Investors urge US Congress for rules slashing CO2
Mon Mar 19, 2007 2:00pm ET140
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Investors urge US Congress for rules slashing CO2
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NEW YORK, March 19 (Reuters) - Institutional investors joined a corporate chorus seeking to sink money into clean energy markets and called on Monday for U.S. Congress to pass rules slashing output of gases linked to global warming.
The investors, including Merrill Lynch (MER.N: Quote, Profile , Research) and Calpers, the largest U.S. public pension fund -- which together manage nearly $4 trillion in assets -- called on Congress to pass legislation aimed to cut emissions of heat-trapping gases 60 to 90 percent under 1990 levels by 2050.
"To tap American ingenuity and drive business to a leadership position in the low-carbon future, we need regulations to enable the markets to deploy capital and spur innovation," Fred Buenrostro, chief executive officer at Calpers, said in a statement ahead of the announcement in Washington on Monday.
The investors were joined by chemical, energy, and insurance companies including DuPont Co. (DD.N: Quote, Profile , Research), PG&E Corp. (PCG.N: Quote, Profile , Research), Allianz (ALVG.DE: Quote, Profile , Research) and BP America, a division of British oil major BP Plc. (BP.L: Quote, Profile , Research)
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"Allianz SE believes it is essential to put a price tag on carbon, thereby enabling market mechanisms to drive emissions reductions and climate protection," said Joachim Faber, a member of the company's board of management, in a statement.
They said such cuts on a global level on the smokestack and tailpipe emissions could avoid worst-case scenarios of global warming. A draft U.N. report said cuts in emissions could mute the worst effects such as water shortages for billions of people or declining crop yields that could mean hunger for millions. That report will be released on April 6.
CAP AND TRADE
The group, organized by Ceres, a coalition of investors and environmentalists based in Boston, said national mandatory market-based solutions, such as a cap and trade system, should be introduced to cut emissions "wherever possible."
Cap and trade markets, initiated by the United States on pollutants that cause acid rain, set a mandatory baseline, in which companies that cut emissions under the target can sell credits to ones that do not cut emissions under the target.
Companies can also earn credits by investing in clean energy projects, like wind or solar power, or methane reductions at coal mines.
The European Union set up such a market in 2005 to meet its members' obligations under the Kyoto Protocol on global warming. Billions of dollars' worth of credits have traded.
Monday's group also called for the U.S. Securities and Exchange Commission to clarify which companies should disclose risks of climate change to their investors in regular reports. It urged Congress to pass energy and transport policies that would allow research, development and deployment of clean technologies.
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President George W. Bush opposes mandatory caps on heat-trapping gases and pulled the country, the world's top CO2 emitter, out of the Kyoto pact in 2001.
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 regained control last November.
A large 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 U.S. sources of coal. It would require huge investments that could raise consumer power bills by 20 percent, a Massachusetts Institute of Technology study said last week. |
