No, Chicken Little, the sky isn’t falling, but from the reaction of so many people—even those who should be more informed—you would think that President Trump’s decision to pull out of the Paris climate agreement spelled doomsday for the world. We are far from it; in fact, pulling out just might spur the economy—not only in the United States but in other countries, as well.
Let’s face it: Pulling out of the Paris agreement does not mean that the U.S. will suddenly have levels of pollution that we experienced in the mid-1900s, when industry was peaking during and after World War II. The U.S. has nothing to be ashamed of when it comes to cleaning up its act, and new technology has, for the most part, turned the thick black smoke coming from various industrial and energy-producing stacks to white steam/water vapor. We should be proud of the advances the U.S. has made in the area of environmental cleanliness.
Now, if we could just keep China from sending its pollution to us via the jet stream. According to various figures and reports, China produces nearly twice the CO2 that the U.S. does and accounts for about 30% of global (human-caused) emissions, according to a report in Business Insider ("These 6 Countries Are Responsible for 80% of CO2 Emissions"). Estimates of the percentage of human-caused CO2 emissions as a percentage of total CO2 emissions still stand at around 10% or less, depending on which report you read and whatever side of the fence the scientist is on. Science reports, however, continue to acknowledge that natural sources of CO2 (from 130+ active volcanoes, plants, forests, etc.) remain the primary source.
Energy concerns are at the heart of any attempts to reduce the levels of human-caused CO2, and that directly impacts the economic health of manufacturing. As countries pledge to reduce the use of fossil fuel energy and move toward wind and solar, the availability of reliable, consistent, strong energy is reduced.
Some advocates of running the world strictly on solar and wind point to Germany as an example; however, they’ve not read between the lines. It is true that Germany uses a good amount of so-called “renewable” energy (solar and wind), in response to the Kyoto treaty, which expired in 2012. But a large part of Germany’s and the European Union’s achievements in meeting those goals had to do with creative accounting. Included in the reduction of greenhouse gases are a variety of numbers on paper: Reliance on “emissions trading, land-use changes or carbon offsets to meet legally binding levels,” said an article in the New York Times on Nov. 13, 2009. As we know, we can make numbers say anything we want, and, in reality, carbon levels weren’t actually “reduced” but were “offset” and traded (large emitters trading with small emitters to show an average and calling it a reduction).
At one point, Germany’s solar efforts were counted as a success because power prices “dipped into negative territory . . . as the sun finally appeared,” said a Forbes magazine article published on Feb. 19, 2016. “But this reflects [solar advocates’] ignorance of the utility system and basic economics and is misleading as to the true cost of power from [solar and wind] sources.”
An article in World Atlas Cost of Electricity by Country shows that Germany has the second highest electric rates ($19.21 per kW hour) only behind Italy at the top ($21.01 per kW hour). The U.S. is 13th at $10 per kW hour. Germany’s high rates are largely the “ramifications involved in Germany’s renewable energy program, including an unstable electric grid, the burden being placed on German households by increased costs for electricity and the need to secure backup power that is affordable and reliable.”
Solar and wind cause surges and falls in the grid, the article noted, an unintended consequence of relying on Mother Nature to provide sunshine and windy days constantly. To stabilize Germany’s grid, “coal is being used more in order to back up the renewable technology (and its intermittent nature) while delivering a reliable base load of power. The result is German residents having to pay feed-in tariffs in addition to high utility costs as a measure to subsidize renewable energy technology.”
Germany’s example prooves that you can’t run a modern, high-tech manufacturing environment on wind and solar. Dropping out of the Paris accord doesn’t mean that the United States won’t continue to use wind and solar as niche energy providers but neither will the Paris accord mean that the world will cease its use of fossil fuels and nuclear energy as the primary means of energy. France, for example, gets approximately 80 to 90% of its energy from nuclear, and while it promises to reduce this level to somewhere closer to 50%, according to some reports, nuclear will be critical to that country’s ability to provide reliable, consistent energy.
Plastics processors (injection molders, blowmolders, extrusion operations, etc.) all need steady, reliable energy that is cost effective, because in this business brown-outs and blackouts cannot be tolerated. If the power goes down when an injection mold is closed and injection is taking place, things pretty much freeze up solid. The cost of a power outage or even a momentary interruption is huge!
The United States needs to expand its use of nuclear energy, which many agree is actually the “greenest” source of energy, as a means to offset the use of fossil fuels, but the question of what do to with nuclear waste remains a big one. Nothing is all good or all bad; every type of energy has its consequence somewhere along the line. Currently, there’s no business case to be made for signing on to an agreement that has no enforcement policies and no penalties for a country that doesn’t meet the agreement’s proposals.
Manufacturing, which includes the huge number of companies involved in plastics production and processing, needs reliable, cost-effective energy to run these plants. One owner of both a mold manufacturing and molding plant noted, when asked by PlasticsToday, “if it’s America first, you have to agree with Trump’s decision to opt out,” he said, requesting anonymity. “Just because everyone else is jumping off the bridge, does that mean we’re supposed to, as well? Apparently, the answer is yes. I’m always in favor of conservation but not government-forced conservation. They can’t even run a monopoly profitably! If the government is in charge, we are screwed!”
Charles A. Sholtis, CEO of Plastic Molding Technology (PMT) Inc., concurs that “China needs to take on much more responsibility to handle its share of emissions reductions.” PMT has put its focus on sustainable manufacturing and believes that the manufacturing sector needs to be proactive in pursuing sustainable manufacturing. “It is up to business leaders to make the type of changes sought in the Paris accord,” he told PlasticsToday.
Given that China has until 2030 to begin that task, nothing much is likely to come from them. In the meantime, most manufacturers will continue along the track toward sustainable manufacturing—but companies will always require reliable, cost-efficient energy to make their businesses globally competitive. Molders are big consumers of energy, which continues to be one of their largest expenses.
“As an energy-producing country, full of natural resources, we need to find cost-effective energy solutions in the U.S., especially in the manufacturing sector,” said Scholtis. “Currently, America is not able to leverage our natural resources to be more competitive on a global scale. Utility companies continue to push for what’s in their best interests, and seem resistant to the change of providing lower cost, sustainable energy solutions.”
A Wall Street Journal article ("U.S. Utilities Boost Investments in Wind, Solar Power") noted that the “utilities continue to burn coal—and increasingly natural gas—to provide the bulk of their power. But power companies are investing in more wind and solar farms because they can sell renewable electricity to other utilities at higher prices than conventional coal and natural gas-fired plants, under contracts up to 25 years long. And federal renewable-energy tax credits reduce the cost of buying or building a new wind or solar power facility, as well as help offset corporate taxes, utility executives say. ‘It’s a very reliable, sustainable, predictable business transaction,’ said Southern Co.’s Chief Executive Tom Fanning.’”
Thus we can see that the Paris climate accord is not all that useful, as a June 2 Wall Street Journal editorial said: “If the decision shows [President Trump] is more mindful of American economic interests than they are, the other virtue of pulling out is to expose the fraudulence of this Potemkin village.”
PMT’s Scholtis concluded that “Trump may be correct in asserting the Paris accord was a bad deal for the U.S., but we still need a better negotiated deal—reducing carbon emissions remains a priority.”
Americans will be better off reducing human-caused carbon emissions our way as we’ve done over the past two decades—in spite of the disappointment the big corporations are showing in the pull out. But just because the U.S. pulled out, nothing says the rest of the world can’t continue down the Yellow Brick Road of renewables, keeping their “green” glasses on and hoping the rest of us will too, as we skip along to the Emerald City.