Global Warming Has Bush on the Hot Seat

His reversal on emissions has CEOs and foreign leaders worried

In mid-March, George W. Bush made a stunning reversal of a campaign pledge to limit emissions of carbon dioxide, a culprit in global warming--and immediately found himself on the hot seat. Predictably, environmental groups are mobilizing to flood the White House with letters demanding that Bush stick to his promise. Bush may pay little attention to them, but in the weeks to come he will face pressure from others who will be much tougher to ignore.

It will come from European leaders, CEOs who favor action on global warming, and members of his own party in Congress. "Bush has not had equal exposure to the other side yet," says Representative Sherwood L. Boehlert (R-N.Y.), chairman of the House Science Committee and co-sponsor of a bill to regulate carbon dioxide. "As part of the enlightenment process, we're going to do our level best to present the President with the information he needs to make the best decision." Boehlert thinks the White House didn't realize that Bush's backtracking would provoke such an angry response--and he thinks the President will have to soften his hardline stance. One reason is that controls on CO2 are supported by Treasury Secretary Paul H. O'Neill, who sent a Feb. 27 memo to the President outlining a policy to slow the increase in levels of greenhouse gas in the atmosphere.

Another sympathetic Administration official is Environmental Protection Agency chief Christine Todd Whitman, who thought she had the White House's full support when she began talking up Bush's campaign promise on carbon dioxide. "Global warming is one of the greatest environmental issues we face," she warned in early March at a conference of world environment ministers in Trieste, Italy. Her remarks prompted a quick response from right-wing members of Congress and utility execs, who raised such a ruckus that Bush cut Whitman off at the knees. In a pithy Mar. 13 letter to Senators Chuck Hagel (R-Neb.), Jesse Helms (R-N.C.), and others, he labeled the science of global warming "incomplete," trashed the 1997 Kyoto Protocol, which calls on developed nations to cut greenhouse-gas emissions, and ruled out caps on CO2 from U.S. power plants.

PLAN B. But now the heat is on Bush. Global warming was high on the agenda of German Chancellor Gerhard Schröder when he visited the White House in late March. The Germans are warning that U.S. inaction on climate will guarantee chilly receptions for other Bush proposals, such as a missile defense system. "This is all about transatlantic relations in general," explains Sascha Müller-Kraenner, director of the Washington office of the Heinrich Böll Foundation, which is affiliated with the Green Party, Social Democrat Schröder's coalition partner and a major player in German foreign policy.

Now that the Bush Administration has declared Kyoto dead, many in Europe are already considering a Plan B: ratifying the protocol without the U.S. But the prospect of other countries moving ahead with limits on greenhouse gases while the U.S. sticks its head in the sand worries many American companies. With the evidence that human activities are causing global warming getting ever more convincing, emissions curbs in many countries are inevitable, execs believe. "Economies will have to adjust to that," says Tom Jacob, manager for international and industry affairs at DuPont. "It would be a mistake if the U.S. economy is insulated from those pressures. When the reality comes, the U.S. will have a bigger game of catch-up--and our competitors will be ahead of us" in developing and using climate-friendly technologies. Even utilities such as American Electric Power Co. (AEP) say establishing reasonable regulations is better than continuing in the present state of uncertainty.

That's why the number of companies supporting efforts to fight global warming is growing. The Pew Center on Global Climate Change now has 33 corporate members, including heavyweights like DuPont, Alcoa, United Technologies, and AEP. They are scrambling to tell the White House that it made a colossal mistake. Backing away from CO2 curbs "is not doing business a favor," says Pew President Eileen Claussen. In addition, emissions-trading experts, like Richard L. Sandor, CEO of Chicago-based Environmental Financial Products, say that Bush's stated reason for the reversal is wrong. Bush argues that CO2 curbs would lead to higher prices for electricity from coal-fired utilities. But Sandor calculates that, if a system of buying and selling permits to emit CO2 is used, coal plants with environmental controls need be no costlier than natural gas plants.

LEARNING CURVE. More pressure is coming from Capitol Hill, where bipartisan bills have already been introduced in both the Senate and House to regulate carbon dioxide. "Congress is not going to sit back, if you will, and fiddle while the planet warms," says Democratic Senator Joseph I. Lieberman of Connecticut.

The push to turn Bush around is just beginning. Hill GOP staffers say the White House underestimated the support in industry and Congress for action on global warming. Now, with the Administration on a steep learning curve, "there may be an opening," says one staffer. So far, Whitman is echoing the Bush line by saying only that the Administration takes "the issue of climate change very seriously." But there soon could be signs of White House efforts to look more environmentally conscious. The Administration is expected to put increased emphasis on renewable energy sources and conservation measures in the forthcoming energy plan, for example. And top aides are telling companies that they haven't yet completely ruled out CO2 curbs. Given the political momentum around the world to address global warming, this is one issue Bush won't be able to cool off.

By John Carey in Washington, with Jack Ewing in Frankfurt and Janet Ginsburg in Chicago

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