10Minutes on climate change

June 2008
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Climate change

At a glance

Will climate and energy policies strenthen the economy and national security, while protecting the environment? Carbon dioxide greenhouse gases targeted by cap and trade policies and stimulus for low-carbon technologies aim to help, but if enacted, how will they affect how the US produces energy?

The new administration promises both climate and energy policies will work together to breathe life into the economy, strengthen national security, and protect the environment.

Proposals include a federally sponsored cap-and-trade system that would progressively reduce the volume of greenhouse gases each company is allowed to emit—typically, the carbon dioxide that results from burning fossil fuels. At the same time, stimulus packages would encourage capital markets to invest in new technologies that would help companies reach emissions reduction targets.

CEOs who have been watching market signals in this area are gearing up. PwC's work with the 2008 Carbon Disclosure Project shows that nearly 80% of CEOs among the S&P 500 are anticipating the business risks related to climate change, while just as many also see related opportunities.

Highlights

  • Stimulus packages for low-carbon technologies and a federal cap-and-trade system to reduce greenhouse gas emissions are proposed for legislative action in the United States.
  • If enacted, these proposals will affect how the US produces energy—bolstering the efforts of a growing number of regional initiatives to combat climate change and stimulate clean technology investments.
  • Investors and other stakeholders are increasingly requesting information from companies on how they will adapt.
  • Although standards will continue to evolve, understanding current expectations and producing reliable information around performance should be priorities today.