CEOs, the UN and Emissions

The May 26 Wall Street Journal ran one of those news articles that tells the world – in this case, the business world – to give up. Specifically, emissions caps are coming in the name of fighting so-called manmade global warming, so either get on board or be left behind.

Naturally, some business executives are more than willing to get onboard for various reasons, ranging from fear to politics to foiling current and/or future competitors to calculation they can make some money off of government dictates.

The Journal article declared:

Chiefs of some of the world's largest companies are urging global leaders to cut a strong deal this December to curb pollution, saying they need certainty on emissions targets to be able to make long-term investment decisions.

The World Business Summit on Climate Change, which brought together more than 500 business leaders, is being seen as a crucial milestone on the road to December's meeting here, at which governments will try to hammer out a successor agreement to the United Nations' Kyoto Protocol. Many of them said a global deal would provide the regulatory certainty and price signals they need to invest in renewable fuels and low-carbon technologies…

In a speech to the summit Sunday, U.N. Secretary General Ban Ki-Moon said that only a few businesses had made climate change a priority, with most sitting on the fence and others defending "the old order." "For those who are directly or implicitly lobbying against climate action, I have a clear message: Your ideas are out-of-date and you are running out of time," he told delegates.

Well, there you have it. Business advice from the United Nations. And of course, the declaration on the need for certainty in order to invest.

In reality, though, given the enormous costs that would come along with government-mandated reductions in CO2 emissions, most businesses would be insane to get onboard. The only thing certain in the entire global warming policy debate is that government dictates on reducing emissions will dramatically jack up energy costs, reduce economic output and incomes, and cripple or destroy entire businesses and industries.

U.N Secretary General Ban Ki-Moon has it backwards. The out-of-date old order are those who still believe that government can intervene in the marketplace and the economy without negative consequences. Indeed, many in this old order actually believe government functions better than private sector ownership and competition to serve consumers. It is this old order that threatens our economy, and businesses should be at the forefront of challenging it.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council