Deere & Co. (DE) has quietly dropped out of a coalition of large companies that has supported a cap-and-trade program for reducing carbon dioxide emissions.
Deere, the world's largest manufacturer of farm machinery, opted to leave the U.S. Climate Action Partnership in May because the group's legislative strategy "no longer served as a foundation for moving forward" with climate change regulation, Ken Golden, a spokesman for the company, said Tuesday. "We came to the conclusion that Deere had other opportunities to be involved in climate change initiatives," Golden said.
Neither Deere nor the coalition announced the company's departure in May. The Moline, Ill., company joins a handful of other companies that have left the partnership in recent months, as political support erodes for comprehensive energy legislation that includes a cap-and-trade program and stricter mandates for energy conservation. Other members to leave the group include construction machinery company Caterpillar Inc. (CAT), and energy companies BP PLC (BP.LN, BP) and ConocoPhillips Co. (COP).
A spokesman for the partnership, Tad Segal, offered no reaction to Deere's reasons for leaving the group but credited the company with "playing a valuable and significant role" in developing the group's policy initiatives.
"As with every coalition, there have been membership changes, including departures and new memberships," Segal said.
About two dozen companies remain in the group, including corporate heavyweights General Electric Co. (GE), Johnson & Johnson (JNJ), Siemens AG (SIE) and Alcoa Inc. (AA). The group also has picked up four new members in the past year, including Honeywell International Inc. (HON) and Weyerhaeuser Co. (WY).
The Washington-based coalition, which was founded in 2007, has been a lightning rod for opposition since its January 2009 Blueprint for Legislative Action recommended creating a phased-in cap-and-trade system for U.S. producers of carbon dioxide, the main ingredient in the heat-trapping greenhouse gas identified as the source of climate warming.
Under such a program, carbon dioxide producers, such as coal-fired power plants, would have their carbon emissions capped at a certain level by government-issued credits or allowances. Those that exceed their limits would have to purchase additional carbon credits from carbon producers whose emissions fall below their allowable amount.
A cap-and-trade program aimed at reducing carbon emissions by more than 80% by 2050 was included in energy legislation passed by the U.S. House of Representatives in 2009. But the House bill has been bogged down in the Senate by intense bipartisan opposition to cap-and-trade provisions. Carbon-emitting companies argue that a cap-and-trade system would put them at a disadvantage to competitors in other countries that don't regulate carbon dioxide. The weak U.S. economy and the threat of job losses caused by cap-and-trade have added momentum to the cap-and-trade opposition.
Two conservative policy groups subjected Deere to public pressure tactics this spring in hopes of turning its employees against their company's membership in the climate partnership.
In television commercials that aired in April in Moline and in Waterloo, Iowa--home of Deere's tractor assembly plants--FreedomWorks and the National Center for Public Policy Research's Free Enterprise Project said cap-and-trade legislation would put Deere's U.S. employees at risk of losing their jobs if the company pursues lower-cost manufacturing sites overseas.
The ads also accused Deere of supporting "back-room deals" by members of Congress to assemble enough votes to pass carbon regulation. The ads urged Deere employees to "stand up against back-room deals in Washington. Tell management: No more back-room deals."
Tom Borelli, the director of the Free Enterprise Project, said the commercials helped convince Deere Chairman and Chief Executive Samuel Allen to depart the climate coalition.
"I really think we had an impact. We really hit a nerve," said Borelli, who also confronted Allen about the Deere's coalition membership at the company's annual shareholders meeting in February.
Deere rejected the notion that groups such as Borelli's influenced the company's decision.
"Deere made a decision independent of the opinions of other organizations," Golden, the company spokesman, said. "Our involvement with various trade and industry organizations is routinely reviewed."
He added the company remains affiliated with other environmental groups that it believes can effectively influence climate change legislation. Deere is a member of the U.S. Environmental Protection Agency's Climate Leaders program and participates in the Business Environmental Leadership Council.