Baerren: Climate change more than a thorny political problem

By Eric Baerren, The Morning Sun

Last decade, the U.S. Supreme Court said that the EPA can, under the Clean Air Act, regulate carbon dioxide as a pollutant. Some people thought it was a silly idea. We exhale carbon dioxide, they said. Others pointed to the inconvenient fact that carbon dioxide also helps trap heat in the atmosphere, and that the amount that we’ve put into the atmosphere since the dawn of the Industrial Age has helped gradually warm the atmosphere in a way that has changed the planet’s climate patterns. It was that second thing that prompted the Supreme Court’s ruling, by the way.

The last president didn’t show much interest in using the EPA to regulate carbon dioxide. His successor, however, took over the Oval Office saying that, while he would prefer to work with Congress on regulating carbon dioxide, if they refused he’d go the administrative route. What followed were years of threats of shutting down the federal government, baleful warnings about death panels, phony scandal mongering and eventually a genuine government shutdown. Earlier this month, the administration decided that it’d had enough of the foot dragging and released a set of proposed rules to reduce the amount of carbon dioxide our power plants pump into the atmosphere.

As you could have predicted, people who just months before were insisting that climate change is a communist hoax immediately attacked the new rules as job killers. There wasn’t any actual factual evidence to support this, but that’s not new either. There never is. It is simply assumed that environmental regulations destroy jobs by saddling employers with burdensome costs of compliance.


Quite the contrary, a new report from an outfit called Business Forward says that manufacturers -- particularly automakers -- can either pay a little more for energy right now or a lot in the future through disruptions to their global supply chains. As a whole, automakers are a lot more heavily invested in their supply chains than they are in energy costs (Ford, in particular, has embraced efficiency), and those supply chains are increasingly vulnerable to extreme weather events. Higher energy costs through new EPA energy rules -- and the report is a defense of those rules -- would add about $7 to a $30,000 car, whereas an hour of downtime because parts can’t move due to extreme weather costs a factory about $1.2 million. The conclusion is that in the long run it’s cheaper for automakers to pay a little extra for clean energy than it is to pay for factory shutdowns because of extreme weather.

You can quibble with the preciseness of the comparison, spending a little bit extra now doesn’t guarantee that there won’t still be future downtimes, but the study is probably the first anywhere to make the case that climate change poses more than just a thorny political problem. It also means choices for businesses, particularly manufacturers. This is new.

For years, we’ve been hearing that this is already the case for insurance companies. Earlier this spring, Lloyd’s of London calculated that the climate change-intensified storm surge of Superstorm Sandy cost the insurance industry about $8 billion, about 30 percent of the storm’s entire costs. Around the same time, Standard & Poor’s said that it might downgrade the credit ratings for nations made vulnerable to destabilization by climate change.

Conservatives may still insist that climate change isn’t happening, but Wall Street isn’t having any of it; conservatives have Fox News, insurance companies have lists of claims paid out. Everyone is already paying, in fact, and in a complex global system, manufacturers have a choice about investing a modest amount now or risk paying through the nose later as a supply network susceptible to extreme weather upsets business assumptions.

Eric Baerren is a Morning Sun columnist. He can also be found at the website Michigan Liberal and can be reached at