Fight Against Climate Change – Negative Impact on Business World?

Climate change is by no means fresh news. The negative changes in the world’s atmosphere are common knowledge with equal awareness that the problem is due to centuries of ignorance and neglect. Frequently both national and international talks are taking place amongst governments, organizations and the general public alike to bring about a change in the rapidly failing eco-system. While at first glance solutions such as those embraced by the Kyoto Protcol[1] are the perfect solution, the fight against climate change actually has the potential to harm some industry areas.

[protected]One such trade which has recently come under fire is the Irish cement industry. Ecocem Managing Director Donal O’Riain has recently claimed that the cost of the environmental and health damage caused by plant emissions since 2000 is nearing €2 billion, adding that it is the largest cost which the industry endures, almost equivalent to 63% of its selling price.[2] The Cement Manufactures of Ireland have been enraged by this statement disputing the figures provided as ‘generalized’ and ‘misinterpreted’.

So why are cement manufacturers consequently angry considering the industry emits a significant amount of greenhouse gases, totaling approximately 5% of global anthropogenic CO2 Emissions?[3] Perhaps the answer lies in the concern for company profit and loss. As internationally there has been an increase in government policies aimed at reducing emissions, it may be the case that executives are fearful of the economical effects these policies can have on them as a company. 

Some of the largest cement companies in the world use fossil fuels for manufacturing. With the implementation of new environmentally friendly policies, up to 80% of this fuel may not be used, wasting resources worth billions of Euros, a loss that companies will not be willing to experience.

The shipbuilding industry is another which is releasing enough emissions to have a significant impact on the atmosphere. Unlike the cement industry where the harm is done solely through the manufacturing process, the emissions released throughout the process of shipbuilding takes a timelier course, often over a thirty year period, from the construction to the dismantling of the ships.

Yet, although the industry can be considered one of the worst offenders, this negative aspect of the industry tends to be overlooked by government officials due to the overall economical impact and necessity of the trade. Similarly, there has been resistance from various maritime sectors who are reluctant to take care of the environmental impacts left by the ships throughout the course of their lifetime.[4]

While the government may potentially have the option to step back and allow the industry to regulate itself, there must be some cooperation by industry professionals to ensure efficient progress. On paper this option sounds plausible but it cannot guarantee that the environment will be its main concern. Why would it as the sole purpose of the shipbuilding, and also the cement manufacturing industry is to generate profit.

This leaves two choices: try to keep already fledgling markets (across all sectors and not limited to those mentioned above) from plummeting further, or put in place tight policies which will preserve the environment but may potentially harm businesses. Regardless, guiding principles need to be constructed sooner rather than later to refrain from an already neglected problem in climate change becoming worse, while ensuring that business are not affected.  Smart investors are more than aware that most fossil fuel reserves are essentially unburnable, yet the system as a whole must see that they do not suffer.[5]


[1] http://www.stanford.edu/~goulder/Intl%20Approaches%20for%20GHG%20Redux%20-%20Goulder-Nadreau.pdf

[2] http://www.irishtimes.com/business/sectors/manufacturing/cement-sector-angry-over-claim-by-ecocem-1.1367895

[3] http://ies.lbl.gov/iespubs/49097.pdf

[4] http://www.oecd.org/sti/ind/46370308.pdf

[5] http://www.irishtimes.com/business/sectors/energy-and-resources/cantillon-fossil-fuel-stocks-are-a-hot-and-risky-topic-1.1369178

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