Fact Pack

Global climate change is a serious threat. We need to take immediate action.

The 1990s was likely the hottest decade of the last 1,000 years.(1) The global surface temperature has risen by about 1°F in the past century, with accelerated warming during the past two decades, partly because of anthropogenic greenhouse gases.(2) The United Nations Intergovernmental Panel on Climate Change projects that the earth’s temperature will increase between 2.5°F and 10.4°F between 1990 and 2100, if no major efforts are undertaken to reduce greenhouse gas emissions.(3)

This warming may cause disastrous effects including:

• Droughts that will increase desertification;
• Rising sea levels that will flood coastlines;
• Increased risk of tropical disease transmission to North America;
• Glacier loss in Alaska and Montana;
• Increases in extreme weather events;
• Stresses to biodiversity and fragile ecosystems; and
• Agricultural production disruption.(1)(3)

Greenhouse gases cause the earth’s surface to warm by letting in energy from the sun, but trapping heat emitted from the planet’s surface. This natural warming is what sustains life – without some greenhouse gases in the atmosphere, average surface temperatures would be 0°F.(3) Since industrialization, humans have rapidly increased the amount of greenhouse gases in the atmosphere through fossil fuel production and deforestation.(2) These additional emissions are overheating the earth.

We must act today. As of 2000, with only 4% of the world’s population, the U.S. was responsible for nearly 25% of global greenhouse gas emissions from fossil fuel combustion.(4) Since 1990, U.S. greenhouse gas emissions have increased 11.5 percent.(5) In 2002, greenhouse gas emissions in the U.S. consisted of 84.5% carbon dioxide (CO2), 8.9% methane, 4.9% nitrous oxide, and 1.8% hydrofluorocarbons, percfluorocarbons, and sulfur hexafluoride.(5)

Businesses are in a position to be leaders in shaping the policy to address global climate change. In 2000, a Republican Washington D.C. polling firm, American Viewpoint, found strong support among Fortune 500 executives for action on global warming.(6) The poll revealed that:

• More than a third support Senate ratification of the Kyoto treaty (another third said they didn’t have enough information to say yes or no);
• Seventy-five percent believe global warming is a somewhat or very serious problem;
• Eighty-two percent of the executives expect that the U.S. government will regulate emissions of CO2 and other global warming gases by 2010; and
• Seventy-seven percent favored increased fuel efficiency standards for cars and trucks.(6)

Although the Bush administration pulled out of the Kyoto Protocol negotiations, it continues to promise to address the serious threat of global warming.(6) The United Nations Framework Convention on Climate Change (UNFCCC), which came into force in 1994 and to which 188 countries are now signatories, required participating countries to inventory and develop preventative strategies for greenhouse gas emissions. The Kyoto Protocol further required industrial nations to agree to reduce their emissions by an average of 5% of their 1990 levels by 2012. Under the Protocol, the European Union is required to reduce its emissions by 8%; the United States would have been required to reduce its emissions by 7% from its 1990 levels. Developing countries, however, were not required to reduce emissions because, although their emissions are growing, their cumulative impact on atmospheric GHG concentrations is still far less than that of the developed countries and their per capita emissions are generally well below those of developed countries.

The Bush administration decided not to participate in the Protocol, citing concerns about compliance costs and about the fairness of the distinction the Protocol makes between developed and developing countries. By September 2003, 100 countries had ratified the Kyoto Protocol, accounting for 44% of the world’s emissions. The pact will become international law once it is ratified by 55 countries, including those responsible for 55 percent of global greenhouse gas emissions. As of 2000, the U.S. was responsible for nearly a quarter of global CO2 emissions from fossil fuel combustion.(4)

One provision of the Kyoto Protocol would allow emissions trading. Leaders in reducing greenhouse gas emissions could trade with those finding it more difficult to achieve reductions. If a U.S. program allowed trading between companies, clean technologies could become a billion dollar industry.(6) Companies also might be allowed to invest in carbon sequestration in agricultural soils and forests or in renewable energy projects to offset their emissions. Such a program would be modeled after the successful Clean Air Act market approach to reducing sulfur dioxide in power plants to combat acid rain. Emissions trading can lower the cost of emissions reduction when compared to traditional command-and-control approaches and its role is expected to expand in the U.S.(7)(8) State Greenhouse Gas Databases that require reporting of greenhouse gas emissions from sources likely to be regulated in the future can begin to provide the infrastructure needed to support a cap-and-trade program for greenhouse gases.

Even those who are skeptical about emissions trading can embrace reporting as a way to motivate emissions reductions. In addition to being cost-effective, State Greenhouse Gas Databases will enable companies to begin GHG reductions today. It will give them a clear picture of their contribution to the problem, and allow them time to look at the most cost-effective ways to improve efficiency and reduce emissions prior to any regulatory scheme.

Several U.S. states have taken the initiative to establish greenhouse gas inventories and registries. These include mandatory reporting requirements to report direct emissions from stationary sources and voluntary programs for company-wide reporting of emissions, including indirect emissions associated with electricity use.

In addition, several states have established programs to keep track of emissions reductions. However, tracking reductions can be very complex and should be standardized across states in order to be useful to businesses and in the fight against climate change. Because of this, the package presented by the State Environmental Resource Center (SERC) does not encourage states to develop their own programs to track emissions reductions; instead, SERC encourages states to be leaders by establishing mandatory GHG reporting guidelines for major emitters.

A comprehensive, mandatory emissions reporting scheme is essential to identifying the possibilities in future cap-and-trade schemes and for states and businesses to identify the best way they can help combat climate change. SERC encourages states to begin enforcing mandatory reporting guidelines today. States interested in a voluntary emissions registry should contact the California Climate Action Registry, currently the nation’s most standardized registry, to explore opportunities for collaboration rather than attempting to start a new registry on their own.