An Adelie penguin looks over the edge of an iceberg on Paulet Island, Antarctica.
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Take General Electric. Its Ecomagination initiative centers on a line of 45 green products, including wind turbines and next-generation jet engines that go easy on the earth but land nicely on the balance sheet. Chairman and CEO Jeffrey Immelt set a goal of generating more than $20 billion in revenue from Ecomagination by 2010, and by 2006 the company had hit the $12 billion mark.
DuPont, which suffered twin hits to both revenue and reputation in the late 1980s and early 1990s, when it had to phase out its production of ozone-destroying chlorofluorocarbons, has made a similar environmental pledge. It sold its Dacron, Lycra and Nylon division--all fossil-fuel-based fabrics--and is concentrating on bio-based materials like Sorona polymer made from starch found in the kernels of corn. DuPont hopes to more than double its revenue from nondepletable resources, to $8 billion by 2015. The company has also cut its greenhouse-gas emissions 72% since 1990 and is aiming for more. That puts DuPont in position to respond nimbly if Washington eventually acts to cap carbon. "We learned that we have to be ahead of legislation," says Linda Fisher, DuPont's chief sustainability officer, a title of growing significance in corporate America. "That is truer today than it was 20 years ago."
Not surprisingly, some companies talk a green game but don't really play one. Ford Motor Co. made a big show of performing a $2 billion environmental overhaul of its River Rouge factory in Dearborn, Mich., but still turns out SUVs like the elephantine Expedition, which gets a puny 14 m.p.g. in city driving. Toyota, famous for its hybrid Prius, has nonetheless joined the U.S. Big Three in lobbying Washington against stricter fuel standards.
This kind of environmental posing--greenwashing is the term of art--will not be a viable business strategy in a world transformed by climate change. The smart money is betting on the need for real innovation--clean technology that lowers costs or improves output. Venture capital is increasingly flowing to green start-ups: $474 million in the first three quarters of 2006 in Silicon Valley alone. That's sparking the interest of everyday investors, who see green technology as--dare they wish it?--the next Internet. Says Ray Lane, a partner at the KPCB venture-capital firm: "If you consider the sheer scale of the problem, I think this is an order of magnitude bigger."
Change on the Hill
Jubilant Democrats crowed about big changes to come when they won majorities in the House and Senate last November, and the arena in which they can make the greatest change--at least domestically--is the environment. Part of the reason is the people who will wield the new power.
The Jurassic James Inhofe, the Oklahoma Republican who has referred to global warming as the "greatest hoax ever perpetrated on the American people," has been replaced as chair of the Senate Committee on Environment and Public Works. In his four years in the post, Inhofe held a total of five hearings on climate change, and the star witness was a science-fiction fabulist: Michael Crichton, a critic of warming theory. Now holding the gavel is California's Barbara Boxer, who has had five hearings on climate change in less than three months. While more hearings are a certainty, she must also help field a flock of green bills being offered by newly empowered Democratic members.
Michigan Democrat John Dingell will be a key player in the debate about lowering carbon dioxide emissions--not just on cars, but economy-wide. The new chairman of the House Committee on Energy and Commerce, Dingell comes from a state congenitally opposed to any measure that could pinch the auto industry. Democrats hope to spin that in their favor, arguing that any climate-change legislation that gets through his committee will have the legitimacy of having cleared a high bar.
The true measure of success for the party will be whether Congress finally passes a law to limit greenhouse emissions. That effort began in earnest in 2003, when Senators John McCain and Joe Lieberman sponsored a bill that would set limits on industrial greenhouse gases and let companies that do better than required sell pollution credits to those that fail to meet targets. One credit worth of extra pollution from a dirty company is offset by one credit worth of extra cleanliness from a more environmentally conscious company, and the clean company is paid for its effort too. This is just the kind of strategy that was implemented in 1990 to curb sulfur dioxide--the leading cause of acid rain--and has resulted in a 35% reduction of the pollutant since.
McCain and Lieberman's bill was soundly defeated that year and in 2005 suffered an even worse Senate smackdown, 60 to 38. With a new Congress in place, McCain and Lieberman will try again. This time they will face competition from Senators Jeff Bingaman and Arlen Specter, whose version would set higher caps and more gradual reductions. "The McCain-Lieberman proposal was very credible," Bingaman says. "[But] this draft has more prospect of actually being adopted." Yet another cap-and-trade bill will probably come out of Boxer's committee, and more bills still will be considered in the House of Representatives.
What all the measures have in common is that they will ultimately have to find their way to hostile territory--Bush's desk. Still, Bush 2007 is not Bush 2004, and the embattled President may decide that vetoing a piece of broadly popular legislation is not a fight worth picking now, especially since corporations see value in it. Kristin Hellmer, a spokeswoman for the White House Council on Environmental Quality, will not rule out the President's signing onto cap-and-trade or any other green bill. "It's a bit premature to have that conversation," she says.
States and cities aren't waiting for Congress to act. California Governor Arnold Schwarzenegger committed the state to a 25% reduction in greenhouse gases by 2020; he was promptly sued by carmakers that would have to increase fuel efficiency to sell there. If California prevails, the size of its market could turn its regulations into a de facto national standard. While no other states have passed limits as strict as California's, about one-third of the U.S. population lives in areas where there are automotive-carbon limits in place or under consideration, with curbs in place in 11 states so far.