Why You Should Care
About Climate Change

Calling for a more rational, long-term energy policy in the United States, the panelists were critical of “extreme-green” activists who oppose expanded exploration for oil and gas and construction of new nuclear power facilities. Without substantial new sources of energy, the future of the U.S. economy is in serious peril, they agreed.

Further constraining attempts to increase energy production is concern about greenhouse gas emissions and their contribution to climate change. Echoing the sentiments of most domestic manufacturers, the panelists emphasized that proposed legislation to limit carbon emissions would put American industry on an unequal footing with foreign competitors, accelerating the flight of production overseas to countries with more lax environmental standards. Besides harming the U.S. economy, the result could actually be a net increase in global greenhouse gas emissions.

This month, the Senate is expected to debate S. 2191, the Climate Security Act of 2007, which calls for U.S. industry to lower its total greenhouse gas emissions 63 percent below 2005 levels by the year 2050. These reductions ostensibly would be achieved through a system in which companies cap their emissions, and then trade emission rights with each other.

A study commissioned by the National Association of Manufacturers and the American Council for Capital Formation was highly critical of the legislation. By 2020, its authors estimate, it would cause over $150 billion in lost GDP, over 1.2 million lost jobs and sharp spikes in the cost of electricity and gasoline (figures supporters obviously dispute).

“Right now the biggest concern we have is that whatever happens in Washington on this CO2 issue, the rest of the world has to play by the same rules,” said panelist Dan DiMicco of Nucor Corp. “If we are not absolutely sure we have the right science behind it, and the rest of the world does not follow along, we will bankrupt our system and fail to achieve the desired impact on the global climate.”

“If we take some extreme action as a country, and the rest of the world says no thanks, inevitably our manufacturing base will decline. All of us who make things, and all of you who process things, will suffer,” panelist John Surma of U.S. Steel told the audience of service center executives.

As an industry, steel currently accounts for less than 2 percent of greenhouse gas emissions in the U.S. Growing demand for steel around the world, particularly in developing countries, will increase production by hundreds of millions of tons in the coming decades—meaning steel-related emissions are bound to increase. “It is impossible the way we make steel today for an absolute reduction of CO2 emissions from the steel sector,” Surma said. Many politicians and environmentalists don’t fully understand the tradeoffs, he added. “This is a 100-year problem. If world leadership is looking for our sector to absolutely decrease emissions, it puts us out of business.”

As panelist Jose Martins of Vale added: “How can we tell developing nations they can’t take their turn raising their standard of living? The only way to solve this problem is through international cooperation. At the end of the day, we all share the same atmosphere.”