Three key Senators – John Kerry (D), Lindsey Graham (R), and Joe Lieberman (I) – were planning to introduce climate legislation this week, but that has been derailed by Graham’s split from the group, as well as Senate Majority Leader Harry Reid’s suggestion that the Senate will take up the topic of Immigration before Energy. While not the only climate change legislation in development, this bill was widely viewed as the most promising opportunity to gain bipartisan traction.
At this time, many experts doubt that any energy legislation will be raised in 2010, particularly as we move closer to mid-term elections this November. Outlook beyond 2010 is highly speculative at this point.
So what does this mean for US business?
Continued indecision means uncertainty. Uncertainty means risk. Risk must be managed – at a cost to the business.
What’s difficult to quantify is the cost of managing that risk, compared with the assumptions about cost under emissions regulation. Establishing a price signal for the emissions of greenhouse gases is a catalyst for achieving emissions reduction. However, the methodology for establishing that price – whether through cap and trade or other tax forms – has been the source of much debate.
You may recall that the US EPA has authority to regulate greenhouse gases under the Clean Air Act. Under the existing rule, suppliers of fossil fuels, manufacturers of vehicles and engines, and facilities that emit 25,000 metric tons or more per year of GHG emissions are required to submit annual reports to EPA.
Industry advocacy groups are split on this issue – some calling for continued efforts for legislation so that uncertainty is reduced, while others are happy to push this until next year thinking that the next round of elected legislators will be less aggressive on climate change.
The future is being shaped today. And in response, organizations are moving forward with management infrastructures to optimize performance, regardless of future emissions regulatory schemes. How is your organization prepared to respond?
