Tag Archives: climate change

GreenBiz

Winning the Sustainability Battle, Losing the Carbon War? | GreenBiz

Winning the Sustainability Battle, Losing the Carbon War?

In establishing the Carbon War Room, Richard Branson, the British-born media and aviation billionaire, explicitly treats the threat of catastrophic climate change as one similar to the threat posed by a world war.

Taking this metaphor a step further, Branson appointed as his general Jigar Shah to head up the CWR. Nearly a year into the mission, however, Shah seems palpably frustrated.

Speaking with Joel Makower at GreenBiz.com’s State of Green Business Forum in Washington today, Shah emphasized that the foot soldiers in this mission — companies, policy makers and voters — are waging a losing fight in this multi-decade struggle.

State of Green Business

First some context on the scope of the fight. Shah reminded the audience that global greenhouse gas emissions are running at about 50 gigatonnes per year today, and are on track to grow to 60 gigatonnes by 2020 if economic growth and climate trends continue without change. To avoid catastrophic climate change of 2 degrees Celsius or more, scientists say we need to trim 17 gigatonnes from that trend by 2020.

Not surprisingly, technology is ready to help solve the problem, says Shah, who earned a reputation as a wunderkind of the solar business, and a fortune — perhaps several hundred gazillion dollars, Makower joked — as the founder of solar energy pioneer SunEdison in 2003. “You’ve got Bjorn Lomborg saying we can’t do anything without more R&D. And policy people saying unless we pass a price on carbon, we can’t do anything,” said Shah. “That’s just poppycock.”

The deeper problem is a tendency to grasp at feel-good solutions without reaching for, or even acknowledging, harder, far more impactful steps.

Shah offered the example of turning off the taps while brushing your teeth: it’s a painless, feel-good behavioral change promoted by countless green living advice columns. Yet compared to the 40 percent of water wasted through leaking pipes across our crumbling water networks, it’s meaningless.

While Makower suggested you could pursue both lifestyle changes and long-term infrastructure goals, Shah batted back the suggestion. “It is an either-or decision,” no matter how much we’d like to think otherwise.

Echoing psychological studies suggesting that consumers’ interest in these issues peters out after a single action, Shah said: “There’s very few people who react to [any environmental message]. So when an NGO mails out to 20 million people turn off your taps, they could just as easily say the more important thing is to actually fix this infrastructure.” But the harder sell is all to rarely made, said Shah.

The problem is compounded by failures of incomplete information, Shah added. With scant understanding of the scale of the climate change challenge, for example, good intentions get diluted.

via greenbiz.com

The Fiscal Times

Climate Change: Hotter, Wetter, Windier and Costlier — Insurers Tally the Potential Toll | The Fiscal Times

It’s not your imagination. The weather in lots of places is getting hotter, windier, and weirder. In September, New York City was hit by its third tornado in the past five years, unprecedented in more than a century of weather records.

For a few minutes on Sept. 16, a macro-burst carved a swath of tree-felling, roof-lifting destruction through Brooklyn and Queens. Remarkably, the storm killed only one bystander. Estimates put the cost of damage from the storm at over $27 million, not including the loss of thousands of city trees.

An unprecedented heat wave and severe drought conditions this summer fueled wild fires in Russia, causing hundreds of deaths and some $15 billion in property loss. Later in the summer, Pakistan experienced cataclysmic flooding, displacing millions and doing some $9.5 billion in damage to housing, infrastructure and farm fields.

Some say these events are part of a normal weather cycle, others say it’s a sign of permanent climate change. Either way, it’s a multi-billion dollar problem. Globally, insured losses from weather events have jumped to an average $27 billion annually from $5 billion over the past 40 years, adjusted for inflation. While rising property values account for part of the increase, a growing share is driven by the intensification and rising frequency of weather disasters, according to an assessment of insured property damage by SwissRe, a Zurich-based reinsurance provider…

More here: http://www.thefiscaltimes.com/Articles/2010/11/16/Climate-Change-Hotter-Wetter-Windier-and-Costlier.aspx

 

GreenBiz

The End Isn’t Near: A Better Way to Spur Action on Climate Change | GreenBiz

The End Isn't Near: A Better Way to Spur Action on Climate Change

From Al Gore’s An Inconvenient Truth, to emotionally wrenching visions such as this video shown at last year’s Copenhagen climate meeting, many climate change communicators opt for shock and emotional awe in their efforts to stir action. Given the scope of the fears, it’s an understandable tactic.

In fact, litanies of massive environmental disruption — often paired with images of imperiled children (here, here and here) — have become a sort of visual cliché used by even the most sophisticated messengers in this arena. Gore’s movie — despite being essentially a PowerPoint presentation on steroids — even won an Oscar. At their best, they can be educational, stirring visions meant to motivate the public.

At their worst, they do the exact opposite. Given the parlous state of climate efforts, it’s pretty obvious that these apocalyptic warnings aren’t winning over droves. I’ve seen it first hand: For every person moved to act by Gore’s work, I’ve observe others who respond with a fatalistic shrug asking, in effect, what could I possibly do about it? Still others have vaulted clear over ambivalence to outright antagonism, angered by the threat these visions suggest, and their implicit accusation of fault.

Now behavioral researchers at the University of California, Berkeley, have shed some scientific light on these unintended consequences of climate communication. The new study, which will be published in the January issue of Psychological Science, suggests that dire descriptions of global warming, in isolation, can backfire, causing viewers to shut off, before considering the problem.

In their paper, “Apocalypse Soon? Dire Messages Reduce Belief in Global Warming by Contradicting Just World Beliefs,” [PDF] researchers Matthew Feinberg and Robb Willer highlight the basic fact that fear and fatalism are poor motivators. The conclusion offers a reminder that, for all the billions being put into mitigating climate change, developing better understanding of human behavior could lead to more change at lower cost.

via greenbiz.com

GreenBiz

BSR 2010: Maersk Slows Down to Go Greener | GreenBiz

BSR 2010: Maersk Slows Down to Go Greener
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Nearly two years after oil’s record pricing run-up, many consumers and businesses have at least softened some of the dramatic changes that $5 per gallon gasoline induced. SUV sales will never be what they were, of course, but big vehicles still rule U.S. roads. And shippers like FedEx and UPS have backed up fuel surcharges, which were tacked onto some shipments.

On the high seas, though, Maersk Line has stuck with the cost-cutting steps it instituted during the energy price spike. At the time, Maersk, the world’s largest operator of container vessels, broke with industry practice and proposed to its shipping clients that by slowing down its ships, Maersk could cut fuel use and lower shipping costs.

While 1,000-foot-long freighters may not have the same zip as a FedEx jet, the container industry has been subject to the same pressure to go “faster, faster, faster” in recent decades, so the move was a gamble, explained Jacob A. Sterling, head of climate and environment sustainability at Maersk Lines, at a BSR 2010 panel yesterday titled Extending Sustainability into the Transportation Sector.

“We’ve always known a minor reduction in speed could deliver energy savings,” said Sterling. A 20 percent reduction in speed can cut fuel use and CO2 emissions by up to 40 percent, the ship operator found. “But for decades, the price of fuel has been so low, shipping costs didn’t factor into companies analysis. The speed from factory to market mattered much more, so we kept pushing to go faster.”

Today, the practice known as slow-steaming has been adopted by many shipping lines, but isn’t the rule on every run. “On a given route — from Asia to Europe, for instance — we’ll run the ships from Hong Kong to Rotterdam at normal speed, or a little slower, because of the high value of the electronics and manufactured goods onboard justifies the expenditure.” But on the return trip, when the ship sails loaded with scrap metal and paper waste headed for Chinese recyclers, slow-steaming makes more sense. “The goods are worth less, and they’re not as time sensitive,” said Sterling. Over 18 months, the shift has cut company CO2 emissions by 7 percent. Maersk has committed to reducing its CO2 footprint by 25 percent by 2020.

via greenbiz.com

GreenBiz

Why Planning for the Worst is Best in Coping With Climate Risks | GreenBiz

Why Planning for the Worst is Best in Coping With Climate Risks

“It’s not a question of if a major hurricane will strike the New York area, but when,” former National Hurricane Center director Max Mayfield once told a congressional committee.

Megan Linkin, an atmospheric perils specialist for Swiss Reinsurance America Corp. in Armonk, NY, reminded me of this ominous projection in a recent conversation, following her presentation at Climate Week NYºC 2010.

Linkin who, as a perils specialist at SwissRe, sports one of the most ominous professional titles I’ve come across, has a PhD in in atmospheric and oceanic science. As part of a broader project involving the New York Academy of Science and in partnership with the city government and a host of regional academic experts, Linkin has recently spent time focusing on the financial perspectives of how climate change could affect America’s largest city. Since climate change is expected to intensify the impact of extreme weather events on the city, a major part of her focus is to assess what the cost of major storms could be to New York City.

In the wake of New Orleans’ hurricane Katrina disaster, or the leveling of scores of cities in Pakistan due to flooding this past summer, it’s not as hard to imagine catastrophic weather events in the Big Apple. Indeed, as we spoke, not far from my Brooklyn apartment, workers were cleaning up the tree fall from the third tornado event in the city’s five boroughs in the past few years, unprecedented in recent history. This summer, New York has endured 39 days with temperatures over 90 degrees Fahrenheit, the most in recorded history.

Of course, it’s a mistake to associate near-term weather events with long-term shifts in the climate, but extreme weather does steer collective thinking in that direction. And climate change is predicted to significantly alter the area’s environment.

According to a forecast by Columbia University Center for Climate Systems Research, the city will see average temperatures rise by as much as 3 to 5 degrees Fahrenheit by the 2050s, and more further out. Sea levels are anticipated to rise by up to a foot by the 2050, and more than twice that if Greenland and Antarctic ice sheets melt quickly. These predictions for average changes bely the destructive potential of outlier events, when heat waves, rainfall, storm surges, or strong winds reach peak power.

New York is uniquely vulnerable in many respects. It is, of course, the most populous conurbation in the United States, with huge swaths of dense building stock merely a few feet above sea level — not just in Manhattan, but also in the city’s most populous boroughs of Brooklyn and Queens as well as Staten Island.

Adding to this list of vulnerabilities are unique sets of infrastructure – subways, tunnels, and bridges – which if damaged or destroyed would wreak long-lasting economic havoc by impairing movement of people and goods between the boroughs. And like Amsterdam, LaGuardia Airport is below sea level and requires constant pumping to keep it dry. JFK Airport is at roughly sea level, facing the Atlantic, so it would likely be at least temporarily knocked out by a major storm.

According to estimates compiled by Linkin, the total value of privately insured coastal properties is $2.4 trillion, including city coastal areas and Long Island, but excluding nearby but similarly vulnerable coastal areas in New Jersey. The city of Hoboken — which has a emerged as a sort of Mini-Me to Wall Street with a clump of office towers housing back office duties for Wall Street’s biggest players — sits directly across the Hudson River from lower Manhattan and would be equally imperiled from a severe storm surge.

via greenbiz.com

BusinessWeek

A U.S./EU Dogfight Over Greener Air Travel | BusinessWeek

 

This August, U.S. airlines face their first big deadline to meet European Union rules on emissions linked to global warming. That’s when carriers landing in Europe will have to submit proposals to the EU on how they plan to track such emissions. This is a first step toward tough European “cap-and-trade” laws requiring airlines to either slash greenhouse gases or pay for permits to emit, starting in 2012. U.S. airlines are watching these developments anxiously, in part because they are already struggling with weak travel demand and yo-yo’ing fuel prices.

The Air Transport Assn. (ATA), which represents U.S. carriers, says the plan violates international law, and that the U.S. government is obliged to object. If the EU proceeds on its course, it faces a thicket of lawsuits, predicts Nancy Young, ATA’s vice-president for environmental affairs. “We adamantly oppose their scheme,” she says—adding that having to purchase credits will stifle funding for the very innovations airlines must develop to cut emissions.

Just how much new carbon costs might increase airfares is unclear. One aviation industry study estimates the annual operating costs of airlines landing planes in Europe will rise by billions of dollars if the EU enacts its plan. But green groups tell a different story. They point to an EU analysis that puts the average price increase for a cross-Atlantic round-trip ticket at just $6 to $56 by 2020, depending on the cost of carbon permits. The effect on prices is “within the range of fluctuations travelers are used to,” says Mark Kenber, policy director at the Climate Group in London.

Environmentalists argue that, compared with the auto and electric power sectors, airlines have had it easy when it comes to efficiency targets and carbon policies. Their special status dates back to 1997, when many countries enacted the Kyoto Accord, a global pact to cut greenhouse gas output. Kyoto didn’t set specific reduction targets for airlines or marine shippers, though both groups were asked to come up with their own plans. That’s because plane flights accounted for just 2% of total industrial emissions at the time, and because of murky jurisdiction issues when planes or ships cross national borders.

U.S. carriers have boosted their fuel efficiency by 31% since 1990 and have promised an equal gain by 2035. Airplane and engine builders, from Boeing (BA) and Airbus to General Electric (GE) and Rolls-Royce (RYCEY), are researching lightweight materials and plant-based jet fuel. Airlines are seeking streamlined flight paths to avoid wasting fuel. Still, because air traffic is growing so fast globally, the sector’s emissions are on track to more than double by 2035.

Outside the U.S., key carriers such as Air France-KLM (AFLYY), British Airways (BAIRY), Cathay Pacific (CPCAY), and Virgin Atlantic are supporting just the sort of carbon caps the ATA opposes. They’re making the case in the runup to the Copenhagen Accord, a process to replace Kyoto that will move into high gear in December. On May 24 the International Aviation Transportation Assn.—a global trade group—for the first time agreed to reduce emissions.

U.S. carriers, which consume 35% of the world’s jet fuel, may not be able to opt out of carbon limits much longer. The Waxman-Markey climate bill moving through Congress includes aviation in its gas reduction goals. “The writing’s on the wall,” says Jake Schmidt, international climate policy director at the Natural Resources Defense Council.

Aston is Energy & Environment editor for BusinessWeek in New York.

BusinessWeek

Can China Go Green? | BusinessWeek

Beijing has big plans to curb pollution and start a cleantech industry. But the global recession and looming trade frictions will test its resolve

The Sun-Moon Mansion, Himin Solar Energy's headquarters in Dezhou

China’s unprecedented growth in recent years has come at a terrible price. Two-thirds of its rivers and lakes are too polluted for industrial use, let alone agriculture or drinking. Just 1 in 100 of China’s nearly 600 million city dwellers breathes air that would be considered safe in Europe. At a time when arable land is in short supply, poisoned floodwaters have ruined many productive fields. And last year, ahead of most forecasts, China passed the U.S. to become the world’s largest source of greenhouse gases.

The immensity of these troubles has produced a result that may surprise many outside China: The nation has emerged as an incubator for clean technology, vaulting to the forefront in several categories. Among all countries, China is now the largest producer of photovoltaic solar panels, thanks to such homegrown manufacturers as Suntech Power (STP). The country is the world’s second-largest market for wind turbines, gaining rapidly on the U.S. In carmaking, China’s BYD Auto has leapfrogged global giants, launching the first mass-produced hybrid that plugs into an electrical outlet. “China is a very fast follower,” said Alex Westlake, a director of investment group ClearWorld Now, at a recent conference in Beijing.

GOVERNMENT SUPPORT

Understanding they are in a global race, China’s leaders are supporting green businesses with policies and incentives. Beijing recently hiked China’s auto mileage standards to a level the U.S. is not expected to reach until 2020. Beijing also says it will boost the country’s share of electricity created from renewable sources to 23% by 2020, from 16% today, on par with similar targets in Europe. The U.S. has no such national goal.

While most environmentalists applaud these developments, China watchers are voicing two very different sets of concerns. Some question whether China will really stand by its ambitious targets and are worried by signs of backsliding as the recession in China’s key export markets drags down economic growth. Another group, interested mainly in America’s own industrial future, fears that China’s growing dominance in certain green technologies will harm budding cleantech industries in the U.S. After all, China’s emergence comes just as the Obama Administration is trying to nurture these same types of ventures, hoping to generate millions of green jobs. Many of these U.S. businesses will have trouble holding their own against low-price competitors from China.

Beijing’s green intentions will soon be put to the test. China is in the midst of the biggest building boom in history. A McKinsey & Co. study estimates that over 350 million people—more than the U.S. population—will migrate from the countryside into cities by 2025. Five million buildings will be added, including 50,000 skyscrapers—equal to 10 New York Cities. And as quickly as new offices and houses multiply, they are filled with energy-hungry computers, TVs, air conditioners, and the like, sharply increasing demand for electricity, which comes mainly from coal-powered plants.

Environmental groups say it is therefore critical that Beijing promote rigorous, greener standards. And to some degree, that’s happening. A government mandate states that by the end of next year, each unit of economic output should use 20% less energy and 30% less water than in 2005. Portions of Beijing’s $587 billion economic stimulus package are earmarked for cleantech. On top of that, in March the Finance Ministry unveiled specific incentives to spark solar demand among China’s builders. Included was a subsidy of $3 per watt of solar capacity installed in 2009—enough to cover as much as 60% of estimated costs to install a rooftop solar array.

USING WASTE HEAT

Steps like these will help Himin Solar Energy Group in Dezhou, Shandong Province. Founded in 1995 by Huang Ming, an oil equipment engineer turned crusader against the use of fossil fuels, the company is the world’s largest producer of rooftop piping systems that use the sun’s rays to heat water. Its eye-catching headquarters, the Sun-Moon Mansion, showcases these heaters, which Himin cranks out in immense volumes—about 2 million square meters’ worth each year, equal to twice the annual sales of all such systems in the U.S. Because its water heaters sell for as little as $220, they are becoming standard in new housing complexes and many commercial buildings across the country.

Broad Air Conditioning, based in Changsha, Hunan Province, is also set to profit as Beijing pushes toward its green targets. By using natural gas and so-called waste heat from other machines and appliances instead of electricity, Broad’s big chillers can deliver two to three times more cooling per unit of energy than a conventional unit. In a similar fashion, Haier, headquartered in Qingdao, Shandong Province, combines low-cost manufacturing and a variety of advanced technologies to create affordable, energy-sipping refrigerators and other appliances. During the 2008 Beijing Olympics, Haier supplied more than 60,000 such devices for visiting athletes and tourists to use.

As these and other domestic players bump up against technological obstacles, they can draw on the expertise of many of the world’s top multinationals. In return for access to its domestic market, Beijing asks such companies as General Electric (GE), DuPont (DD), 3M (MMM), and Siemens (SI) to share their technology, help upgrade their China-based supply chains, and spread industrial processes to make manufacturing more efficient. These aren’t simply green practices, says Changhua Wu, Greater China director of the Climate Group, a consultancy in London that partners with companies to combat climate change. “They’re best practices.”

GE, for example, has transferred expertise to Chinese partners in everything from wind turbine construction to the building of low-pollution factories. At the Beijing Taiyanggong power plant, waste heat from the combustion process is recycled, resulting in around 80% efficiency, more than double the rate of most conventional power plants in the U.S. The bulk of GE’s sales of turbines for power plants in China are the ultra-efficient models. David G. Victor, a Stanford University professor who has studied China’s electric grid, says some of the coal plants being built there are “much more advanced than those we see in the U.S.”

Wal-Mart Stores (WMT), which buys some $9 billion worth of goods in China each year from some 20,000 vendors, infuses its supply chain with the latest ideas about energy efficiency. For example, Chinese factories that work with Wal-Mart are obliged to track vast quantities of data on energy use and make the information available for audits. “Many Western companies can’t track their own energy consumption,” says Andrew Winston, consultant and co-author of the book Green to Gold.

TORPEDOING U.S. SOLAR?

China’s early achievements in cleantech owe a lot to collaborations such as these. The benefits: China cleans up its own pollution, and the government-backed initiatives in solar and wind help drive down the cost of renewable energy systems in countries around the world.

But there is a downside. The rock-bottom prices for made-in-China green technology could make it impossible for cleantech ventures in the U.S., Europe, or Japan to compete. How, for example, will they go up against Suntech Power, based in Wuxi, Jiangsu Province, the world’s lowest-cost manufacturer of standard solar panels? The U.S. boasts plenty of advanced technology. But any efforts by Washington to nurture this sector could be quickly undercut by a flood of Chinese-made solar panels. Such a deluge is likely if there is a big increase in public subsidies for rooftop solar systems. “What [that would] do is create 10,000 Chinese jobs,” says Roger G. Little, chief executive of Spire Corp. (SPIR), a leading U.S. maker of manufacturing equipment for photovoltaics. “If we import all the [solar] modules, it will obliterate U.S. manufacturing” in this area.

A similar scenario exists in the much heralded area of electric vehicles. BYD, headquartered in Shenzhen, started selling its first plug-in hybrid, the F3DM, last year. It beat Toyota (TM) and General Motors (GM), both of which are developing such “plug-ins,” and hit the market with a price tag they probably can’t match: just $22,000. Henry Li, a BYD general manager, says the company will roll out a version of the car in the U.S. in 2011. Chevy’s answer to this car, called the Volt, is expected to cost about twice as much and won’t be out until next year.

How did BYD pull off this coup? Part of it is just being the new kid on the block. Today’s automobiles, with their advanced combustion engines, are the most complex mass-produced goods ever made, assembled from thousands of highly engineered parts provided by a web of suppliers. It’s difficult for a Chinese startup to compete on such a sophisticated playing field. But the emergence of a new, green-vehicle category clears the way. BYD was able to break in by leveraging its background as a battery maker. When it ran into technical hurdles, the company could draw on a deep pool of inexpensive, well-trained talent at China’s top engineering schools. BYD is also a leader in pure electric vehicles, the logical next step. The government is now putting some muscle behind BYD’s push. It is heavily subsidizing electric-car sales in about a dozen cities—in a stroke, making China the world’s biggest market for such advanced vehicles. Its goal is to boost domestic output of battery-powered vehicles to a half million per year in 2011.

How Washington and the beleaguered U.S. auto sector might respond to a wave of inexpensive electric vehicles from China is difficult to predict. And it is also unclear how China’s cleantech efforts in cars, energy, and other areas will be affected if key markets such as the U.S. and Europe don’t recover quickly from the recession. Chinese makers of solar photovoltaics, including Suntech, export about 98% of their production. They have been battered this year by a collapse in demand in Germany, Spain, and Japan, China’s top markets for solar gear. Suntech’s factories are currently running at half of last year’s capacity.

Even inside China, academics and business executives say Beijing needs to do more to bolster cleantech initiatives and make them recession-proof. For example, without better information on how such policies as the current Renewable Energy Law are to be enforced, “many of the terms are meaningless,” complains Himin’s Huang. And even when the terms are clear, companies don’t always adhere, says Zhou Weidong, the Guangzhou-based China director at the Business for Social Responsibility, a global consultancy promoting sustainable business practices: “Paying penalties is cheaper than complying with the law in many areas.”

At times, it seems as though Beijing is pedaling in the wrong direction. Late last year, China’s Environmental Protection Ministry loosened review standards on potentially polluting industrial projects. In an economic crunch, “environmental protection is downplayed to second, or third, or even fourth priority,” observes Guo Peiyuan of SynTao, a corporate social responsibility advisory firm in Beijing.

While acknowledging there has been some backsliding, most China watchers say the government is unlikely to stage a full-throttle retreat. Too much of its export growth is contingent on meeting strict environmental regulations. And Beijing recognizes that Chinese society can’t tolerate much more environmental degradation. The World Bank estimates damage from pollution—everything from decimated fisheries to premature human death—saps nearly 6% of China’s gross domestic product each year as well. For economic reasons alone, it will be difficult for China to turn back the clock.

with Charlotte Li and Pete Engardio

~

Check out the original story here: http://www.businessweek.com/magazine/content/09_21/b4132040805185.htm

Media, panels & talks

Radio – The Leonard Lopate Show: Underreported: Climate Change | WNYC 3/06

Audio

via wnyc.org

2005 was the warmest year on record in the Northern Hemisphere. On today’s Underreported, we’ll focus our attention on climate change, and whether or not the effects of global warming are already being felt. We’ll look at some of the lesser-known issues currently being debated—from exploding beetle populations in the West, to the financial risks associated with global warming. Dr. Paul Epstein from the Center for Health and the Global Environment, Dr. Gavin Schmidt from NASA/Goddard Institute for Space Studies, and Adam Aston of BusinessWeek join us.

http://www.wnyc.org/shows/lopate/2006/mar/16/underreported-climate-change/

BusinessWeek

The Race Against Climate Change — How top companies are reducing emissions of CO2 and other greenhouse gases | BusinessWeek

On Nov. 21 power company executives from all over the country gathered in the Pit, a spacious General Electric () auditorium in Crotonville, N.Y., to meet with GE CEO Jeffrey R. Immelt and his team. The day was overcast and cold, but the discussion was about the warming climate. At one point in the meeting, David J. Slump, GE Energy’s chief marketing executive, asked for an informal vote. How many of the 30 or so utility and GE business executives thought that, once President George W. Bush was no longer in office, the U.S. would impose mandatory curbs on the emissions of carbon dioxide and other greenhouse gases linked to global warming? Four out of five of them agreed. “Forget the science debate,” says Cinergy Corp. CEO James E. Rogers, who was at the meeting. “The regulations will change someday. And if we’re not ready, we’re in trouble.”

The world is changing faster than anyone expected. Not only is the earth warming, bringing more intense storms and causing Arctic ice to vanish, but the political and policy landscape is being transformed even more dramatically. Already, certain industries are facing mandatory limits on emissions of carbon dioxide and other greenhouse gases in some of the 129 countries that have signed the Kyoto Protocol. This month representatives of those nations are gathering in Montreal to develop post-Kyoto plans. Meanwhile, U.S. cities and states are rushing to impose their own regulations.

A surprising number of companies in old industries such as oil and materials as well as high tech are preparing for this profoundly altered world. They are moving swiftly to measure and slash their greenhouse gas emissions. And they are doing it despite the Bush Administration’s opposition to mandatory curbs.

This change isn’t being driven by any sudden boardroom conversion to environmentalism. It’s all about hard-nosed business calculations. “If we stonewall this thing to five years out, all of a sudden the cost to us and ultimately to our consumers can be gigantic,” warns Rogers, who will manage 20 coal-fired power plants if Cinergy’s pending merger with Duke Energy is completed next year.

One new twist in the whole discussion of global warming is the arrival of a corps of sharp-penciled financiers. Bankers, insurers, and institutional investors have begun to tally the trillions of dollars in financial risks that climate change poses. They are now demanding that companies in which they hold stakes (or insure) add up risks related to climate change and alter their business plans accordingly. For utilities like Cinergy that could mean switching billions in planned investments from the usual coal-fired power plants to new, cleaner facilities.

The pressure is forcing more players to wrestle with environmental risks, even if the coming regulations aren’t right around the corner. As the debate over climate change shifts from scientific data to business-speak such as “efficiency investment” and “material risk,” CEOs are suddenly understanding why climate change is important. “It doesn’t matter whether carbon emission reductions are mandated or not,” explains David Struhs, vice-president of environmental affairs at International Paper Co. () “Everything we’re doing makes sense to our shareholders and to our board, regardless of what direction the government takes.” The nation’s biggest paper company, with $25.5 billion in sales, IP has upped its use of wood waste to 20% of its fuel mix, from 13% in 2002. That’s cut both net CO2 output and energy costs.

REALITY DAWNS
Adding to the pressure on CEOs, the public has largely accepted global warming as reality. And as in the case of IP, the economic logic can be compelling. Far from breaking the bank, cutting energy use and greenhouse emissions can actually fatten the bottom line and create new business opportunities, while simultaneously greening up companies’ reputations. One company that has hiked its visibility on this changed landscape is GE. It formed a new Ecomagination division last May to offer everything from more efficient locomotives to advanced, low-emitting coal power plants.

Scores of companies have already taken action to fight climate change. Who are the leaders? In this special report, BusinessWeek has teamed up with the Climate Group, a British organization that serves as a clearing house for information on carbon reduction, and Innovest Strategic Value Advisors, a leading Wall Street green investment research firm. Together with a panel of expert judges drawn from academic institutions, we have identified and ranked the companies that have shown the greatest initiative in cutting their greenhouse gas emissions. We have also identified best practices, effective policies, and what kinds of results to expect.

Details about how the judges made their selections and a wealth of material on the companies and individuals in the rankings can be found at businessweek.com/go/carbon. The lists feature some gold-plated names: Citigroup () is working with Fannie Mae () to encourage sales of energy-efficient homes. IBM () saved hundreds of millions of dollars by cutting energy use, while Unilever managed to slash its greenhouse gas output by more than 10% in a single year.

Topping the company ranking is an experienced hand at making the most out of changing regulations, DuPont (). Back in the mid-1980s, DuPont created a profitable business selling substitutes for chlorofluorocarbon (CFC) refrigerants that were destroying the earth’s protective ozone layer. Tackling climate change was a natural extension of that experience. After studying the data, “we came to the conclusion that the science was compelling and that action should be taken,” says DuPont Chairman and CEO Charles O. “Chad” Holliday Jr.

BEATING GOALS
In 1994, DuPont committed to cutting its gas emissions by 40% by the year 2000 from its 1990 levels. By 2000 the company had met its original target and set an even more ambitious one — a 65% reduction by 2010. But the gains have been so dramatic that DuPont has already hit that goal too. It also uses 7% less energy than it did in 1990, despite producing 30% more goods. That has saved $2 billion.

Saving money and reducing risks are both powerful incentives, and they help explain why investors and insurers are pressuring CEOs to tackle climate change.

Insurers in particular are staggered by their mounting bills for hurricanes, floods, fires, hailstorms, disease, heat waves, and crop loss. Many scientists agree that higher temperatures are causing more powerful storms and perhaps intensifying extreme weather events, ranging from drought and wild fires to ice storms.

Even tiny weather changes bring awesome costs. A slight uptick in intense storm activity could boost annual wind-related insured losses, to as much as $150 billion a year — an increase equivalent to two or three Hurricane Andrews in an average season, according to a 2005 study by the Association of British Insurers. Indeed, insured losses from catastrophic weather events have already increased fifteenfold in the past 30 years. “Risk of climate change is real. It’s here. It’s affecting our business today,” says John Coomber, CEO of insurer Swiss Re.

Rising temperatures aren’t the only factor in the increasing toll from weather-related disasters, of course. Development along coastlines and other high-vulnerability areas is surging, concedes Evan Mills, an energy scientist at the U.S. Energy Dept.’s Lawrence Berkeley National Laboratory. But overall, “weather-related losses are becoming more erratic and growing much faster than such shifts can explain,” he says.

The insurance exposure extends beyond weather events to management decisions. Corporate directors and officers are protected from personal liability for mismanagement by so-called D&O policies. If executives at companies that hold the policies don’t take stock of their environmental risk exposure, they could be on the firing line for mismanagement — with insurers picking up the tab. Says Chris Walker, managing director of Swiss Re’s Greenhouse Gas Risk Solutions: “Property. Life. Health. Crops. D&O — you name it. It’s the perfect storm for insurers.”

That’s why climate change is causing insurance companies to ally with institutional investors, banks, and rating agencies. Together they are pushing companies to start thinking about greenhouse emissions as a material risk, just like other forms of financial risk that can impair future earnings. JPMorgan Chase & Co. (), for instance, is helping analysts and bankers model the impact of carbon on the banks’ clients. “Global warming is on the radar screen of a lot of financial institutions,” said Denise Furey, senior director of Fitch Ratings Ltd., at a recent climate conference.

The specter of new regulations on carbon emissions has already galvanized executives at Alcoa Inc. (), another company on the BusinessWeek/Climate Group list. To reduce its greenhouse emissions and save energy, too, Alcoa improved a key step in the aluminum production process, helping to cut total greenhouse gas output by 25%.

A handful of big coal burners have also leaped to the forefront. American Electric Power (), Cinergy, and TXU () all did detailed studies of the risks posed by climate change — and by expected new rules. Their biggest challenge: planning new power plants for an uncertain future. At some point in the next 40 years — the operating life of a plant — the U.S. is certain to join in a round of international greenhouse discussions, says Michael G. Morris, CEO of AEP, the nation’s biggest coal consumer: “That’s clear in my mind, and in our board’s mind.” If the U.S. rules are similar to Europe’s, where it already costs a company more than $20 to release a ton of CO2, utilities and rate payers could face billions in expenses.

That would force utilities to invest more in lower-carbon alternatives such as wind power, “clean” coal, or natural gas, which emits one-third as much carbon per kilowatt as coal. But executives need to know soon what rules they will have to meet. That’s why many are in favor of mandatory limits — though they hesitate to say it publicly because of the opposition in Washington.

ISOLATED
The President remains opposed to any policy that would require carbon cutbacks. Instead, the White House asserts that climate change can be tackled with voluntary action and with major investments in alternatives to fossil fuels, such as hydrogen.

Yet the White House is growing increasingly isolated. U.S. public opinion is shifting. In October, a Fox News poll found that 77% of Americans believe global warming is happening, and of those, 76% say it’s at least partly due to human activity. That’s making greenhouse gas reductions trendy: The 2006 Super Bowl in Detroit, for one, aims to offset all of the new CO2 the championship generates by planting thousands of trees in the hills and towns near Ford Field.

More substantively, states are stepping into the breach with their own regulations. Nine Northeastern and Mid-Atlantic states have formed the Regional Greenhouse Gas Initiative (RGGI). By 2009 the initiative aims to set up a “cap-and-trade program” covering carbon dioxide emissions by nearly 200 power plants operating in Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont. Companies would be given an upper limit on greenhouse gases they may release. If they can cut their emissions below that level, they can sell the unused allowances to companies that are emitting above their cap level.

This initiative could bring a major change in the politics of global warming. First, state action will compel more companies to seek nationwide regulation from Congress, explains Eileen Claussen, president of the Pew Center on Global Climate Change. “Companies don’t want to see a patchwork of state regulations. As more states get involved, it ups the ante.”

Plus, two likely candidates for the 2008 Republican Presidential nomination are on board. New York Governor George E. Pataki launched the regional initiative in 2003, and Massachusetts Governor Mitt Romney backs it in principle.

Meanwhile in Washington, the Republican-led Congress is opposing the Administration’s hard line. On June 22, over the objections of the White House, the Senate voted 54-43 for a resolution calling on Congress to “enact a comprehensive and effective national program of mandatory market-based limits and incentives on emissions of greenhouse gases.”

Some evangelical Christian groups, traditional allies of the Bush White House, have joined the call for action. “This used to be seen as just the passion of a few environmentalists on the left,” says Jim Jewell of the National Association of Evangelicals, which includes 52 denominations serving 30 million parishioners. “But support on the issue has broadened. God’s call on his people is to care for his creation.”

In the battle in the nation’s capital, it will help that some people believe God is on the side of greenhouse gas reductions. For most business executives, though, the real driver is the bottom line. Often, the best way to slash emissions is simply to reduce energy consumption. Because carbon is basically a proxy for fossil energy, cutting carbon equals cutting costs, argues energy guru Amory B. Lovins, head of the Rocky Mountain Institute (RMI), a nonprofit energy and environment policy think tank: “Efficiency is cheaper than fuel.”

That approach is what landed Geneva’s STMicroelectronics, the world’s No. 6 chipmaker, on the BusinessWeek/Climate Group ranking. Lovins and the RMI helped cut the company’s energy use by 5% per year. Many changes were surprisingly low-tech, such as putting in larger air-conditioner ducts. That enabled air-circulating fans to do their job at half speed, using just a seventh of the energy. Last year, with $40 million in improvements, the company saved $173 million.

When mandatory regulations are issued they essentially put a price tag on carbon emissions. That obviously makes cleaner, more efficient projects more financially attractive, spurring new business opportunities. GE, for one, is seizing the moment with its new Ecomagination division. And scores of small companies are bringing new clean-technology innovations to market. Massachusetts Institute of Technology chemical engineer Isaac Berzin started GreenFuel Technologies Corp. to harness the power of algae to grab CO2 from the exhaust of a gas-fired power plant. At a pilot site atop MIT’s on-campus power station, the GreenFuel device cuts CO2 by 82% on sunny days and by 50% on overcast days.

How far can this effort go? Some economists say cutting emissions and boosting efficiency will spur economic growth this century. The engineering challenges are immense and will require research and development investment in fields that have been relatively neglected until now: alternative energies, carbon sequestration, higher efficiency engineering, new lightweight materials for buildings and vehicles, and rebuilding old industrial and energy infrastructure with clean gear.

Yet despite the claims of the global-warming skeptics, the cost can be affordable. As the examples of companies in the BusinessWeek/Climate Group ranking show, there often is a boost to the bottom line. Far more substantial cuts are needed to make a real dent in the global-warming problem. And clearly, the developing nations need to be on board with cleaner technologies as well. But the news is that many companies are energetically tackling this growing environmental challenge.

By Adam Aston and Burt Helm, with Michael Arndt in Chicago, Amy Barrett in Philadelphia, and John Carey in Washington