Is Carbon Regulation Good for Business?

Cap-and-trade opponents have tried to portray the legislation working its way through Congress as bad for business. The U.S. Chamber of Commerce says it would set off a "catastrophic cascade" of lawsuits and "choke off growth"—and some economists say that the House bill, if enacted, would shave 1 percent off GDP growth in the near term. But carbon regulation is coming—the EPA last month declared greenhouse gases a danger to public health—and some believe CO2 emissions are poised to become a key performance indicator, like cash flow or supply-chain efficiency. IBM is betting the new rules will boost its business. Since 2007, the company has helped 3,300 companies reduce energy use by an average of 40 percent. Most recoup their investment within 18 months, according to IBM. "For every dollar saved on energy, there's an additional $6 to $8 in operational savings," says Rich Lechner, IBM's VP for energy and environment. Just as firms like SAP made billions in the 1980s and '90s selling IT solutions, so too will those helping companies keep tabs on CO2 emissions. Evergreen Energy, whose Web-based system helps the agriculture and energy sectors manage CO2, saw client orders triple in December as companies try to establish a baseline carbon footprint before they have to start reducing it. While some see carbon regulation as a stick, as IBM's Lechner puts it, "we view it as a great big carrot."