We’ll Always Have Paris…

F unny I should be writing this op-ed at this time, as our friend and colleague, Quality Digest’s editorial director Taran March, is currently traipsing around Paris and its surrounding environs, no doubt enjoying a baguette or brioche or some other culinary delight. Gratefully, that’s about the limits of my French, so I’ll forego any further attempts to depict what Paris might be like to Taran’s wondering eyes and bilingual pen.

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Of course, Paris has been much on the minds of people across the world of late, and not just if we happen to have friends and loved ones visiting the city. That’s because, in one brash and brief speech in the White House’s Rose Garden earlier this month, U.S. president Donald Trump took this country out of the Paris Agreement on global climate change, to which former president Barack Obama had committed the United States on Earth Day, April 22, 2016.

There are several ways to consider the topic of climate change, and all of them are politically charged. As usual, my intention is not to get into the arguments for or against—there are many perspectives on either side, and I don’t want to debate them here.

I do want to consider one piece of this puzzle, however; a piece that’s possibly as contradictory, confusing, and partisan as any of the others, but one that’s so central to the work done by a large cross-section of our audience that I believe it deserves discussion. This involves the economics of carbon emission control, and what it means for manufacturers both here in the United States and abroad.

In his speech, President Trump said that the Paris Accord was a bad deal that was unfair to U.S. workers. “This agreement is less about the climate and more about other countries obtaining a financial advantage over the United States,” he said. Later, he added, “I was elected to represent the citizens of Pittsburgh, not Paris.”

The latter part of that quote is indisputably true. Trump is the U.S. president, and his charge and responsibility does not extend beyond the borders of the United States. But what of the first half of that statement? Is it true that the Paris Accord is really about the other industrialized nations of the world seeking to rip off the United States at every turn?

The answer is… maybe. The arguments in favor of leaving the agreement mostly revolve around the economics of carbon emission control, specifically that it would place draconian limits on U.S. companies, especially manufacturers. If, the argument goes, U.S. companies faithfully abide by the parameters of the agreement and others (i.e., the Chinese) cheat, then our companies would have spent more money than necessary in the short term for no benefit other than some amorphous goal of cutting future temperature increases that might very well be out of mankind’s control anyway.

There are a couple of ways to think about this. First, understand that the Paris Accord was constructed in such a way that “cheating” isn’t necessary. There are no hard-and-fast targets that any nation needs to abide by. If a party or other signatory wants to change their self-assigned targets, the agreement lets them do just that.

But let’s consider current energy needs and those of the future. Say that a nation does in fact cheat or at least change their targets in the future and dramatically increase carbon emissions. What then? Aren’t they getting away with something?

Again, maybe. If technology stays as it is forever, then sure, those that break or bend the emission rules are going to benefit. But things will change; they always do. And those who are making the effort to support green energy and reduce their reliance on the current technologies of the day will be the ones to reap the rewards of the newer, more efficient technologies of the future. It’s as true in energy as in computing, purchasing, personnel management, or any of the other key inputs that smart companies need to manage well.

Then, what about waste? Henry Ford famously admonished against anything going up the smokestack because it represented wasted materials and ate into profitability.

As broad and far-reaching as these questions may be, there is an even bigger one worth considering: What will be the framework of regulatory compliance and oversight in the future United States? Abandoning the Paris Accord is one move to give companies more leeway over how they wish to operate. Repealing Dodd-Frank may be next. In sectors ranging from financial services to housing to airlines, and many more, the federal government is stepping back from long-established controls and oversights to take a laissez faire attitude the likes of which this country hasn’t seen in something like 90 years. What are we to make of that and the long-term implications for sustainable business models?

Quality Digest editor in chief Dirk Dusharme and I talked about many of these very same topics on the June 2 episode of our weekly web TV show, Quality Digest LIVE. I hope you’ll watch our extended discussion on the politics of regulation in general and climate change specifically, with an emphasis on what leaving the Paris Accord might mean to U.S. manufacturers in the future. Click here to check it out.

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