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William A. Levinson

Kyoto and Quality

How greenhouse gas regulations will outsource U.S. jobs

 


Several northeastern states and California are attempting to mandate greenhouse gas reductions similar to those required by the Kyoto Treaty. My home state of Pennsylvania should, instead of joining the politically correct lemmings, become the China of the Northeast by rejecting all greenhouse gas mandates. Pennsylvania might thereby attract factories and manufacturing jobs from the other states in question.

Advocates of the Kyoto Treaty will doubtlessly denounce this position as uncaring and socially irresponsible. The hard truth is, however, that mandated carbon dioxide restrictions, carbon taxes and so on will do little or nothing to affect global warming as long as places like China have no obligations whatsoever to curtail their emissions. Their sole effect will be to move the smokestacks, the jobs under the smokestacks and all their carbon dioxide to China. Meanwhile, some of Kyoto’s most vocal advocates include South American countries that are burning down rain forests to clear land for agriculture. When it comes to action, as opposed to lip service, the “rest of the world” that Kyoto’s domestic advocates are so fond of citing doesn’t take the purported problem seriously.

Social responsibility and, indeed, the duties of the engineering profession require mediation of pollutants (e.g., mercury compounds, particulates, and nitrogen and sulfur oxides) that can harm people, animals and plant life. Perhaps the best way to phrase the ethical question is, “Would you be willing to live downwind from your factory?” Carbon dioxide is not, however, harmful in the concentrations that power plants and vehicles emit. Meanwhile, it is socially irresponsible to enact legislation whose sole effect will be to move working people’s jobs offshore.

Lean manufacturing is a viable countermeasure to cheap offshore labor, and the United States invented “scientific management” for this purpose a hundred years ago. Henry Ford, who developed scientific management into what Japan later adopted as the Toyota Production System, would surely have fired any executive who proposed moving a factory offshore for cheap labor, as the following quote demonstrates:

“Cutting wages is the easiest and most slovenly way to handle the situation…. It is, in effect, throwing upon labour the incompetency of the managers of the business.” (Ford, My Life and Work, 1922.)

Instead, Ford wrote, “The location of a new plant is largely determined by the cost of its power and the price at which it may make and ship goods to a given territory.” ( Today and Tomorrow, 1926.) Lean manufacturing can reduce the labor cost per unit of product to the point where it costs more to ship it from China than it does to make it in the United States. It cannot, however, reduce the per-unit energy cost below a certain level. No matter how efficient one makes the process, it requires a certain minimum amount of energy to, for example, separate aluminum from oxygen. California’s dysfunctional energy policies once turned manufacturers into nonvalue-adding middlemen by driving prices so high that aluminum factories shut down and resold energy on the open market.

Kyoto’s advocates want factories to have to pay for “carbon emission credits,” which could be exchanged in the marketplace. Trading stamps, comics, baseball cards, and other collectibles would add about as much value to our economy and society. The old joke about being paid for “not raising hogs” could meanwhile be adapted to “not emitting carbon dioxide”--a symptom of clinical and, by extension, economic, death.

Instead of looking to ineffective mandates and treaties to reduce greenhouse gas emissions, we should rely on old-fashioned profit motives. Henry Ford could probably have registered his industries to ISO 14001. Instead of throwing into the river whatever wouldn’t go up the smokestack--which would probably have been legal at the time--Ford recycled paint fumes as solvents, distilled scrap wood into saleable chemicals, and sold slag from his blast furnaces as cement and paving material.

Today, Pennsylvania is turning waste from coal mining operations into clean fuels while using gas from landfills to generate power. Since fuel cells bypass the efficiency limitations of coal-burning thermal power cycles, reacting coal with steam to make hydrogen can produce more energy per pound of coal--and, incidentally, less carbon dioxide per unit of energy. Australian farmers, meanwhile, are investigating drugs and vaccines that will suppress methane-producing bacteria that live in the digestive tracts of livestock. This will improve their profits because the animals will convert their feed into meat or wool instead of methane, which also happens to be a greenhouse gas. These are examples of the market-driven and intelligent environmentalism that creates jobs instead of destroying them, while reducing greenhouse gas emissions painlessly and economically.

About the author
William A. Levinson is the principal of Levinson Productivity Systems P.C. (www.ct-yankee.com) and the author of Henry Ford’s Lean Vision: Enduring Principles from the First Ford Motor Plants (Productivity Press, 2002).