Obama climate plan divides business

The Obama administration's environmental policy is deepening divisions between big businesses on climate change, mirroring polarisation among US states over an issue that will drive more legal and political conflict next year.

A controversial White House plan to curb greenhouse gas emissions from power stations has exposed a growing rift between consumer businesses that support the proposal and industrial groups that are vehemently opposed to it.

President Barack Obama is seeking to make action on climate change a central part of his legacy, but the plan from his environmental regulator is already threatened by lawsuits and Republican opponents in Congress.

The corporate divide emerged from 1.6m-plus comments sent to the Environmental Protection Agency by a deadline of midnight on Monday, reflecting arguments that will rage as the agency seeks to finalise its plan by June 2015.

A group of more than 220 companies including well-known US names such as Kellogg, Levi-Strauss, Mars, Nike and Starbucks has signed a letter in support of Mr Obama's plan, along with European groups including Adidas, Ikea, Nestle and Unilever.

The letter, organised by Ceres, an investor group that campaigns on environmental and social issues, says the companies agree that climate change poses "real financial risks", and tackling it is "one of America's greatest economic opportunities of the 21st century".

Tim Brown, chief executive of Nestle Waters North America, said supplies of crops and water were essential to the company's business, and both were threatened by climate change.

"We see it as crucial to the sustainability of the company. We're 148 years old, and we would like to be here for another 148 years."

He added: "We feel consumers are going to be a big influence in this debate, and it's important for them to know which side we come out on."

The EPA plan would cut carbon dioxide emissions from power stations by 30 per cent by 2030 from 2005 levels, primarily by reducing the US's dependence on coal.

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The regulator has set emissions targets for each US state, which must decide how to achieve the cuts by switching to cleaner energy sources such as natural gas, nuclear or wind, by improving grid efficiency, or by reducing electricity consumption.

But Mitch McConnell, who will lead a Republican Senate majority in the new Congress next year, has said one of his priorities is "to try to do whatever I can to get the [EPA] reined in".

Industry and fossil fuel businesses are strongly critical of its climate change plan. A coalition of groups including the National Association of Manufacturers, the American Petroleum Institute, the American Chemistry Council and the American Iron and Steel Institute, made a joint submission that said the EPA plan would make US companies uncompetitive in world markets.

They said: "The proposed rule far exceeds the authority delegated to EPA by Congress and would have profoundly adverse consequences on both industry and the economy."

The groups urged the agency to withdraw the plan and to "engage instead in a process with all interested stakeholders regarding the development of a lawful and reasonable rule".

The conflicting positions of businesses match divisions between US states. A group of 17 attorneys-general from states that either lean Republican or are big fossil fuel or industrial producers slammed the Obama administration's plan and said it was illegal.

<>The green regulator was attempting to "override states' energy policies and impose a national energy and resource-planning policy that picks winners and losers based solely on EPA's policy choices," they said in a submission. Twelve of the states, led by West Virginia, have already filed a lawsuit against the EPA's plan.

A rival group of 13 attorneys-general from Democratic-leaning states and the District of Columbia backed the EPA, filing a submission that said the agency was obliged to act on power plant emissions and had the legal authority to do so.

David Flannery, a lawyer at Steptoe & Johnson in West Virginia who worked on a submission for utility companies opposed to the plan, predicted more legal challenges.

"If the administration decides to go ahead with this rule, then we have the odd dilemma of serious litigation proceeding at the same time that states arguably have the obligation to develop plans to implement the rule," he said. "I am sure efforts will be made to get the courts to stay that or slow it down."

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