Capitalists getting Green!

note the excerpt that "the capital markets are becoming increasingly
sensitive to the climate change issue. But the country and the
environment cannot depend on good sense or even good business sense
to persuade other corporate leaders to follow Kohlberg Kravis Roberts
and Texas Pacific. Congress needs to move briskly toward legislation
that would put a price on carbon, either by taxing it or capping
emissions."

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NEW YORK TIMES

February 28, 2007
Editorial
A Green Deal on Coal

People who worry about global warming and want the United States to
do more to reduce greenhouse gas emissions received some very good
news over the weekend from a very unlikely source. As part of an
ambitious buyout deal, TXU, a Texas utility that has long been a
target of environmentalists, will abandon plans to build eight old-
style coal-burning power plants, which would have dumped huge amounts
of carbon dioxide into the atmosphere.

The buyers — two private equity companies, Kohlberg Kravis Roberts
and the Texas Pacific Group — also agreed to invest $400 million to
help their customers use energy more efficiently, and to explore
cleaner ways to burn coal. In a gesture of potentially broad
political consequence, they pledged to join other forward-looking
companies in backing federal legislation imposing mandatory limits on
emissions of carbon dioxide, the main greenhouse gas.

The deal represents a shrewd reading of the political waters by the
new owners. TXU had come under heavy fire from influential members of
Congress, the courts and even the local citizenry. The companies also
knew that plants using older technologies and producing heavy
emissions could be severely penalized if Congress ever chose to
regulate carbon dioxide. It also helped that Texas Pacific’s co-
founder, David Bonderman, is himself an ardent environmentalist who
was willing to reach out to TXU’s opponents, including influential
environmental groups, for their help in negotiating a deal.

Though the deal could be trumped by another offer, it is already
being hailed as a pivotal moment in the fight against global warming.
We shall see. It is certainly further evidence that the capital
markets are becoming increasingly sensitive to the climate change
issue. But the country and the environment cannot depend on good
sense or even good business sense to persuade other corporate leaders
to follow Kohlberg Kravis Roberts and Texas Pacific. Congress needs
to move briskly toward legislation that would put a price on carbon,
either by taxing it or capping emissions.

The Energy Department says there are 159 new coal-fired power plants
on the drawing boards; of these, only 32 are considering — though not
committed to — technologies that could significantly reduce carbon
dioxide emissions. What’s needed is federal legislation that would
drive them in the direction TXU’s new owners have promised to take.

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