GM Joins Climate Group Calling for U.S. Carbon Cap (Update2)

By Kim Chipman

May 8 (Bloomberg) -- General Motors Corp. will become the first U.S. automaker to join a coalition of companies calling on Congress and President George W. Bush to support a mandatory nationwide cap on global-warming pollution.

``GM views the need to promote energy security and reduce greenhouse gas emissions as both a business necessity and an obligation to society,'' General Motors Chief Executive Rick Wagoner said in a statement today.

The No. 1 U.S. carmaker joins companies such as General Electric Co. and Lehman Brothers Holdings Inc. in the U.S. Climate Action Partnership formed in January. The coalition's members, in a bid to combat climate change and profit from the sale of new ``clean'' technologies, seek to cut carbon dioxide emissions by as much as 30 percent within 15 years and as much as 40 percent by mid-century.

The partnership proposes to reach that goal through a ``cap and trade'' system in which companies buy and sell carbon credits. Bush opposes a carbon cap, arguing it would harm the economy. Yet, the support of companies like GM, which has fought a carbon law in California, portends a sea change in U.S. climate policy, says Environmental Defense President Fred Krupp.

``This is a breakthrough anyway you look at it,'' said Krupp, whose group is a member of the partnership. ``It's unprecedented in the history of U.S. environmental lawmaking to have so many big companies so far ahead of Congress.''

Climate Change Legislation

There are currently at least six climate change bills before Congress, where Democratic leaders have said that passing legislation to address the threat of global warming is a top priority.

A United Nations panel of scientists said this year that global warming is ``very likely'' caused by humans and that world temperatures and sea levels will increase by the end of the century.

Many proponents of carbon limits, including presidential candidate and Republican Senator John McCain of Arizona, say a carbon cap is also needed to help reduce the U.S.'s reliance on foreign oil.

Detroit-based GM is at odds with at least one of the partnership's recommendations for curbing greenhouse gases -- the tightening of fuel-economy requirements for U.S. vehicles. GM has resisted efforts in Congress to support higher standards, which could threaten profits from the light trucks that make up 60 percent of GM's U.S. sales.

Dozen New Members

GM said today that it considers the development and use of alternative fuels and electric cars as a more effective solution to global warming than higher fuel-economy standards. John DeCicco, an automobile policy specialist at the New York-based advocacy group Environmental Defense, a member of the coalition, said he doesn't see the differing views as a problem.

GM's joining the partnership ``represents a collective commitment to working together to find a solution that works for everyone,'' DeCicco said in an interview. ``Our goal is carbon reduction and protecting the planet. We aren't wedded to preconceived ways of getting the job done.''

GM said in March that it will cut carbon dioxide emissions at its 83 North American factories by 40 percent in three years.

The automaker said today it is renovating its Toluca, Mexico, factory to a new painting process that uses 14 to 21 percent less electricity and cuts carbon dioxide emissions by 12 to 18 tons annually. The plant produces medium-duty trucks and pickups for the Mexican market.

DuPont Painting Process

The process, developed by DuPont Automotive, a unit of Wilmington, Delaware-based DuPont Co., uses solvents to allow the automaker to apply layers of wet paint without drying in between, Jim Haverland, director of paint materials for GM, told reporters today in Warren, Michigan.

General Motors is among a dozen companies to join the partnership since it was unveiled on Jan. 22.

They include PepsiCo Inc., the maker of Frito's chips and Mountain Dew soda; Dow Chemical Co., the largest U.S. chemical maker; Johnson & Johnson, the world's biggest health-care products company; and the U.S. arm of Royal Dutch Shell Plc, Europe's largest publicly traded oil company.

The new members give the partnership a total of 22 companies, including some of the biggest U.S. power producers.

Citigroup Loans

Separately, New York-based Citigroup Inc. said today that it plans to make loans and investments of $31 billion in alternative power sources to combat global warming, bringing the largest U.S. bank's overall target for ``green'' projects in the next decade to $50 billion.

``Clearly, there's an interest in addressing what is a serious planetary issue and doing it in a way that creates an economic return as well,'' said Frances Beinecke, president of the Natural Resources Defense Council, a member of the Climate Action Partnership.

GM shares fell 14 cents to $29.98 at 4:02 p.m. in New York Stock Exchange composite trading. They have fallen more than 2 percent this year.

To contact the reporter on this story: Kim Chipman in Washington at kchipman@bloomberg.net .

Last Updated: May 8, 2007 16:33 EDT

		Email this article Printer friendly format