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Sustainability: The Writing’s on the Hill

September 4th, 2007 · by Tim Minahan · 2 Comments · enviro/social sustainability, supply management

If you’ve been considering adopting sustainable supply practices, now’s the time to make good on your intentions. If not, you soon may have no choice.

Before setting off on summer vacation both houses of Congress debated naescent legislation designed to cool global warming. While the bills were not signed into law, they signal growing bipartisan support for climate change policy. And the legislation is expected to be reintroduced in the new legislative session.

The message to business: you will embrace environmentally responsible practices.

The Senate climate bill aim to shave 60% off 1990 U.S. greenhouse gas emissions levels by 2050 — about a 2% reduction per year. Put forth by presidential hopefuls Sens. John McCain, Joe Lieberman, and Barack Obama, the bipartisan proposal would require companies to report their yearly emissions. It would also require the purchase and/or trading of emissions allowances and reductions through a National Greenhouse Gas Database, which would contain an inventory of emissions and registry reductions.

The Energy Information Agency (EIA) says the proposed legislation would increase energy costs and slow economic output by $533 billion between 2009 and 2030. EIA predicts that, if passed, the climate bill would boost gasoline prices by 23-cents in 2020 and 41-cents in 2030. EIA says coal-powered plants and utilities would be worst hit, with the price of coal under the legislation projected to climb 129% by 2020 and 245% by 2030.

Meanwhile, across the pond, Britain’s Parliment is expected to issue legislation to cut carbon dioxide emissions by at least 60% by 2050. (Spurred by environmental groups and public pressures, some Parliment members are pushing for emissions reduction targets to be raised to 80% off 1990 levels.) Insiders expect the bill to be introduced in November and has a good chance of passing into law by mid-2008.

Companies would be wise to get a jump on the legislation now by adopting strategies for more energy efficient buildings and plants. Supply managers should also collaborate with suppliers to drive energy efficiency and more sustainable manufacturing practices across the supply chain. These moves will not only ensure compliance, but they ultimately will hold down supply costs and enhance competitiveness.

 

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2 responses so far ↓

  • 1 Michael // Sep 18, 2007 at 4:50 pm

    The cost of this bill, as calculated by the government, is $21 Billion a year in lost economic output and higher energy costs! What’s the upside? I didn’t see any quantification of the benefits of a 2% per year reduction in greenhouse gas emissions. Can you share any data regarding the quantifiable benefits of reducing these gasses? I’m all for reducing gasses, but at what price? History has shown that Americans, and Europeans for that matter, have rejected feel good things like reducing gas emissions until it hits their pocketbooks (http://www.foxnews.com/story/0,2933,185171,00.html). Sacrificing 2% of your nations GDP for no tangible benefits is nuts.

  • 2 Tim Minahan // Sep 19, 2007 at 7:42 pm

    Michael:

    I fear you may be thinking about sustainability all wrong. Companies that only adopt energy efficient or environmentally responsible practices in response to legislation are missing the boat and may actually be at greater risk to bear the burden of the costs you reference.

    On the other hand, there are ample examples of companies that have curbed energy consumption and emissions or adopted more environmentally responsible practices for both cost savings and competitive advantage.

    Consider Adobe, which invested $1.1 million in 45 energy efficiency projects to date, yielding nearly $1 million in annual savings. That’s full payback on its initial investment every 13 months. http://www.supplyexcellence.com/blog/2006/11/09/the-cost-and-payback-of-going-green/

    Or you don’t need to travel two city blocks without recognizing how Starbucks has turned socially responsible and sustainable purchase decisions into a booming and highly profitable business.

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