The debate regarding climate change has shifted from whether to regulate greenhouse gases to how best to regulate greenhouse gases. At least eight bills are pending in Congress that will implement some form of cap and trade regulatory system and/or carbon tax to reduce carbon emissions. Senate Bill 2191 (Lieberman-Warner Climate Security Act of 2007) continues to move in the Senate. The U.S. Climate Action Partnership - founded by companies such as Alcoa, GE and Caterpillar to advocate for a cap and trade regulatory system - has doubled its corporate membership. Regulation of greenhouse gases is inevitable.

While the energy, infrastructure and manufacturing sectors will bear the initial burdens, regulation of emissions of greenhouse gases will affect virtually every sector of the U.S. economy. Congress recently required the EPA to develop an economy-wide greenhouse gas reporting system. Continuing climate change impacts will cause inevitable economic costs and social disruption. These effects will create opportunities and liabilities for U.S. companies. The implementation of the Kyoto protocol, for example, already has created a $50 billion plus market involving emission reduction credits in Europe.

Businesses should act now to understand how pending greenhouse gas legislation will affect their business. Understanding your "carbon footprint" will place your business at a competitive advantage in a carbon-constrained world.

Landmark case law and pending legislation has brought climate control to the forefront of corporate strategy. The Supreme Court's recent ruling defining greenhouse gas as an air pollutant and giving the EPA statutory authority to regulate emissions of such gases from new motor vehicles, as well as a number of bills currently pending in Congress affecting everything from emissions standards to renewable energy mandates, have companies embracing for inevitable change in regards to global climate strategy. Shareholders are increasingly raising environmental concerns before boards of directors via shareholder resolutions. Existing carbon "cap & trade" programs implemented under the Kyoto protocol in Europe are being studied for potential implementation in the U.S.

The CSI group will provide an independent analysis and will seek to represent enterprises that may be impacted by climate change legislation and need to know more about climate change initiatives.

The Climate Strategies & Insights group at Powell Goldstein advises their clients on a variety of climate change issues. The attorneys in the group have substantial experience with air pollution control matters, buying and selling emissions reduction credits, forestry, government affairs, project finance, real estate, the formation of carbon investment firms, and business transactions involving carbon credits and related matters. For a more thorough overview of some of these issues view a CSI presentation by Chris Thompson.

In addition to our Climate Strategies & Insights group, Powell Goldstein also offers services in the area of Sustainability. For more information on these services, please click here.

Articles of Interest

"July 2007 Senate Developments"
"The Carbon Tax Is Dead…Or Is It?"