The Chamber Watches Itself On Climate Change

The U.S. Chamber of Commerce, under fire from key members for its opposition to Democratic climate-change legislation, distributed a letter Congress-wide "highlighting our support for comprehensive, sensible legislation to address global climate change."

The chamber isn't budging much from its original objections to climate change bills moving through Congress. It still believes that businesses in other countries should be subject to the same standards as those in the U.S., objects to any climate change legislation (including what's being considered now) that it believes will threaten American jobs, and wants nuclear energy to be admitted into the green energy mix. But with its membership split on the issues, the chamber is looking to appease both sides--emphasizing its support for global warming fixes, while criticizing key segments of the Democrat-supported bills. The missive also contains a tonal shift from naysayer to backer of alternatives, which puts it ahead of the game when compared to the Republican Party.

Or not?

Seven minutes later, the Chamber issued a fresh release: "Misguided Climate Change Policies Would Negatively Impact South Carolina's Economy." Heavy on caveats, light on solutions. 

One wonders how much input the Chamber is taking from Nike, Johnson & Johnson, and others who have been dissatisfied with its advocacy of late.

May 14, 2009


          The U.S. Chamber of Commerce, the world's largest business federation representing more than three million businesses and organizations of every size, sector, and region, supports strong, sensible legislation to address global climate change that protects jobs and the economy while reducing greenhouse gas emissions.  The purpose of this letter is to reiterate the Chamber's core principles on climate change, and to suggest a path forward on the issue.

Congress Must Move Past Two Decades of Failed Proposals

          Congress has been deadlocked over a solution to the climate change issue for almost twenty years.  The same costly, rigid ideologies have failed, year after year after year, primarily because the resulting proposals impose huge costs without any ability to stabilize concentrations of greenhouse gases in the atmosphere.  Environmental activists have advocated for these proposals while denouncing as "business-friendly" any idea that attempts to strike a balance between workable environmental solutions that preserve jobs and economic growth.  These same activist groups would have Congress believe that if the U.S. first commits to domestic greenhouse gas limitations, China, India, Brazil, and other emerging economies will follow suit with binding commitments of their own.  This concept is an unsupportable article of faith that carries with it great economic and political risk.

          The divisions among states, regions, industries, and their elected officials are growing deeper by the day.  As Congress once again prepares to bang the gavel on a climate change policy debate, congressional leadership has a serious choice to make:  continue to push the same costly, rigid ideas of the past two decades, or take steps to begin a workable process to reduce emissions of greenhouse gases.  Hopefully, Congress will at least consider the practical over the ideological.

The Chamber's Principles for Action on Climate Change

          The Chamber does not, as a matter of policy, support or oppose any specific conceptual approach to address greenhouse gas emissions, including cap and trade or carbon tax.  Rather, the Chamber weighs climate legislation on a bill-by-bill basis against five core principles.  Any legislation or regulation to address greenhouse gas emissions must:

(1)   Preserve American jobs and competitiveness of U.S. industry;
(2)   Provide an international solution that includes developing nations;
(3)   Promote accelerated development and deployment of greenhouse gas reduction technology;
(4)   Reduce barriers to the development of climate-friendly energy sources; and
(5)   Promote energy conservation and efficiency.

          The Chamber's broad-based membership supports these principles because they make sense.  When the Chamber has opposed climate change legislation, it has been because these principles have not been met.  In fact, the common threads running through many previous legislative proposals the Chamber has opposed are huge economic costs and job losses with no discernable climate-related benefit.  Simply put, these bills were all economic pain for essentially no environmental gain.

          Moreover, since the Massachusetts v. Environmental Protection Agency Supreme Court decision in 2007, the Chamber has expressed to Congress, the Bush and Obama administrations, and the Chamber's membership that Congress must approve comprehensive climate change legislation to avoid the catastrophic cascade of regulations that would otherwise result as a consequence of the decision.

          Because the majority of greenhouse gas emissions come from the burning of fossil fuels, the climate challenge is largely an energy challenge.  Nevertheless, virtually every climate policy proposal over the past two decades has ignored a fundamental truth:  because greenhouse gas emissions reductions would remove a tremendous amount of fossil energy from the economy, policies must also ensure that appropriate amount of replacement energy (renewables, nuclear, clean coal) could be supplied at a reasonable cost.  This debate is not just about the climate; it is about a path forward to ensure that the U.S. has a long-term supply of secure and affordable energy that is a driver of the economy and a key component of every American's quality of life.

The Way Forward:  Move Together, Not Alone

          The reality of global climate change is that it is a global issue that requires a global response.  The vast majority--80 percent or more--of future emissions will come from developing countries, and they must be part of any solution.  The U.S. has a great deal to lose, but very little to gain, from acting alone.  To ensure America's continued competitiveness in the global marketplace, Congress and the Obama administration must not act alone; the United States must reach out to the other nations of the world and "move together."  Any new national climate change policy should therefore be conditional on an international agreement that requires full international participation.

          To combat global climate change, world leaders must agree to a treaty that sets real--and realistic--enforceable targets for all nations, while allowing each nation the flexibility to meet these targets through whichever policy device it chooses.  Under such a global system, the European Union can retain its Emissions Trading System, Japan can proceed with its preferred "sectoral approach," Brazil can focus on reducing emissions from deforestation and forest degradation, and still other nations can choose to implement their own cap and trade system, carbon tax, or other program.  In the U.S., Congress and the Administration can figure out the best approach to addressing emissions without concern for leakage of jobs or trade wars because the entire world will be making contributions to eventually stabilizing greenhouse gas concentrations in the atmosphere.

          As a new treaty is being negotiated, the Obama administration should continue with its aggressive corporate average fuel economy (CAFE) program, make robust investments in research, development and deployment of clean energy and energy efficiency technologies, and continue to implement the fuels and efficiency laws already on the books, such as the Energy Policy Act of 2005 (EPAct 2005) and Energy Independence and Security Act of 2007 (EISA).

          All of these measures will reduce emissions of greenhouse gases; after all, that should be the goal.  Any new measures, whether legislative or regulatory, should be conditional on and consistent with a new international agreement.  The Chamber's proposal is compatible with legislation that Congress has considered and overwhelmingly approved in the past, including the Byrd-Hagel resolution of 1997, and the Hagel-Pryor provisions of EPAct 2005.

          The Chamber believes the new international approach should:

Consider growing energy needs;
Set realistic and achievable goals;
Strike a balance between environmental protection, energy security, and economic growth;
Ensure global participation, including binding commitments by emerging economies;
Allow for diversified approaches;
Ensure that mitigation actions by all parties are measurable, reportable, and verifiable;
Recognize technology development and commerce as crucial prerequisites to achieving emission reductions;
Protect intellectual property rights;
Remove trade barriers to environmental goods and services; and
Place the U.S. on an equal competitive footing with the rest of the world.
          The Chamber is working closely with business groups from other nations to make sure that a new international climate change arrangement will make a real environmental difference without tanking the economy.  At a meeting of international business groups from five continents in Copenhagen in February, and at the G8 business summit in Italy in April, the international business community endorsed many of the same principles outlined above.

The Chamber's Plan Will Reverse Two Decades of Climate Failures

          The Chamber represents more than three million members with diverse views on just about every issue, and climate is no exception.  Some support cap and trade.  Others support a carbon tax.  Still others disagree with current scientific analysis.  But at the end of the day, there is a broad consensus among the Chamber's members that climate policies should be international in scope, must not hurt jobs or the economy, and must promote technology and efficiency.

          In the United States, where we respect the processes established by our Constitution, and which many times generate divergent opinions, we need to recognize that many of our best ideas for moving the country forward come from the resolution of conflict with a compromise that brings the country together.  Tactics used by some environment group are loud, intolerant and divisive, but their proposals are narrow:  restrict new energy resources to a few select technologies such as wind, solar and geothermal while blocking nuclear energy, which in a carbon-starved world would be the nation's only carbon-free baseload energy technology.

          The 111th Congress is poised to address climate, and the details of the American Clean Energy and Security Act (ACES), which appears to be the focal point of this effort, are in constant flux.  However, Congress must not forget that ACES involves considerably more than just cap and trade.  ACES would overlay cap and trade on top of an already dizzying array of existing and proposed energy and environmental regulations.  It would authorize an unlimited number of citizen suits against businesses based merely on the fear of impending climate change, with the added bonus that plaintiffs and their attorneys need not actually prove that an injury occurred.  It would expose America's 27 million small businesses to EPA-enforced New Source Performance Standards for their machinery and equipment.  It would allow states to continue with their own duplicative cap and trade programs on top of the federal program, starting in 2017.  And it would impose carbon tariffs on goods imported into the U.S., a move that will almost certainly spur retaliation from global trading partners.

          Unfortunately, the debate in Congress has left the nation with two terrible options:  (1) expensive, complicated, regulation-heavy, domestic-only legislation like ACES, or (2) an "even worse" set of mandatory CO2 controls on everyone and everything through existing Clean Air Act programs.  The rigid ideology exhibited over the last twenty years of the climate change debate has not only clearly divided the nation but it has failed miserably to produce any results.  Congress should stop, take a breath, and consider sensible policy alternatives that increase our energy security, promotes a strong economy, and contributes to a global reduction in emissions.

          Congress is at a crossroads on climate policy.  It can continue to push the decades-old, rigid and failed policies supported by some environmental groups, or it can implement serious reductions in greenhouse gases that will allow the Administration to go to Copenhagen with new ideas for bringing the rest of the world into the process of reducing greenhouse gas emissions.  The Chamber is ready, and willing, to work with Congress and the Administration to "move together" with our international partners and achieve these goals.

                                                                        R. Bruce Josten