US executives add to calls for carbon pricing

Two of the world's largest companies signalled their support for carbon pricing policies this week, further highlighting the extent to which many business leaders are now actively lobbying for increased environmental regulation.

According to Reuters reports, George David, chairman of engineering conglomerate United Technologies Corp (UTC), told a US House of Representatives Select Committee on Energy Independence and Global Warming this Monday that legislators had to find a way to impose a clear and predictable price on carbon.

Noting that previous periods of rising oil prices had been followed by falling prices, he argued firms needed to be sure that the current period high energy costs would continue.

"We need to reaffirm the principle of predictability," said David. "We need to say to our world that we are going to have a cost of carbon, whether it's cap-and-trade or a carbon tax. There's got to be an understanding that the cost of energy is going to be high for a long time."

Speaking at the same hearing, John Rice, a vice chairman at General Electric (GE) signalled the company's support for a US cap-and-trade scheme as the best means of providing a " reliable market pricing mechanism for carbon".

However, he added that while putting a price on carbon to drive businesses away from carbon intensive business models, the government also needed to make it easier for firms to develop alternatives through greater support and tax credits for low carbon technologies.

"We get questions such as, 'Is this possible, can it be done?'" Rice said. " Carbon capture and sequestration can be done today, it's technically viable. Is it commercially viable? Not yet. We have to be thinking in terms of both technical viability and commercial viability."

The hearing is the latest in a string of developments highlighting the extent to which many senior business leaders are now in favour of carbon trading mechanisms, despite the potential of such measures to raise operating costs.

Many carbon intensive businesses may remain opposed to the concept of carbon pricing, but others are now actively lobbying for such moves.

Earlier this year, a coalition of 50 of the largest institutional investors in the US wrote to Senators calling for the adoption of binding emission targets in line with those proposed in the ill-fated Lieberman-Warner bill.

Their calls followed a similar communiqué supported last year by 150 of the world's largest multinationals that urged world leaders to deliver a binding international legislative framework for reducing carbon emissions.