GOLETA, California—It's not often you hear executives from the biggest U.S. industries and a Republican governor clamoring for stronger regulations on climate change. But that's exactly what they want.
Without clear climate change policy, not only will manufacturing jobs be siphoned off to overseas rivals investing heavily in renewable energy sources, but U.S. companies won't have any clear direction on where best to invest their money in new capital projects to keep in line with regulations, top executives said.
They criticized the United States government sharply for failing to invest in new energy technologies.
They also blasted officials for neglecting to create aggressive energy efficiency standards and failing to extend tax subsidies for clean energy sources such as wind and solar -- measures they say would create jobs for Americans.
"The entire chemical industry and manufacturing sector has lost 3.1 million jobs due to a lack of a coherent energy policy," Dow Chemical Co Chief Executive Andrew Liveris said in an interview at a Wall Street Journal conference near Santa Barbara. "We have a manufacturing crisis in this country ... The leadership of this country needs to step up."
Robert Lukefahr, president of BP Plc's BP Alternative Energy North America added, "We don't know how to deploy capital when the rules change year on year."
To make up for the U.S. government's lack of regulations on climate change, California Governor Arnold Schwarzenegger said his state had been forced to pursue its own aggressive environmental standards, some of which the U.S. Environmental Protection Agency has denied.
"Why is the state of California creating it's own regulation? It's because Washington is not," Schwarzenegger said at the conference.
Improved energy efficiency standards for buildings and appliances; more research and development into biomass, clean coal and other technologies; and opening more U.S. acreage to oil exploration would all help create jobs, Dow's Liveris said.
At a separate conference in Pittsburgh, experts said U.S. workers are already finding jobs building wind turbines, installing solar panels and retrofitting buildings with stronger insulation to conserve energy.
Kathleen McGinty, secretary of Pennsylvania's Department of Environmental Protection, said companies like Spain's Gamesa Corporacion Tecnologica -- which makes windmill turbine blades -- have created jobs in a state once dominated by the steel and coal industries.
"We are a hard-hat, blue-collar, steel-tipped boots kind of place, and maybe we have something to offer," McGinty said.
But U.S. executives said their companies should be the ones building the nation's "green economy" and creating such jobs, with help from the federal government.
General Electric Co CEO Jeffrey Immelt said at the Wall Street Journal conference on Wednesday that tax credits due to expire this year were critical to supporting the U.S. renewable energy industry.
GE would sell its wind turbines and other green products in Turkey, Mexico and other nations if they were not purchased here, he added.
Defending the renewable subsidies, Immelt argued that industries including commercial aviation and housing have long received similar incentives.
"For some reason we decide that energy is the one industry in the world where the only policy should be the price of a barrel of oil," Immelt said. "I don't know why an anti-technology, stick-your-head-in-the-sand approach is applauded by anybody."
Immelt also said that the United States should be moving quickly to permit more nuclear power plants and pursue the development of plants that burn coal more cleanly by socking away harmful carbon dioxide emissions underground.
GE, Dow, Duke Energy Corp, environmental groups and other U.S. utilities and manufacturers are members of the U.S. Climate Action Partnership (USCAP), which has called for a market-based emissions trading system and a nationwide limit on carbon dioxide emissions that would lead to reductions of 10 percent to 30 percent over the next 15 years.
At the conference, Immelt defended GE's membership in USCAP, saying he wanted to have a role in determining environmental legislation rather than have it "pushed down my throat" down the road.
Climate change legislation has been moving more quickly in Europe. The European Union aims to slash greenhouse gas emissions by 20 percent by 2020 and increase the share of wind, solar, hydro and wave power and biofuels in their energy mix by the same date. Unlike the United States, the EU also has a carbon emissions trading system.
Most immediately, U.S. companies are particularly concerned with the failure of Congress to extend tax credits for renewable energy. Those tax credits, which expire later this year, are critical to offsetting the cost of developing renewable energy projects and to making them competitive with energy from fossil fuels.
Business leaders also said government must fund research and development of clean energy sources and technologies.
"I don't want to invest in R&D. My job is to work with commercialization" said John Doerr, a partner with venture capital firm Kleiner Perkins Caufield and Byers.