Dow Chemical seeks global framework

NEW YORK (Reuters) - Dow Chemical (DOW.N), the largest U.S. chemical maker, is calling for a global framework with regional or national variations to help tackle climate change, said Chief Sustainability Officer Dave Kepler on Monday.

"I think what we need to have is an international framework; I don't think we are going to have one big carbon market here in the world," Kepler told the Reuters Global Environment Summit, in a telephone interview.

"I think the big contributing countries, essentially the U.S. and Europe, have to be engaged; frankly, so do China and India," he added.

Dow is a member of the U.S. Climate Action Partnership, which was launched earlier this year and includes companies and environmentalists.

The group has asked Congress to enact legislation to cut U.S. greenhouse gas levels by 10 to 30 percent within 15 years and reduce the emissions by as much as 80 percent by 2050.

Kepler said the approaching U.S. presidential election is likely to accelerate the pace of the debate in the United States.

The current talk in Washington of implementing tariffs on countries that do not implement a cap and trade policy is unproductive, said Kepler.

"I think the U.S. should worry about showing leadership first and then worry about penalties later," he said.

"I think as we go forward the U.S. has got to get to a point where they make a commitment as to the absolute number and cap, and once that's done you have dialogue," he added.

Cap and trade is a policy tool that sets limits on harmful emissions, giving allowances to affected industries and countries within these limits, or caps. Those with emissions above the cap can buy credits from those who pollute less; this is also called emissions trading.

"I think if we try to bring it all together in one giant system, it's going to break. But if each country can step forward with the view of pacing each other, I think that is the practical way to go forward," said Kepler.

Dow has reduced its energy intensity by 22 percent from 1995 to 2005, resulting in energy savings of 900 trillion British thermal units, which is enough to power eight million U.S. homes for a year.

The Company buys hydrocarbon raw materials like liquefied petroleum gas, crude oil, naphtha and natural gas. Expenditures for hydrocarbon and energy accounted for 49 percent of Dow's production costs and operating expenses in 2006.

(Reporting by Euan Rocha and Matt Daily, editing by Tim Dobbyn)