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Why big railroads are torn over climate policy

Posted by: Adam Aston on September 16, 2009

Joel Kirkland at ClimateWire reveals how climate policy is splitting not just industries, but even individual companies.

Focusing on the Dakota, Minnesota & Eastern Railroad, Kirkland shows how big rail carriers, who have done well hauling coal from the plains states, are already having trouble funding expansions in coal regions because of worries that coal use will fall if a fee is placed on emitting carbon. From this perspective, railroads have reason to fight any carbon policy.

Yet, just such a charge is likely to help the railroads in most other markets. Once the cost of diesel fuel goes up, more shippers will switch away from long-haul tractor trailers, and onto more fuel-efficient railroads. This is a good reason for the rail executives to pushing for charges on carbon. Kirkland writes,

But for many [rail carriers], the outlook is mixed, as well. Long-term investments in new and upgraded rails and depots will depend on how mandatory carbon reductions hit electric utilities, chemical makers, steel makers, car companies and manufacturers. Part of the coal business might get derailed, but the cost of hauling goods could push an increasing number of trucks off of congested highways and shift their cargo onto train cars, which use far less fuel to haul a ton of goods.

Read more here: “Big Coal Carriers Navigate a Risky Climate Track”

Reader Comments


September 16, 2009 7:15 PM

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This glimpse into the future is available at my email address for $20.pp

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BusinessWeek correspondents John Carey and Mark Scott, cover the green scene, keeping on top of the business aspects of energy, the environment and climate change, as well as the technologies, policies, markets and people that are shaping how the earth's resources will be used in the century ahead.

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