US Senate panel examines industry efforts to address climate change

A US Senate Environment and Public Works subcommittee’s Oct. 17 hearing on industry efforts to address global climate change quickly turned into a discussion of whether such efforts are occurring too late to make a meaningful difference.

“The disastrous impacts have been obvious for anyone to see, and yet Congress has undertaken no significant legislation to address the climate crisis. Why is that? Because hundreds of millions of dollars are spent by the fossil fuel industry to block climate action,” Sen. Sheldon Whitehouse (D-RI), ranking minority member of the committee’s Clean Air and Nuclear Safety subcommittee, said in his opening statement.

Whitehouse pointed out that officials from two major US trade associations—the US Chamber of Commerce and the American Petroleum Institute—were among the hearing’s four witnesses and could be expected to outline efforts by the two organizations and their member companies to address global climate change. “Innovation is a beautiful thing. America specializes in it. But it doesn’t happen in a vacuum. Without federal policies, such as a price on carbon, there’s little incentive for businesses to invest and innovate,” he said.

Sen. Michael Braun (R-Ind.), who chairs the subcommittee, noted in his opening remarks that BP PLC said in its 2018 Statistical Review of World Energy that the US was the world leader in reducing carbon emissions, prompting the American Enterprise Institute to point out that for the ninth time in this century the US led the world in overall emissions declines.

“What’s been most impressive is that US industries have been able to make these impressive emissions reductions while not sacrificing the country’s overall economic competitiveness. But we must constantly remain vigilant of the balance,” Braun said. “There’s a real risk that in attempting to curb emissions, American families, workers, and businesses will be hit with rising prices, fees, and utility bills.”

Already taking action

“It will be largely up to the business community to develop, finance, build, and operate the solutions needed to power economic growth worldwide, mitigate greenhouse gas emissions, and build resilient, lower-carbon infrastructure,” said Martin J. Durbin, who leads the US Chamber’s Global Energy Institute. “Thousands of businesses already are taking action in their own operations and along their value chains by investing in technology solutions and enhancing their efficiency.”

Durbin said breakthroughs in commercially-viable technologies will be necessary to enable substantial cuts in GHG emissions while maintaining economic growth. “The US should maintain a leadership role in technologies, such as advanced nuclear, energy efficient systems and building materials, large-scale renewables, energy storage, high-efficiency, low-emission power plants, and carbon capture and storage-utilization by supporting a broadly based public and private-sector technology portfolio,” he said.

A second witness, Frank J. Macchiarola, API industry downstream and industry operations vice-president, noted that the US economy grew by 20% from 2005 to 2017 as carbon dioxide emissions fell by 14% overall and CO2 emissions from electricity generation dropped by 28%.

“Importantly, while we have experienced a dramatic increase in US production of natural gas, emissions of methane from our industry have decreased over the past 20 years,” Macchiarola said. “The story here is the same: We have accomplished positive environmental outcomes by advancing the technologies that ensure that we are capturing both [volatile organic compounds] and methane.”

Macchiarola said, “Our industry has been at the forefront of innovation; developing technologies to reduce emissions from hydraulic fracturing completions, storage tanks, pneumatic controllers and leaks. We have worked directly with [the US Environmental Protection Agency] since the early days of the Obama Administration in 2010 to ensure that EPA’s regulations incorporate these and other effective emissions reductions requirements, and we continue to support these regulatory requirements.”

Bold policies needed

Two other witnesses acknowledged such efforts but warned they may be happening too late. “Voluntary reductions are but proverbial drops in the bucket. Because of decades of relative inaction, the scale of the problem has grown and time to act is rapidly shrinking,” said Andrea Dutton, a visiting geoscience professor at the University of Wisconsin at Madison. “Policy solutions must therefore be bold, moving us rapidly towards net-zero emissions with the aid of stringent and integrated policy interventions including putting a price on carbon.”

Dutton said, “Reductions don’t happen in a vacuum. They are driven by policy, which in turn drives innovation to meet new targets.”

Another witness, John K.S. Wilson, a vice-president and director of corporate engagement at Calvert Research & Management, noted, “At the moment, business incentives are misaligned because those responsible for the emission of [GHG] do not bear the costs of climate-related harms such as extreme weather events, drought, and sea-level rise. Instead, these costs are borne by us all. For this reason, many investors support policies such as a carbon tax to better align the real costs of climate change with those parties responsible for the emission of [GHGs].”

Wilson told the subcommittee that despite efforts already under way, the Washington investment management company has found that a clear consensus among both investment professionals and corporate executives that voluntary efforts will not be enough. “A clear policy signal would allow investors to better quantify the economic implications of climate change on investments and more efficiently allocate capital to investments suitable for the low-carbon economy,” he said.

“For companies, policy clarity would help to overcome the pressures of short-termism that sometimes hamper long-term innovations. We observe, for example, that a mix of subsidies and requirements has helped to [provide the necessary incentives for] the research and development that has rapidly brought the price of wind and solar energy down, and improved access to clean and renewable sources of energy,” Wilson stated.