The CEOs of 13 US and Global Fortune 500 companies or their subsidiaries, in collaboration with four leading environmental groups, have issued a call for action on climate change — including an economy-wide carbon pricing policy to meet the climate challenge at the lowest possible cost.
This new initiative, known as The CEO Climate Dialogue, urges the President and Congress to put in place a long-term federal policy as soon as possible, in accordance with a set of six Guiding Principles for climate legislation. The group aims to build bipartisan support for climate policies that will increase regulatory and business certainty, reduce climate risk, and spur investment and innovation needed to meet science-based emissions-reduction targets.
“Ford is deeply committed to reducing carbon emissions from our vehicles and facilities and believes that a comprehensive solution across all sectors is needed to address climate change,” says Joe Hinrichs, President of Automotive at Ford. “The CEO Climate Dialogue brings together a variety of voices from the business community to address climate policy issues urgently and in a universal way. We’re proud to be the first automaker to join the initiative as we invest more than $11 billion to put new, electrified vehicles on the road even faster.”
A December 2018 CDP analysis showed that some of the largest US-based corporations view climate change as an increasing risk to their bottom line and reputation among consumers and investors, and a record number of global investors have been calling on governments to accelerate action on climate change. Due to the increasing concern about climate risk, US companies are stepping up on climate change at a pace never before seen, but a lack of climate policy in the US continues to put the private sector at risk.
The CEO Dialogue is led by BASF, BP, Citi, Dominion Energy, Dow Chemical, DTE Energy, DuPont, Exelon, Ford Motor Company, LafargeHolcim, PG&E, Shell and Unilever. With input from four leading environmental groups — the Center for Climate and Energy Solutions, Environmental Defense Fund, The Nature Conservancy and World Resources Institute — the group is committed to working with lawmakers to explore various policies designed to address carbon pricing.
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“Climate change and global warming are among the most pressing challenges of our time. BASF products enable energy efficiency and climate protection in a variety of sectors. We work continuously to further reduce emissions from our production and have set ourselves the goal of carbon-neutral growth until 2030,” said BASF Chairman and CEO Wayne T. Smith. “Through the CEO Dialogue, we will engage with stakeholders and develop solutions to safeguard our planet.”
The CEO Dialogue is asking for the following six principles to inform and accelerate federal climate legislation:
Significant reduction of US greenhouse gas emissions so that the US is demonstrably a leader — or at least participating — in global efforts to effectively limit climate change. Specifically, US policy should ensure the country is on a path to achieve economy-wide emissions reductions of 80 percent or more by 2050, with aggressive near- and mid-term emission reductions commensurate with this goal.
Effective: A key test of any climate policy is whether it will deliver timely emissions reductions across the economy and includes mechanisms that provide certainty that emission goals are met. The timeline for reductions must allow capital-intensive industries to adjust in an economically rational manner. Policies must encourage investment and planning decisions consistent with the timeframes needed, and focus on emissions-reductions outcomes, not specific resources or technologies.
Market-based: An economy-wide price on carbon is the best way to use the power of the market to achieve carbon reduction goals in a simple, coherent and efficient manner. The CEOs desire to do this at the least cost to the economy and households. Markets will also spur innovation and create and preserve quality jobs in a growing low-carbon economy.
Durable and responsive: Well-designed and stable policies will deliver predictable results and increase public support over time, providing durability across time and political cycles. Policies should be adaptive over time in terms of pace and scope of reductions, as our understanding of climate change, policy impact and technological changes evolves.
Do no harm: Policies must support the competitiveness of the US economy, by addressing emissions leakage that can undermine climate objectives, while safeguarding against negative impacts on biodiversity, land and water.
Promote equity: Unabated climate change is a major threat to the US economy. Therefore, policies to address climate change, which may also entail some cost, must provide transparency and promote
affordability while distributing costs and benefits in such a way that promotes equity. Policies must include mechanisms to invest in US workers and in disadvantaged communities that have the least resources to manage the costs of climate change.
With these Guiding Principles, The CEO Dialogue intends to initiate constructive and ongoing discourse with members of Congress, focusing on the need for market-based policy solutions.
“There is an urgent need for action on climate change, and no one person or company can solve it in isolation — it will require systemic change and cooperation from governments, companies and individuals,” said Amanda Sourry, President of Unilever North America. “I am proud to join with US business leaders from different sectors to support policy action, including carbon pricing.”