In December 2015, 195 countries signed an agreement at the United Nations Framework Convention on Climate Change in Paris. In June 2017, President Trump announced that the US would withdraw from the agreement, joining Syria as the only countries to remain outside of the agreement. What does that mean for the connector industry?
By Caroline Hayes
Climate Change and the Connector Industry
In 2015, facing growing evidence that rising temperatures are impacting all life on Earth, the global community laid out a plan to limit carbon emissions to net zero and limit global temperature increases to 1.5°C by the year 2060. Every country agreed that it was in its best interests to minimize the destabilizing forces climate change presents to each nation’s security and economy. The effects of climate changes, including: agricultural droughts, natural disasters, conflicts over resources, mass relocations of human populations, rising sea levels, and the spread of diseases, make this a global priority for the 196 countries that have signed what is now called the Paris Agreement. (Number 196 is Nicaragua, which initially said the agreement wasn’t tough enough, but joined later. The country already gets more than 50% of its energy from renewables and intends to reach 90% by 2020.) The agreement set out goals and timetables to reduce carbon emissions, and vowed to set new targets and report on progress every five years.
The coordinated efforts require management and tracking of progress across all participating governments. President Trump’s decision surprised many, not least because the treaty stipulates that a country cannot announce its intention to leave before November 2019. The main cause for consternation, though, was what the non-participation of one of the world’s largest industrial countries would mean for action on climate change.
Limiting the release of fossil-based carbon depends on turning to technology. Renewables are expected to play a greater role in each country’s efforts to limit emissions. This means the agreement has an impact on companies that produce electronics, including connector companies.
HARTING Ltd.’s Managing Director Peter Hannon believes that the US move will be harmful for the country. “Negative impacts on US companies as a result of the country’s withdrawal from the Paris Agreement cannot be ruled out,” he says. “American manufacturing processes and products could suffer from the stigma of ignorance as regards climate change and depletion of resources. This will make them less competitive internationally in terms of sales opportunities. The withdrawal from the Climate Agreement will also slow development towards advanced eco-friendly industry and hamper creative innovation.”
However, Hannon says this could bring greater opportunities for other regions. “Asia and Europe can benefit from America’s withdrawal from the Paris Agreement if they . . . continue to invest in the research, development, and manufacture of eco-friendly products, processes, and procedures,” he told Connector Supplier. “This strategy will be successful in the medium and long term, because green awareness and the will to protect the environment is steadily gathering pace all over the world, and demand from markets and consumers is increasing accordingly. This may generate significant growth drivers and huge competitive advantages over the US for the relevant sectors and industries in Asia and Europe, and the German electronics industry in particular.”
He added that non-participation could also compel US-based companies to move overseas. “The relocation of American companies to Europe cannot be ruled out, particularly as large US corporations have spoken up in favor of conservation and against Trump’s decision,” he said.
Detractors point to gaps in the Paris Agreement, notably excluding aviation and shipping. The International Civil Aviation Organization (ICAO) has said it will work to reduce emissions separately from the global agreement. If aviation is separated from community efforts to reduce climate change, can it be an over-exaggeration to say the treaty hinges on US participation?
Dr. Jenifer Baxter, Head of Energy and Environment at the Institution of Mechanical Engineers (IMechE), believes the US may have to meet the terms of the Paris Treaty in order to continue to trade. “By withdrawing from the Treaty, it does not directly follow that the US will not meet standards and requirements or that their manufactured goods will necessarily be less environmentally friendly,” she says. “What it does mean is that they are choosing not to report on their activities, and that gives the impression that the US does not want to comply with global climate change goals. This is more about appearances and leadership rather than specifically how goods are manufactured.”
Baxter points out that the majority of US electronics products tend to be exported to Mexico, where there is considerable manufacturing of goods, which are then imported by the US. “This means that a large amount of US electronics manufacturing will be to meet domestic use and that of the South American nations,” she said. “There is also a large export market for medical devices, and these will have very specific requirements that the US electronics manufacturing industry will be required to meet.”
How countries choose to ratify Paris will be significant. “If this becomes part of their trade negotiations with the US, or a requirement of their procurement processes, then it could potentially have an impact. If it becomes part of how a nation chooses to create standards in electronic goods, as seen in the EU [European Union], then if the US still meets these standards it may have no impact,” Baxter told Connector Supplier.
Technology will play a part with R&D in clean technologies and energy-efficient goods and services. Innovation is expected across the board, including new materials and manufacturing processes, as companies look for new solutions.
Baxter cites the EU’s recent regulation on energy use by vacuum cleaners to increase equipment efficiency and reduce energy consumption. “This has meant that manufacturers have had to innovate new solutions to low-energy suction, or have their goods cost significantly more to the consumer,” she says.
Another example is electric vehicles. “Manufacturers are finding ways to reduce costs and using different lightweight materials to reduce power demand,” she says. This is accompanied by the need to find cleaner, recyclable batteries and introduce an infrastructure for electric vehicles.
Chance for Innovation
Manufacturers may have to change processes and materials to meet targets, and this will have a cost penalty initially. By withdrawing from the agreement, US manufacturing may save some of this cost, but it will be a temporary gain, believes Hannon.
“In the short term, the US electronics industry might benefit from the US withdrawal from the Paris Climate Agreement, but it may fall behind in the medium and long term without the drive for innovation generated by the agreement. On the face of it, the US government’s position might protect and favor dirty industries, but over time they will have to respond to the demand for clean technologies and global consumer pressure for eco-friendly products and manufacturing processes, and will be forced to justify their attitude to a critical public,” he said.
“As the Paris Agreement comes into effect across the globe, it is possible that nations will bring in standards that require lower energy use in both manufacture and use, and require higher levels of remanufacture and recycling,” proposes Baxter. “If any country producing goods that do not meet these standards wants to trade with countries that require high standards, then it is likely that they will change their manufacturing materials and practices in order to access large markets.”
Hannon is optimistic that the US withdrawal from the climate agreement could be a marketing boon for companies based in the EU and other countries. “It opens up opportunities for the economies of other countries to be forward-looking, resource-efficient, and eco-friendly in contrast and to work together as responsible partners on global trends,” he sais. “This includes the development of innovative products. Efficient production will also create cost advantages for manufacturers and consumers and will pay off in the truest sense of the word.”