Manufacture This

The blog of the Alliance for American Manufacturing

Many manufacturers already are doing their part to combat climate change.

President Donald Trump announced on Thursday that he is moving to withdraw the United States from the Paris Agreement. Reaction poured in from around the world, with many arguing that the move is a step back in the effort to address climate change.

Here at the Alliance for American Manufacturing, we believe climate change is real and that manufacturers should do their part to lower greenhouse gas emissions and improve our environment. We thought it would be useful to offer some insight on what many manufacturers already are doing, and what else can be done.

Do American industries have a role to play in combating climate change? What has industry done already?

American manufacturers can and should lead when it comes to reducing greenhouse gas emissions. And the good news is that Americans do not have to choose between good-paying manufacturing jobs and a clean environment. We can do both — and in many cases, work already is well underway to do just that.

There are the often-cited clean energy jobs of the future, from wind turbines and solar panels to lithium ion batteries and other advancing technologies. But even industries that have been around for well over a century are shifting to a more eco-friendly future.

For example, clean vehicle technology directly supports 288,000 manufacturing and engineering workers in 48 states, according to a May 2017 report from the BlueGreen Alliance, whose member organizations include labor leaders like the United Steelworkers and environmental groups like the Sierra Club and Natural Resources Defense Council.

About 160,000 of these manufacturing jobs are in five states in the industrial heartland — Michigan, Indiana, Ohio, Tennessee, and Kentucky — where workers build vehicles with strong clean car and fuel economy standards.

These cars are built with steel from high-tech steel mills, like the ArcelorMittal Plant in Cleveland. ArcelorMittal has spent $125 million since 2008 as a partner in the Sustain Our Great Lakes Program, helping to restore and protect the Cuyahoga River. The company also has worked hard to reduce its carbon footprint, reducing its energy intensity by 4 percent over the last three years.

This mirrors much of the work done by the U.S. steel industry overall, which reduced its energy intensity by 32 percent since 1990 and its greenhouse gas emissions intensity by 37 percent over the same period, according to the American Iron and Steel Institute.

And it’s worth pointing out that the American steel industry is lightyears ahead of what’s happening in China — the world’s No. 1 producer of steel (and a massive overproducer, natch).

China’s steel industry accounts for 50 percent of the world’s production of carbon dioxide from steelmaking, equal to all the other steel mills in the world combined. In fact, U.S. steelmakers spend 80 percent more than their Chinese counterparts per ton of steel to limit air and water pollution levels.

O.K., but what about the Paris agreement going forward? How will it impact American companies now?

It will fall to other countries to take the lead. They will find that difficult. Especially China, the world's foremost leader in carbon emissions.

But though President Trump has removed the United States from the table, American companies — many of whom recognize climate change as a threat and saw the accord as a framework to address a worldwide issue – should continue their environmental efforts. They’re still worthwhile, whether the United States is a signatory or not. But China will ultimately have a major role to play in all of this, too.

Is Trump really helping manufacturing workers with this move? He claimed he was in his announcement.

Look, do environmental protection rules make it tougher to do business in some sectors? Sure. But while tough environmental standards are hard on certain industries, they create jobs, too (like those 288,000 clean vehicle jobs we mentioned above).

As United Steelworkers President Leo Gerard wrote on Thursday:

“The union believes clean air pays; clear water provides work. Engineers design smokestack scrubbers, skilled mechanics construct them and still other workers install them. Additional workers install insulation and solar panels. Untold thousands labor to make the steel and other parts for wind turbine blades, towers and nacelles, fabricate the structures and erect them.”

Support for environmental protection isn’t an either/or issue.

President Trump said he was elected to represent "Pittsburgh, not Paris." What's going on there?

Trump used the city of Pittsburgh – and its enduring image as a manufacturing hub – as a rhetorical device a few times during his remarks. Now there's word the White House is planning a "Pittsburgh, not Paris" rally to gin up support for the president's decision. 

This comparison got called out by lots of media members, and even the Burgh’s mayor.

All of that criticism has a point: Pittsburgh’s economy is clearly different than it was 50 years ago. But thousands are still employed by the steel industry in western Pennsylvania, and the remaining mills in the Pittsburgh area have greatly improved on their emissions. The new coke oven at U.S. Steel’s Clairton Works, for instance, is one of the industry’s cleanest – and it was a $500 million investment by the company.

Manufacturers are doing their part to create a greener economy, including an old steel stalwart that is still headquartered in the Steel City. But the biggest threat to them isn’t high environmental standards — rather, it's subsidized, dirty steel from the other side of the world.

O.K., what happens going forward, especially when it comes to future international agreements?

The Trump administration is currently working on several potential trade deals, including a renegotiation of the North American Free Trade Agreement and bilateral deals with countries across the globe. In any case — whether it be during this administration or years down the line — it is vital that any trade agreement the United States enters into include binding mechanisms to protect the environment and reduce carbon admissions.

One way to address environmental concerns directly is something called a Border Adjustment Carbon Tax, an idea that has support from conservatives like former Secretaries of State James Baker and George Shultz, along with former Treasury Secretary Henry Paulson.

Under such a plan, a carbon tax would be collected wherever fossil fuels enter the economy, including at the mine, well or port. Imported products from countries that do not have a carbon tax in place would also be taxed, a system designed to address nations that are aiming to gain a price advantage over carbon-taxed domestic goods.  

What's the Bottom Line?

The Paris accord was nonbinding, but the United States’ withdrawal has clearly upset the order of things for all kinds of industries. Some of the commodities industries in the United States that Trump likes to champion are among the cleanest in the world and already leading the way. That won’t change, nor should it. And let’s be real: Environmental rules aren’t what threatens American steelworkers anyway.

We think a clean environment is in the best interest of factory jobs. Paris accord or not, we hope manufacturers continue to invest to clean up their acts.