Trucking will continue down emissions-reduction path, with or without Paris Accord
The irony is evident, even if it got lost in the national news cycle. As President Donald Trump yesterday announced the U.S. was pulling out of the Paris Climate Accord, workers at the Brayton Point Power Station in Somerset, MA, were preparing the coal-fired plant for decommissioning. Just one day before, May 31, the last remaining coal plant in New England closed its doors for good.
ISO New England says that only 2% of electricity in New England was generated by coal in 2016. The reason? Most utilities have switched to cleaner, more efficient, and as it turns out, cheaper methods of power generation. We are talking things like natural gas, wind and solar. Even as far back as 2000, only 18% of the region’s power came from coal-fired plants.
“Economics, not regulation, is the prime driver of near-term coal sector distress,” Swami Venkataraman, an analyst with Moody’s Investors Service, is quoted by NBC News. “The trend of low gas prices and declining renewable costs are independent of expectations created by the CPP and will continue to affect coal-fired generation even in its absence.”
According to the American Action Forum, coal is now responsible for only about 30% of U.S. electricity generation. Natural gas contributes 33%. This is not just a New England trend.
What does coal have to do with trucking? Coal – and the miners who produce it – represented a large bloc of voters who helped get Trump elected. Throughout the campaign, Trump decried Obama-era regulations that pushed alternative, cleaner forms of energy. Pulling the U.S. out of the Paris Accord is another step in reversing those regulations, which the current administration claims is costing the U.S. jobs.
Trump’s proposed budget would cut 30% of the Environmental Protection Agency’s yearly budget. Individual programs facing elimination or significant cuts include the Superfund program, which cleans up contaminated sites, and the trucking industry’s SmartWay Transport Partnership program.
Say what you want about Smartway, the program has been at the center of a revolution in reducing vehicle emissions through improve fuel efficiency. It claims that U.S. trucking companies have saved over $27.8 billion in fuel costs since its inception. Those savings boost the bottom line, but they also help keep shipping rates lower which result in lower costs of goods for consumers.
What effect will Trump’s decision to leave the Paris Accord have on U.S. businesses, specifically trucking? Probably little, if any. And certainly less than proposed cuts to domestic programs such as EPA will have.
The reasons are twofold: states are going it alone, and according to many experts, the U.S. may still hit the agreement’s targets simply because businesses – and consumers – are demanding it.
First, the second part. According to the Yale University Climate Change Communication Program, 70% of Americans believe global warming is real; 53% believe humans are mostly responsible for it; and 71% somewhat or strongly trust scientists who have said humans are accelerating the impact.
Under the agreement, the Obama administration agreed to cut U.S. greenhouse gas emissions 26% to 28% below 2005 levels by 2025.
More than 60 Fortune 500 companies wrote letters to the Trump administration urging it to “re-affirm our deep commitment to addressing climate change.” Most larger companies now have employees dedicated to sustainability efforts. They are doing this for a number of reasons. First, sustainability programs, in many cases, have proven to cut costs, and secondly, consumers are increasingly focused on buying goods from corporate partners focused on caring for the environment.
The 2015 Cone Communications/Ebiquity Global CSR Study found that 90% of consumers expect companies to operate in a responsible way to address social and environmental issues. It turns out, it’s just good business practice.
The first part of the argument is that several states have already made commitments to the Paris Accord in spite of the federal government’s stance. California, Washington and New York announced the United States Climate Alliance. Those three states produce about 20% of U.S. GDP and 11% of U.S. emissions, according to the Energy Information Administration.
“If the President is going to be AWOL in this profoundly important human endeavor, then California and other states will step up,” California Gov. Jerry Brown said in a statement. Expect more states to join the effort. And if states are working to meet the goals, then businesses in those states will need to work to meet the appropriate state regulations.
"I am one of those optimists who believes that we are well on our way to a transition to a low carbon economy in spite of any short-term logic governments use," Murali Kanakasabai, founder and president of consulting firm Two Degree Innovations, told FreightWaves. "Businesses ultimately make this transition because it makes business sense from a risk-reward standpoint. Technology innovation for renewable generation and distribution is making economies leapfrog the development curve. Same thing that happened with mobile phone vs landlines is happening with energy ... my view is this thing will transition bottom-up from businesses and state-level action."
For the trucking industry, emissions reduction started long before the Paris Accord. Long before EPA Phase 2 Greenhouse Gas regulations. Long before EPA Phase 1 Greenhouse Gas regulations. And it started because it makes good business sense.
Reducing fuel usage reduces business costs. More aerodynamic tractors and trailers cut fuel usage. If they didn’t, every manufacturer would still be selling thousands of cabover tractors. They don’t, in part, because fleets want more fuel efficiency. It’s why, while diesel fuel still dominates the industry, investment in alternative power options continues. Even shippers are doing their part, for example, by reducing packaging size because they can move more product in a single trailer, reducing shipping costs.
In a blog posting, the Diesel Technology Forum notes how much cleaner current diesel engines are and how they have contributed to reduced greenhouse gases.
“Today, over 95% of the largest Class 8 trucks are powered by diesel and 1-in-3 come with the latest near zero emission reduction technologies that contribute to improving air quality,” the group writes. “These advanced diesel technologies also come with a fuel savings benefit that have saved 101 barrels of crude oil and 43 million tons of carbon dioxide emissions since 2011. A new Class 8 truck owner will save almost $3,000 in fuel costs relative to previous generation technology. While intended or not, this fuel savings translates to almost 10 tons of C02 saved each year. These are significant successes that will contribute to energy savings and energy independence goals and greenhouse gas emissions priorities for many fleets and equipment owners.”
The group notes that advancing technology such as “advanced lightweight materials, aerodynamic designs, better tire technologies, next generation transmissions and even lubricants will collectively help the diesel engines operate more efficiently and contribute greatly to fuel savings.”
Trucking is on a path to reduced emissions, whether or not the U.S. participates in the Paris Climate Accord. It has been for years, and nothing the current administration is doing will change that.