Frank O'Donnell is president of Clean Air Watch, a nonpartisan, nonprofit organization aimed at educating the public about clean air and the need for an effective Clean Air Act.
One of the enduring myths propagated by opponents to new controls on global warming pollution is that it will cause economic mayhem. (See, for example, the recent Washington Post Outlook piece by Bjorn Lomborg.)
We rarely hear the flip side of the issue—that new limits on heat-trapping emissions not only are needed to protect the planet, but actually could become an economic boon for companies smart enough to develop cleaner products.
So it was heartening this week to sit in on a hearing by the Select Committee on Energy Independence and Global Warming led by Rep. Ed Markey, D-Mass., which explored some of the many business opportunities that could result from a low-carbon economy.
Although dealing with global warming "may lead to substantial costs, it is our experience that it can also create correspondingly large opportunities for industry," noted Neil Carson, Chief Executive of Johnson Matthey PLC, a United Kingdom-based company.
"Competition to seize these opportunities leads to investment by industry in better technologies that can reduce the costs significantly," added Carson, who represented the UK Corporate Leaders Group on Climate Change set up by Prince Charles (who exhorted Markey's committee to achieve "the boldest possible targets").
Unless you work in suburban Philadelphia, where Johnson Matthey has a factory, you may not have heard of this company, but I guarantee you are breathing easier because of it: The company makes catalytic converters and other pollution control devices. Carson recalled that tough Clean Air Act and California emission standards were "instrumental for creating the global market" for these products. By contrast, he noted that a voluntary approach alone "weakens the investment case for new technologies and slows down technical progress." (He was too polite to mention President Bush, but cited shortcomings in European Union requirements.)
He cited the UK government's Stern Review on the Economics of Climate Change which warned earlier this year that aggressive action is needed to deal with global warming, but pointed to great "opportunities" for companies that could develop and sell low-carbon energy products.
(Though the timing was a coincidence, the argument was underscored this week by a Sierra Club-United Steelworkers report, which concluded that nearly 220,000 new jobs could be added to the U.S. economy if an emphasis is placed on ensuring that wind, solar, geothermal and biomass equipment is manufactured domestically.)
Aside from the obvious need for Congress to limit carbon emissions, Markey's panel heard that there are other removable barriers that inhibit some changes towards a lower-carbon economy.
Ralph Izzo, Chairman, President and CEO of Newark-based Public Service Enterprise Group, Inc., noted that power companies could spur a "paradigm shift" towards greater energy efficiency --- one of the quickest and best ways to reduce carbon emissions—but added that state regulatory authorities often inhibit this by not permitting companies to pass on the costs of efficiency improvements. (California, as it so often has on environmental issues, has led the way by rewarding utilities for meeting aggressive energy efficiency targets.)
Similarly, Izzo noted that federal tax law currently prohibits power companies from receiving tax credits for investments in solar energy. His company has already announced a plan to invest $100 million to help develop solar energy in New Jersey,
but Izzo noted that a change in tax law could be "a powerful incentive for additional solar energy investment."
Though Markey's committee didn't delve into it, one other fact has become very clear: If we don't set very aggressive pollution reduction targets, we won't see the kind of technology-changing outcomes that we really need to achieve a low-carbon future.
For example, in a little-publicized press release last month, the Cummins engine company reported it planned to sell big new diesel highway truck engines in 2010 without pollution control devices to limit emissions of smog-forming nitrogen oxides.
Cummins doesn't plan to do anything illegal or improper. It's simply taking advantage of the system. The company began selling cleaner-than-required diesel pickup truck engines this year, and is permitted to "bank" the added cleanup and apply it to future years, thus avoiding the need for advanced pollution controls.
It's the kind of example that lawmakers may want to keep in mind as they explore similar "cap and trade" approaches to global warming.