Recent legislation has aggressively targeted green house gases (GHGs), and in particular Carbon Dioxide. This includes the failed legislation from Waxman-Markey and Cantwell-Collins which both aimed at reducing the release of C02 from US sources. Widely known as Cap and Trade, these two pieces of legislation would have effectively put a price tag on carbon emissions, albeit in different manners.
As you have read in the news, these two works are by and large dead in Washington. Despite legislative inaction, the problem still looms over US industry. In particular, the EPA has ruled that greenhouse gases are a threat to public health. Thus, under the clean air act the EPA has jurisdiction to start regulating all GHGs. However, the EPA has not rolled out an explicit roadmap on how they plan to regulate GHGs. Herein lays the problem for manufacturing in the US – uncertainty.
Uncertainty as to how GHGs will be regulated
Uncertainty as to what industries will be regulated
Uncertainty as to what it will all cost
What is clear is that responding to proposed targets for carbon emissions reductions will require dramatic solutions within the next decade. Since the primary driver of GHG’s is energy, this will present U.S. industry with the economic necessity to fundamentally re-conceive its energy usage to reflect a new economy.
Forward looking businesses can start investing now in research, so that when regulations come into effect, they will already have a plan for moving forward. This includes performing energy audits, baseline carbon foot-printing, and detailed studies of high energy usage processes. By doing this research in advance, companies can understand needed capital improvements and at what carbon price those improvements are financially viable.
Posted by Mark Norfolk
