The US Climate Action Partnership

A novel, pragmatic alliancefor promoting legislativeaction on climate changeEd Whittingham • Researcher and Author

July 2008

The US Climate Action Partnership:

S u s t a i n a b l e E n e r g y S o l u t i o n s

Sustainable Energy Solutions

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Introduction............................................................................................................1

Acknowledgements............................................................................................4

1 Why USCAP, Why Now?.............................................................................5

2 USCAP: Formation and Structure ...............................................................8

2.1 Early group formation..................................................................................8

2.2 USCAP organizational structure..................................................................10

2.3 USCAP funding model...............................................................................12

3 “A Call for Action” and Growing Pains..................................................13

3.1 “A Call for Action” development.................................................................13

3.2 Post-“A Call for Action” period: Challenges amidst growth............................15

Afterword: Lessons from the USCAP Experience ........................................18

Table of Contents

1 U S C A P R E P O R T • T H E P E M B I N A I N S T I T U T E

Introduction

From time to time, for-profitcompanies and non-profit,environmental non-govern-

mental organizations form “novel, pragmatic alliances”1

between each other to pursue sustainable development goals of mutual importance. For example, the Clean Air RenewableEnergy (CARE) Coalition and theAlberta Ecotrust Foundation are twoCanadian coalitions of companies andENGOs that are lobbying and grant-making respectively to achieve sharedobjectives. In the United States there is the Climate Savers program, a WorldWildlife Fund initiative aimed at establish-ing partnerships with innovative compa-nies to help them voluntarily reduce theirGHG emissions. The U.S. Climate ActionPartnership (USCAP) is also one suchnovel, pragmatic alliance.

USCAP is a coalition of 27 transnationalcompanies and six major U.S. environ-mental non-governmental organizations(ENGOs) advocating for strong nationallegislation to reduce greenhouse gasemissions. It is novel because neverbefore in the U.S. has a cross-sectoralliance been formed with the explicitintent of lobbying federal lawmakers foreffective, binding greenhouse gas legisla-tion. The World Resources Institute (WRI),a founding USCAP member, sums up theuniqueness in the following way above:2

It is pragmatic in that it draws upon thestrengths that both sectors bring with themto the table. Although still in its infancy –USCAP’s founding members only publiclyannounced the partnership in January2007, with its “A Call for Action” report – the group claims to have already influenced the thinking of law-makers on greenhouse gas legislation,USCAP’s raison d'être. Two representa-tives of USCAP member organizationsdescribed examples of the coalition’s influence in this way:To date, four legislative proposals beforelawmakers are roughly within the rangeof targets outlined in “A Call for Action,”

The US Climate Action Partnership

1 S. Sanderson, “The Future of Conservation,” Foreign Affairs 81,no. 5 (2002): 162.

2 www.wri.org/climate/topic_content.cfm?cid=4268

z USCAP is unprecedented. This is the first time at this scale that

major U.S. corporations and environmental NGOs have unit-

ed behind common principles and recommendations.

z USCAP is calling for mandatory regulation, including a cap

and trade system with fixed limits on emissions.

z USCAP is urging significant emissions reductions, relative to

current levels, starting within a year of rapid enactment.

“The Lieberman-Warner bill [a leading Senate climate changebill] is pretty obviously based on “A Call for Action.” Lieberman-Warner is the vehicle on the Senate side, and we had a direct line of communication going with Lieberman-Warner staff.Everything in the bill is not necessarily agreeable to all USCAPmembers, but its details are clearly influenced by the Call.”

U S C A P R E P O R T • T H E P E M B I N A I N S T I T U T E 2


as the figures3 below illustrates, althoughit is important to note that all the billswere developed before USCAP cameinto being. Whether through its directlobbying efforts, testimony at hearings,publishing position papers or serving as

a consensus-based consultation body,USCAP aims to influence the progress ofthese bills.In September 2007, the Pembina Institutedecided to investigate USCAP, partly to

3 Figure 1 is available at the USCAP website: www.us-cap.org/www.us-cap.org, while Figure 2 was prepared for USCAP by the WorldResources Institute chart and is available at www.wri.org/stories/2007/01/uscap-recommendations.

“Bingaman and Lieberman-Warner have all put bills within the

USCAP context. The first hearing on the Congress side pulled

USCAP NGOs and corporate CEOs in to testify. The Congress

committee wants to be as close to USCAP as possible.”

Figure 1:USCAP’s recommendedemissions reductionrange, presentto 2022

Figure 2:USCAP’s recommendedemissions reduction rangerelative to proposed U.S.>GHG reductionbills, present to 2050

understand it as one example of a cross-sector partnership for sustainable develop-ment4 and partly to understand it as apotential vehicle for influencing climatelegislation. Some key questions drove thisinvestigation: How and why did thisgroup of unlikely, counterintuitive bedfel-lows come together? How is it organizedand funded? What have been the majordevelopments in its short existence? Whatlessons does USCAP have to offer tothose operating in other jurisdictions?Because of its newness the coalition hasreceived little review or study by an out-side party, and answers to these funda-mental questions remain undocumented.For those interested in both novel, prag-matic cross-sector partnerships and waysto influence greenhouse gas legislation, aprimer on USCAP from an insider per-spective would help in understanding thepotential and limitations of the USCAPmodel in other jurisdictions. To producethe primer, Ed Whittingham, the co-direc-tor of Pembina’s corporate consultancy,conducted semi-structured interviews inOctober and November 2007 andFebruary 2008 with five representativesof USCAP member organizations andadministrators. This report comprises thefindings from the interviews.

The report is organized as follows:z Section 1, “Why USCAP, Why Now?”

presents some of the political and eco-nomic drivers that interviewees men-tioned as contributing to the genesis ofUSCAP, in the context of other, docu-mented success factors for cross-sectorpartnerships.

z Section 2, “USCAP Formation andStructure” briefly outlines the sequenceof events in the establishment ofUSCAP, as well as key points on howthe coalition is organized andresourced.

z Section 3, “A Call for Action” andGrowing Pains” outlines the major stepsin the development of the coalition’smost key policy document to date. Italso documents some of the challengesthat the group faced in the post-“A Callfor Action” period. Capturing thenature of the “growing pains” in thewords of USCAP members is with theintent of helping others avoid the samein comparable jurisdictions.

z Finally, an afterword section, “Lessonsfrom the USCAP Experience” presentsinterviewee recommendations for othersconsidering similar initiatives in the con-text of the coalition’s successes andchallenges to date.



4 See www.corporate.pembina.org/partnerships for a summary of the institute’s past research into cross-sector partnerships for sustainabledevelopment.



As an interview-based report, there arefour things to note:i) Throughout the report, interviewees are

not identified by name to ensure confi-dentiality.

ii) Wherever possible the report uses thewords of interviewees to tell theUSCAP story. Direct (but unattributedquotes) are indicated by quotationmarks and text boxes.

iii) It is worthwhile noting that the report is not meant to be exhaustive; rather, it is designed to provide brief, timelyinformation not documented elsewhereto others contemplating the role ofUSCAP-like initiatives in their own jurisdictions.

iv) The report is not designedto present or critiqueUSCAP policy positions.To understand USCAP policy the reader shouldread “A Call to Action”and the group’s variouspolicy statements, avail-able at www.us-cap.org/.

AcknowledgementsThe Pembina Institute and Ed Whittinghamthank Alcan, the Alcoa Foundation, Dow Canada, Dupont Canada, General Electric Canada, the Institute of International Education and the World Wildlife Fund for their support and advice toward the preparation of this report. They also thank the followinginterviewees for their time and input: Larry Boggs (GE), Michael Parr (Dupont),Truman Semens (Pew Center on GlobalClimate Change), Jennifer Layke (WRI)and Tim Mealey (Meridian Institute). Any inaccuracy in the report is the fault of Pembina and Whittingham and notthat of any interviewee.



Before examining the mechanics of USCAP, it isworthwhile understanding

some of the historical, political andbusiness drivers for its origins.Specifically, why do participatingcompanies and ENGOs feel that theparticular USCAP model of partner-ship is their best route to achievingtheir organizational goals for GHGlegislation, instead of acting inde-pendently?After all, cross-sector partnering is not with-out its risks. For industry, it can be an actof “letting the hen into the fox house,” i.e.,exposing senior decision making to a tra-ditional adversary. Further, businesseshave a higher financial risk when collabo-rating with the non-profit sector, as typical-ly they bear the lion’s share of costs(although with USCAP costs are muchmore evenly allocated than is typical – seesection 2.3, “USCAP funding model”). Foran ENGO, reputation is critical to attract-ing donor funding and influencing stake-holders. Collaboration with the “wrong”for-profit organization (i.e., one that has anegative reputation within the ENGO com-munity or among donors) can have detri-mental effects on that reputation, with pre-dictable repercussions for both influenceand funding. For all parties, there is theongoing risk of draining staff time, energyand expertise through pursuing collabora-tion that in the end does not live up toexpectations or objectives.

Several drivers led to the willingness toattempt to overcome these risks, and ulti-mately to the emergence of USCAP:

More politically effectivetogether than separatePerhaps first and foremost, collaborationon pushing for GHG reduction legislationwas seen as a means of increasing thepolitical effectiveness of the two sectors inovercoming government cautiousness onthe issue. Collaboration between groupswith divergent views often grabs the atten-tion of government and increases aware-ness of a particular issue. In this case,USCAP ENGOs and companies alikesensed strength in numbers could lead to apolitical win. In other words, strange bed-fellow coalitions tend to be more powerfulthan sectors operating independently.

While the advantage for ENGOs workingwith companies is clear – such as beingable to influence large emitters early in thelegislative process, then joining forces withtheir corporate considerable lobbyingclout and resources – the advantage forcompanies to work with ENGOs, particu-larly for those in jurisdictions where

1. Why USCAP, Why Now?

“It’s very different to have companies and ENGOs walkingtogether and presenting a common front. The strength of theLieberman-Warner bill is because [corporate and ENGO] CEOstestified to conservative republicans that it’s time to act. Warnersaid that he has to think about things differently because theCEOs together were making the ask.”



ENGOs are poorly funded and small insize relative to U.S. ENGOs, may be lessso. A corporate interviewee described thecorporate side’s incentive in this way:

Pre-regulatory engagementdecreases riskInterviewees acknowledged the risks associated with an adversarial approachduring or after a regulatory consultationprocess. Early engagement betweenENGOs and industry helps to create botha clearer understanding of the commonground and identify legitimate differencesin goals, and in doing so mitigates risk. It gives more time and space for ENGOsto achieve buy-in to the solutions they aresuggesting inside the tower of industry. For industry’s part, it can avoid costly and undesirable arbitration or hostileaction by ENGOs further downstream.One interviewee noted the risk of corporate inaction that ENGOs posed:

Right timingSelect companies have been voluntarilyreducing their greenhouse gas emissionssince the nineties. The first major ENGO-industry coalition program focused specifi-cally on reducing corporate emissions wasthe WWF’s Climate Savers program,established in 1999. While efforts likeClimate Savers have helped to lay thefoundation and set precendents for therecent spate of corporate action on cli-mate change, recent political (such asstate-level climate change initiatives) andcultural events (such as the popularity ofthe film “An Inconvenient Truth”) have alsoprovided propulsion. One interviewee sug-gested that the combination of publicattention on the climate change issue anda shift in political power in Washingtoncreated a favourable environment for thediscussions to get traction.

“The other side [those opposing binding GHG legislation] willhave more money and more everything, but there is sense ofdefeat on their side. There is a sense of inevitability because theNGOs’ ground forces [i.e., their members] are so much more onUSCAP side. With the NGO memberships with us, victory isinevitable. It’s only an issue of timing, and everyone now knowsit’s inevitable.”

“For years industry espoused market solutions. Well, ENGOsstarted to use the power of the market themselves – either youcan join us in market-based solutions, or we will use the marketagainst you to shift you. If ENGOs can get customers to changetheir behaviour, the company will always follow. USCAP comespartly from a growing recognition that markets can be harnessed.”



Precedents for collaborationThere was also a historical precedent forthis kind of collaboration. While USCAP isunprecedented as a cross-sector partner-ship to influence greenhouse gas legisla-tion, it is arguably a “reemergence of an old model” of consensus and collabo-ration in the U.S. between environmentallegislation stakeholders, one that has re-emerged with the climate debate. As one interviewee said:

Enough trust and understand-ing existed among actorsAll mentioned the high level of existingtrust between key founding organizations.As is perhaps intuitive, trust is a key ingre-dient to partnerships with the other. At aNovember 2006 Pembina-hosted forumon cross-sector partnerships, participantsidentified maintaining trust and honestybetween collaborating partners as at thecore of separating successful from unsuc-cessful collaboration.5

Understanding of the other is also impor-tant. Some interviewees for this projectspecifically mentioned that each ENGOhad its own corporate advisory committee.At the aforementioned November 2006forum, when discussing “What are thebest things that ENGOs and industry cando for one another?” industry representa-tives mentioned demonstrating an under-standing of the business world as a keyconsideration on their list, while ENGOsmentioned trying to understand life as an ENGO as fundamental to them. The interaction created through bodies like corporate advisory committees can help to sensitize each side to working collaboratively with the other.

“Why now? Two reasons. One, the science and publicawareness of the issue were growing considerably.Two, politically, the dynamic was changing. When thisadministration was first elected, there was no reason towork on the issue. Even people who thought somethingshould be done went on to other things. Now, in the twilight of the administration, it’s modifying its tone and paying more attention. USCAP is at the confluenceof the political centre moving away from the White House to Congress and public attention [on climate change] solidifying.”

“Up to 1990, almost all environmental legislation in the U.S.was done through some form of consensus process andbipartisan approaches. The 1990 Clean Air Act was titanic– it cut across the U.S. economy. People tired themselves out,and in the process it opened up a divide. When theRepublicans gained Congress in 1994, the approachbecame further divided. USCAP is actually a reemergenceof an old model, but one that arose outside of the politicalprocess instead of within.”

5 See http://corporate.pembina.org/pub/1377 for the full proceedings report on the 2006 “Thought Leader Forum on EnvironmentalNGO-Industry Collaboration.”



2.1 EARLY GROUP FORMATION

Across the interviews,accounts of the order of events in early 2006

that led to the birth of USCAP suggest the following chronology. (Note that specific group and individualnames have been omitted at the request ofinterviewees.)z In early 2006, conversations were tak-

ing place among different actors on thepotential for a cross-sector partnershipfor influencing emerging U.S. GHG leg-islation. One interviewee suggestedthat “four different simultaneous effortswere occurring around town,” (i.e.,Washington, DC), involving two found-ing companies and two foundingENGOs.

z One of these company-ENGO, CEO-to-CEO conversations dealt with opera-tional opportunities at the company toreduce GHG emissions. While theENGO CEO was supportive of thework, he also understood the need fora policy roadmap to allow companiesthat have reduced their emissions tosucceed in the marketplace. Some timelater, around spring 2006, the ENGOCEO and a counterpart discreetlyapproached the company CEO to askhim if he was interested in forming asmall group to develop principles foraction on climate change, specificallyto influence emerging U.S. legislation.

z The company CEO agreed, recogniz-ing the strategic opportunity that bind-ing GHG legislation presented for com-panies producing GHG efficient prod-ucts. Two other ENGOs quicklybecame involved. From there, the fiveorganizations – the company and thefour ENGOs – immediately invited oneother company “at the top of their list”to take part.

z The initial group of six drafted a short-list and discreetly invited other compa-nies to become founding organizations.Of note, more companies wereapproached during those early stagesof effort than the eventual eight otherswho “signed on” and endorsed “A Callfor Action.”

z One interviewee put the essence ofUSCAP’s early formation in very simpleterms: “All of them [founding CEOs]were running around talking to like-minded individuals. Once they bumpedinto each other, they decided to con-geal into one.”

Interviewees also generally agreed upon several key points relating to theearly discussions:z Early discussions were CEO-to-CEO,

informal and unfacilitated at first. (TheMeridian Institute was brought on as aprofessional facilitator only after anagreement in principle was reached byfounders on the intent of the group.)Early discussions took time: in fact, theearly group did not meet face-to-faceuntil three to four months after discus-sions began.

2. USCAP: Formation and Structure



z Contrary to typical agenda-dominatedENGO-industry processes, USCAP wasnot a case of ENGOs coming to indus-try with questions or demands. Rather,the intent of the group was clear fromthe start: co-create and articulate principles for effective GHG legislationand work toward the enactment of legislation as close to those principlesas possible.

z With six founding groups saying go,eight others were easy to get on board.As noted above, more companies wereapproached than just the eight whojoined.

z While the founding companies were“seen as naturals” given their existingrelationships with the founding ENGOs

and interest in promoting greenhousehas legislation, from there USCAPaimed to add representation from keysectors to the coalition. By diversifyingits membership, USCAP hoped toincrease its influence with law makers.

This intent accounts for the large numberof sectors that USCAP members collective-ly represent, such as chemicals, oil andgas, mining, consumer goods, power,power generating equipment manufactur-ing, and automobile manufacturing. Still,diverse representation brings with it diver-sity of interests, leading to some of the“messiness” discussed in Section 3.2.

Table 1: Founding USCAP Members

Alcoa General Electric

BP America Lehman Brothers

Caterpillar Inc. Natural Resources Defense Council

Duke Energy Pew Center on Global Climate Change

DuPont PG&E Corporation

Environmental Defense PNM Resources

FPL Group World Resources Institute

Table 2: USCAP membership as of March 2008 –ENVIRONMENTAL NGOS

Environmental Defense

National Wildlife Federation

Natural Resources Defense Council

The Nature Conservancy

Pew Center on Global Climate Change

World Resources Institute

“By “informal” no one was recording conversations,

synthesizing or reporting back. Rather, emails were sent

back and forth; there was no synthesis, nor was there one

set of documents that was circulating. All of it was done

in very informal, unstructured way that became a big part

of the trust building. Doing so gave all a sense of who the

others were, and where they were coming from.”

U S C A P R E P O R T • T H E P E M B I N A I N S T I T U T E 1 0


2.2 USCAP ORGANIZATIONALSTRUCTUREWhen USCAP got going in early2006, it had by one account “zerogovernance.” As discussion pro-gressed and subgroups were creat-ed, representatives realized that thecoalition needed more structure andorganization. This realization led toa more formalized structure, notunlike that of other policy-focusedcoalitions.Typically, there are one to three represen-tatives per member organization whoserve USCAP in some capacity. The levelof involvement in the different USCAP com-mittees and working groups varies widelyamong the member organizations. Whilesome are “always very involved, some justhave one person who tracks progress atsteering committee, and that’s it.”CEO representatives serve as the coali-tion’s board, at the top of the hierarchy.They meet infrequently, about once every

Table 2: USCAP membership asof March 2008 – COMPANIESAlcan Inc.

Alcoa

American International Group, Inc. (AIG)

Boston Scientific Corporation

BP America Inc.

Caterpillar Inc

Chrysler LLC

ConocoPhillips

Deere & Company

The Dow Chemical Company

Duke Energy

DuPont

Exelon Corporation

Ford Motor Company

FPL Group, Inc.

General Electric

General Motors Corp.

Johnson & Johnson

Marsh, Inc.

NRG Energy, Inc.

PepsiCo

PG&E Corporation

PNM Resources

Rio Tinto

Shell

Siemens Corporation

Xerox Corporation

“Originally some companies were seen as naturals.

We intentionally decided to have adequate sector breadth;

for example, we needed an adequate blend of nukes, coal

burners, energy intensive manufacturing, primary metals.

We really wanted a coal mining company, and we really

wanted autos in. Then we decided who would be best to

approach and which companies.”



few months. A steering committee is com-prised of one representative from eachentity. It meets every other week andmakes policy decisions for board (CEO)approval. Within the steering committeethere is a smaller executive committee,comprised of the heads of the various sub-committees. Sub-committees include agovernment outreach committee, a commu-nications committee (“mostly staffed bycommunications pros”) and a membershipcommittee, and are open to anyone toparticipate. Representatives from bothENGO and corporate sectors chair thesteering committee and all sub-committees.Beneath the steering committee sit fourwork groups: transportation, international,

credit for early action and technologyR&D. Work groups are typically small,made up of only two to three people.The Meridian Institute and LighthouseConsulting serve as “Coalition Co-Coordinators.” Meridian handles adminis-tration and governance, while Lighthouseis responsible for public and governmentaffairs work. (Of note, four people atMeridian work full-time on USCAP matters.) Powell Tate, a strategic com-munications and public affairs firm, was retained in December 2006 for communications work.Figure 3 presents a visual representationof USCAP’s organizational structure.

Figure 3: USCAP Organizational Structure



2.3 USCAP FUNDING MODELBefore the formalization of USCAP’s struc-ture, to pay for group expenses such asfacilitation fees, “for a long time [mem-bers] were just tin cupping.” A coalitionof USCAP’s size and ambition is pre-dictably expensive to run. As membersrecognized the need to secure moreresources for organization and outreach,the steering committee developed a strawbudget. USCAP’s total annual budget for the period following the release of “A Call to Action,” February 1 –December 31, 2007 is $2.35 million.Contributions to the budget are requiredby all organizations, but not at equal lev-els. During the “tin cupping” stage it wasdecided that each company would payone share, while each ENGO pays a halfshare. This same oneshare/half share formula isstill used for the larger, longer-term contributions nowrequired of members.Assuming 30 total shares –27 full and 6 half – the 2007budget would have requiredcompanies to contribute$78,333 each and ENGOs$39,166 each.

For a coalition of such considerable ambi-tion, its budget is modest. Members con-sider themselves to be working on aslimmed down model relative to theiropposition (considered by one intervie-wee to be “coal and oil, and less so theChamber [of Commerce]”). The corporate-NGO pairing allows them to save on thePR front:

“USCAP companies are cheap – we’re not extravagant

spenders, because we have the NGO ground forces.

It’s amazing how thin the budget actually is. Most of the

companies that participate in coalition are not big spenders

on this issue – you don't see ads running on the airwaves.

Instead, USCAP is playing the inside game.”



3.1 “A CALL FOR ACTION” DEVELOPMENT

W ith the founding 14 groups in place, representatives began

meeting to develop what eventuallybecame the “A Call for Action:Consensus Principles andRecommendations from the U.S.Climate Action Partnership.”6

Developing the three specifics of the call,the six design principles that USCAPwould come to espouse and the 15 recommendation categories proved noeasy task: while membership meant thatan organization had to agree to a manda-tory system, “everything beyond that thegroup had agreed to deliberate about.”There are several points that intervieweesnoted about this period:

The development of “Call”principles was a “slog”z Principles were developed and

approved within the first six months ofUSCAP’s existence. To make decisionson the principles, the full group at thestaff level “slogged” through discussionsto get to staff-level consensus. When no consensus was reached, staff andfacilitators strove to get the options asnarrowly framed as possible for CEOs,who subsequently made the necessarydecisions.

Cap and trade was quicklychosen over carbon taxes or a hybrid systemz Carbon taxes as an option were dis-

missed at the outset of discussions. BothENGOs and companies felt that a cap

3. “A Call for Action”and Growing Pains

A Call for Action: Introductory Statements

z We Know Enough to Act on Climate Change

z The Challenge Is Significant, but the United States

Can Grow and Prosper in a Greenhouse Gas

Constrained World

z We Need a Mandatory, Flexible Climate Program

USCAP Principles:

1. Account for the global dimensions of climate change

2. Create incentives for technology innovation

3. Be environmentally effective

4. Create economic opportunity and advantage

5. Be fair to sectors disproportionately impacted

6. Reward early action

6 The full document is available at the USCAP website: www.us-cap.org/



and trade system, and not carbon taxesor a hybrid of the two, should becomethe backbone of the “Call.” Accordingto interviewees, this was for three rea-sons: one, the political climate in theU.S. is not conducive to calling for theintroduction of a new tax. (Said oneinterviewee, “no new taxes is theRepublican mantra.”) Two, environmen-tal groups are skeptical of a carbon taxas in the absence of an emissions capor high enough price, it does not guar-antee the behavioural change neces-sary to reduce emissions. Three, thefounding NGOs and companiesargued strongly against a carbon tax,influencing those who followed:

(Still, the spectre of select carbon taxinghas not been completely dismissed byUSCAP. The CEO of a company thatjoined USCAP in late 2006 has saidpublicly that taxes would be the bettermechanism. Partly as a result of thisCEO’s efforts, the “Scope of Coverageand Point of Regulation of the Cap andTrade Program” section of the “Call” —the only part of the document that pres-ents options — includes the option of“another policy tool applied to the car-

bon content of fossil fuels” used as partof a “hybrid” program. This implies acarbon tax specific to transport fuel andis apparently a point still being deliber-ated upon by USCAP.)

CEOs pushed for policy recommendations in addition to principlesz In July 2006, the idea of making policy

recommendations in addition to princi-ples was first proposed by CEOs. Upuntil this point, staff member representa-tives did not think that USCAP wouldcome to consensus on policy recom-mendations and were planning to onlygo as far as articulating principles. InDecember 2006, CEOs met to agreeon the proposed policy recommenda-tions for a January 2007 unveiling.

Dealing with coal was problematicz The group’s position on coal-fired

power plants attracted the first realpress attention and political push back.Some organization leaked a story inDecember 2006 to the Wall StreetJournal that USCAP would call for amoratorium on new coal-based energyfacilities. The ensuing article caused arash of last-minute meetings amongCEOs, including the night before theJanuary 22, 2007 release of the“Call”, to clarify the group’s position.Eventually the recommendation catego-ry dealing with new coal-based plantswould be changed:

“When membership expanded from the founding NGOs and

other companies, there was a set of principles that all had to

agree to join. Mandatory reductions were part, and they were

not specified as coming from cap and trade, but it was

presumed so. That presumption bore out very quickly.”



(An interviewee put the crux of theissue in plainer terms: “If the [carbon]price is too low, utility companies can still do pulverized coal, buy the allocation and go ahead with businessas usual. The environmentalists don’twant that to happen. That’s why theyare opposing coal that isn’t IGCC[Integrated Gasification CombinedCycle, sometimes called “clean coal”]and with CCS [carbon capture andstorage].)The leak clearly challenged the still nascent coalition, requiring “the mostintensive facilitation” of any point in itsshort history. Further, the issue of coalcontinues to be divisive and carry withit important political implications, asexplained in the following section.

3.2 POST-“A CALLFOR ACTION” PERIOD: CHALLENGESAMIDST GROWTHAll interviewees pointed to the periodimmediately after the “A Call for Action”launch (February–early April 2007) as adifficult time for USCAP, rife with confu-sion and a lack of clarity about whatwould happen next and the appropriaterole for the facilitator (Meridian). Manycomments addressed this period.

Why did USCAP decide to modify the sectionin A Call for Action relating to new coal-based energy facilities? 7 Initial press inquiriesrevealed that there was confusion regarding theUSCAP recommendation on new coal-based energyfacilities. Some interpreted the original language to mean that USCAP was advocating a de facto moratorium on new coal-fired power plants. This wasnot the group’s intent. Therefore USCAP decided to change the paragraph to state the members’expectation that coal will continue to play a role in ourenergy future, while also emphasizing that policies areneeded to speed the transition to low-and-zero emission stationary sources that can cost effectivelycapture CO2 emissions for geologic sequestration.

“Like a dog trapped in a car”“December ‘06 to January ‘07 was no time to have discussion on what to do after launch. There were lots of issues still to resolve. There was a leak, etc. So, there ended up being differentviews among founding members on what to do next and control issues. Meridian ended up as anobject in maneuvering – used by people to advance their own interests.”

"[It was] extremely messy. We lost two months of momentum because of competing views and lackof clarity on roles."

“After the roll out, lawmakers said “great, help us to do these bills.” We were kind of like a dogtrapped in car. We were unprepared and ended up being slow to respond to calls for input fromlawmakers.”

“We hired people to facilitate dialogue, but not to structure a coalition. We didn’t have structureand governance early on to make the transition smoothly. Plus, it was difficult to rush through policyconversations.”

“We did not plan well for growth. Most people involved are government affairs lobbyists who havenever managed anything in their lives.”

7 From the FAQ section of the USCAP website: www.us-cap.org/faqs/index.asp



Diversifying and expandingmembership while “not do[ing]any violence to the Call”In addition to creating more structure anddefining policy positions, member organi-zations decided to expand and diversifymembership. The expectations of incomingorganizations had to be carefully man-aged. One representative explained inplain terms how this was accomplished:

Structuring while growing: “It turned out to be messy”While the diversification strategy may besound from a political perspective, grow-ing while simultaneously creating anddefining structure proved difficult. Further,interviewees mention that in hindsight itcost the group valuable time.

Further, growth and the accompanyingincrease in administrative and governanceburden created other problems.

“Dealing with hard issues”amidst a sense of urgencyAlthough accounts are mixed, some thinkthat USCAP is facing its most difficult period at the time of the writing of thisreport (March 2008). USCAP is currentlyat the stage of crafting fairly detailed policy recommendations on an interrelatedset of issues: the cap itself, a timeline forthe cap, allocation and allowances, costcontainment, etc., all of which lackeddetailed information in the “Call.” Just asproponents behind the Lieberman-Warnerbill [a leading Senate climate change bill]are attempting to define the quantitativeaspects of GHG legislation, so too is theUSCAP group.

“The [incoming] CEO has to send letter to all existing CEOsendorsing the “Call for Action” and committing to stick to thoseboundaries. You agree to not do any violence to the “Call forAction.” If it says green, don’t wave blue. Still, if you say lightgreen, and you say dark green, publicly you can say we’re allgreen but here’s my shade.”

“There was no preconceived idea of what an expanded membership looked like.Before the launch, it was a case of here’s what we think the agenda is and selling peo-ple on agenda items. Recruiting and setting agenda items at same time? It turned out to be messy.”

“The most difficult part has been growth – adding companies. Integrating them tooklonger than it should have – too long on arguing about organization, integrating newmembers, who should be new members. All this makes prospects for achieving legis-lation in this Congress harder.”

“At what point do you create a member that is just a flagwaver who does not participate actively? That of coursebrings with it issues, such as funding, how to prevent blockers, etc.”

“Founding groups spent the first 9-10 months in a small grouplocked in small room together. Now, with a larger group,[decision-making] is increasingly difficult. The new group hasn’t spent the same degree of time together. We also nowhave variety of levels of experience and engagement.”



While in the words of one intervieweethere is still a “reasonable” prospect ofreaching consensus on these issues, bymost accounts it is taking longer thanmembers expected. Still, one respondentthinks that USCAP is making “slow andsteady progress” toward resolutionbecause members feel a sense of urgencyto fulfill their mandate of helping to enactGHG legislation quickly. A few commentsspeak to their sense:

“Upcoming tank battles”While USCAP members are confident thatdraft legislation will to come to a floor votein the Senate in 2008, its chances of gath-ering the 60 votes that it needs is question-able. One interviewee thinks that “it can’tget through Senate – CAP doesn’t have60 votes and that won’t change, not in itscurrent form.”What will happen in the House is also aquestion mark, as is whether or not thepresident will veto the bill.8 Accordingly,

while “legislation is inevitable... it will bea compromise. Lieberman-Warner willform the base as long as the Democratscontrol the Senate, but it will still need significant changes.” The extent of thechanges are expected to trigger a seriesof political skirmishes that intervieweescharacterized in military terms and predictwill be fought between coal-producingand non-producing regions. In preparation for the looming battle,USCAP member representatives haveincreased dialogue, with an equal empha-sis on coming to internal consensus andexternal lobbying. Whether or not climatelegislation will be passed in this last session of Congress, scheduled to end inDecember 2008, remains to be seen. All told, proponents of climate legislation“will have to make a lot of progress to getsomething passed by year’s end.” Werelegislation not to be passed in this sessionof Congress, some draft form would berolled over into the next session, but asillustrated above, USCAP members arekeen to fulfill their primary objective sooner than that.

“We’re dealing with hard issues right now. It’s a

difficult time. We’re dealing with issues that impact

bottom lines, involving hard negotiations. Whether

CAP comes out whole or not is in doubt. I’m not sure

if it can reach consensus. And it will be hurtful to

process if don’t reach consensus.”

“The tank battles haven't yet begun. They will only come when there is a reasonable prospect of legislation actuallyhappening. Then you will see the Congress fully engaged.”

“Interestingly, GHG legislation is not an issue of party politics;it's an issue of regional economics. Look at a map and seehow many states produce electricity with coal: 26 states havemore than 50% of electricity generated by coal. This is wherethe battle line will be drawn.”

“The other factor is that a recession is coming and it [pass-ing a bill] will be harder to do under a recession. The ene-mies of climate legislation will push the cost issue muchmore in the next Congress, so it won't get any easier.”

“Some people in CAP may prefer to wait, but our commit-ment was to enact legislation ASAP and that legislationwas intended to be a balance.”

“The legislative process is not waiting around for USCAPto finalize its details.”

8 All three contending 2008 presidential candidates at the time of the writing of this report – Senators John McCain, Barack Obama and HillaryClinton – are on the record as supportive of binding climate legislation and are therefore unlikely to use presidential veto power. The choicethat George Bush, the current president, would make is less certain.



Over the course of the interviews, representatives

referred to a number ofaspects of USCAP that they felt have played important roles in theinfluence that they perceive thecoalition to have had to date. They also frankly discussed some ofUSCAP’s organizational challenges, such as those presented in the precedingsection. When asked for their recommen-dations for comparable initiatives, intervie-wees circled back to both as a way offraming their tips for others. As a conclud-ing section, the following groups their recommendations into theme statementsand provides supporting commentary, in no order of importance or frequency of reference.

Make it a CEO-driven process.USCAP is at its core a CEO-CEO, peer-peer conversation about what they want toaccomplish. Several interviewee commentsspeak to the importance of direct CEOparticipation in USCAP, in particular theirrole in creating a more aggressive “A Callfor Action” than what would have beencreated without their participation.

Afterword: Lessons fromthe USCAP Experience

“Was the differentiator from everything else, and is

[USCAP’s] single strongest asset. Staff (i.e., the lobbyists)

from member organizations are always more conserva-

tive than the CEOs. CEOs also force timely work in what

is a complicated process that can bog down. Therefore

CEO-driven deadlines were also critical to success.”

“At several critical points, CEOs have looked themselves

in the eye and have taken leadership positions. On some

things they fall in line with the positions of their organiza-

tions; on other points they’ve had more flexibility. It’s really

valuable when CEOs articulate when they are willing

to task risks.”

“CEOs were very engaged from day one. Typically, staff

don’t know how long the leash is. Staff would get so far in

the process then bring in CEOs. CEOs would actually push

the group further – for example, staff didn’t want to set

numerical targets to start, but CEOs forced them to do that.

They charged and empowered individuals to cut deals.”



Maintain confidentiality in the formation stageSeveral interviewees underscored the use-fulness of keeping early discussions veryquiet. While some knew that discussionsaround USCAP were happening, no oneinvolved in the discussions talked external-ly about their substance.

Plan for a greater time commitment than what is first expected, and use professional facilitatorsThe USCAP process has proven to be verylabour intensive. Many interviewees (andother representatives of member organiza-

tions with whom the author has had con-tact) said that they were caught off guardby the time demand. One corporate repre-sentative claimed that he could easilyspend two full days per week on USCAPwork; some ENGO members now havethree dedicated USCAP staff. Withoutexception interviewees also pointed to theneed for professional facilitation and weregenerally appreciative of the work ofMeridian and Lighthouse.

Conserve resources for later workSimilar to planning for a greater time commitment than expected is the need toensure that enough resources are avail-able for any phase following a publiclaunch of policy positions. “A Call forAction” proved more detailed than anyone expected, consuming both timeand funding. The time required to replen-ish both impeded progress following thelaunch of the “Call.”

Be expansive with membershipearly, and expand once policypositions are clearOne interviewee emphatically advised oth-ers to be expansive with its membership tostart, instead of adding groups following apublic launch of policy positions. Thisincludes determining early what sectors toinclude and not include, and agreeing toa shortlist of target companies for inclusionper sector.

“We maintained strict secrecy – negotiations were con-

ducted in secret and were discussed with no one, almost

to very last moment. There was one story that led to a lit-

tle blurb before launch, but that’s it. The goal was to not

make the discussions a political event in and of itself.”

“No CEO wanted to be quoted as having said some-

thing that he or she didn’t say.”



USCAP continued to deliberate on policyand add structure, while expanding mem-bership. By all accounts, attempting thethree at once was inadvisable. As anotherinterviewee put it bluntly: “You can avoidthat hell that we experienced.”

Plan for growthDuring “Call” deliberations, USCAP spentlittle time discussing structure, governanceand other organizational design issues. Asevidenced in section 3.2, this cost USCAPmomentum and could have been avoidedwith greater and earlier growth planning.

Maintain a “laser beam focus” on the issue and a sense of urgencyLast but certainly not least in importance,USCAP members and facilitators are cred-ited with being very good at keeping a“laser beam focus” on the GHG issue,and not letting other matters get in theway of making progress on discussions.Further, representatives mention that thedrivers discussed in the “Why USCAP,Why Now?” section help to “up the ante”for all involved, keeping the imperative foraction as well as talk at the forefront of thegroup’s work. Thus, in spite of the ongoinggrowth struggles, members are committedto continuing the novel USCAP approachtoward influencing the U.S. climatechange legislation debate.

I’d very carefully select the 20 key NGOs and

companies that will get you all the way through the

policy deliberations. Be more expansive than you

otherwise would have been at the outset, ride it all the

way through, then plan for expansion.

No one wants to create an association or create a new

bureaucracy, but adding structure can reduce transaction

costs. Have a growth plan plus an organizational plan

and someone who is trusted to be a manager. In hindsight

we could have used an ED [executive director] earlier.

Ed Whittingham Researcher and AuthorEd Whittingham is director of the Pembina Institute’sconsulting services group, through which he advisescompanies, governments, politicians and communitieson sustainable energy solutions. He specializes ineffective strategies and management practices forincorporating the concerns of stakeholders into decision making and planning.

In 2005 Ed completed an MBA at York University’sSchulich School of Business, where he specialized in corporate sustainability and international business. During his studies he was a Social Sciences and HumanitiesResearch Council of Canada scholar, an Export Development Canada scholar and a visiting researcher at the United Nations Environment Programme’s Japan branch.

Since 2005 he has led Pembina Corporate Consulting’s research into cross-sector partnerships for sustainability. This report on the US Climate Action Partnership wascompleted as part of an Alcoa Foundation Conservation and Sustainability PractitionerFellowship. For more information on Pembina’s “Unlikely Allies” project visit http://corporate.pembina.org/partnerships. To request information on Pembina’s consulting services, presentations and sustainability leadership training program contact Ed at [email protected], or visit corporate.pembina.org.

S u s t a i n a b l e E n e r g y S o l u t i o n sJuly 2008

Documents

The US Climate Action Partnership