Investors to Press US Congress on Global Warming
Author: Timothy Gardner
The dozens of investors include Merrill Lynch, The Capital Group, which manages US$850 billion in mutual funds, and the California Public Employees Retirement System, the largest US pension fund, said a source at Ceres, a Boston-based coalition of investors and environmentalists.
"Investors are seeking strong legislation with tangible greenhouse gas reduction targets," said the source.
The United States is the world's top emitter of gases from smokestacks and tailpipes that scientists link to global warming. Mandatory emissions cuts could give investors confidence to put more money in low-carbon alternative energy, like wind and solar power, and other technologies.
The source said the investors have "specific goals" in mind for carbon-cuts.
Mandatory cuts could also set the stage for a cap-and-trade market on greenhouse gases like the European Union's, in which companies that cut emissions under a set limit can sell credits to others that have not. Investors could also speculate in that market.
In a separate push in January, 10 major US energy, chemical, and manufacturing companies, including Duke Energy Corp. and General Electric Co., called on Congress and President Bush to place a national limit on CO2 emissions that would lead to 10 to 30 percent reductions over the next 15 years.
Bush opposes mandatory greenhouse gas cuts and withdrew the country from the Kyoto Protocol on global warming in 2001, saying it unfairly left rapidly developing countries like China and India without emissions limits.
Change could be nearing however, as top 2008 presidential contenders from both parties favor a mandatory greenhouse gas plan.
Efforts to limit emissions of heat-trapping gases have also moved up Congress' list of priorities since Democrats took back control from Republicans in last November's mid-term elections.
A large possible low-carbon investment could be capturing and burying carbon dioxide, the main greenhouse gas, from coal-burning power plants. That technology, which is not yet commercially available, would allow continued heavy reliance on vast US sources of coal, but will require huge investments that could raise consumer power bills by 20 percent, a Massachusetts Institute of Technology study said this week.
The European Union set up its carbon credit trading system in 2005 to meet member countries' obligations under the Kyoto pact. Trade in greenhouse gas permits doubled last year to more than US$26 billion.
US trade in such permits could be worth US$30 billion to $40 billion per year based on a US$7 per ton cap on emissions, the National Commission on Energy Policy said in 2004.