America Inc prepares for emission cuts

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America’s corporations have long been bracing for the day when they would be required to carry out sharp cuts in the emissions that cause global warming. That day seemed to move a bit closer last week, when President Barack Obama outlined a national target for such reductions.

Much of corporate America has already been thinking about how to comply. Many businesses concluded years ago that such limits were inevitable, and they have been calling on Congress to define the exact rules they will need to follow.

Already, many companies are recording their emissions and analysing the results. Some have set voluntary targets for reductions and are claiming substantial progress in meeting them. Sustainability—a notion mostly heard in environmental circles only a decade ago—has become a mainstream idea to which some companies are committed and many are paying lip service.

Major corporations, including General Electric, the Ford Motor Co. and PepsiCo, have teamed up with environmental groups to set up the US Climate Action Partnership, a wide-ranging coalition trying to find ways to cut emissions .

The White House said last week that the President would present a provisional target at the Copenhagen summit meeting on climate next month to reduce greenhouse gas emissions. It will be "in the range" of 17% below 2005 levels by 2020, and 83% below by 2050, the White House said.

That target reflects the goals specified by legislation that was passed in the House in June. A similar Bill is bogged down in the Senate, which would set cuts of 20% by 2020.

Limiting the growth in greenhouse gas emissions, let alone cutting them, will require a radical transformation of the nation’s energy consumption and fuels that will most likely take decades. It is bound to hurt some energy-intensive businesses, like petroleum refiners and coal-fired power plants, and some manufacturers, while bolstering the development of alternative power industries like solar and wind.

To reduce emissions, Congress has been looking at a mechanism called cap and trade, in which legislators would set a limit on the nation’s emissions and it would decline each year. They would also assign pollution permits that companies could then buy and sell depending on their needs.