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[greenyes] Business Response to Kyoto

February 16, 2005
Mixed Feelings as Kyoto Pact Takes Effect

UDWIGSHAFEN, Germany - From the day that Jürgen F. Strube joined BASF in
1969, his company has been cleaning up its act. At that time, it was making
plans for a wastewater treatment plant at its chemical production complex
here, which stretches for nearly five miles along the Rhine.
That is why Mr. Strube, chairman of BASF's supervisory board, responds with
a hint of impatience when asked how European industry plans to comply with
the Kyoto Protocol, requiring Germany and 34 other nations to cut their
emissions of carbon dioxide and other greenhouse gases.
As the agreement takes effect on Feb. 16, worries about its fairness are
mixed with mild resentment. Europeans have set some of the most stringent
targets for reducing greenhouse gases, which trap heat in the earth's
atmosphere and have been linked by climate experts to global warming.
It is bad enough, in their view, that American and Chinese companies will
not bear these extra costs. But worse, the ultimate goal of curbing
greenhouse gases will not be realized because carbon dioxide emissions,
unlike polluted rivers, are a global rather than a local problem.
"We have already done so much in the past that we feel others should not get
a free ride," Mr. Strube said. "We could reach a situation where the leader
is a lonely rider going into the sunset, and everyone else sits back and
says, O.K., let's wait and see when he will return."
The pressure, he says, should be on the United States, which generates a
fifth of the world's greenhouse gases but is staying out of the Kyoto
system, or on nations with rapidly growing economies like China and India,
which approved the agreement but are not required to reduce emissions - even
though together, they already account for 14 percent of the world's total.
"The basic message has to be that we need to bring the other countries
aboard," said Mr. Strube, who also heads a leading business group, the Union
of Industrial and Employers' Confederations of Europe.
Still, in some ways, European fears may be overblown. Even in the United
States, which formally rejected the pact in 2001, a growing number of
companies regard mandatory reductions as inevitable. It is a future they
must prepare for, whatever the politics of the moment.
There is a sense on both sides of the Atlantic that the Kyoto Protocol is
already changing corporate behavior in lasting ways. From costly investments
in carbon-filtering technologies to a complicated new system for buying and
selling carbon-emission credits, the agreement is forcing change on
businesses, regardless of whether they operate in Kyoto countries.
"The globe doesn't know whether greenhouse gas is coming from Bangor, Me.,
or Beijing, China," said Michael G. Morris, chief executive of American
Electric Power, the largest electricity generator in the United States and a
top emitter of carbon dioxide. "It simply affects the whole planet."
Mr. Morris said he thought that the United States would someday be party to
a global treaty on greenhouse gases. At company headquarters in Columbus,
Ohio, he said, they refer to it as "son or daughter of Kyoto."

Peter Anderson
4513 Vernon Blvd. Suite 15
Madison, WI 53705
(608) 231-1100 / Fax 233-0011

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