Business Forward Report: Climate Change Disruptions Costing Indiana Manufacturers Millions

Posted by Laura Arnold  /   June 07, 2014  /   Posted in Uncategorized  /   No Comments



Mary Kuhlman, Public News Service-IN

(06/05/14) INDIANAPOLIS – A new report finds Indiana manufacturers have more to lose from disruptions caused by climate change than the costs associated with new Environmental Protection Agency carbon standards.

It's estimated the proposed standards will raise electricity prices by 6 percent, and that increase will impact manufacturers.

But 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 is having a massive impact on manufacturing.

"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 just $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 with 516,000 automotive jobs in Indiana, the implications of inaction on carbon pollution are enormous.

"There are 430 major suppliers across the state, 3,000 different dealerships,” he says. “Chrysler, Ford, GM, and Toyota each have major facilities, and every one of those suppliers and every one of those major automakers, depends on the supply chain we've been talking about."

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, resulting in lost business opportunities, jobs, income for workers and revenue for communities.

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