First Up -- The Two Sides of Climate Change

While the move to a greener economy offers many exciting opportunities, the transition is also fraught with peril.

When it comes to sustainability, Al Kabus, president of the Mohawk Group and shown on our cover this month at Mohawk's Greenworks Center recycling facility, gets it. The challenge for businesses is not just to manufacture environmentally responsible products and do so in a sustainable fashion, but also to make a profit operating that way.

Kabus points out in our cover story, "Closing the Loop," that the company believes its drive for sustainable products and operations offers a win-win in that Mohawk will gain financial benefits both from operational efficiencies and from meeting the needs of increasingly environmentally conscious consumers.

If the consequences of global warming are grim, the unleashing of human invention and creativity in responding to climate change is frequently inspiring. Recently, I came across a news item about the Napa Wine Co. in Oakville, Calif. The winery produces wastewater from its wine making, cleaning and disposal operations. Bruce Logan, a Penn State environmental engineer, has installed a hydrogen generator at the winery that will take wastewater, and by applying bacteria and a small amount of electrical energy, convert the organic material into hydrogen. A small amount of the hydrogen will be used in a fuel cell. While the project is designed to demonstrate a renewable method for hydrogen production, the winery eventually hopes to use the hydrogen to run vehicles and power systems.

No one project like this will solve the climate problem; we're facing a challenge that requires a global effort. That's why the public policy decisions now being made in the United States and around the world are so critical. For example, Sens. John Kerry (D-Mass.) and Barbara Boxer (D-Calif.) have introduced a climate change bill that, unlike the House bill, does not include a "border adjustment" provision. Such a provision is designed to impose tariffs on products made in countries that do not take steps commensurate with developed nations to reduce their carbon footprint.

Critics such as Sen. Sherrod Brown (D-Ohio) argue that without such protections, the United States faces the risk that "we lose jobs and climate-change emissions increase as a company moves from Findlay, Ohio, to Wuhan, China, where we follow much stronger environmental rules than they do...."

Brown says he is less interested in imposing such a sanction as in attaining a level playing field, an argument that is no academic issue for the U.S. business community. According to the Economic Policy Institute, more than 4 million jobs could be at risk if U.S. climate-change legislation does not include a tariff on goods imported from countries that don't adopt similar emissions standards. But the U.S. Chamber of Commerce and the National Association of Manufacturers oppose such provisions, warning they will hamper trade and lead to retaliation. For its part, NAM says the House bill that includes the tariff provisions could result 2.4 million job losses and higher energy prices.

The backdrop for this debate, of course, is increasingly dire reports from scientific organizations regarding the pace of climate change. On Sept. 24, the Intergovernmental Panel on Climate Change issued a new compendium of studies performed since its landmark 2007 climate change report, which found that it was "very likely" that greenhouse gas emissions accounted for most of the global warming observed since the mid-20th century. The new report shows disturbing evidence that phenomena such as glacier melting and dangerous increases in the acidity of ocean water are occurring even faster than the 2007 report forecast.

So while swift action is needed to battle climate change, that action has to exist in an economic environment that is fair and will not result in its own set of catastrophic changes. Otherwise, the two sides of climate change will simply drag down each other.

Steve Minter is IW's chief editor. He is based in Cleveland.

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