Deere leaves CO2 cap-and-trade group

By Dow Jones Newswires
Posted Aug. 25, 2010 at 1:56 p.m.

Deere & Co. has quietly dropped out of a coalition of large companies that has supported a cap-and-trade program for reducing carbon dioxide emissions.

Deere, the world’s largest manufacturer of farm machinery, opted to leave the U.S. Climate Action Partnership in May because the group’s legislative strategy “no longer served as a foundation for moving forward” with climate change regulation, Ken Golden, a spokesman for the company said Tuesday.

“We came to the conclusion that Deere had other opportunities to be involved in climate change initiatives,” Golden said.

The Moline, Ill., company joins a handful of others that have left the partnership in recent months, as political support erodes for comprehensive energy legislation that includes a cap-and-trade program and stricter mandates for energy conservation. Other members to leave the group include construction machinery company Caterpillar Inc.  and energy companies BP PLC and ConocoPhillips Co.

A spokesman for the partnership, Tad Segal, offered no reaction to Deere’s reasons for leaving the group, but credited the company with “playing a valuable and significant role” in developing the group’s policy initiatives.

“As with every coalition, there have been membership changes, including departures and new memberships,” said Segal.

About two dozen companies remain, including  General Electric Co., Johnson & Johnson, Siemens AG and Alcoa Inc.  The group also has picked up four new members in the last year, including Honeywell International Inc. and Weyerhaeuser Co.

The Washington-based coalition, founded in 2007, has been a lightning rod since its January 2009 Blueprint for Legislative Action recommended creating a phased-in cap-and-trade system for U.S. producers of carbon dioxide, the main ingredient in the heat-trapping greenhouse gas identified as the source of climate warming.

Under such a program, carbon dioxide producers, such as coal-fired power plants, would have their carbon emissions capped at a certain level by government-issued credits or allowances. Those that exceed the limits would have to buy additional credits from carbon producers whose emissions fall below their allowable amount.

A cap-and-trade program aimed at reducing carbon emissions by more than 80 percent by 2050 was included in energy legislation passed by the  House of Representatives in 2009. But the bill has been bogged down in the Senate by intense bipartisan opposition to cap-and-trade provisions. Carbon-emitting companies argue that a cap-and-trade system would put them at a disadvantage to competitors in countries that don’t regulate carbon dioxide. The weak U.S. economy and the threat of job losses caused by cap-and-trade have added momentum to the opposition.

Two conservative policy groups subjected Deere to public pressure this spring in hopes of turning its employees against their company’s membership in the partnership.

In television commercials that aired in April in Moline and Waterloo, Iowa — home of Deere’s tractor assembly plants — FreedomWorks and the National Center for Public Policy Research’s Free Enterprise Project said cap-and-trade legislation would put Deere’s U.S. employees at risk of losing their jobs if the company pursues lower-cost manufacturing sites overseas.

The ads also accused Deere of supporting “back-room deals” by members of Congress to assemble enough votes to pass carbon regulation.

Tom Borelli, director of the Free Enterprise Project, said the commercials helped persuade Deere Chairman and Chief Executive Samuel Allen to depart the climate coalition.

Deere rejected that notion.

“Deere made a decision independent of the opinions of other organizations,” Golden, the company spokesman, said. “Our involvement with various trade and industry organizations is routinely reviewed.”

He added the company remains affiliated with other environmental groups it believes can influence climate change legislation. Deere is a member of the U.S. Environmental Protection Agency’s Climate Leaders program and participates in the Business Environmental Leadership Council.

Deere’s stock was  down 1.3 percent in afternoon trading, at $61.54.


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