of greenhouse gas reductions. For most business executives, though, the real driver is the bottom line. Often, the best way to slash emissions is simply to reduce energy consumption. Because carbon is basically a proxy for fossil energy, cutting carbon equals cutting costs, argues energy guru Amory B. Lovins, head of the Rocky Mountain Institute (RMI), a nonprofit energy and environment policy think tank: "Efficiency is cheaper than fuel."

More at: http://www.businessweek.com/magazine/content/05_50/b3963401.htm