The Supreme Court’s decision, in West Virginia v Environmental Protection Agency, crippled the agency’s ability to mandate a cap on carbon dioxide emissions from power plants. While distressing in its own right, it also serves as a portent of things to come with regards to the regulation of carbon emissions from all industries, including the U.S. manufacture of chemicals.
Worldwide, the chemical sector alone accounts for 18% of all carbon emissions. The U.S. chemical manufacturing industry — responsible for making the base chemicals that comprise much of the products we use every day, from desk chairs to clothing — accounts for one fifth of global chemical production, and generates 184.1 million tonnes of CO2 per year, or 18% of all carbon emissions.
The high court ruling does more than eliminate the U.S. from meaningful leadership in solving the climate crisis. While it may confer short-term economic benefits for certain states and industries, it will both accelerate the runaway train of climate change and could damage the U.S. innovation economy in the long term. It will disincentivise corporations from funding research and development activities on clean processes, putting lead weights on U.S. global competitiveness and leaving us further and further behind other nations adhering to timelines for carbon neutrality. The result: the U.S. could be permanently sidelined as a global player in next-generation technologies and emerging market sectors driven by climate policies in Europe and elsewhere, which are aimed at achieving carbon zero by 2050, per the Paris Accord.
As a citizen worried about climate change, I find this ruling is extremely worrisome. As an engineer, I find it especially lamentable because we, as an engineering community, are beginning to make real strides toward developing scalable technologies that can avoid, mitigate, and remediate emissions and create cleaner industrial manufacturing processes. These include new electrochemical processes, advanced batteries and energy storage devices, and novel strategies for integrating manufacturing with the power grid.
On the technical side, we are collaborating with chemical companies to do our part; now we need the government to provide strong leadership and incentives for the transition.
But while the Supreme Court may have taken away the EPA’s stick, the U.S. government still has a carrot. While it may not be able to mandate change through regulation, the federal government can encourage change through incentives, thus allowing the chemical manufacturing industry to retrofit itself to be more efficient and sustainable through the use of renewable power at scale. The move, via increased government funding for research, development and demonstrations, tax rebates or other financial subsidies, could also circumvent death by legislative purgatory: a years-long transit of green mandates through a dysfunctional system, the result of which could very likely be an anemic concoction of regulations geared to the lowest common denominator.
Subsidizing innovation could be a major boost for U.S. competitiveness, at a time when we have fallen further and further behind other nations in the development, production and deployment of clean technologies. And it makes “cents”: as component prices get cheaper, renewable processes fed by renewable energy are becoming more competitive versus fossil fuel-based manufacturing. Low-profit margins advocate for fossil fuel use in the short-term due to the upfront investment in retrofitting manufacturing plants with new equipment, but in the long term, renewables are poised to confer lasting revenue benefits.
Subsidies for industry, like those given to consumers to invest in solar panels, would provide the initial push toward a cleaner economy. This strategy may partly cover the upfront resources necessary to make the shift to alternative renewable-powered manufacturing processes that, once implemented, make both economic sense for chemical manufacturing companies’ bottom lines and shareholders. In addition, potential cost-savings from switching to increasingly lower levelised cost of energy from renewables could be reinvested on collaborative early-stage research efforts between industry and academia, and incubators that accelerate technical development and commercialization potential of new clean technologies.
After all, companies may save a slice of revenue for goodwill projects, but goodwill is not how capitalism operates; the market must come up with solutions, but the government can certainly provide the impetus. It’s hard to imagine a scenario in which the government
faces the slings and arrows of outraged company executives, legislators, and stakeholders because the agency offered financial benefits to do the right thing and advance toward a cleaner industry, which, by the way, would create opportunities and inject new energy and entrepreneurial spirit into local economies. And there’s the side benefit: helping the world slow the imminent existential threat of climate change.