Monday, January 28, 2008

Chaos isn't good for business

It seems loony greens and their tree-hugging friends aren't keeping executives up at night. Rather, the bogeymen spooking business leaders turns out to be the politicians who promote supposedly 'business-friendly' voluntary approaches to cutting greenhouse gases.

Why? Top execs want clarity on climate change policy and prefer a U.N.-brokered system to the voluntary approach championed by the White House and some leaders in the Republican Party, according to a study. Investors always prefer a nasty known to unknown that offers a glimmer of hope. An established system, even one involving a carbon tax or deep cuts to emissions would clear the way for businesses to adjust their forecasts and plan accordingly, according to the study.

Canadian political leaders are getting the same message. Policy chaos isn't good for business, apparently. The business leaders have no problem with the noble goals of various greenhouse gas policies being developing in Canada, they just wish the country had one national approach rather than a half dozen local ones. Will a uniform emissions policy drive business out of Canada? Just the opposite, apparently.

"This is affecting investment plans," said Tom d'Aquino of the Canadian Council of Chief Executives. "How can you make investment decisions on a 15 or 20 or 25-year horizon if you are living in a country that is totally fragmented on environmental policy? The danger is that of some people saying if Canada can't get it together, maybe we should go somewhere else. People have actually said that to me."

But why stop at national borders? If a national plan is superior to local ones, wouldn't an international policy trump local ones? The Washington Post (registration required) notes the similarity between the European Union plan unveiled last week and Lieberman-Warner bill on the floor of the Senate. The largest businesses in the United States, those with the biggest lobbying clout, already operate under greenhouse gas regulations in Europe. It's hardly a surprise many of these companies are actively pressing for Washington to get on board and bring some conformity to global policy.

Cue President George W. Bush in Monday's State of the Union address:

And let us complete an international agreement that has the potential to slow, stop and eventually reverse the growth of greenhouse gases. This agreement will be effective only if it includes commitments by every major economy and gives none a free ride.

Bush, with his roots in the corporate wing of the Republican Party, is playing catch up to his supposed base. He may try to pitch a voluntary system again this week in Hawaii when he convenes a meeting on climate change. He'll get few takers.

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