by Dan Lonkevich and Edward Klump (Bloomberg)
Kohlberg Kravis Roberts & Co. and Texas Pacific Group agreed to acquire TXU Corp., the largest power producer in Texas, for $44 billion in the biggest-ever leveraged buyout, said two people with knowledge of the deal.
KKR, run by Henry Kravis and George Roberts, and Texas Pacific will pay between $69 and $70 a share, or almost $10 more than TXU’s closing price at the end of last week. They will also assume about $12 billion in debt, said the people, who asked not to be identified because the deal hasn’t been announced.
Kravis and Roberts, both 63, upended the buyout world in 1989 with their $31 billion purchase of food- and tobacco-maker RJR Nabisco Inc. It was the largest LBO ever and remained so until November, when KKR joined in the $33 billion buyout of hospital chain HCA Inc. That deal was topped this month by Blackstone Group’s takeover of Equity Office Properties Trust, the biggest U.S. owner of office buildings, for $39 billion.
The general availability of money is driving all of these transactions higher and higher,'' said Todd Richey, 41, a former investment banker with Banc of America Securities who now teaches finance at the University of California at Irvine's business school.Occasionally, there’s hubris or irrational exuberance, but with the low cost of capital right now, there’s lots of opportunities for big deals to be successful.’’
TXU, after almost going bankrupt in 2002 because of a failed overseas expansion, has rebounded and may earn $2.6 billion in 2006, up 51 percent from a year earlier, according to the average estimate of six analysts surveyed by Bloomberg. Natural-gas prices that more than tripled in this decade have increased power prices in Texas, making TXU’s coal and nuclear plants more valuable.
Good Cash Machine'<br />The plants can produce more than 18,300 megawatts, and the company is also the largest electricity retailer in the state, selling power to more than 2.2 million homes and businesses. TXU owns a transmission business that could be sold to pay off debt used to fund the LBO. </p><div> </div><p> TXU ``turned into a good cash machine,'' said Perry Sioshansi, president of Menlo Energy Economics, a consulting firm in Walnut Creek, California. </p><div> </div><p> Lisa Singleton, a spokeswoman for Dallas-based TXU, couldn't be reached for comment. Mark Semer, a KKR spokesman, and Owen Blicksilver, a representative for Texas Pacific, declined to comment. </p><div> </div><div> </div><p> Lehman, Morgan Stanley<br />KKR and Texas Pacific will spend $5 billion on the deal, and four investment banks, including Lehman Brothers Holdings Inc. and Morgan Stanley, will put up another $3.5 billion, the people said. The rest of the purchase price will be borrowed. </p><div> </div><p> Closely held LBO firms use a mix of cash from investors plus their own funds and debt secured on the target they buy to finance their deals. They typically seek to expand companies or improve performance before selling them within five years. </p><div> </div><p> Spokeswomen Torie von Alt at Lehman and Marie Ali at Morgan Stanley declined to comment. Both banks are based in New York. </p><div> </div><p> TXU Chief Executive Officer C. John Wilder will have a small slice of the equity investment and will continue to run the company, the people said. Wilder, 48, has overseen an almost fivefold gain in TXU shares since taking over in February 2004. Wilder has returned TXU to a focus on electric generation and distribution in the Dallas region. </p><div> </div><p> TXU will have 50 days to consider any other offers for the company, the people said. </p><div> </div><p> To help gain approval for the transaction, TXU and its buyers are agreeing to abandon eight of 11 coal-fired generators the company planned to build and support mandatory U.S. limits on power-plant pollution that contributes to global warming. </p><div> </div><div> </div><p> Opposition to Plants<br />The Natural Resources Defense Council and Environmental Defense negotiated in the past two weeks with the buyout firms and Goldman Sachs Group Inc., which is advising on and financing the transaction. The company also will devote $400 million to cutting power demand in Texas. </p><div> </div><p> Wilder's power plant expansion aimed to give the company more low-cost power to sell in the state's deregulated wholesale market. The prospect of increased pollution that could make smog worse in Houston and Dallas, and emissions of carbon dioxide, stirred opposition among environmentalists and mayors in the state. </p><div> </div><p> Two proposed buyouts of utilities have failed in recent years, and two of the largest U.S. utility mergers have also been undone by opposition from state regulators and politicians. </p><div> </div><p> Closely held LBO firms use a mix of cash from investors plus their own funds and debt secured on the target they buy to finance their deals. They typically seek to expand companies or improve performance before selling them within five years. </p><div> </div><div> </div><p> Deals Get Bigger<br />KKR, based in New York, and Texas Pacific of Fort Worth, Texas, have been partners on earlier utility buyouts. In July 2004, the firms were part of a group that bought Houston-based Texas Genco Holdings Inc. for $3.65 billion. They sold the company, the second-largest power generator in Texas, to NRG Energy Inc. for $5.8 billion in February 2006. </p><div> </div><p> Buyout firms announced a record of more than $700 billion in takeovers last year, and almost $50 billion so far this year, according to data compiled by Bloomberg. Investors, seeking returns that exceed stocks and bonds, poured a $432 billion into private-equity funds last year, also a new high, according to London-based Private Equity Intelligence Ltd. </p><div> </div><p> That money is increasingly going into bigger deals. The average price of the 10 largest buyouts stood at $25.5 billion before the TXU deal was announced, Bloomberg data show. KKR, Blackstone, Texas Pacific, Carlyle Group and Bain Capital LLC each had a role in two of those transactions. </p><div> </div><div> </div><p> Past Investments<br />KKR, founded in 1976, is almost done gathering $16.6 billion for its latest U.S. fund. Past investments include Toys ``R'' Us Inc., Sungard Data Systems Inc. and VNU Group BV. </p><div> </div><p> Texas Pacific was founded in 1992 by David Bonderman, 64, James Coulter, 47, and Bill Price, 50. It raised $15 billion last year. It has invested in about 75 companies, including Burger King Corp. and Continental Airlines Inc. </p><div> </div><p> TXU shares gained $2.38, or 4.1 percent, to $60.02 in New York Stock Exchange composite trading on Feb. 23, the biggest one-day gain in more than nine months. The merger was first reported after exchanges closed, and the shares jumped another $10 in after-hours trading. </p><div> </div><p> The cost of credit-default swaps tied to $10 million in bonds of TXU, rose $254 to $87,475 on Feb. 23, according to Bloomberg data. An increase in the contracts, used to speculate on a company's ability to repay its debt, suggests a deterioration in the perception of credit quality. </p> </div> </div> <div class="post uncustomized-post-template"> <table border="0"><tr> <td width="40"> <br /> </td> <td> <h3 class="post-title"><a href="http://bajaenergys.blogspot.com/2007/02/brasil-gas-natural-profit-falls-58-as.html">BRASIL: Gas Natural Profit Falls 5.8% as One-Time Gains Drop</a></h3> </td> </tr></table> <div class="post-body"> <p>by Kristian Rix (Bloomberg) <br /></p><div>Gas Natural SDG SA, Spain's largest natural-gas supplier, said profit fell 5.8 percent in the fourth quarter because it didn't repeat one-time gains from selling assets.<br /><br />Net income fell to 208 million euros ($274 million) from 220 million euros a year earlier, the Barcelona-based supplier said in a regulatory filing today. The decline was limited by earnings growth at the utility's electricity-generation unit.<br /><br />Chief Executive Officer Rafael Villaseca has built power plants to profit from Spain's reliance on natural gas to meet new electricity demand. The utility was forced to sell most of its gas-transport business because of government regulations, and it failed this year in a plan to acquire Endesa SA, the nation's largest power producer, in a hostile takeover.<br /><br />The shares rose 1 cent to 32.92 euros as of 9:32 a.m. in Madrid. Profit of 195 million euros was expected, according to a Bloomberg News survey.<br /><br />During 2006, Gas Natural booked a 248-million euro gain from the sale of shares in Enagas SA, the operator of Spain's network. Gas Natural had by August met government demands that it sell all except 5 percent of that company.<br /><br />Gas Natural has expanded its supply business in Latin America and built gas-fed power plants in Spain to make up for the loss of its near-monopoly in that market.<br /><br />Villaseca's plan to take over Endesa was thwarted when Germany's E.ON AG, made a higher bid that he could not match. Vice-Chairman Antonio Brufau said last month the gas supplier will now seek other alternatives to link more closely the gas and electricity businesses.<br /><br />New Construction<br />Spain and other European countries are replacing coal-fed power plants with gas-fed units because the latter are more efficient and produce less carbon dioxide, a gas blamed for global warming. Europe's emissions-trading program forces utilities to buy permits for every ton of the pollutant they spew that exceeds their government allotment.<br /><br />Earnings before interest, tax, depreciation and amortization, or ebitda, at Gas Natural's electricity unit in Spain increased more than fourfold to 55 million euros after the utility started a gas-fed power plant in Cartagena, in the south-east of the country.<br /><br />The supplier has 2,800 megawatts-worth of gas-fed power plants and is building another 2,000 megawatts, which it plans to have running by the end of 2008.<br /><br />Gas Natural's Latin American gas business had an ebitda of 97 million euros, up 10 percent, driven by gains at its largest unit, in Brazil.<br /></div><div><a href="http://www.bloomberg.com/">Bloomberg</a><br /></div> </div> </div> <div class="post uncustomized-post-template"> <table border="0"><tr> <td width="40"> <br /> </td> <td> <h3 class="post-title"><a href="http://bajaenergys.blogspot.com/2007/02/usa-citadel-shaw-tudor-shun-global.html">USA: Citadel, Shaw, Tudor Shun Global Warming as Short Sales Climb</a></h3> </td> </tr></table> <div class="post-body"> <p>by Daniel Hauck and Michael Tsang (Bloomberg) <br /></p><div>The smartest money in global warming stocks may be scurrying to the exit just when the enthusiasm for alternative-energy companies is at an all-time high.<br /><br />While SunPower Corp. and Theolia SA are among more than 180 companies whose shares have surged as much as 240 percent this year -- buoyed by efforts to curtail the observed increase in the average temperature of the Earth's atmosphere and oceans --the market's nimblest investors already are hedging their bets.<br /><br />D.E. Shaw & Co., Tudor Investment Corp., Citadel Investment Group LLC, Caxton Associates LLC, SAC Capital Advisors LLC and Pequot Capital Management Inc. reduced their stakes in solar- power and ethanol producers in the fourth quarter, according to filings with the U.S. Securities and Exchange Commission. The hedge funds manage about $86 billion.<br /><br />``As an investment play,'' global warming is ``a bubble'' and ``social short-term craze,'' said Ken Fisher, who oversees $35 billion as chairman of Fisher Investments Inc. in Woodside, California.<br /><br />Anyone looking for corroboration of that assessment may find it in the so-called short selling of U.S. alternative-energy stocks last month, which climbed 45 times faster than the average for Standard & Poor's 500 Index members.<br /><br />SunPower, the biggest U.S. producer of solar energy, had the largest jump in short sales relative to shares outstanding in the Nasdaq Stock Market. Short sellers sell borrowed stock on the bet price declines will let them to buy back the shares at a lower price and profit from the difference.<br /><br />Hedge Funds<br />Hedge funds, whose managers are among the highest-paid professionals on Wall Street, have turned away from the group, including solar-and wind-power producers, ethanol and biodiesel makers and fuel-cell manufacturers, as their shares trade at a record relative to earnings.<br /><br />Hedge funds are loosely regulated investment partnerships tailored to institutions such as pension funds and endowments, as well as people with typically at least $1 million in net worth. They manage an estimated $1.4 trillion in assets.<br /><br />Alternative-energy stocks became more costly as the United Nations said global warming is ``very likely'' caused by humans, President George W. Bush called for a fivefold jump in the U.S. use of renewable fuels over 10 years, and California Governor Arnold Schwarzenegger signed legislation to install a million solar roofs in the state by 2018.<br /><br />Arise, SunPower<br />A group of alternative-energy stocks has risen 18 percent on average this year globally, according to data compiled by Bloomberg. The 183 companies, with a combined market value of $92.3 billion, exceeded a 3.7 percent advance in the Morgan Stanley Capital International World Index.<br /><br />Arise Technologies Corp., which sells solar-powered battery rechargers, had the group's biggest gain. Shares of the Kitchener, Ontario-based company surged 240 percent.<br /><br />The Bloomberg World Energy-Alternate Sources Index, composed of 27 stocks, jumped 22 percent this year. SunPower, based in Sunnyvale, California, reached a record last week, while Theolia, a wind-energy company, gained 113 percent in 2007.<br /><br />Theolia rallied on an agreement to sell a 15 percent stake to General Electric Co., the biggest power-plant equipment maker. GE will pay 20 million euros ($26.3 million) and hand over 165 megawatts of wind farms in Germany to the Aix en Provence, France-based company.<br /><br />Kyoto Treaty<br />The European Union and 35 countries have agreed to cut emissions by 5.2 percent below 1990 levels, starting next year, through 2012 under the UN's Kyoto treaty on greenhouse gases.<br /><br />Even the U.S., which has refused to ratify the Kyoto treaty, said the human role in climate change is no longer debatable after the UN released its Feb. 2 report. The country is the largest emitter of greenhouse gases.<br /><br />Speculation that demand for alternative energy will soar has made the industry's shares more expensive. The Bloomberg World index is valued at 44 times estimated earnings, up from 28 times in June and about triple the ratio for the MSCI World.<br /><br />Companies in the Bloomberg U.S. Energy-Alternative Index are even pricier. Based on forecast earnings, their shares are valued at an average of 60 times. Five of the 12 members of the index reported losses in 2006.<br /><br />Shares of SunPower, which have risen 158 percent since the company's initial public offering in November 2005, trade at 49 times forecast profit. S&P 500 companies on average are valued at 15.7 times estimated earnings.<br /><br />Through the Roof’
In the solar-energy universe, you can see how all the shares have gone through the roof,'' said Rajesh Varma, manager of the $141 million Carmignac Innovation fund in Paris.People have made a lot of money, and now you need to stand back.’‘
Varma, who started looking at alternative-energy stocks two years ago, sold his stakes of Conergy AG and Solarworld AG, Germany’s two largest solar-power companies. He also dumped his shares of Suzlon Energy Ltd., India’s biggest builder of wind turbines, in December.
D.E. Shaw founder David Shaw, who advised former President Bill Clinton on science and technology and made an estimated $340 million in 2005, sold 146,692 shares of SunPower last quarter. The sales at the firm, which manages about $25 billion, reduced its stake by 84 percent.
The firm trimmed its holdings in VeraSun Energy Corp., a Brookings, South Dakota-based company that’s the second-largest U.S. ethanol producer, by 14 percent and in Headwaters Inc., a South Jordan, Utah-based coal processor, by 13 percent.
D.E. Shaw, Tudor
New York-based D.E. Shaw also sold all of its 179,100 shares in Aventine Renewable Energy Holdings Inc., the fourth-largest U.S. ethanol producer, located in Pekin, Illinois. Kari Elassal, a spokeswoman for D.E. Shaw, declined to comment on its holdings.
Tudor Investment, the hedge-fund firm headed by Paul Tudor Jones that oversees $16.1 billion and is located in Greenwich, Connecticut, also cashed out its stake in Aventine. Tudor spokesman Steve Bruce wasn’t immediately available for comment.
Kenneth Griffin’s Citadel, a $13.4 billion hedge fund based in Chicago, and Bruce Kovner’s Caxton, a New York-based fund that oversees more than $12 billion, sold out of SunPower.
Bryan Locke, spokesman for Citadel, declined to comment, while Caxton’s spokeswoman Toby Young was not immediately available for comment.
Thematic Bet'<br />SAC, a $12 billion hedge fund run by Steven Cohen, sold all of its 216,413 shares in Pacific Ethanol Inc. last quarter. The Stamford, Connecticut-based fund bought the stock in the third quarter. Pacific Ethanol, based in Fresno, California, counts Bill Gates as its largest holder.<br /><br />Pequot Capital, a $7.6 billion fund manager based in Westport, Connecticut, sold its shares of Headwaters. The firm also reduced its stake in Covanta Holding Corp., a Fairfield, New Jersey-based company that produces energy from municipal solid waste, by almost half.<br /><br />Jonathan Gasthalter, a spokesman for SAC, and Christopher Kittredge, a spokesman for Pequot, both declined to comment.<br /><br />``The unwinds in those positions were probably somewhat correlated to the reduced demand and pricing pressures in oil,'' Talbot Stark, BNP Paribas SA's global hedge fund relationship manager, said in London. ``It was a thematic bet, so if you see oil prices come off and they dip down to $52 or so, the whole momentum in alternative energy sources abates for a moment.''<br /><br />Crude-oil futures, which reached a record $78.40 a barrel in July, fell to as low as $54.86 in the fourth quarter.<br /><br />More Shorts<br />This quarter, hedge funds and other investors that can profit from share-price drops have increased their bets against U.S. alternative-energy stocks, industry statistics indicate.<br /><br />The total short interest on the companies in the Bloomberg U.S. index of alternative-energy stocks surged 68 percent last month on average. First Solar Inc., a Phoenix-based maker of solar modules that sold shares to the public on Nov. 16, had the biggest increase in short interest with a 626 percent jump.<br /><br />Excluding First Solar, short interest climbed 12 percent, compared with a 1.5 percent increase for S&P 500 companies, calculations by Bloomberg show.<br /><br />Almost half of SunPower's float, or shares available for trading, was borrowed and sold as of mid-January. The short interest rose 15.4 percentage points from mid-December, the biggest increase for any Nasdaq-listed company. This month's figures are due this week.<br /><br />``By itself, I don't know that global warming is a viable investment theme,'' said Malcolm Polley, who oversees $1 billion at Stewart Capital Advisors LLC in Indiana, Pennsylvania. ``It's largely Wall Street's answer of trying to create something where there really isn't anything that exists.''<br /><br />Citigroup, Lehman<br /><br />Citigroup Inc., the biggest U.S. bank, Lehman Brothers Holdings Inc., the fourth-largest U.S. securities firm, and UBS AG, the world's biggest money manager, each published 100-plus page reports this year on how investors can capitalize on efforts by governments and companies to combat global warming.<br /><br />``We're approaching a perennialtipping point,’‘’ Ed Kerschner, Citigroup Investment Research’s chief investment officer and the author of the firm’s report, said from New York. You're going to get some imminent responses. These things are going to happen in 2008 and 2009, not 20 years from now.''<br /><br />SunPower was among 74 companies identified by Citigroup that stand to profit from demand for clean-energy technologies. The list also included Q-Cells AG, a solar-cell maker based in Thalheim, Germany, and Cropenergies AG, an ethanol producer located in Mannheim, Germany.<br /><br />Ian Scott, Lehman's global equity strategist in London, included two wind-turbine makers among his firm's 15 picks: Randers, Denmark-based Vestas Wind Systems A/S, the world's biggest, and Clipper Windpower Plc, based in London.<br /><br />Ethanol Shares<br />Alternative-energy stocks have slumped before. Since surging to a record in May, Pacific Ethanol has lost more than half its value on concerns the stock price had outstripped demand for the fuel and that prices of corn, used to make ethanol, are rising.<br /><br />Some solar-energy companies have slid because of their inability to turn a profit even as demand increases. Marlboro, Massachusetts-based Evergreen Solar Inc. said this month that its fourth-quarter loss was $5.5 million, wider than a year ago, as revenue almost tripled. The stock had the biggest decline in seven months after the results were announced.<br /><br />Alternative energyis all the rage,’’ said Stuart Schweitzer, New York-based global strategist at JPMorgan Asset Management, which oversees about $1 trillion. That does not mean that as an investor you'll be able to make money.''<br /></div><div><a href="http://bloomberg.com/">Bloomberg</a><br /></div> </div> </div> <div class="post uncustomized-post-template"> <table border="0"><tr> <td width="40"> <br /> </td> <td> <h3 class="post-title"><a href="http://bajaenergys.blogspot.com/2007/02/usa-ge-lehman-backing-for-emissions.html">USA: GE, Lehman Backing for Emissions Curbs Puts Heat on Congress</a></h3> </td> </tr></table><span class="post-labels"><div> <div align="right"><a href="http://feeds.feedburner.com/baja-EnergyBlog-laveaga"><img border="0" alt="www.BajaeNergyBLOG.com" src="http://feeds.feedburner.com/baja-EnergyBlog-laveaga.gif" style="border: 0pt none ;" /></a></div> </div></span> <div class="post-body"> <p> by Kim Chipman and Tina Seeley (Bloomberg) <br /></p><div>Senator James Inhofe, who calls the consensus that humans cause global warming a corruption of science, shot off a warning letter to more than 60 chief executive officers in December. The Oklahoma Republican told the leaders not to support bills this year to cap carbon dioxide emissions, saying Wall Street might penalize shares of their companies. </div><p> The admonition was Inhofe's latest salvo to derail the growing movement of companies, scientists and lawmakers pushing for mandatory limits on the release of greenhouse gases. </p><div> </div><p> In January, a new alliance of corporations including General Electric Co. called for caps in the U.S., which emits a quarter of the world's carbon pollution. Two weeks later, a United Nations panel released its finding that humans are the main cause of global warming. Both moves emboldened Democrats, who've introduced five bills to reduce greenhouse emissions. </p><div> </div><p> Inhofe isn't conceding defeat yet. The 2008 presidential election makes it less likely the U.S. will enact carbon caps anytime soon, says Christine Todd Whitman, a former Republican governor of New Jersey and head of the Environmental Protection Agency. </p><div> </div><p>It’s going to be hard,’’ says Whitman, who’s now a consultant on environmental issues. Watch out for the very fulsome discussion that always ends with a poison pill. One side will insert something into the final bill that they know the others can't accept in order to have it as a campaign issue in 2008.'' </p><div> </div><p> The United Nations panel predicts temperatures are likely to increase by 1.1 to 6.4 degrees Celsius (2 to 11.5 degrees Fahrenheit) by the end of this century and the global sea level may rise 18 to 59 centimeters (7 to 23 inches). That jump might submerge large parts of the barrier islands and damage property along the coasts of Florida and the Gulf Coast, scientists say. </p><div> </div><p> McCain's Cap Bill<br />The warmer temperatures are accelerating the melting of Arctic sea ice, which spurred the U.S. Fish and Wildlife Service in December to propose listing polar bears as a threatened species. James Hansen, the U.S. government's top climate scientist, says the U.S. must begin to slow carbon emissions in the next 10 years to prevent large-scale, irreversible damage to ecosystems and economies around the globe. </p><div> </div><p> Presidential hopeful John McCain, a Republican senator from Arizona, helped draft legislation for acap and trade’’ program: Polluters emitting less carbon than allowed under the law would be able to sell or trade their excess pollution permits to others.
The measure has been co-sponsored by nine senators, including two Democrats running for the White House: Hillary Clinton of New York and Barack Obama of Illinois.
The political ground has shifted,'' says Senate Energy Committee Chairman Jeff Bingaman, a New Mexico Democrat.There’s a real prospect for passing legislation.’’
Corporate Climate Alliance
The U.S. Climate Action Partnership, an alliance of 10 corporations including securities firm Lehman Brothers Holdings Inc. and power producer Duke Energy Corp., gives Democrats a boost, says Timothy Wirth, a former senator and climate negotiator for President Bill Clinton. Wirth calls the alliance the most significant development in addressing climate change since the 1997 Kyoto Protocol, the multinational agreement that President George W. Bush opposed because he said it would hurt the economy.
It will provide every political figure with a lot of cover,'' Wirth says. </p><div> </div><p> Duke Energy, one of the nation's largest generators of coal- fired power, says carbon regulation is inevitable and would prefer Congress to enact rules so it can plan for the future. For members like GE, carbon caps are also a market to exploit, says James Rogers, CEO of Charlotte, North Carolina-based Duke Energy. </p><div> </div><p>It’s an opportunity for many of our businesses to develop technologies that could be used worldwide,’’ he says.
Edison Electric Institute Row
Inhofe, the ranking Republican on the Senate Committee on Environment and Public Works, said that carbon caps legislation wouldn’t likely get the votes needed to pass. Carl Pope, executive director of the Sierra Club, an environmental group that lobbies in Washington in favor of carbon limits, agrees.
You still have a lot of senators from states that view themselves as carbon producers,'' Pope says.And you have a lot of senators ideologically opposed to having the federal government do anything.’’
Edison Electric Institute, a Washington-based lobbying group for utilities such as Southern Co. and Duke Energy, has a divided membership on emissions caps. The participation of Duke Energy and other utilities in the alliance caused a row within the EEI, with some members suggesting Rogers should be stripped of his title as chairman of the group, according to people who requested anonymity because they aren’t permitted to talk on the matter. Rogers declined to comment on this matter.
China Waits
In February, EEI issued a statement in favor of federal legislation to reduce emissions. The vaguely worded release, which made no mention of mandatory caps, said any legislation must have minimal economic impact. Electricity prices would jump as much as 13 percent as utilities passed on the costs of compliance to consumers under a bill Bingaman is drafting, according to a U.S. Energy Department estimate.
China and India are waiting for the U.S. to impose caps before they do, says Abyd Karmali, a managing director at Fairfax, Virginia-based ICF International Inc., an adviser to nations on the Kyoto Protocol.
China and India will definitely not take on caps before a country they believe has the moral responsibility to reduce emissions first,'' Karmali says. </p><div> </div><p> The U.S. released 19.7 metric tons of energy emissions per person in 2004 compared with 3.7 metric tons for China, the International Energy Agency says. </p><div> </div><p> Bush's Legacy<br />European Union lawmakers say the region plans to cut its greenhouse gasses 20 percent by 2020 compared with 1990 levels. The EU would increase that figure to 30 percent if the U.S. imposed caps, says European Environment Commissioner Stavros Dimas. </p><div> </div><p> Bush, who acknowledged that climate change was a serious challenge in his State of the Union address in January, may be more willing to support legislation as he considers his legacy, says Senator Tom Carper, a Delaware Democrat. Carper says he spoke to Bush the day after the State of the Union at a visit to DuPont Co. in Delaware. </p><div> </div><p>A parade is forming, a consensus is forming here,’’ Carper says he told the president. You need to lead the parade.'' </p><div> </div><p> The senator, who also raised the matter with the president nine months earlier at the White House, perceived a change in Bush.I think he was just more receptive,’’ Carper says.
If not, the next president will have to decide whether higher electricity bills are a cost worth paying to reduce the risk of devastation from melting icecaps and rising seas.
