Delegates from 195 nations met in Paris on December 12 and took a stand against climate change at the 21st Conference of Parties (COP21). President Barack Obama called the accord a "turning point for the world."
The agreement – to curb greenhouse gases and keep the world from heating up by 2 degrees Celsius – could also be a turning point for manufacturing.
From an increased focus on green manufacturing to growing business opportunities for both buyers and suppliers of manufactured parts, and to possible reductions in shipping costs, here are 3 big implications that could come out of the COP21 decision.
Manufacturers Will [Most Likely] Get Greener (And Cleaner)
Quickly becoming a hot topic, Green Manufacturing is catching on at big name manufacturers such as Earth Tec, Dell, and Nike. And by getting ahead of this trend, they are positioning themselves to succeed and grow even in the face of potential increased governmental regulation in the area of greenhouse emissions.
As we know, by-products of the manufacturing processes of both small and large manufacturers can and do contribute to pollution. CNC Machining often releases hazardous oil and coolant mists while injection molding produces harmful fumes and vapors. And that's not to mention noxious gases released when refining oil or manufacturing chemicals for many of the materials used in the manufacturing process.
Overall, curbing greenhouse gases over the past decade has caused many suppliers to be more efficient in their manufacturing processes. And that doesn't look to change.
A study by New York University found that profitable pollution reduction increased manufacturing efficiency by 5-8%.
The Energy Sector Will Innovate -- And Power the Manufacturing Industry
In recent years, the push for alternative energy sources has led to manufacturing growth in energy subsectors such as biofuels, wind energy, and hydropower.
Just look at the solar industry. Among nations implementing solar energy solutions, the United States is setting growth records across the board. For example, the solar industry employs more than 29,000 manufacturing professionals in the United States alone at more than 650 manufacturing facilities. And that number is steadily growing.
The U.S. Department of Energy found that steelmaking could possibly see reduced production costs of 10-20% by properly leveraging energy reduction measures.
Shipping Rates Could Actually Decrease -- Giving Manufacturers a Leg Up
Today, most Class-8 trucks get about 6 mpg, contributing to more than one-fifth of greenhouse gas emissions and oil usage in the United States. If that mile-per-gallon number were raised to 10 mpg or more, "the cost savings per [120,000 miles driven by a Class-8 truck] could be $25,000 or more," according to a recent Wal-Mart logistics study.
In July, BMW's first fully-electric Class-8 truck hit the roads in Germany. Currently getting about 62 miles per charge, the truck's range is relatively small. But its impact on global warming will be huge. Each truck keeps 11.8 metric tons of CO2 out of the atmosphere each year, or 82.6 metric tons over its lifetime. Compare that to the more than 530 metric tons of CO2 emitted each day by the entire U.S. Class-8 truck fleet in 2013 alone. The savings are staggering.
But curbing CO2 emissions isn't all an all-electric fleet would do. Outfitting more Class-8 trucks with alternative fuels will, in the long run, actually reduce shipping costs, helping buyers and suppliers ultimately save more money on shipping their parts.
According to the Environmental Protection Agency and the National Highway Safety Administration:
[From 2021-2027] a buyer of a new long-haul truck would recoup the extra cost [of outfitting his fleet with emission reducing technology] in under 2 years through fuel savings…The proposed standards would result in approximately $230 billion in net benefits over the lifetime of the vehicles outfitted.
That's a huge cost savings over time.
When the Consumer Federation of America studied what households and businesses are actually paying for when they pay for logistics, research discovered that most were spending about $4,500 a year on freight costs. $1,100 of that was in fuel. So more efficient and less environmentally damaging fuels are a win-win for everyone.
The COP 21 deal isn't going to impact manufacturing just yet -- at least 55 of the 196 member nations must ratify the measure before that happens. And there are still a few kinks to work out. But whatever the outcome, the future of manufacturing is bright ... and green.