Charles Dharapak  /  AP
Henry Paulson accepts the nomination to be Treasury secretary as President Bush looks on at the White House event on May 30.
updated 6/2/2006 11:53:57 AM ET 2006-06-02T15:53:57

Henry Paulson may find the tightrope he’ll be walking as President Bush’s Treasury secretary will span a wider gulf than in his current twin jobs as chairman of Goldman Sachs and The Nature Conservancy.

Both the Wall Street powerhouse and the world’s richest environmental group look at global warming as a dire threat requiring government-mandated reductions in carbon dioxide and other gases that trap heat in the atmosphere like a greenhouse.

Bush doesn’t.

In fact, the president has rejected the Kyoto international global warming treaty that was negotiated during the Clinton administration. And that’s the rub for staunch supporters of Bush’s environmental policies.

“You do not want someone serving as a Cabinet officer who has a habit of indulging his environmental hobby at the expense of his financial responsibilities,” said Tom Borelli of the Free Enterprise Action Fund, a mutual fund set up partly to debunk climate science that accepts the idea of global warming.

Steve McCormick, president of The Nature Conservancy, said Paulson won’t shy from sharing his views on global warming in Bush’s Cabinet.

“He is unhesitant in expressing his opinion when he thinks it’s the right thing to do,” McCormick said. “I’m sure that if there’s an opportunity for Hank to provide his point of view on this issue, he will take advantage of it.”

From farm boy to New York birder
Paulson, nominated Tuesday by Bush to succeed John Snow at Treasury, took an early interest in nature. He was raised as a Christian Scientist on an Illinois farm, where he still keeps five acres and has let raccoons have the run of the house. Before college he wanted to become a forest or park ranger. Instead he opted for a business career, getting an MBA from Harvard.

He and his wife, Wendy, are both skilled birders. At their house in Illinois, they’ve raised birds, dogs, cats, raccoons, flying squirrels, lizards, snakes, mice, turtles, frogs and a tarantula.

“Environment is my passion,” Paulson told Charlie Rose in a PBS interview in 2004.

At Goldman Sachs, he arranged for a handler with a leather glove to bring in captive-bred birds of prey to show off each year. The handler would come from The Peregrine Fund, another conservation group on which he serves on the board.

In New York, he often stops in Central Park, close to where the couple lives, to go bird-watching while on his way to work. Wendy Paulson volunteers as an environmental education teacher at public schools in Harlem. She also is board chairman of Rare, an international environmental nonprofit group.

Environmentalists normally critical of Bush believe they may have an advocate with access to the president’s ear.

“It isn’t every day that the Sierra Club finds itself welcoming a nomination to George W. Bush’s Cabinet while ultraconservatives decry the move,” said Carl Pope, the Sierra Club’s executive director.

“But on issues like global warming, Hank Paulson appears to favor managing risk rather than cooking the books,” Pope said. “It is heartening that someone of Mr. Paulson’s stature in the financial world is willing to say that immediate action must be taken to combat global warming.”

Goldman Sachs’ carbon stand
Last year under Paulson’s direction, Goldman Sachs issued an eight-page position paper on environmental policy, saying it accepts a scientific consensus, led by United Nations climate experts, that global warming poses one of the greatest threats this century.

Like Bush, the Goldman Sachs statement endorsed a market for businesses to buy and sell rights to emit greenhouse gases, saying it will spur technology advances by companies “that lead to a less carbon-intensive economy.” But, it added, “Voluntary action alone cannot solve the climate change problem,” a position contrary to the Bush administration’s view.

The Nature Conservancy, under Paulson’s direction, likewise supports a mandatory approach. It supports legislation by Sens. John McCain, R-Ariz., and Joe Lieberman, D-Conn., to cap U.S. greenhouse gases at 2000 levels, within five years. The Senate defeated the measure last year.

William Reilly, who headed the Environmental Protection Agency in President George H.W. Bush’s administration and now chairs the World Wildlife Fund, said Paulson is “very much at home in the outdoors.”

Paulson became chairman of The Nature Conservancy in 2004 after The Washington Post a year earlier raised questions about tax breaks claimed by the group’s benefactors and private side deals on conservation easements.

He quickly assuaged lawmakers’ concerns while also promoting conservation to Asia’s business leaders and working with Chinese government officials to set land aside for parks.

“He has a reputation of being a very hands-on and supportive chairman,” Reilly said of Paulson’s work on behalf of environmentalists. “He was personally very generous and helpful in congressional relations the past year or so.”

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