Cap carbon to spur economy - US business leaders

By Deborah Zabarenko, Environment Correspondent

WASHINGTON, Nov 18 (Reuters) - U.S. business leaders including the troubled Big Three automakers offered a prescription on Tuesday for economic recovery and job creation: cap the carbon emissions that spur global warming.

"The twin dynamics that are going to inform our industry for the next 20 or 30 years are climate change and sustainability," David Crane, CEO of NRG Energy Inc., said in an interview before the group's official announcement. "Climate change actually represents an area where U.S. business could be ahead of the curve instead of behind the curve."

Crane is among the leaders of 26 corporations and six environmental groups that make up the U.S. Climate Action Partnership, which since 2007 has pushed for a cap-and-trade system in the United States in line with the Kyoto Protocol, which imposes emissions limits internationally.

The climate partnership, known as USCAP, wants reductions in greenhouse gas emissions that are 60 percent to 80 percent below current levels by 2050, a goal that is in line with what President-elect Barack Obama supports.

Crane and others in the group recognize the pressure the global financial crisis could put on any carbon-cutting plan.

While politicians, business leaders and the American public all have indicated they want a cap-and-trade plan, Crane said, "If you say it'll have a highly destructive impact on the economy, jobs will be lost, people won't be able to put food on the table, the support for it's going to go way down."

Eileen Claussen, president of the Pew Center on Climate Change, a member of USCAP, said the financial slump could actually provide impetus to go forward with a carbon-capping law. Many companies see green investment as a way out of the problem, she said by telephone.

ECONOMIC DOWNTURN IS A REASON TO GO GREEN

"Some of the things you would have to do under climate legislation -- becoming more efficient, putting significant dollars into new technology investments and new infrastructure -- are all job-creation tools and revenue-producing tools," Claussen said.

"So rather than viewing the economic downturn as a reason not to do this, many in the business community are viewing this as a reason to do this," she said.

USCAP also include Alcoa, AIG, Boston Scientific, BP America, Caterpillar, ConocoPhillips, Chrysler, John Deere, Dow, Duke Energy, DuPont, Environmental Defense Fund, Exelon, Ford, FPL Group, GE, GM, Johnson & Johnson, Marsh, National Wildlife Federation, Natural Resources Defense Council, The Nature Conservancy, PepsiCo, PG&E, PNM Resources, Rio Tinto, Shell, Siemens, World Resources Institute and Xerox.

The United States is alone among major industrialized nations in rejecting the Kyoto pact, which the Bush administration maintains gives an unfair economic advantage to fast-growing economies like China and India.

Legislation that would have set up a cap-and-trade system failed to pass in the U.S. Senate this year, and it is doubtful that this kind of measure would become law in 2009, even though Obama favors it.

A cap-and-trade system puts a limit and a price on carbon emissions, which come from coal-fired power plants and fossil-fueled vehicles, among other human activities and natural sources. Companies that emit excessive amounts of carbon could buy credits from those that emit less.

In a separate announcement on Tuesday, Edison Electric Institute, an association of publicly traded electric companies, and the environmental group Natural Resources Defense Council called on U.S. state officials to encourage electric utilities to be more energy efficient.

"Energy efficiency needs to be a true business proposition, wherein utilities don't just recover costs but have the incentive for delivering energy efficiency products and services similar to incentives for new infrastructure development," Edison's David Owens said in a statement.

(Editing by Doina Chiacu) (For more Reuters information on the environment, see http://blogs.reuters.com/environment/ ) Keywords: CLIMATE USA/BUSINESS

(deborah.zabarenko@thomsonreuters.com;+1 202 898 8388; Reuters Messaging: deborah.zabarenko.reuters.com@reuters.net)

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