Why “Cleaning Up” Doesn’t Mean Cutting Profits

Posted on January 5, 2011

Although we focus primarily on the fuel savings and other financial advantages that CNG provides fleets, we sometimes forget the significant environmental benefits that CNG brings to bear, especially in reducing CO2 emissions and pollutants.

In a recent newsletter, our friends, Eric Taub & Andrew Keenan at Verus Carbon Neutral wrote an interesting article reminding us that there is also a significant financial impact of emissions looming in the not too distant future. They write:

Global Buyers Looking at Carbon Emissions

According to Lord Stern, one of the most important climate-change economists, countries that are cutting their GHG emissions now may decide to implement trade restrictions on carbon-intensive US exports. These restrictions could come as early as 2020, so we would only have a decade to change others’ minds. President Obama has said he wants to cut national emissions by 17% by that 2020 deadline, and here is how federal and state governments plan to reach this goal:

One of the major steps to achieve this overall 17% cut lies in federal agencies, which have released ten-year sustainability reports that plan to cut emissions between 3-30%. These reports and objectives span every federal agency, including the Department of Defense, which plans to make a 30% cut in emissions.

In other parts of the Executive branch, the EPA has released GHG reporting rules for the oil and gas industries. These refineries must report their emissions beginning 2011 and submit a final report to EPA by March of 2012. This will increase the EPA’s Greenhouse Gas Reporting Program’s influence from 85% to 88% of US industrial GHG emissions.

EPA has also made progress in the trucking and ground transportation world. Heavy-duty trucks and buses will have new standards that will lead to GHG reductions between 7-20%. If manufacturers exceed these regulations and clean up even more, they can acquire and sell offsets to other manufacturers. These vehicle upgrades would pay for themselves (probably through fuel savings) within a year.

As for state measures, California voters defended their statewide cap-and-trade program on Voting Day by rejecting Prop. 23. This ballot measure would have prevented the cap-and-trade program from existing until California unemployment reaches 5.5% for a full year (it is currently 12.4%). The proposition failed, with 60% of the populace voting “No.”

The results of these new federal and state actions challenge the long-standing belief in the dichotomy between economic growth and environmental cleanliness. Over the next decade, the achievements of these regulations should convince those of all political agendas that “cleaning up” does not mean cutting profits. Through mechanisms like efficiency, transparency, technological solutions and cap-and-trade, these new policies will save the country billions of dollars while cleaning the air and increasing energy security.

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