Manufacturing Savvy

When Good Legislation Is Bad

That's at least how the steel industry would categorize the Cap and Trade legislation. While lower emissions is a worthy and necessary goal, the means to achieve that might not be so good. At a briefing this week by the Institute for Steel and Iron, James L. Wainscott, CEO of AK Steel Corp., had some pretty harsh words about the effect of this legislation on the already beleaguered steel industry."It’s clear to me that, if we don't get our climate policy right, we face the prospect of ceding another huge segment of America's industrial prowess to the BRIC countries -- Brazil, Russia, India and China. And that would mean further loss of our manufacturing jobs.”
(For full article click here )

And the Pew Center on Global Climate Change says that manufacturing industries with high levels of energy use would lose an average 1% of their production to imports from countries where greenhouse gas emissions are not penalized. While Pew says this is a moderate loss, I don’t think those industries who are trying to hold onto their shirts would categorize this as moderate. (For full article click here)

And consumers won't get a great deal if you consider it will cost $1600 per household for a 15% reduction in CO2 emissions, according to a Congressional Budget Office report. (For full article click here )

However some form of this legislation is going to pass and how industry prepares for it will set stage for their survival. At the recent IndustryWeek Best Plants Conference, held in Nashville April 27-29, I had the pleasure of listening to Andrew Singer, Sr. VP, Constellation Energy, NewEnergy Power, tell the audience that “Hope is not a Strategy.” Companies need to be proactive, he said, and incur the costs now when action is voluntary and therefore more reasonably priced. Just imagine the costs, Singer points out, when everyone is scrambling to meet very high standards very quickly.

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