Folks,

Here’s the second article from Green Chip Stocks, about the recent Supreme Court ruling against the EPA, and an upcoming Asia-Pacific business summit that will focus on global warming and energy security.

–C

EPA Refuses and Loses, but Business Chooses

By Chris Nelder

2007-04-03

Things are really starting to “pop” now, as the world rises to the global warming challenge. Yesterday, three significant announcements caught my attention.

First, the Supreme Court ruling on Massachusetts v. EPA. This fight dates back to 1999, when environmental groups and officials from twelve states petitioned the EPA to begin addressing global warming by limiting the emissions from new cars of four greenhouse gases: carbon dioxide, methane, nitrous oxide, and hydrofluorocarbons.

In 2003 the EPA refused, citing scientific uncertainty over the issue, saying that they lacked the authority to regulate greenhouse gases, and claiming that greenhouse gases don’t qualify as the “air pollutants” that they are mandated to control.

The coalition group sued, arguing that the Clean Air Act required the EPA to take regulatory action, but in 2005 a D.C. federal appeals court upheld the EPA’s decision.

That took the fight to the Supreme Court. In a narrow 5-to-4 ruling, they agreed yesterday that Congress’s clear intent was for the EPA to guard the public health by reducing and controlling agents that cause air pollution, including greenhouse gases.

“Under the clear terms of the Clean Air Act, EPA can avoid taking further action only if it determines that greenhouse gases do not contribute to climate change or if it provides some reasonable explanation,” wrote Justice John Paul Stevens for the majority, putting the onus back on the global warming deniers to prove their position.

In short, the Supreme Court told the Bush administration to stop playing politics with global warming science and get down to the dirty work of doing something about the problem.

No doubt, the decision sends a clear signal to politicians and industry alike–particularly the automobile industry and utilities that operate coal-fired power plants–that the time has come to put an end to the denials and the double talk on climate change and take positive action for the public welfare.

I anticipate that in the next year or two, the Big Three will become much more simpatico to the issue, and start offering cleaner and greener vehicles. Indeed, they’ve already signaled that they will do so: The Alliance of Automobile Manufacturers, which represents GM and backed the EPA, issued a statement saying it would work with Congress and the administration for a “national economy-wide approach to addressing greenhouse gases.”

IPCC Warnings Intensify

This turn in the public debate comes not a moment too soon, because the second announcement that got my attention yesterday was about another forthcoming report by the IPCC, the U.N.’s Intergovernmental Panel on Climate Change. This is the same group of scientists from around the globe whose February report caused so much hubbub by stating that greenhouse gas emissions from human activity were “very likely” to blame for causing global warming.

In the new report, their focus is sharpened, and their warnings are all too clear. Here are a few choice quotes:

“Climate change could threaten the lives of hundreds of millions of people in the decades to come.”

“Even the most optimistic forecasts say the climate will continue to change and the planet will be irrevocably damaged…In the absence of action to curb emissions of carbon dioxide and other heat-trapping gases, the future looks bleak.”

“Within two or three decades, there could be 1.5 billion people without enough water,” creating “ refugee crises like we’ve never seen.”

[Although some cold climates would enjoy warmer weather] “clearly there would be no winners left anywhere.”

Business Rising to the Challenge

With politics brushed aside and the worldwide scientific community making itself heard loud and clear, it only makes sense that the business community would respond to the challenge.

There have been a handful of such announcements lately, almost too many to keep up with. But this one is significant because it comes from the Asia-Pacific Economic Cooperation group (APEC), a WTO-like organization that promotes business and trade between the economies of Asia and North America.

The 21 member economies include the U.S., Canada, Mexico, Russia, China and Japan. They represent more than a third of the world’s population and include world’s largest energy consumers, accounting for 60% of global energy demand.

Unlike the WTO, APEC reaches purely voluntary agreements based on consensus, and makes non-binding commitments. They are freer to operate outside the spheres of trade policy and treaty disputes.

Each year, APEC selects three key issues that it wants to address with presidents and prime ministers, and at their annual meeting they meet with world leaders in small groups to press for the changes they want to see.

So what burning issues do they want to bring to the attention of some of the most powerful people in the world this year?

They want agreement on some common principles and goals regarding energy and global warming.

Again: The top businesspeople and leaders of more than half the world are going to seek agreement on a new path into the future.

They see the twin challenges of peak oil and global warming straight ahead, just as we do here. And they’re going to address them head-on, as if to prove once again that business is much more agile than politics.

As I’m sure I’ve said somewhere before, coming to grips with these challenges seems to cause everyone to experience the same range of emotions that Elisabeth Kübler-Ross identified as the five-stage cycle of grief: denial, anger, bargaining, depression, and acceptance. It’s hard to do individually, and no doubt it’s even harder to do collectively.

By my count, the world is moving past the denial and anger stages. About half of the players are still mired in depression and bargaining, but the cutting edge is already on to acceptance.

That’s a whole lot farther along than I would have bet we’d be five years ago. This year is really shaping up to be a turning point.

It’s a great time to be an investor on the right side of it all, too. What could be better than “doing well by doing good?”

Until next time,

Chris Nelder