By Jim Fuller

A growing number of U.S. industry leaders are beginning to consider the impact of global warming and the need to develop new energy-efficient technologies to cut greenhouse gases, suspected of causing climate change.

Representatives from more than 160 countries meeting in Kyoto, Japan, in December 1997 hammered out a protocol that calls for developed countries to reduce their emissions of greenhouse gases by an average of 5.2 percent below 1990 levels by the years 2008-2012. Such heat-trapping gases, primarily carbon dioxide, are produced from the burning of fossil fuels used to heat homes, power automobiles, and sustain industrial production.

To meet their emissions-reduction targets, governments must turn to industry to develop environmentally friendly and energy-efficient products and technologies. Speaking at the White House Conference on Climate Change in October 1997, President Clinton said that industry played a central role in addressing the challenge of climate change.

"We must work with business and industry to find the right ways to reduce greenhouse gas emissions," Clinton said. "We must promote technologies that make energy production and consumption more efficient."

Clinton also pointed out that many companies have already begun to take steps to reduce the threat of global warming. For example, he said, a number of electric utilities are working with homeowners to promote a new technology called geo-exchange, which uses geothermal pumps to heat and cool homes. This method costs far less than traditional systems while reducing greenhouse gas emissions by 40 percent or more.

One important element of Clinton's domestic plan to reduce greenhouse gases is the building of partnerships with key energy producing and emitting industries to develop sector-by-sector initiatives. Daniel Dudek, senior economist with the Environmental Defense Fund, points out that the president's plan also promises tax credits for early emissions reductions by industry. "Companies have the opportunity of being both pro-active and self-serving," he said.

Up to now U.S. businesses have mainly opposed the Kyoto accord, saying it will put jobs at risk by piling additional costs onto the shoulders of companies struggling against international competition. But there have also been signs of a shift in attitude among industry executives, with a growing number of companies beginning to focus on how to reduce greenhouse gas emissions.

In recent months, oil company executives representing major firms such as Texaco, Sun, and Shell oil companies have made remarks suggesting that fossil fuels may be changing the world's climate and that companies must begin to address the problem.

Robert Campbell, chief executive of the major East Coast oil refiner Sun Oil, told Clinton in a letter that the White House conference "reinforced my view that there is sufficient scientific concern about man-made climate impacts to justify initiation of prudent mitigation measures now."

Peter Bijur, the head of Texaco, told a high-level meeting of financial leaders earlier this year that "the debate really isn't about the science anymore. It's about what companies are doing, and what they are doing is to look at the next generation of technologies and improving efficiencies of operations, reducing emissions of refineries and things like that."

A Texaco spokesman told reporters that Bijur's comments were about using Texaco's technology and other strengths to be more competitive into the next century. For instance, he said, Texaco has technology that can convert natural gas into a clean-burning, highly efficient diesel fuel that would help reduce the amount of natural gas that is flared at the top of smokestacks, which contributes to the buildup of greenhouse gases.

Clement Main, vice president for international relations at Texaco, said the best way to involve developing countries in measures to mitigate climate change is to make investment, technologies, and managerial expertise available to them through direct investments and joint ventures.

"The ability of developing countries to replace outdated industrial infrastructures and to utilize more efficient available technology will be crucial to achieving meaningful global results," he said.

Red Cavaney, who heads the American Petroleum Institute, said that once you move beyond industry's concerns over the Kyoto agreement, you get different views from industry officials on how individual companies are going to implement emissions reductions and on how they look at different alternative energy sources.

Dudek said that beyond the oil companies, he has also seen a shift in attitude among utility and car companies that want to help shape the emerging rules for reducing emissions. He said Kyoto provided a wake-up call to those industries.

Industry officials also point out that investment cycles in many sectors -- for example, electric power-generating plants -- can extend over several decades, and car fleets are not replaced overnight but over 10 years or more. Government and industry measures to implement the Kyoto agreement must take such realities into account.

Auto makers are already working on a variety of new vehicles that offer maximum mobility and minimum pollution. The nation's Big Three car companies and Toyota Motor Corporation, through the Clinton administration's Partnership for a New Generation of Vehicles, have agreed to develop hydrogen fuel-cell cars and a mid-size family car using an advanced internal combustion engine that cuts current emissions of hydrocarbons by 70 percent. Early versions of the family car are scheduled to go on sale as early as 1999.

At this year's Detroit auto show, major auto makers displayed prototypes of hybrid electric-and-gasoline cars that will get up to 34 kilometers to the liter and predicted a slow phase-out of the internal combustion engine in 20 to 30 years. Auto executives report that with the recent signing of the global-warming treaty and with clean-air standards tightening in the United States, Europe and elsewhere, it suddenly is no longer business as usual for the industry.

"We need to do it," said Harry Pearce, vice chairman of General Motors Corporation. "We want to do it. And we're going to do it. We're deadly serious about it."

In the utility sector, two pioneering companies -- one American and the other Canadian -- recently signed a ground-breaking agreement that is considered the first step toward the creation of an international trading system for reductions of greenhouse gas emissions. The establishment of a global emissions trading system is one of the key proposals of the Kyoto Protocol.

Under the latest agreement, the Canadian oil and gas company, Suncor Energy, will purchase the equivalent of 100,000 metric tons of emission reduction credits from Niagara Mohawk Power Corporation of Syracuse, New York, with an option to buy up to an additional 10 million tons of credits over a 10-year period. Through the agreement, Suncor will be able to achieve its voluntary emission reduction targets for less money, while Niagara Mohawk will have extra cash for future clean energy products.

Vice President Gore praised the agreement, pointing out that while the rules for emissions trading are not yet final, "the market itself is already emerging."

Michael Marvin, executive director of the Business Council for Sustainable Energy -- a group that includes electric utility, energy efficiency, natural gas, and renewable energy companies -- said "there is little question" that companies are moving toward reducing emissions.

"While divergent views remain on whether the government should mandate reductions of emissions, more and more of U.S. industry is beginning to take advantage of the technological advancements available to assist in reducing emissions, and the competitive advantages such actions will bring to their bottom line," he said.

Marvin cited the decision by Georgia-Pacific, one of the largest forest products companies in the world, to insulate just 450 meters of its industrial steam lines used in the production of plywood. The company estimated that the insulation cut steam usage by 2,700 kilograms per hour, saving over 16 metric tons of fuel per day, and reduced carbon dioxide emissions by 5 to 6 percent.

Marvin also pointed to the economic strides being made by the renewable energy industry. He said solar manufacturing plants, for example, are opening up across the country, employment is increasing at 30 percent per year, and new improvements are being made in solar photovoltaics, solar pool heating, and solar thermal technologies.

But despite the growing number of industry officials that acknowledge a need to focus on reducing greenhouse gas emissions, many companies remain opposed to the Kyoto Protocol. Constance Holmes, chair of the Global Climate Coalition, which represents 230,000 companies told Congress recently that ratification of the climate agreement would cause substantial economic damage and loss of jobs, and would not achieve its stated goal of stabilizing greenhouse gas concentrations.

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Jim Fuller writes on the environment and other global issues for the United States Information Agency.

Global Issues
USIA Electronic Journal, Vol. 3, No. 1, April 1998