Searching for certainty
How does the business community view the Copenhagen summit and the prospect in the United States of EPA regulation of greenhouse gases?
"The business community is split," says Kevin Parker, global head of asset management at Deutsche Bank. "You've got the radical right as espoused by the Chamber of Commerce. I think these guys are crackers. Then you have the 850 heads of corporations around the world who are calling for climate change regulations. And these are sober CEOs who run businesses...They're saying that 'the uncertainty is killing us. We know you're going to have to do this, so get on with it so we can get on with life.'"
But what can businesses expect? Some financial firms are trying to put the conference in perspective for execs and investors. Here are two excerpts from a report by FBR Capital Markets, based in Arlington, Va. The first makes an observation about a contradiction in climate talks:
Climate negotiations face a serious "chicken and egg" problem. Congress is reluctant to pass binding emissions reductions without confidence that developing nations will do the same. However, developing nations are unlikely to cap emissions without significant mitigation funding from the U.S., which only Congress can provide.
The second takes a crack at forecasting the outcome here in the United States after Copenhagen:
The next two weeks will produce some headline volatility on climate change; but we advise investors to focus on the facts, which will remain unchanged:
(1) conservative Senators are the bottleneck on climate change, and any agreement reached in Copenhagen is still contingent on Congressional action; (2) the real key to international climate agreement is not binding targets but funding--again, Congress, not the President, controls this variable; (3) the EPA still has authority to regulate greenhouse gases under the Clean Air Act and is moving forward aggressively. Ultimately, we believe that this will drive Congress to enact cap-and-trade legislation in 2010. If Congress fails, the EPA will continue with regulation under the Clean Air Act.
Steven Mufson| December 8, 2009; 4:14 PM ET Save & Share:
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