Time for a More Climate-friendly Mobile Air-Conditioning Refrigerant?
Climate Change Compliance as a Business Opportunity
A great deal of attention is being paid to the development of multilateral and national accords and legislation designed to compel private industry to reduce carbon emissions. The key assumption underlying these efforts seems to hold that private industry worldwide cannot be counted on to initiate or facilitate carbon emissions reductions voluntarily, and certainly not as part of a preferred business model. But suppose for a moment that this assumption is not entirely correct, that private industry is in fact ready to start embracing climate change as a function of its own self-interest. The implications of such a trend could be far reaching.
Continue Reading...Climate Adaptation
As we consider climate legislation, we do not like to be reminded that despite our best efforts, the likelihood is that national and global GHG reductions will not be enough in time to keep regional climate from changing significantly. A new two-year Resources for the Future project, “Adapting to Climate Change,” has as its purpose developing an array of on-the-ground measures to allow our institutions to mitigate the effects of climate change, when and if it occurs. [summary]
Continue Reading...Now is the Time to Assess the Impacts of Climate Change on Your Business
In the absence of federal climate change legislation, how should a company evaluate the impact of forthcoming climate change regulation on their business plans? Companies can start by recognizing that in many parts of the country climate change regulation already has been enacted at the state level, and that federal policy is likely to resemble this effort, only on a national scale. In this regard, most northeastern states have joined the Regional Greenhouse Gas Initiative ("RGGI"), which will take effect January 1, 2009. Under RGGI, greenhouse gas emissions from fossil fuel burning power plants will be capped at 2009 levels until 2015, and thereafter must reduce emissions 2.5 percent annually until 2018. Similar schemes have been adopted in several other states. These measures will have a significant impact on the cost of electricity; businesses that buy power from these utilities will face higher energy costs which could price their products out of the market. Planning for such contingencies must begin now.
Another sign of the changing perception of the pressures on the carbon economy is the recent adoption of the so-called "Carbon Principles" by three of the world's largest financial institutions – JP Morgan Chase, Citi, and Morgan Stanley. Under the Carbon Principles, these financial institutions state that they will consider the cost of carbon emissions or mitigation of the emissions on their investment decisions and investment advice. Thus, for example, before financing a coal-fired power plant these banks would estimate the cost per ton of carbon of carbon dioxide emissions which the plant might have to pay to emit under future legislation – and consider that cost as part of the investment decision. This new approach will have profound effects on carbon-intensive industries: for firms with plans to expand operations or open build new plants, the cost of borrowing just went up.
While costs will undoubtedly increase, climate change legislation will also create opportunities for investment and new ways to do business. These are but a few of the concrete climate change-related developments that firms can assess now.
With that in mind, every business should consider starting the evaluation process to determine where they are today and how they may be able to prosper in the new climate change world.
CONTINUE READING - Full Advisory PDF
Published McKenna Long & Aldridge LLP Climate Change Advisory (March 2008)
