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A Changing U.S. Climate

Fortnightly Magazine - February 2005

action on carbon could build. As the Wall Street Journal editorialized critically on Dec. 13, 2004, just as the COP-10 meeting in Buenos Aires got under way, there is a "budding corporate enthusiasm for mandatory reductions in greenhouse gases" and that "big business becomes a lobby for CO 2 regulation." 13

But for the moment the action is in the states, and the prospects for federal movement may depend on the actions of influential state governors like Arnold Schwarzenegger of California and George Pataki of New York.

[Editor's Note: Recently, the Sustainable Energy Institute convened a panel of federal and state officials, as well as utility sector and non-profit representatives, to share their views on the emergence of state-level regulations limiting GHG emissions and the implications for the utility sector. This article was based in part on the views expressed at the event. ]


  1. Danny Hakim, "Several States May Follow California's Lead on Cars," , Saturday-Sunday June 12-13, 2004, p. 15.
  2. The description of state policies is based largely upon a recent report by the Pew Center on : 2004 Update, pp. 9-17.
  3. From Josh Bushinsky, Pew Center on Global Climate Change, "Implications of State Climate Change Policies for the Utility Sector," presentation to Sept. 24, 2004 SEI Roundtable.
  4. Under the Kyoto Protocol, EU countries will not be able to earn credit for emissions reductions in the U.S. However, regulated American companies may be allowed to buy emissions credits from the EU.
  5. Utilities named in the suit are AEP, Southern Co., Tennessee Valley Authority, Xcel, and Cinergy.
  6. For TXU's complete white paper, see .
  7. See Global Climate Change: Position on State, National, and International Policy. .
  8. Testimony delivered Oct. 1, 2003. Subject of hearing: McCain-Lieberman Climate Stewardship Act.
  9. Juliet Eilperin, "White House to Push 'Clear Skies' Legislation; EPA Rule Put on Hold as Bush Seeks Bill," , Dec. 14, 2004, p A3.
  10. Andrew Freedman, "Climate Change: Sen. Inhofe Denounces Climate 'Alarmism' as Clear Skies Debate Looms," , Vol. 10, No. 9, Jan. 6.
  11. Andrew Freedman, "Climate Change: Stevens, McCain Sound Alarm Over Arctic Warming," , Vol.10, No.9., Nov. 15, 2004.
  12. Robert G. Kaiser, "The Political Veteran; He Survived Vietnam and Won the Senate. Could Chuck Hagel Take the White House?," , Nov. 15, 2004, p. C1.
  13. "Kyoto 'Capitalists'," , Dec. 13, 2004, p. A16.

Factors affecting power-sector attitudes towards climate change measures include:

  • State policies designed to cut GHG emissions
  • Litigation by states seeking GHG emissions reductions
  • Shareholder resolutions to disclose risk posed by climate change and by potential non-compliance with future requirements
  • Pressure from insurance companies to reduce risk
  • Prospects for lower bond ratings as financial analysts evaluate environmental risk exposure
  • Desire to "level the playing field" by companies operating in GHG-regulated states
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