444 By Susan Ariel Aaronson and David Deese With a reaction by ...

alternative energy research and development, including oil sands. It expects to spend$150 million for research on non-conventional oil and gas resources and new energysources in 2008.165Why were U.S. firms so slow to move on climate change? Managers at some ofthese firms not only rejected the concept of “climate change” but they also worked toblock a policy response which would have facilitated both adjustment and investment inalternative energy. In addition, these firms collaborated with government officials tothwart both international initiatives such as the Kyoto Protocol and domestic movement.The Bush Administration was sympathetic to this perspective: it rejected the KyotoProtocol as too costly and based on unproven science In fact, the Bush Administrationrejected any approach with mandates. Several Senators put forward less stringentapproaches, but none passed Congress from 2000-2006. Finally, in 2007, Congresspassed and Bush signed the Energy Independence and Security Act of 2007. It raised fueleconomy requirements, provided incentives for biofuel development and usage, enhancedefficiency standards for buildings, lighting and appliances, and accelerated R & D ofsolar, geothermal and marine energy. But this bill did not end tax breaks for oil and gasexploration in the U.S. 166Perhaps the European companies have found it easier to respond to the challengeof climate change because the EU has evolved a more supportive policy environment.The EU Emissions Trading Scheme established a cap and trade within which participantscan trade emissions permits. This policy has encouraged all firms to reduce emissions aspart of their regular business planning, while removing much of the concern about loss ofcompetitive position to firms not participating. In addition, European governments have455