As published on USA Today, Dec 28, 2020, by Charles Hernick.
As we head into what is expected to be a divided government in 2021, many industry watchers say that Washington is unlikely to take meaningful action on climate change, and that Congress would be wise to concentrate on low-hanging fruit.
Republicans, focused on a more resilient post-pandemic economy, will prioritize private sector job creation, strengthening industry and trade policies that don’t disadvantage American workers.
Many Democrats are likely to call for Green New Deal-like approaches to address climate change and create government-secured jobs.
In such a landscape, low-hanging fruit feels easy, but we should set our sights higher. It is time for Congress to work together — in a bipartisan fashion that addresses Republicans’ key priorities while also significantly cutting greenhouse gas emissions — on one of the most difficult climate challenges: reducing the carbon footprint for heavy industry.
Little has been done, so the policy playing field is wide open. No idea has been tried and discarded; partisan camps have not been locked down.
Heavy industry like iron, steel and cement production has an outsized impact on trade, job growth and the environment, which make it an alluring opportunity to reduce greenhouse gas emissions. Globally, industry accounts for about 19% of direct greenhouse gas emissions — 33% when including indirect emissions, such as those generated by lighting and heating industrial facilities.
Indeed, data-driven climate policy needs to focus on industrial emissions because they have steadily increased and could soon surpass power sector emissions.
Because it is at the heart of the supply chain, the industrial sector has an outsized influence on critical economic indicators. Estimates based on Bureau of Labor Statistics data show that for every 100 jobs created or lost in the durable goods manufacturing sector, more than 700 jobs hang in the balance elsewhere in the economy.
Differentiating between low-carbon “Made in the USA” products from imported high-carbon products should enable a revitalization of domestic manufacturing and domestic job creation, as well as bring stability back to the sector.
The United States is one of the largest importers of embedded carbon — indirect emissions related to the supply chain and other activities in processing. Policies that address carbon embedded in the trade of energy-intensive goods such as steel and cement represent an immense opportunity to reduce emissions and rebuild the American economy.
China, the largest emitter of greenhouse gases, also is the largest exporter of embedded carbon. Other trade partners’ carbon output needs to be reduced too.
Shape trade policies around emissions
As a result, countries are beginning to take a closer look at imported products and adjusting their trade policies accordingly. The European Union is pursuing a carbon border adjustment, an attempt to apply monetary value to carbon emissions generated in the creation and transportation of imported goods.
Heavy industry remains a difficult sector to decarbonize; there is no substitute for concrete, iron and steel. In fact, cement production alone is responsible for about 10% of global emissions. But better information on the differences between companies and products will help drive business toward clean, American-sourced materials.
The Building Transparency database includes carbon disclosures by dozens of companies for hundreds of products. Such efforts can go a long way to support market demand for lower carbon-emitting solutions.
And there is a growing list of technologies being developed to help industry mitigate emissions. Carbon Cure, for example, manufactures a technology that introduces recycled carbon dioxide into fresh concrete to reduce its carbon footprint without compromising performance.
Seed market for low-carbon products
Ultimately, a smart plan for both trade and climate should have three main components:
► Empower companies to reduce their emissions voluntarily.
► Facilitate growth in the market for goods that have lower emissions profiles, and reduce barriers for people and companies interested in purchasing low-carbon products.
► Update federal procurement policy to ensure that the U.S. government — the world’s largest buyer of goods and services — favors American-made low-carbon products.
It will require hard work and attention to detail for Republicans and Democrats to come together on climate policy. A focus on reducing the industrial sector’s emissions will boost economic prosperity in the United States and strengthen America’s position around the world. That is something all Americans can get behind.