Business Roundtable Unveils Climate Change Policy Position.

Statement Offers Pragmatic, Proactive Solutions to Help Sustain U.S. Economy and Society While Decreasing Greenhouse Gas Emissions

WASHINGTON -- Business Roundtable, an association of 160 chief executive officers of leading U.S. companies, today announced a new policy statement on climate change, acknowledging that climate change poses a serious risk and that the time for action is now. After reviewing the science, the policy statement concludes that "the consequences of global warming for society and ecosystems are potentially serious and far-reaching" and that "steps to address the risks of such warming are prudent now even while the science continues to evolve." The Roundtable's new policy statement proposes a series of benchmarks and principles against which climate change policy proposals should be measured.

"Today marks the first time that a broad cross-section of business leaders from every sector of the U.S. economy have reached consensus on the risks posed by climate change and the need for action," said John J. Castellani, president, Business Roundtable. "The Business Roundtable's diverse membership stands ready to work with policymakers on proactive solutions that address climate change while sustaining economic growth."

The climate change position was developed through a consensus-driven process led by Business Roundtable's CEO members that included outreach to senior members of Congress and leading climate scientists. Chad Holliday, chairman and CEO, DuPont, and chairman of Business Roundtable's Environment, Technology and the Economy Task Force, commented, "The thinking of U.S. CEOs on climate change is evolving significantly. A growing number of CEOs view it as a major issue for their companies and many of us have called for timely U.S. action."

The policy statement calls for "collective action that will lead to the reduction of greenhouse gas (GHG) emissions on a global basis, with the goal of slowing increases in greenhouse gas concentrations in the atmosphere and ultimately stabilizing them at levels that will address the risks of climate change."

As a starting point for efforts to achieve this goal, Roundtable members agree that:

* More companies should commit to making emission reductions a priority and report on their progress in achieving these reductions;

* An improved national registry for reporting emissions and documenting reductions would stimulate additional progress by industry;

* Government policies should encourage early action and investment to reduce emissions and improve energy efficiency;

* Increasing energy efficiency is a proven and cost-effective strategy for reducing emissions and should be a priority for business and government;

* The development and deployment of energy-efficient, low GHG technologies is vital to long-term emission reductions;

* RD&D (research, development and deployment) investment in new low-GHG technologies must be increased in the public and private sectors to levels commensurate with the climate challenge; and

* Investment in climate science must be continued at a high level so that we can better understand and predict the magnitude and timing of future warming.

Roundtable members have differing views on the policy tools (e.g. cap-and-trade, carbon taxes, emission or product standards) under consideration by policymakers, but are proposing a series of benchmarks and principles against which climate change policy proposals by the U.S. Congress or the Bush Administration should be measured. The Roundtable will provide a sounding board for policymakers on the pros, cons and impacts of different proposals as the legislative process moves forward.

Since 2003, Business Roundtable has led the landmark Climate R.E.S.O.L.V.E. (Responsible, Environmental Steps, Opportunities to Lead by Voluntary Efforts) program that encourages member companies to take voluntary action to reduce, avoid or sequester greenhouse gas emissions. Climate RESOLVE has spurred greater awareness of climate issues in the business community and motivated many companies to develop policies and strategies for managing its emissions. One-hundred and one companies are now participating in Climate RESOLVE. The Roundtable is today releasing the names of all Climate RESOLVE participants.

To read Business Roundtable's Climate Change Position Paper or view its Climate RESOLVE participants and learn more about the program, visit www.businessroundtable.org

Business Roundtable (www.businessroundtable.org) is an association of chief executive officers of leading U.S. companies with $4.5 trillion in annual revenues and more than 10 million employees. Member companies comprise nearly a third of the total value of the U.S. stock markets and represent over 40 percent of all corporate income taxes paid. Collectively, they returned $112 billion in dividends to shareholders and the economy in 2005.

Roundtable companies give more than $7 billion a year in combined charitable contributions, representing nearly 60 percent of total corporate giving. They are technology innovation leaders, with $90 billion in annual research and development spending - nearly half of the total private R&D spending in the U.S.

Business Roundtable

Climate Change Statement

According to leading scientists, there is increasing evidence that the earth's climate has been warming over the last century and increases in the earth's temperature are affecting many global ecosystems, especially the polar areas. At the same time that warming has been occurring, greenhouse gas (GHG) concentrations in the atmosphere have increased due to rising worldwide emissions of GHGs. Major sources of these emissions include the combustion of fossil fuels, tropical deforestation and other land use changes.

Because the consequences of global warming for society and ecosystems are potentially serious and far-reaching, steps to address the risks of such warming are prudent now even while the science continues to evolve. Business Roundtable supports collective actions that will lead to the reduction of GHG emissions on a global basis with the goal of slowing increases in GHG concentrations in the atmosphere and ultimately stabilizing them at levels that will address the risks of climate change.

These actions need to be coordinated with efforts to address other urgent world priorities, such as reducing poverty, improving public health, reducing environmental degradation and raising living standards. Reliable and affordable world supplies of energy are essential for meeting these challenges.

Although we support actions to address global warming, there is a range of views and preferences among our members about the policy tools that will best achieve that objective. Some companies support mandatory approaches; others do not. Recognizing that legislation and regulation are under consideration, the Roundtable supports an open and constructive dialogue about the principles that should shape climate policy and the pros and cons of various options. As a starting point for this dialogue, our members agree on the following policy objectives:

Taking Action and Reporting Progress

Building on the leadership efforts of many U.S. companies, more companies should commit to making emission reductions a priority and report publicly on their progress in achieving these reductions. An improved national registry for reporting emissions and documenting reductions would stimulate additional progress by industry. Government policies should encourage early action and investment to reduce emissions and improve energy efficiency. This will motivate more companies to step forward and provide public recognition to those companies who have reduced their carbon footprints.

Improving Energy Efficiency

A proven and cost-effective strategy for reducing emissions is improving efficiency in the production, distribution and use of energy. Opportunities to achieve greater energy savings using existing technologies exist throughout the economy. To capture these savings, the Roundtable's recent report More Diverse, More Domestic, More Efficient: A Vision for America's Energy Future advocates a goal of improving the energy intensity of the U.S. economy by 25 percent. To achieve that goal, U.S. companies should work collaboratively with the government to improve energy efficiency in buildings, equipment, appliances and manufacturing, as well as in the electricity sector. Energy and carbon efficiency in the transportation sector should be increased by improving the fuel efficiency of vehicles through development and deployment of energy efficient vehicle technologies, increased use of renewables, and pursuing policies that reduce growth in vehicle miles traveled. All levels of government should demonstrate leadership by committing to improve energy and carbon efficiency in their buildings and fleets and partnering with business to enhance public education about the benefits of energy conservation. Governments should also encourage business and consumers to adopt energy efficiency technologies and eliminate regulatory impediments to their deployment.

Developing and Deploying Low-GHG Technologies

The development and global deployment of new, efficient low GHG technologies is vital to an effective long-term response to concerns about global climate change. These technologies are essential to reducing GHG emissions while meeting rising energy demands to support economic growth. Any legislative or regulatory framework must stimulate private sector innovation and investment as well as consumer awareness and acceptance of new technologies in the marketplace. Expanding penetration of these technologies in developing economies where GHG emissions are rapidly increasing should be an urgent priority along with emission reductions from major contributing countries in the developed world.

Increasing RD&D Investment

Research, Development and Demonstration (RD&D) investment in new low-GHG technologies must be increased in the public and private sectors to levels commensurate with the magnitude of the climate challenge. RD&D programs should be better coordinated across economic sectors and focused on technologies with the greatest promise in reducing GHG emissions on a life-cycle basis. We will need to educate and train a new generation of scientists and engineers equipped to lead the rapid technological advances that will be required to address the climate challenge.

Investing in Climate Science

Scientific uncertainties remain regarding the relative impact of human activities on warming trends as compared to natural phenomena and the precise magnitude, time and regional distribution of temperature and climate changes that can be expected over the next century. Investment in climate science must therefore continue at a high level so that we can better understand and predict the magnitude and timing of future warming of the planet, its potential effects on ecosystems and human activities, its impacts on the economy, the role of different factors in causing global warming and the potential benefits and costs of mitigation and adaptation strategies. A continued U.S. leadership role in climate science is essential.

Aligning Reduction Timelines with the Trajectory for New Technologies

As we continue to reduce emissions, the steps we take should be aligned with the expected timelines for developing and commercially deploying advanced technologies in the U.S. and globally and the ability of our economy to reduce its carbon footprint in an economically sustainable manner, without increasing shortages of energy and raw materials, price spikes or competitive imbalances which threaten economic growth.

Following a Flexible Step-wise Approach

Longer-term measures should be based on a flexible step-wise approach that allows us to adjust our goals and strategies over many decades as climate science evolves and we become more certain about the potential magnitude and causes of future warming trends, learn more about the technologies required for continued progress and better understand the environmental and economic consequences of climate policies. Our policy framework should be sufficiently flexible to allow the nation to make a course correction if the economic impacts of achieving specific levels of emission reduction are unacceptable.

Selecting the Right Policy Tools

Different policy tools for achieving emission reductions are being considered, including carbon taxes, cap-and-trade programs and standards that dictate carbon content or maximum allowable emissions for fuels, products or technologies. We believe policymakers should judge the potential value of these tools by whether they (1) are effective in reducing projected emissions, (2) are flexible and maximize use of markets, (3) encourage technology solutions, (4) minimize complexity and transaction costs, (5) are cost-effective, (6) operate in a transparent manner, (7) provide predictability and certainty to business, (8) minimize undesirable competitive imbalances in the domestic or global economy and (9) foster innovation and business opportunities. An effective set of policy tools will be one that provides a clear and stable long-term economy wide framework for emission reductions that enables rational business planning and investment.

Applying Policy Solutions Equitably

Policy solutions should be economy-wide in scope and framed equitably so as to avoid unwarranted impacts on particular industry sectors, technologies or regions of the country. The social, economic and environmental impacts of policy options must be openly and understandably communicated to the American public.

Maximizing Access to Limited Feedstock and Energy Supplies

Carbon constraints can increase competition between different sectors over limited feedstock and energy supplies. An equitable policy framework should account for and mitigate the resulting employment, social and economic impacts. As Business Roundtable has previously emphasized, this will require increasing the supply and diversity of domestic energy sources (including renewables, clean coal, nuclear and natural gas) and removing market barriers to innovative high-efficiency technologies that reduce energy/feedstock demand and increase supply. For example, accelerating investment in promising carbon capture and sequestration technologies will help insure that coal remains an essential fuel and feedstock for manufacturing and energy production while dramatically lowering GHG emissions.

Adopting Global Solutions to a Global Problem

Climate change is global both in its causes and its impacts and requires a global response. Focusing on the U.S. alone will not reduce worldwide GHG emissions or stabilize atmospheric concentrations. An equitable and effective global framework for addressing climate change should be put in place under which all major emitting countries (including China, Brazil and India) are committed to appropriate emission reduction goals. It should also address tropical deforestation, which contributes roughly 20% of total anthropogenic GHG emissions. U.S. leadership in establishing this global framework is essential.