From 2011 to 2013 severe weather cost the U.S. economy more than $200 billion. With the frequency and intensity of severe weather increasing, so are production delays and disruptions.
This week, the Environmental Protection Agency held hearings in four cities across the country to gather feedback on the recently proposed Clean Power Plan. Business Forward President Jim Doyle testified at hearings in two cities, Atlanta and Pittsburgh.
He discussed the impact climate change has had on business leaders, manufacturers in particular. He cited recent Business Forward Foundation research, which found that the costs associated with the new regulations will be less than economic losses from weather-related disruptions.
In today’s global economy, supply chains are bigger, more specialized, more global, and incredibly fast. The very characteristics that make them more efficient make them more interdependent. Doyle explained that extreme weather events around the world have disastrous impacts on supply chains at home.
“Over the past four years, American factories have been disrupted by typhoons in Thailand, hurricanes in the Gulf of Mexico, droughts in Texas, tornadoes in Kentucky, falling water levels across the Great Lakes and flooding in the Northeast.” – Associated Press
While critics have claimed that the EPA’s proposal will cost businesses more money to implement, the businesses’ savings overall will significantly outweigh the costs of supply-chain interruptions.
“Sixty percent of manufacturers’ cost is supply chain. Less than one percent of its cost is electricity. Let’s worry about the supply chain. That’s the cost driver.” – WABE
Doyle explained that the study concluded that the EPA’s proposal is an important step in protecting the manufacturing industry from economic losses. Severe weather is far more expensive to America’s manufacturers than the costs of EPA standards intended to address it.