- What is Dow’s position on climate change?
Dow accepts the conclusion of the United Nations Intergovernmental Panel on Climate Change (IPCC) that global temperatures are rising and it is very likely that human activities are contributing to climate change. We do believe that this global challenge is solvable and that technology and innovative chemistry can play a key role in the solution.
- What steps is Congress taking to address the issue of climate change?
In June, the House of Representatives passed the American Clean Energy and Security Act of 2009. The legislation, spearheaded by Henry A. Waxman (D-CA) and Edward J. Markey (D-MA), includes a cap and trade framework as the bill’s centerpiece and the legislation reflects many of the recommendations found in the U.S. Climate Action Partnership’s (USCAP) Blueprint for Legislative Action. Dow is a member of USCAP and participated in the development of the Blueprint for Legislative Action. The U.S. Senate is expected to take action this fall.
- Why is cap and trade important to Dow?
Under a cap and trade system, not only is there a set limit on the overall emission level, but the system also provides flexibility for companies to determine how best to comply with the emission cap. This in turn triggers innovation and the development of low-carbon technologies. Dow believes this market-based approach is the best way to unleash technological innovation and ensure that short- and long-term emissions targets are met.
- How can Congress best protect the global competitiveness of companies like Dow?
We believe the legislation of GHG emissions in the U.S. is inevitable, but Congress must address the issue of global competitiveness. It is imperative that climate policy be designed to allow energy-intensive and trade-exposed manufacturers, like Dow, to remain globally competitive. If U.S. climate policy simply shifts U.S. production (and GHG emissions) to countries without a climate policy it does nothing to reduce global emissions.
This problem—known as carbon leakage—is one of the central policy issues that must be addressed through the allocation of free allowances to U.S. energy intensive and trade exposed manufacturers like Dow until such time that the carbon leakage problem is solved through an international agreement.
- What provisions in the Waxman-Markey Bill are important to Dow’s success as a company?
Dow believes that any comprehensive climate policy should include the following measures:
Specifically, provisions are needed that do not penalize the use of fossil energy as a feedstock material. Carbon contained in the energy the chemical industry uses as feedstock are not emitted as CO2 and are, in fact, sequestered in the products we manufacture.
Second, provisions that minimize fuel switching from coal to natural gas by implementing policies that accelerate deployment of CCS and greater energy efficiency measures, and by bringing more renewable energy into the mix.
- What other complimentary climate change policies will help companies like Dow thrive?
It is important for lawmakers to aggressively promote energy efficiency in buildings and homes, support GHG reduction policies in the transportation sector, and clean coal technology. These complementary policies are needed to ensure that emission reductions are spread out over the entire economy and low-carbon technologies are developed and deployed as quickly as possible.
- What if Congress cannot pass a law, should the EPA step in and regulate CO2 emissions?
Should Congress fail to reach an agreement on legislating CO2 emissions, the EPA will move to regulate carbon dioxide under the Clean Air Act. By using a command-and-control approach to address GHG emissions, the EPA will ensure that the total cost exceeds the cost of legislation currently before Congress. Regulations by the EPA will lack the flexibility inherent in a cap and trade system.
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