VA Auto Industry Report on EPA Carbon Reduction Plan
PHOTO: A new report finds the auto manufacturing industry in Virginia has more to lose from disruptions caused by climate change than the costs associated with proposed EPA carbon standards. Photo credit: Missy Schmidt/Wikimedia Commons.
June 5, 2014
NORFOLK, Va. – The proposed Environmental Protection Agency rule to reduce carbon pollution from power plants won't be free – but climate change may be even more costly.
It's estimated the EPA’s proposed standards will raise electricity prices by 6 percent, and that will impact manufacturers.
But a new report from the Business Forward Foundation crunched the numbers for the auto industry, measuring the cost of the standards against the cost of the problem the standards are trying to address.
Report author Jim Doyle says severe weather spurred by climate change disrupts production and the supply chain.
"Severe weather has closed bridges, flooded factories, warped train tracks, threatened ports, and slowed shipping,” he explains. “Auto plants are losing days of production to severe weather, some are losing weeks. And by comparison the cost of these standards is minute."
According to the report, the increase in electricity rates will cost manufacturers $7 more per vehicle produced.
But Doyle says because the auto industry operates a very sophisticated and global supply chain, a plant loses more than $1.25 million for each hour lost when severe weather forces a shut down.
Doyle says in Virginia, the auto industry is connected to 140,000 jobs, 133 suppliers and 2,700 auto dealerships.
"But perhaps the most important thing about Virginia and autos is the Norfolk port – the fact that that one port supports manufacturing plants across the Midwest and the Mid-Atlantic,” he points out. “They all depend heavily on parts coming through the Norfolk port."
David Foster, executive director of the Blue Green Alliance, says as the nation transitions to cleaner energy, there are lessons already learned from when the U.S. instituted new fuel economy rules.
He maintains those standards revived the collapsed auto industry.
"A million jobs as a result of embracing higher environmental standards and innovation as the driver of the 21st century economy,” he states. “We need to do for the energy sector exactly what we did for the automotive sector."
Foster adds that disruptions caused by climate change threaten other industries as well.