Green logistics: Senate EPW Committee passes 'Climate Change' bill
Jeff Berman, Group News Editor -- Logistics Management, 11/9/2009
S. 1733 the Clean Jobs and American Power Act-more commonly known as the "Climate Change" bill-was passed by the Senate Committee on Environment and Public Works (EPW) by an 11-1 vote late last week.
This bill, which was introduced by Senators Barbara Boxer (D-Calif.) and John Kerry (D-Mass.), has a goal to hit a 20 percent reduction from 2005 levels of carbon dioxide emissions, along with an 83 percent reduction in CO2 emissions by 2050.
Senator Boxer said in a statement that this bill will help the U.S. wean off a dependence on fossil fuels; put the country in charge of its own energy future; prevent dangerous pollution; and spur billions of dollars of private investment to create millions of clean energy jobs
But one aspect of this bill that has been met with heavy scrutiny due to the potential for increased costs for businesses and consumers as a result of "cap and trade," a form of emissions trading, which is used to control pollution by offering economic incentives in order to achieve reductions in emissions pollutants. Cap and trade would put limits on emissions from motor vehicles, coal-fired plants, and factories.
The argument against cap and trade-and its subsequent potential impact-on transportation and logistics was made clear in a recent Logistics Management reader survey poll of 115 logistics and transportation executives, which found that 90 percent of respondents opposed the bill, with 92 percent indicating it will increase costs to varying degrees.
The survey stated that 8 percent of respondents maintain cap and trade will raise costs by 0-5 percent, 24 percent said it would raise costs by 6-10 percent, 25 percent said it would raise costs by 11-15 percent, and a cumulative 44 percent indicating costs would go up by 16 percent or more.
But Kerry and Boxer maintain that these higher emission reduction targets impact "less than two percent of American businesses and keeps American industry competitive during the transition to a new energy economy."
Meanwhile, reasons from survey respondents for the argument against cap and trade included: lack of details on how the process works, no scientific evidence to support human caused climate change, add extra costs to the supply chain and subsequently shift production to countries with less restrictions, lack of demonstrable benefits, and increased unemployment, among other factors.
While in the minority, those respondents that favored cap and trade noted there are various long-term benefits, including taking steps to reduce U.S. dependence on oil, coupled with economic incentives to cut CO2 emissions.
"It is the right thing to do for the planet," said an automotive shipper. "Sustainable energy investment and growth is the newest economic and societal evolution. Cap and Trade can be an area for the U.S. to gain a competitive edge in being a supplier of a portion of the World's energy needs."
Shipper impact: At a time when economic concerns have trumped all others, it is still important for shippers to keep sustainability and green supply chains top of mind, said Ryan Boccelli, director of logistics at Stonyfield Farm-the world's leading organic yogurt maker-based in Londonderry, N.H., in an interview earlier this year.
"There is no doubt in this economy that the term ‘green' has taken a back seat for a lot of companies, with more of them focusing on efficiencies but not realizing that ‘green' and efficiencies actually go hand in hand," he said. "The tough part for many shippers is putting the capital up front for green technology and initiatives. I hear daily from carriers with capacity concerns and other customers focused on reducing delivery frequency. There is a large focus on building truckloads, but most people don't realize that if you put the effort behind a green program there will be benefits in the end."
In regards to the proposed legislation for reducing GHGs, Boccelli said he is more in favor of setting limits that shippers can work towards achieving like the EPA's tractor emissions requirements, which required incremental improvements from 2004 to 2007 to 2010. An incentive-based approach, explained Boccelli, may have a better outcome for shippers than one mandated by legislation, which he said could send the wrong message to shippers, adding if shippers work together with appropriate providers, they may be better equipped and prepared to meet future green goals.
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