With the intent to deliver practical actions to address global greenhouse gas emissions, the United Nations (UN) Secretary-General’s Climate Action Summit is underway in New York. This year’s summit is garnering significant media attention, in part because many young climate activists from across the globe are voicing their concerns over climate change. Perhaps the global spotlight this is casting upon these issues will also reinvigorate the fact that while the prospect of an all-encompassing, national carbon market remains unknown, it doesn’t mean that national carbon regulation is slowing down.
National Carbon Regulation Is Moving Along
In July, members of both political parties introduced three bills in Congress that contained tax-based carbon proposals; the ‘We Are Still In’ movement reported that over 2,200 businesses and investors continue to support and pursue actions to meet the Paris Agreement; and greenhouse gas emissions continue to garner significant attention from candidates running for elected office in 2020.
So far, 11 U.S. states and over 50 countries have implemented some form of market-based regulations for carbon. If you’re in one of the states, or exporting to these countries, these regulations are likely already affecting you.
And, meeting the requirements of these countries is crucial for the long-term financial health of U.S. manufacturing businesses.
For example, with over $130B in export sales at stake, the food, beverage, and feed industries need to measure, monitor, and reduce their carbon emission to increase market potential and also, avoid financial penalties.
4 Steps for Regulatory Prowess for the Short- and Long-Term
There are four steps you can take now to fulfill current regulatory requirements and ensure access into important markets going forward:
- Define Your Boundaries: Some emissions may be within your company’s control, while others might fall within your suppliers’ control. Defining what’s “in” and “out” will help your company understand the entities that matter for your regulatory and market needs.
- Measure and Manage Your Inventory: Manufacturing processes, facilities, fuel combustion, packaging, and transportation are all potential culprits. Measuring across all sources will help your company assess where its risk resides and what capital investments to make. If your company does not measure and track emissions, its efforts do not exist in the eyes of customers or regulators.
- Monitor Regulatory and Policy Changes: Regulations and policies change, and with any change the landscape your business operates in can shift dramatically. It is important to monitor any proposed changes in all the states and countries where your company has facilities or customers. It is also important to have your voice heard. Far too often companies are reactive to proposed regulations instead of proactively advocating for policy that makes sense for their industry. Waiting to react will put your company at a severe disadvantage.
- Set Goals: Goals can help your company understand progress and drive the necessary change to reduce your regulatory burden. Goals allow companies to set measurable objectives and design a system necessary to meet them.
Contact a K·Coe Isom advisor to learn how your business can proactively stay ahead of carbon taxation, policy, or regulations. Our manufacturing business experts can provide comprehensive analysis and carbon policy consulting to capture opportunities and manage risks for your business.