The Green Wars

I'm passingly familiar with the issues surrounding global energy use, peak oil and the need to move economically to sustainable energy sources. Some people say there is a global climate change crisis, some deny it.

As one with a scientific background, but not a background in ecological science, I can't say from direct study who's right. But I have looked at the issues enough to know a couple of things: the unanimous verdict of the scientific community in the science journals is that global climate change is a real, man made emergency. I'm also hearing from some insurance industry contacts that they believe it and are trying to make plans: they can't keep underwriting many coastal areas and businesses the way they have in the past, based on recent risk assessment history.

The New York Times offers this bit as part of a series:

When Timberland, the outdoor clothing company, studied ways to reduce its carbon emissions four years ago, it weighed several options: building a wind farm in the Dominican Republic, buying power generated by renewable resources and setting up a vast bank of solar panels at one of its distribution centers in Ontario, Calif.

It chose to do all those things, but that was the easy part. When Jeffrey B. Swartz, Timberland's president and chief executive, considered how much carbon dioxide was produced in making leather for the company's famous boots, the answer came as a surprise.

"As it turns out, the vast majority of the greenhouse gases associated with manufacturing leather comes from cows in the field," Mr. Swartz said. "Yes, methane."

While Timberland figures out how to reduce these emissions — it is examining ways to change the feed for cows — the company has already cut its greenhouse gases by 17 percent from their 2002 level and aims to become carbon-neutral by 2010 by offsetting its emissions through renewable or alternative energy sources.

Americans are increasingly recognizing that the effects of carbon emissions on global warming are a serious problem, but there are no rules in the United States regulating heat-trapping gases comparable to those that most other developed countries have adopted under the Kyoto Protocol. Some United States businesses, though, are responding for a variety of reasons anyway: to satisfy customers or shareholders who worry about the environment, to improve their public image or to drive down their energy costs. In addition, some states and local authorities have stepped in to try to curb their contributions to global warming.

For Timberland, while it shares the concerns over global warming, it's mostly a matter of dollars and cents. As Mr. Swartz put it: "What idiot will leave costs on the table? I hope it's our competitors. I get paid to create value."

But reducing carbon emissions is no easy task.

Scientists, economists, environmentalists and a growing rank of business leaders warn that corporate America needs to move more quickly or it will face the consequences: higher energy prices, a potential cost for carbon pollution and, eventually, products that will have trouble competing globally because other countries are reducing emissions.

The United States is responsible for a quarter of all the carbon dioxide sent into the atmosphere each year. It has not ratified the Kyoto Protocol, the treaty on climate change that went into effect last year for more than three dozen countries in Europe and elsewhere, that set targets and timetables for cutting emissions.

If consumption of fossil fuels continues at today's pace, the Energy Department predicts that carbon emissions in the United States could rise to more than eight billion tons by 2030 — 38 percent above current levels — as energy use keeps growing.

"This is a huge challenge for American businesses, particularly those trying to compete internationally," said Adam Markham, executive director of Clean Air-Cool Planet, an advocacy group in Portsmouth, N.H. "Most of the rest of the developing world has a legislative mandate to curb emissions, but in the United States, in many cases, there is no real reason for companies to act."

The major energy companies are pushing back hard, through advertising and lobbying, against these trends. But the green wars are here to stay for American and global businesses. I expect we'll be hearing more, not less, about this. Politicians and demagogues can say what they will, but my business sources tell me carbon emissions and sustainable energy will be huge priorities at the beginning of this century. There's room here for innovative, smaller companies to lead the way in the development of sustainable energy models and technologies that the big players lack incentives to explore in earnest.