The Administration’s submission of its Climate Change Plan to the United Nations today is a reminder of the complex nature of global greenhouse gas (GHG) politics, economics and realities, and what is at stake for the competitiveness of U.S. manufacturing. Manufacturers want a strong international agreement that includes binding commitments from all major emitting nations.
First, as is graphically represented on Page One of the Plan, the United States is already leading the world in reducing GHG emissions. Since 2005, no country has reduced its carbon dioxide (CO2) emissions by more than the United States—nearly 700 million tons of C02 or a reduction of close to 12 percent. U.S. manufacturers are leading the way, producing more efficient and lower emitting cars, trucks and machines; creating new and innovative products to increase the energy efficiency of houses, buildings and factors; and unlocking new technologies to generate more power with fewer emissions. Since 2005, carbon emissions from manufacturers and other industrial facilities have fallen by more than 10 percent. This progress will continue, as manufacturers are driven by a commitment to environmental sustainability and recognition that reducing emissions is good for the bottom line—more efficient factories have fewer emissions and lower costs.
However, the Climate Change Plan is also a reminder that, without similarly aggressive actions from major emitters like China and India, overly aggressive or prescriptive domestic regulations—like those under consideration by the Environmental Protection Agency (EPA) for power plants—threaten the competitiveness of U.S. manufacturers while doing little to reduce GHGs globally. The progress in lowering our domestic emissions since 2005 has been completely offset, by a factor of four, from increased emissions from China alone during that period. And while the Administration is now making further commitments to the international community to deepen cuts, China promises only to increase its emissions until 2030. India does not appear willing to even do that.
Investment dollars, like GHG emissions, are not constrained by national borders. Limiting fuel choices in the U.S. and increasing the costs of energy through regulation may, in fact, lower domestic emissions, but if you are simply sending production overseas to a country like China you are accomplishing little. In fact, you may be making the situation worse. With fewer environmental laws and an economy that emits five times as much CO2 per unit of GDP, policies that send production and jobs to countries like China may actually result in a net increase in global emissions.
The Administration’s Climate Change Plan reminds us that we have to be realistic about what we can control and what we cannot. As a country we should continue to strive to reduce GHG emissions, but we must do so without sacrificing our international competitiveness, particularly if the world’s largest emitter is unwilling to do the same. More and more, it looks like this Administration may be faced with the prospect of going it alone. That presents real challenges for manufacturers.
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