Foreign Responses To Climate Change May Impose Carbon Footprint On US Companies

Whether there is global warming, climate change, or not, other nations are increasingly taking action to reduce the “carbon” footprint in a manner that will impose an ever-increasing footprint on the American workplace. An example recently occurred with the E.U.’s determination that U.S. carriers must comply with E.U. emissions reductions or, in the alternative, pay fines which could add up to billions of dollars. The United States has officially complained about this policy. The outcome is not final.  

The dispute may be a harbinger of an increasing trend to impose restrictions related to climate change, which may be faced by American employers. In addition to this newly reported development, recent reports (see here and here) have confirmed that the Foreign Trade Agreements proposed by the United States with other nations increasingly contain not only labor but environmental standards, some of which are stricter than those in the United States. 

When the initial issues of global warming and climate control arose decades ago, the conventional wisdom was that the US would be in the vanguard of nations imposing restrictions, but that developing nations and so-called “third-world” countries would not be able, nor want, to impose such restrictions, because of their desires to use cheap, polluting energy sources. It was also argued that many US employers would outsource to other nations to reduce their operating and labor costs, and to obtain the benefit of a “race to the bottom.” Whether this were correct, there are increased reports of companies from other countries opening up businesses in the United States, because US wage scales and labor costs are regarded as being cheaper. A good example was a recent controversy involving efforts of a union to organization IKEA workers in the Richmond, Virginia area. The labor union involved in the organizational efforts said that IKEA representatives were not following their stricter, more union-friendly, codes in Sweden, which the union argued might have made union organizational efforts easier. It was pointed out that environmental, social and working rules and the standards of the average employee in Sweden were higher than those in the United States, and the wage scale was significantly larger, so that opening a plant in the United States was relatively cheaper by comparison. 

The international “foot print” of climate controls in the workplace will continue to be worth following even if the US does not enact, or impose, legal requirements in this area in the near future. Environmental practitioners involved with environmental permitting and land use issues may increasingly see related impacts of global climate control laws and issues in their practices.