Considering Emissions and Mergers

But evidence shows that China is cutting back its emissions. According to analyses by the EIA and the Lawrence Berkeley National Laboratory, China’s carbon dioxide emissions have decreased 17% since 1997. In other words, this nation appears to be taking the greenhouse gas problem seriously.

Which brings us to the United States.

President Bush made a campaign pledge to regulate carbon dioxide emissions. He later backed away from that pledge and said he wasn’t convinced that global warming is a problem. After getting back a report he requested from the National Academy of Sciences, he decided that it is indeed a problem. In fact, White House press secretary Ari Fleischer said, “The president understands this is a very serious problem.”

But the solution proposed is to conduct more research. After years of research, and acknowledging a “serious” problem, the answer is to study it more.

And we’re not going to spend any more on this problem. The Bush budget calls for approximately the same funding as last year. Plus, we’re reducing aid to developing countries to fight global warming.

It doesn’t sound like the U.S. government is very serious about this issue.

It is entirely illogical to cite anything as serious, and then not take any action to resolve the situation. Technologies are available today, and incentives can be applied to put them in place quickly.

The least we can do is maintain emissions at current levels so that we don’t worsen a condition that we’ve already identified as serious. Allowing U.S. emissions to increase, as they did last year, is not a solution. And it can allow a serious problem to get critical.

To Merge Or Not To Merge

Another subject in the news has been the GE-Honeywell merger that wasn’t. U.S. regulators quickly approved the combination, requiring minimum concessions. European regulators, however, rejected the merger, mandating major concessions that GE’s Jack Welch said “cuts the heart out of the strategic rationale.” The company would not sell off the very reason it acquired Honeywell — expanded aviation business — and the European Commission said no deal.

Why such a divergence? The U.S. puts its emphasis on protecting consumers, while Europe is said to focus on protecting competitors.

Treasury Secretary Paul O’Neill originally said that a rejection by European regulators would be “off the wall.” He later used kinder, gentler words, but he still supported the U.S. antitrust view.

“It does seem to me the driving principle should be what’s in the best interest of ordinary people around the world in terms of raising their standard of living,” he said. “If companies can combine and produce more value for regular human beings, it seems to me that’s a conclusive test.”

Protecting customers from a combined company that can exert market power to raise prices is a reasonable determination for blocking a merger. But protecting competitors from tougher competition is not so noble, and it’s antithetical to capitalism. An economic measure should apply, not may the best lobbyist win.

In any case, the rules should be the same here and there, so that companies across the globe know exactly what they’re getting into when they attempt to merge, and they don’t spend eight months, as GE-Honeywell did, spinning their wheels.

Mazurkiewicz is news and legislation editor. He can be reached at 810-296-9580; 810-296-9581 (fax); mazurkiewiczg@bnp.com (e-mail).

Publication date: 07/16/2001