Stateside GPs still awaiting carbon law

US fund managers following the CRC scheme developments taking place in the UK are still anticipating their own government's response to climate change, sources have told PEM. 

The US Congress to date has stalled in passing a comprehensive climate change bill, and any debate on a carbon bill is likely to be trumped by economic concerns, said Stuart Hammer, counsel in Debevoise & Plimpton’s corporate department and environmental practice group.

However, GPs with strong plays in carbon-intensive businesses understand even a slight change in the political winds can result in new green initiatives, added Hammer. 

Many GPs in the US are discounting the value of energy-thirsty assets or giving a second look at renewable energy product lines which could appreciate if a price is placed on greenhouse gas emissions.

Environmental reporting requirements at the local level, however, appear a greater possibility. In the absence of a federal climate bill some states have introduced green initiatives which require reporting or reductions on emissions. California for instance has proposed implementing its own cap and trade program though the initiative has been delayed due to recent judicial action.

Likewise, ten north-eastern and mid-Atlantic states have taken up the global warming cause by capping (and ultimately reducing) CO2 emissions under the “Regional Greenhouse Gas Initiative”. The program’s goal is to reduce CO2 emissions from the power sector 10 percent by 2018.

Not willing to wait for an answer from Congress, the US Environmental Protection Agency also took steps to regulate greenhouse gas emissions. The EPA finalised a rule requiring certain large emitters of GHGs to report their annual GHG emissions to the EPA. That rule is already effective and requires many facilities to collect data on their GHG emissions, said Hammer. The EPA estimates the rule will require reporting from approximately 10,000 facilities. 

For a definitive guide on how to incorporate environmental best practices into your operations, see our Responsible Investment Handbook.