March/April 2007 | The Aluminum Association | Washington
Industry Comments on Climate Change Policy; Bush Administration Promotes Open Trade; Korean FTA
Emissions Legislation May Mandate Reductions for U.S. Companies
The Aluminum Industry has adopted a “Position on Climate Change Policies” in Washington Association meetings and by ballot vote of its board.
The position recognizes that scientists have determined that the earth is gradually warming due, in part, to increased atmospheric concentrations of greenhouse gases (GHG) due to human activities, and that the aluminum industry recognizes that climate change presents a challenge that requires cooperative action on a global basis, and promotes international participation.
Should the U.S. adopt legislation that would regulate GHG emissions, the industry seeks recognition of the benefits of recycling toward GHG emissions reduction. After the initial energy investment in primary aluminum production, the recycling of aluminum saves 95 percent of energy and GHG emissions.
The industry’s complementary primary and reclamation system thereby reduces the overall energy consumption in total U.S. aluminum production by approximately 46 percent, and reduces GHG by approximately 38 percent. The industry sees opportunity for further reduction and supports policy that provides incentives for recycling.
The position demonstrates that life-cycle studies of aluminum’s use in North American automotive applications show that replacing two pounds of traditional material with one pound of aluminum to lightweight a vehicle can save on a typical mid-size sedan 20 pounds of CO2 emissions over the lifetime of that vehicle. The use of automotive aluminum has doubled since 1991 and is expected to double again in the next decade. This light-weighting savings occurs also for truck, buses, trains, boats and ships for all transportation means. Any climate change policy should recognize and provide incentives for additional transportation light-weighting applications that reduce transportation-related GHG emissions.
The aluminum industry’s Voluntary Aluminum Industrial Partnership has met or exceeded goals since 1990. From 1990 to 2000 the program reduced by about 45 percent PFC emissions, resulting in annual emissions reductions of over 2.2 MMTCE. Since the industry has taken the initiative to voluntarily reduce its process GHG emissions, it strongly supports policies and programs that give credit for early action taken since 1990.
The Industry supports efficient and economically sound emissions trading programs and registries that recognize early emissions reductions. It supports an economy-wide, fair market-driven approach that may include a cap and trade program that limits GHG emissions. The approach should result in market incentives that stimulate investment and innovation in technologies necessary to grow while achieving environmental reduction targets.
To reduce potential negative impacts on the U.S. manufacturing sector, which by 2005 had already reduced total GHG emissions below 1990 levels, provision should be made in any GHG program to reduce the expected negative impacts of energy cost increases such as through corporate tax credits. The industry participates in and recommends public/private partnerships to spur pre-competitive research to reduce GHG process emissions and to promote energy saving aluminum product applications.
The industry supports a responsible approach to growth in demand for its products and the consequent growth in activity and related emissions, noting that solutions to the climate change issue involve both reducing emissions at the source, and also over the full life-cycle of the material or products.
Korean Trade Agreement Expected to Commence in May; TPA Set to Expire
In February President Bush notified Congress that a free trade agreement with the Republic of Korea is expected to commence in May. The U.S. Trade Representative is confident that the negotiations will result in a bilateral free trade agreement (FTA). Korea is already our seventh largest trading partner with $72.6 billion reported for 2004. An FTA will enable American companies to increase their exports, and will require Korea to eliminate tariffs on U.S. industrial goods, as well as reduce its non-tariff barriers.
The Bush Administration delivered to Congress on March 1 the 2007 Trade Policy Agenda and the 2006 Annual Report of the President of the United States on the Trade Agreements Program.
Among the highlights of 2006 on the multilateral front was U.S. leadership in the ongoing effort by World Trade Organization Members to conclude a comprehensive, ambitious and balanced Doha Development Agreement. The United States also completed bilateral World Trade Organization accession agreements with Vietnam, Russia and Ukraine.
The Administration pledged to continue these multilateral, bilateral and regional activities to deepen and strengthen trade ties around the world and to ensure the rules of trade are fair and evenly applied. The Administration will also work with Congress on a bipartisan basis to secure an extension of Trade Promotion Authority set to expire in June.
