Panelists at a California conference argued Thursday about whether corporate climate-change initiatives are really worth their weight in gold. 

At The Wall Street Journal ECO:nomics conference in Santa Barbara, participants questioned whether programs such as carbon cap-and-trade systems are good for business.

Mindy Lubber, president of Ceres and director of the Investor Network on Climate Risk, said companies that address climate change are getting applause, not complaints, from shareholders.

Those that aren’t making an effort, she said, are getting shareholder requests that they disclose their financial risks from climate change.

Lubber advocated a carbon cap-and-trade system that would limit the amount of carbon emissions companies could release. The system also would introduce an auction that essentially would set a market price for heavier polluters to buy carbon credits from companies that pollute less than they’re allowed.

"Right now, we have a thing that’s free, and that’s carbon pollution," she said. "When things are free, we get a lot more of it."

Meanwhile, Steven Milloy, a managing partner at Action Fund Management, a free-market advocate, said companies should be disclosing more of the financial risks of a potential cap-and-trade system.

"We found only a few companies were disclosing the risks of regulation," he said. "Others paint this rosy picture -- we’re going to make money [off of carbon regulation]. This is an economic issue. I agree with that. It’s an economy killer."

Failing to disclose the risks of a cap-and-trade system is "just blowing sunshine up everybody’s dress," he said.

Milloy said he thinks corporations are being used by social activists to push their political agenda. He specifically mentioned Jeffrey Immelt, CEO of General Electric, among other prominent CEOs.

Immelt, who spoke at a session Tuesday evening, predicted federal climate-change legislation and called the current energy-policy uncertainties "a certain kind of hell."
"You think Jeff Immelt is being used?" Alan Murray, executive editor of The Wall Street Journal Online and a moderator of the panel, asked Milloy.

"Immelt has his own agenda and thinks he is using them, but I think they are using him," he said. "We’ve heard four CEOs. I haven’t been impressed [with any of them]."

Milloy incited laughter when he said he was as much of an environmentalist as anyone else in the room, and still more guffaws when he said his group doesn’t see carbon dioxide as a pollutant.

Climate-change initiatives will lower, not increase, the bottom line, he said, pointing to economists who have forecast that a cap-and-trade system would have negative economic impacts – or, in his words, "a train wreck" -- while dismissing the same economists’ support of a carbon tax as being based on a belief "in junk science."

Still, Lubber agreed that financial risks from a cap-and-trade system should be disclosed to investors along with the risks of not addressing climate change.

"There will be some losers," she said. "There is nothing easy about the world’s biggest challenge. But waiting for tomorrow to do what we could do today … is not an option. … It costs money, to be sure, but it costs money not to do it."

She added that the total impact of climate-change initiatives on corporations’ share prices is probably "about a wash" so far.

"Companies are finding they are able to save money and are able to make money. Whether or not they’ve seen overall share prices change, I’m not sure," she said, adding that many different factors aside from the environment contribute to share prices.

But capping carbon emissions and putting a price on them will encourage companies to reduce pollution and will jump-start innovation and technology to help them do that, she said.