New Business Roundtable Study Identifies Policies to Boost Reductions in GHG Emissions, While Minimizing Economic Consequences

WASHINGTON--(BUSINESS WIRE)--Business Roundtable, an association of chief executive officers of leading U.S. companies, today released an economic modeling study with policy recommendations that have the potential to deliver approximately twice the greenhouse gas (GHG) reductions at roughly half the economic cost of emissions-limiting legislation that doesn’t address obstacles to emissions reduction. The study, The Balancing Act: Climate Change, Energy Security & the U.S. Economy, modeled the cost and benefits of removing critical barriers to technology development and deployment in carbon-pricing policies.

“As business leaders, the members of Business Roundtable are committed to taking action to limit GHG emissions and put our nation on a more sustainable path”

“As business leaders, the members of Business Roundtable are committed to taking action to limit GHG emissions and put our nation on a more sustainable path,” said Michael G. Morris, Chairman, President and CEO, American Electric Power and Chair of Business Roundtable’s Sustainable Growth Initiative. “However, we know that addressing climate change is going to seriously strain our economy. We conducted this study to determine the best ways to cut GHG levels while minimizing the economic impact. We found that a successful policy for reducing GHGs must leverage a balanced portfolio of technologies and eliminate barriers to technology development and deployment. Only this combination will allow us to successfully reduce GHG emissions without significantly hampering economic growth.”

Business Roundtable’s study was designed to compare and evaluate policy recommendations that have the potential to reduce barriers to technology development and deployment and, therefore, to improve GHG reductions while minimizing costs for American households and businesses.

The study found that without policy leadership – that is, supportive policies to remove barriers to new technology – imposing a price on carbon will cause real GDP to drop by 2 percent by 2050. In contrast, policies that advance a balanced portfolio of technologies can deliver almost twice the GHG reductions at roughly half the economic cost. In fact, a balanced portfolio approach is the only one that has the potential to achieve the large-scale reductions in GHG emissions that many policymakers are targeting. Additionally, these policies can enhance America’s energy security by diversifying the transportation fuel supply mix.

The study is part of a collaborative effort among Business Roundtable member CEOs to develop technology-based policies that can reduce emissions, accelerate economic growth and enhance energy security over the coming decades. The inputs for the study were developed by teams of company engineers, economists and public policy experts. Based on an assessment of our nation’s economic, environmental, and security challenges, the study modeled the extent to which three core strategies can enhance the efficiency of a carbon pricing mechanism:

Increased use of domestic resources to produce low-cost, low-carbon electricity;
More efficient utilization of electricity and heating fuels in homes and businesses; and
Modernization of the transportation fleet and diversification of the transportation fuel mix.

The study identified six “technology pathways” critical to implementing these strategies:

Building efficiency improvements;
Renewable power generation;
Advanced nuclear power generation;
Carbon capture and storage;
Advanced vehicle technologies; and
Advanced biofuels.

The study also identified two “enabling pathways” central to realizing the full potential of the technology portfolio: electric grid modernization and increased domestic supplies of oil and natural gas.

“Imposing a price on carbon will not be cost-free or easy – it will require an extensive transformation in the way our nation consumes and produces energy. However, our study clearly shows that these costs can be mitigated by combining policy leadership with aggressive energy technology investments to reduce GHGs and drive economic growth – potentially saving our economy up to $1.9 trillion over the next 40 years,” said John Castellani, President of Business Roundtable. “We look forward to working with Congress and the Administration to implement the balanced portfolio of strategies and technologies necessary to build a stronger, more sustainable future for America’s citizens, communities and companies.”

For more information on Business Roundtable’s The Balancing Act: Climate Change, Energy Security & the U.S. Economy, please visit www.businessroundtable.org or click here to view the report.

Business Roundtable is an association of chief executive officers of leading U.S. companies with more than $5 trillion in annual revenues and nearly 10 million employees. Member companies comprise nearly a third of the total value of the U.S. stock markets and pay nearly half of all corporate income taxes paid to the federal government. Annually, they return $133 billion in dividends to shareholders and the economy.

Business Roundtable companies give more than $7 billion a year in combined charitable contributions, representing nearly 60 percent of total corporate giving. They are technology innovation leaders, with more than $70 billion in annual research and development spending – more than a third of the total private R&D spending in the U.S.

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