U.S. industries weigh climate talks outcome

November 28, 2000
Web posted at: 12:30 PM EST (1730 GMT)

In this story: One-fifth of emissions from vehicles 'Widespread alarm' in the coal belt RELATED STORIES, SITES

CHICAGO, Illinois (Reuters) -- America's smokestack industries, while halfway pleased about the collapse of U.N. climate control talks, realize they are not off the hook for cutting back on the world's worst greenhouse gas emissions.

The pressure to reduce air pollution will no doubt re-emerge when negotiations resume as early as next year, and industries ranging from utilities to auto manufacturers are watching closely and lobbying for favorable treatment.

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"It's not like we sent people over there to kill it," General Motors Corp. spokesman Dave Barthmuss said of the talks that ended in failure over the weekend at The Hague. "If we were given mandates, and targets to hit, there are a lot of technologies we have to meet them."

The stakes are also high for the coal mining and electric utility industries.

They are keenly aware of the key stumbling blocks at the talks over the issues of pollution credits for so-called carbon "sinks" such as forests, the creation of a market for the trading of pollution allowances, and the clean development mechanism where countries encourage companies to make clean investments elsewhere to offset national obligations to cut emissions.

"Do not tie one hand behind the backs of utilities. If we have emissions targets to meet, allow us to be flexible," said John Grasser of the National Mining Association. "Emissions trading is important as a cheaper route to take."

Commodity futures trader Richard Sandor, who pioneered the trading of sulfur dioxide pollution credits a decade ago, said the breakdown at the climate talks was only temporary and he envisions a "climate exchange" for trading pollution credits.

"The battle at The Hague was not bad news because there's an implicit acceptance of emissions trading as a viable policy tool," Sandor said.

The market-based approach to cutting emissions rewards countries or companies that reduce pollution below their allotment, while shrinking the overall amount of emissions -- much as guidelines outlined in Kyoto, Japan, in 1997 called for developed nations to reduce emissions 5 percent below 1990 levels by 2010.

For instance, General Motors already contributes to causes like the Nature Conservancy, which purchases forested land for preservation, and which could earn the company credits.

"We need a keyboard of actions" to reduce greenhouse gas emissions, said Dan Becker of the Sierra Club environmental group. "We need to press the keys for auto fuel efficiency, longer-lasting light bulbs, and cleaner fuels.

"We're not talking about any industry going under. The only industry where we're going to have to find creative solutions for the employment losses is the coal industry," he said.

The Sierra Club says the United States, with only 4 percent of the world's population, produces a quarter of the greenhouse gases blamed for global warming and other climate changes. One-fifth of that emerges from vehicle tailpipes.

The Sierra Club is not alone in saying the auto industry is at fault for not making more fuel-efficient, cleaner cars.

Chuck Frank, who runs one of the nation's largest car dealerships, Z Frank Chevrolet, said auto manufacturers have blamed the higher cost of developing and selling fuel-efficient vehicles for too long.

"They've been using that excuse for 30 years. From a car dealer's perspective, personal transportation in the United States is part of our culture and heritage. The public is going to continue to buy personal transportation...they can afford whether its solar-powered, hydrogen or propane," Frank said.

In the coal belt, particularly east of the Mississippi River where high-sulfur coal is mined, there is "widespread alarm" over the climate control conference, said Taylor Pensoneau of the Illinois Coal Association.

Because of the halving of the number of U.S. coal mines and mechanization in the industry, the ranks of coal miners have shrunk to 81,000 from 131,000 a decade ago.

But the United States cannot turn its back on coal, which currently accounts for half the nation's electricity output, said John Grasser of the National Mining Association.

"To have a good solid energy program in this country, you have to use everything, and that includes renewables, though they have limited use," Grasser said.

If global emissions cuts are enacted, the utility industry would likely convert more coal plants to burn cleaner natural gas, though a recent study by the Electric Power Research Institute concluded that was not a viable solution.

"Even if the shift from coal to gas could be accomplished, reliance on natural gas for electricity generation could not be maintained at such a high level for an extended period of time," said the group's Gordon Hester, in a report published on its Web site.

Copyright 2000 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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United Nations Framework Convention on Climate Change
  • The Convention and the Kyoto Protocol
General Motors
National Mining Association
The Nature Conservancy
Sierra Club
Electric Power Research Institute

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