Prospects for Federal GHG Legislation

During 2007, the debate on national legislation to control the pollution that causes global warming will start in earnest in the Congress. We will likely see energy legislation moving forward in both the House and Senate, and the adoption of some form of climate legislation during the next three years. We may see climate legislation during 2007 that, ironically, environmentalists will oppose because it’s too weak.

The first factor that will likely drive the passing of legislation is the change in public attitudes. The mid-term election was not about the environment or climate change or energy – generally voters focused on the war, competence, and corruption – but exit polling revealed that heavy advertising by congressional candidates in key swing districts focused on energy and climate had a significant impact on independent voters. Recent polls show public attitudes on energy and climate shifting, in particular when the issues of energy security and climate change are linked.

Americans have been influenced by extreme events like Hurricane Katrina, and by Al Gore’s movie, speeches, and lectures. Media coverage of global warming has increased from a trickle to a steady flow of science, business, and political coverage.

Another indicator of political change is the accelerating pace of local and state action. Early last fall, California passed the nation’s strongest legislation to reduce greenhouse gas emissions by 20 percent. Political observers in California attribute the turnaround in Governor Schwarzenegger’s lagging political fortunes to his endorsement of that legislation – he moved rapidly from lagging to leading in the polls. It wasn’t just California that took action. Three hundred fifty five cities have climate action plans. Twenty two states require renewable power as part of their electrical energy mix. Eleven states have joined California in imposing stricter rules on automobiles than the Federal Government. Seven Northeast states that imposed their own cap on emissions from electrical generating plants in 2005 are soon likely to be joined by Massachusetts and Maryland.

These state and local actions are strong political indicators. Historically, on issues ranging from child labor to the environment, social change has begun at the local and state levels. State experiments demonstrate solutions at a smaller scale, but invariably differ from one another. By creating a patchwork of differing state requirements, state action increases pressure on industry to support federal standards for the sake of consistency and predictability.

This is happening – leading companies are beginning to take independent action on climate change. Hundreds voluntarily measure and report their emissions of green house gases (GHGs). Most of America’s largest companies ranging from Alcoa to Wal-Mart, are voluntarily reducing their emissions. Many companies now seek to become leaders in low carbon technologies, identifying climate constraints as drivers of tomorrow’s markets, and building strategies around products that will help their customers reduce greenhouse gas emissions.

One illustration is General Electric. A year and a half ago GE said it would grow its sales of “Ecomagination” products from $10 billion to $20 billion in five years. Ecomagination products include everything from the highly-efficient compact fluorescent light bulbs being sold by Wal-Mart to the GEnx engines that power Boeing