(Dow Jones) Senior White House and Obama administration officials say they are worried the nation's economic recovery could stall if Congress doesn't pass a climate bill this year.
The officials warn that investors are so uncertain about the future cost of emitting greenhouse gases that they are sitting on capital rather than pouring it into "clean" technology, new power plants or energy-intensive manufacturing.
The administration has for months been moving away from advocating climate legislation primarily as an environmental issue and toward a jobs-creation argument. But the comments are a marked shift to a stronger rhetoric: fears of prolonging the recession. The White House says spurring "clean," or low-greenhouse-gas-emitting energy, can help lay the foundation for the 21st-century U.S. economy.
"Right now there's a lot of money on the sidelines," said Energy Secretary Steven Chu. "Capital on hold means investments not being made, investments not being made means jobs not being created," he said at an Export-Import Bank conference last week.
Companies that could capitalize on a carbon-constrained economy, such as General Electric Co. (GE), Alstom SA (ALO.FR), Areva (CEI.FR), Babcock & Wilcox, a unit of McDermott International (MDR), Siemens AG (SI), Chesapeake Energy Corp. (CHK) and First Solar Inc. (FSLR), say policy clarity will focus investment. So do emitting businesses that will need to adapt, such as American Electric Power Co. (AEP) and BP PLC (BP).
Ambiguity, however, breeds risk, which begets financiers' reluctance.
The White House is attempting to revive legislation that would effectively curb emissions of greenhouse gases such as carbon dioxide. A bill that passed the House last year stalled in the Senate, and the administration is working to pump life into alternative proposals. However, many lawmakers, officials and pundits say the prospects for a climate bill this year are increasingly dim.
Meanwhile, the Environmental Protection Agency is moving ahead with regulations to cut greenhouse gases under existing law, regulation that industry fears is too blunt and may damage the economy.
But without certainty on how--and how much--greenhouse gases will be curbed, the energy industry has little idea how to factor the potential price of carbon into their cost expectations or even demand. It cuts both ways: Financiers are wary of investing both in conventional as well as new technology.
"The economic team ... is very concerned about the chilling effect on investment of not having legislation," said Joseph Aldy, special assistant to the president for energy and environment, at an event here last week.