climate change: current policy landscape and implications for u.s. industry

April 20April 20thth, 3:30-, 3:30-5:005:00

2009 MEP National Conference2009 MEP National Conference

Climate Change: Current Policy Climate Change: Current Policy Landscape and Implications for U.S. Landscape and Implications for U.S.

IndustryIndustrySpeakers: Speakers:

Tom Olson, Tom Olson, Environmental Environmental Defense FundDefense Fund

Bob Baugh, Bob Baugh, AFL-CIO Industrial AFL-CIO Industrial Union DepartmentUnion Department

Climate ChangeClimate Change………..………..• What it’s about….What it’s about….

• How we can fix it…….How we can fix it…….

• AndAnd how it creates how it creates

business opportunities business opportunities

for U.S. manufacturersfor U.S. manufacturers

Tom Olson, Environmental Defense FundTom Olson, Environmental Defense Fund

MEP Conference, Orlando, Florida – April 20, 2009MEP Conference, Orlando, Florida – April 20, 2009

Why we need to act on climate change…..a very

short course

Climate Climate Change 101Change 101

Emissions this decade have been worse than the “worst

case” imagined in 2000

Absent strong action, the U.S. will be dramatically

hotter within your lifetime

• In south Florida in the 2030s, almost every year will be as In south Florida in the 2030s, almost every year will be as hot as, or hotter than, the hottest year of the second half of hot as, or hotter than, the hottest year of the second half of the 20the 20thth Century. Century.

• Almost everywhere in the US, these scorching years will Almost everywhere in the US, these scorching years will become at least 15 times more frequent in the next few become at least 15 times more frequent in the next few decades. decades.

So what are lawmakers trying to do to protect us?

• Put a national cap on greenhouse gases (Waxman-Markey bill in the House – first votes next week)

• Put regional caps on GHGs (already in place in New England and some western states)

• Require utilities to rely more on wind, solar, and other renewable sources of power (Waxman-Markey bill, Bingaman bill)

• Direct stimulus funding to renewable energy, energy efficiency, and expansion of the national electric grid

• Fund R&D on ways to capture carbon dioxide from power plants and store it underground (various bills)

The common theme of all these policies….

• Reducing greenhouse gas pollution by…

– Encouraging more energy production from sources that emit little or no GHG pollution

– Reducing energy use through energy efficiency

President Obama – President Obama – 4/18/094/18/09

• ““The only way to truly spark the transformation to a The only way to truly spark the transformation to a clean energy economy is through a gradual, market-clean energy economy is through a gradual, market-based cap on carbon pollution, so that clean energy based cap on carbon pollution, so that clean energy is the profitable kind of energy. …. is the profitable kind of energy. …. If businesses If businesses know today that we are closing this carbon pollution know today that we are closing this carbon pollution loophole, they will start investing in clean energy loophole, they will start investing in clean energy nownow…. That’s how we can grow this economy, …. That’s how we can grow this economy, enhance our security, and protect our planet at the enhance our security, and protect our planet at the same time.” same time.”

What does this mean for manufacturers?

• http://info.ems-rfid.com/opencms/system/modules/com.szinf.ems/resources/images/manufacturing3http://info.ems-rfid.com/opencms/system/modules/com.szinf.ems/resources/images/manufacturing3.JPG.JPG

Traditional MEP focus: Traditional MEP focus: Lean ManufacturingLean Manufacturing

• Helping companies become more competitive by Helping companies become more competitive by reducing energy use (and energy bills) in a carbon-reducing energy use (and energy bills) in a carbon-constrained worldconstrained world

– EXAMPLE: any business that uses large amounts of EXAMPLE: any business that uses large amounts of hot waterhot water can save money with a new-generation can save money with a new-generation condensing hot water heatercondensing hot water heater

– EXAMPLE: any company with a EXAMPLE: any company with a large roof large roof may be may be able to lease its roof space to a company that will able to lease its roof space to a company that will install solar panels for freeinstall solar panels for free

– EXAMPLE: any company that owns its own building EXAMPLE: any company that owns its own building may be able to may be able to contract with an ESCO contract with an ESCO to reduce to reduce energy expenses while saving moneyenergy expenses while saving money

• Great resource for energy efficiency: Great resource for energy efficiency: www.aceee.org

http://www.aceee.org/

Traditional MEP focus: Traditional MEP focus: Lean ManufacturingLean Manufacturing

• Helping companies meet the demands of suppliers Helping companies meet the demands of suppliers (like Wal-Mart, Toyota, Boeing) that require vendors (like Wal-Mart, Toyota, Boeing) that require vendors to meet tough environmental standardsto meet tough environmental standards

LessCarbonMoreJobs.org

Environmental Defense Fund

There are 8,000 parts in a wind turbine -- Liz Salerno, AWEA

bolts, lubricants, copper wiring, fiberglass housing, ball bearings, turbine blades, concrete & steel foundations and seals, power transmission equipment, printed circuits, motors and generators, measuring devices

For a 44 MW project, with 29 individual wind towers:•6,452 tons of steel

•609 tons of composite fiberglass

•12,470 tons of concrete

“We just make screws and bolts – tower bolts, nacelle bolts, blade bolts – not nuts or anything else. But we think of ourselves as the Cadillac of bolts.”

-- Dan Alvarez, product manager, Cardinal Fasteners

250 Climate Solutions:New Economy + Old Economy

• Environmental Defense Fund• Building and Construction Trades

Department (AFL-CIO)• International Brotherhood of

Boilermakers• Industrial Union Council (AFL-

CIO)• United Association of Plumbers

and Pipefitters

Project Sponsors:

Project author: Duke University Center on Globalization, Governance & Competitiveness

Value chains for 7 climate solutions …LED Lighting

Concentrated (Thermal) Solar

Auxiliary Power Units

Management of hog waste

High Performance Windows

Waste heat recovery (new)

Electric hot water heat pumps (new)

It’s just a window.

Raw Materials

Components

Finished Products

Retailers &Wholesalers

Raw Materials

SilicaNickel

ChromiumPolystyrene

FoamArgon

AluminumFiberglass

VinylLumberKryptonTitanium DioxideSilver

Components

7 Major Components:

Low-e CoatingsFlat GlassSpacersGas Fills

Backer RodsFlangesFrames

Finished Products

AndersonJeld-Wen

Masonite Int.Pella

AtriumFortune Brands

MarvinMI Windows

MilgardPly Gem

Weather Shield

Lowe’sHome Depot84 Lumber

Stock Building Supply

Renewal by Anderson

Detroit DoorJefferson DoorBee WindowMatthew’s

Pacific Mutual

Retailers &Wholesaler

s

It’s not just a window.

Map 1: Top U.S. Component and Window Manufacturers

Source: Swanson, John G. (2008, February 1). Top Manufacturers of 2008: Source: Swanson, John G. (2008, February 1). Top Manufacturers of 2008: It's Been a Tough Year. It's Been a Tough Year. Windows & DoorsWindows & Doors. .

311 U.S. LED Supplier Firms, 2008

SOURCE: CGGC, based on LEDs Magazine, LED Suppliers Directory 2008SOURCE: CGGC, based on LEDs Magazine, LED Suppliers Directory 2008

“We chose Cree Xlamp LEDs because they provide industry-leading performance and they provide the reliability and design flexibility needed for this highly visual project.”

--XiGuang Fu, executive directorGrandar Landscape Lighting and Technology Group

Environmental Defense Fund, Roberts, 2009Environmental Defense Fund, Roberts, 2009

Cree, Inc. Employees, 2002-2008

Source: CGGC, based on Cree, Inc. 2002, 2003, 2004, 2005, 2006, & 2007, 2008 Annual ReportsSource: CGGC, based on Cree, Inc. 2002, 2003, 2004, 2005, 2006, & 2007, 2008 Annual Reports


Less Carbon = More Jobs


LessCarbonMoreJobs.org

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Low Carbon

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New EconomySustainable TechnologiesRenewable EnergyEnergy Efficiency

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RPS Passed AB32 Introduced AB32 Passed

Post AB32:

98% CAGR (05-07)

Pre-AB32:

20% CAGR (02-04)

Green Investment in Green Investment in CaliforniaCalifornia

2002 20062003 2004 2005 2007

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Source: Cleantech Group

Green Investment in OhioGreen Investment in OhioNumbers are 10x smaller than California chartNumbers are 10x smaller than California chart

April 20April 20thth, 3:30-5:00, 3:30-5:00

How this session fits into the overall MEP strategyHow this session fits into the overall MEP strategy

Climate Change, and policies to address it, will be major drivers of Climate Change, and policies to address it, will be major drivers of manufacturing practices for foreseeable future. MEP has made Sustainability manufacturing practices for foreseeable future. MEP has made Sustainability and Process Improvements key factors in our Next Generation framework to and Process Improvements key factors in our Next Generation framework to demonstrate MEP’s ability to be part of the solution to our nation’s energy demonstrate MEP’s ability to be part of the solution to our nation’s energy challengeschallenges

How this session fits into a center’s strategy / business modelHow this session fits into a center’s strategy / business modelCenters drive waste out of production processes and help position companies Centers drive waste out of production processes and help position companies for growth markets (e.g., green)for growth markets (e.g., green)

How this session fits into a client’s strategy / business modelHow this session fits into a client’s strategy / business modelEnables a company to reduce costs, meet environmental standards, and sell to Enables a company to reduce costs, meet environmental standards, and sell to new customers interested in more green productsnew customers interested in more green productsMarket diversification is a high priority for many SMEs – maybe sell toMarket diversification is a high priority for many SMEs – maybe sell torenewable energy OEMsrenewable energy OEMs

How could a center sell this to a clientHow could a center sell this to a clientGreen products are cool! Implementing more eco-friendly business practices Green products are cool! Implementing more eco-friendly business practices will broaden your appeal to new customers and markets, helping you get will broaden your appeal to new customers and markets, helping you get ahead of the “green” waveahead of the “green” wave

2009 MEP National Conference2009 MEP National Conference