Climate Change: Emission-control legislation is coming soon—count on it.
Financial Services: Confidence is rising, the economy will follow, but more slowly.
Business Costs: PC prices are falling fast, yet you might want to avoid the netbooks.

Climate Change
Climate change rules won’t come this year.
But make no mistake: They are coming. If Congress doesn’t pass a bill sometime in 2010, the EPA will act, and that would cost a lot more. In the end ... a cap and trade system to limit overall emissions of greenhouse gases. But there’s still a heap of disagreement about how and when to cut down on emissions and who should foot what’s sure to be a huge bill.

A potent coalition is pushing legislation: Obama, many Democratic lawmakers, environmentalists, U.S. allies abroad, unions, and a surprising number of firms, including Alcoa and Duke Energy. The U.S. Chamber of Commerce is even taking flak from members who are angry with the group’s opposition to a climate change bill.
Business has strong motivations:
Lawmakers would offer industry breaks on cost and timing. EPA would probably set limits that would be tougher and much more expensive. Even with inevitable delays from lawsuits against regulation, it’s not a risk worth taking.

Whatever the mechanism, reducing greenhouse gases will be costly for all.
The energy sector will feel the biggest wallop. Electric power generation produces up to 35% of carbon dioxide emissions. To rein that in ... much less reliance on coal burning plants, substituting a lot more natural gas. More nuclear power, too. If utilities can’t cut their CO2 enough, they’ll have to make up the difference by buying carbon credits ... paying someone else to offset their own emissions. State utility boards will limit rate increases, making it impossible to recoup all costs.
Another victim: Transportation, hit with fuel price hikes as emissions caps reduce refinery production and lead to more imports. That means greater costs, too, for supermarkets, shippers and other businesses. Carmakers will need more hybrids so their fleets get better gas mileage overall. The result: Higher sticker prices.

Much of the political debate involves how to soften the economic blow. Utilities want a generous starting allowance of free carbon credits or tax rebates to lower their costs at carbon offset auctions. Automakers want similar help. But there’s a risk: Giving away too many credits could undercut the efficacy of the program by sapping the incentive for businesses to curb their emissions.
The delay in Washington may hamper talks on a new global climate pact in Copenhagen, Denmark, in Dec. If the U.S. shows up without its own plan in place, it will be much harder to persuade China, India and others to agree to new limits.
Lack of an accord would put U.S. industries at a competitive disadvantage when rules take effect, pushing up their production costs faster than foreign rivals’.

Financial Services
The bank stress tests succeeded in one regard: They boosted confidence, persuading investors that there are no more big bad shoes waiting to drop. Investors snapped up shares, pushing up prices and making it easier for big banks to raise badly needed capital. Banks generally scored higher than people expected, although the tests made it clear that some banks are in better shape than others.
But the banks aren’t out of the woods yet. They still need new ways to earn income, and they need a plan for when they can’t rely on cheap Fed loans. Many are still on shaky ground ... very much at risk if the recession lingers.
The big unknown: Will the banks now feel more confident about lending? Ending the credit crunch is the real goal of all of the administration’s rescue efforts.

Tight credit will force more businesses to liquidate rather than reorganize. The number of companies filing for Chapter 11 bankruptcy will keep growing ... up 33% this year ... with fewer able to secure financing to make a fresh start.
Companies near bankruptcy have few options. Drawing down credit lines is harder because banks are pulling in that lifeline as soon as a business defaults. Banks that will lend want to be paid back quickly, often in just a few months.
Firms that go into bankruptcy won’t have much time to work their way out. Without new sources of capital, they’re forced to sell assets at depressed prices,
which hastens the end. If your company is in trouble, seek help from an expert now. And try to cut costs and negotiate deals with vendors to improve odds of riding it out.

One reason credit remains tight: Lack of confidence in bond ratings. Because bond issuers pay to get the ratings, there’s a conflict of interest concern, heightened by the fact that the credit agencies failed to see many defaults coming.
But ratings reform isn’t in the cards. The system is too firmly established, though the SEC will require more disclosure and impose a few other rules to help.

Look for Congress to enact long stalled legislation on 401(k) fee disclosures.
That will help smaller firms sort through plan choices. A bill likely to pass this year would force 401(k) service providers to break fees into four categories: Administrative, management, transactions and everything else. Also ... a requirement
that all plans include at least one low cost index fund as an option for participants.
The downside is likely to be higher costs because of the added bookkeeping.
There’s also fear that some companies will offer only index or money funds. They’re cheaper but have limited upside potential, plus employees want more choice.

Business Costs
PC prices are near rock bottom. Retailers have worked off inventories that built up during the current recession. Still, it may be worth waiting for Microsoft’s new operating system, Windows 7, likely to come out later this year.
Tiny netbook PCs are tempting, but probably a poor choice for most firms. Priced as low as $300 apiece, their screens are just too small for most business uses.