Helena Joyce
The manufacturing sector is a significant contributor to global warming, emitting carbon dioxide and other greenhouse gases through the burning of fossil fuels and certain industrial processes. In the United States, manufacturing emissions have shown a declining trend, with a 17% decrease from 2002 to 2021. However, the manufacturing sector's emissions are heavily concentrated in specific industries, with the chemical and refining industries accounting for 59% of emissions in 2021. While environmental regulations have been a primary driver in reducing pollution, productivity growth has had a limited impact, as it increases the total output that can also lead to increased pollution. The cost of carbon pollution is substantial, with American firms incurring hundreds of billions of dollars in corporate carbon damages. The responsibility for reducing emissions lies with both companies and consumers, and a growing number of companies are committing to renewable initiatives.
| Characteristics | Values |
|---|---|
| Air pollutants in the US | 66 million tons of pollution in 2023 |
| Change in emissions of air toxics from 1990 to 2017 | 74% decrease |
| Change in total emissions of six principal air pollutants from 1970 to 2023 | 78% decrease |
| Change in manufacturing emissions from 2002 to 2021 | 17% decrease |
| Change in manufacturing emissions from 2012 to 2019 | 0.6% decrease per year |
| Percentage of corporate carbon damages attributed to the manufacturing industry | 90% |
| Percentage of corporate carbon damages attributed to four industries (energy, utilities, transportation, and manufacturing) | 90% |
| Change in tax rate on pollution emissions from 1990 to 2008 | Over 100% increase |
| Change in pollution emissions from manufacturing from 1990 to 2008 | Decrease |
| Change in imports of goods manufactured in highly polluting processes | Slower growth rate compared to overall imports |
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What You'll Learn
How much pollution is caused by burning fossil fuels?
The burning of fossil fuels is a major contributor to pollution and climate change. Fossil fuels, including oil, natural gas, and coal, are used to generate energy, electricity, and power transportation and industrial processes. Since the invention of coal-fired steam engines in the 1700s, our reliance on fossil fuels has steadily increased, with global fossil fuel usage increasing over 4,000 times compared to 1776. Fossil fuel companies are major polluters, and investors are increasingly recognizing the need to move away from these companies due to the environmental risks and the urgent need to reduce emissions.
The combustion of fossil fuels releases large amounts of carbon dioxide (CO2), a greenhouse gas, into the atmosphere. Greenhouse gases trap heat, intensifying the greenhouse effect and leading to global warming and climate change. The burning of fossil fuels is the dominant cause of global warming, with 89% of global CO2 emissions attributed to fossil fuels and industry in 2018. The effects of these emissions are far-reaching, with rising global temperatures, melting glaciers, rising sea levels, and altered ecosystems. Additionally, the carbon dioxide released from burning fossil fuels accumulates in the atmosphere and dissolves in the ocean, causing ocean acidification.
Fossil fuel air pollution has severe health impacts, contributing to approximately one in five deaths worldwide. A recent peer-reviewed study published in Environmental Research estimated 8.7 million premature deaths globally in 2018 due to exposure to fine particulate matter (PM 2.5) from burning fossil fuels. This figure is more than twice the previous estimate and does not include deaths caused by long-term ozone air pollution or smog, which are also driven by fossil fuel combustion. The health crisis caused by fossil fuel pollution is a global issue, with the highest toll seen in China and India, totaling nearly five million premature deaths in those two countries alone. Other severely affected areas include western Europe, Southeast Asia, and parts of the United States, specifically the Northeast and Midwest.
The World Health Organization (WHO) has set an air quality standard of 10 micrograms per cubic meter for fine particles (PM2.5). However, in the United States, air pollution exceeds this standard in 73 counties, impacting the lives of 36 million people. The economic cost of carbon dioxide pollution is also significant, with "corporate carbon damages" from publicly owned companies running into the hundreds of billions of dollars for American firms alone.
To address the issue of fossil fuel pollution, governments worldwide signed the Paris Agreement in 2015, committing to reducing carbon emissions. However, current efforts are insufficient, and a mass switch to renewable energy is necessary. While some fossil fuel companies have started investing in renewable initiatives, their advertising campaigns often do not reflect their true expenditures, which remain largely focused on oil and gas. Increased environmental regulation has been a primary driver of the decrease in pollution emissions from U.S. manufacturing, and similar stringent regulations are needed to curb the devastating impacts of fossil fuel pollution on the environment and human health.
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The impact of environmental regulations on pollution levels
The stringency of environmental regulations has had a notable impact on decreasing pollution emissions from US manufacturing. A comparison between inferred pollution tax and the NOx Budget Trading Program, a cap-and-trade system, revealed that pollution taxes increased significantly in regulated states and industries following the introduction of the program. While productivity and trade influence pollution levels, the increasing rigor of environmental regulations is the primary driver of the decline in US manufacturing pollution. This is supported by research showing that a single tax on pollution emissions would have increased by over 100% between 1990 and 2008, indicating the positive effect of stringent environmental rules.
Environmental regulations have induced innovation in clean technologies, although the benefits may not outweigh the costs for regulated entities. Country- or sector-level data can be challenging to analyze due to aggregation bias and the potential endogeneity of environmental policies. Nevertheless, environmental regulations have positively impacted human health and the environment, with reductions in particulate air pollution adding up to 1.4 to 1.5 years to the average American's life expectancy since 1970.
While the Clean Air Act has made significant strides, air pollution remains a health concern in the US. Outdoor air pollution, including common pollutants and diesel emissions, poses challenges. Additionally, indoor air pollution, which is not regulated under the Act, can also cause health issues. However, the EPA continues to work collaboratively to address these issues and has made progress in achieving national air quality standards.
The impact of environmental regulations extends beyond air quality. For instance, lead in motor vehicle gasoline has been phased out, addressing neurological issues in children and cardiovascular risks in adults. Additionally, emissions standards for new motor vehicles have contributed to meeting carbon monoxide air quality standards. These regulatory efforts have improved the environment and the well-being of Americans, showcasing the positive influence of environmental policies on pollution levels.
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The cost of carbon dioxide pollution
Carbon dioxide pollution has a significant cost, both financially and environmentally. The social cost of carbon is a metric that measures the economic damages resulting from each additional ton of carbon dioxide emitted into the atmosphere. The current central estimate of the social cost of carbon is over $50 per ton, with some studies placing it at $185 per ton, far higher than the current federal estimate of $51 per ton. This cost is expected to increase as the full impacts of climate change are better understood and priced in.
The financial cost of carbon dioxide pollution is significant, with economists calculating that the world's corporations produce so much climate change pollution that it could eat up about 44% of their profits if they had to pay damages. A study analyzing the carbon emissions of publicly owned companies found that the global "corporate carbon damages" likely run into the trillions of dollars, with hundreds of billions attributable to American firms. These costs are expected to rise as the price of carbon emissions increases and as more comprehensive data becomes available.
The environmental cost of carbon dioxide pollution is also significant. Carbon dioxide is a greenhouse gas that contributes to global warming and climate change. The impacts of climate change include rising global temperatures, extreme weather events, sea-level rise, and ecological damage. According to a report, if fossil fuel extraction continues at the same rate over the next 28 years as it did between 1988 and 2017, global average temperatures could rise by 4°C by the end of the century, leading to catastrophic consequences such as substantial species extinction and global food scarcity risks.
To address carbon dioxide pollution, governments and businesses have implemented carbon pricing mechanisms, such as emissions trading systems (ETS) and carbon taxes, which put a price on carbon emissions to incentivize emission reductions. Additionally, there is a growing trend of companies transitioning to renewable energy and investing in green technologies, although the pace and scale of these efforts are often criticized as insufficient.
In the United States, pollution from manufacturing has been declining due to increasing environmental regulations, such as the NOx Budget Trading Program, which imposes a cap-and-trade system on manufacturing plants and electricity generation units. However, air pollution remains a concern, with 73 counties having worse air quality than the World Health Organization (WHO) standard, affecting 36 million people.
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The top polluting companies
While it is difficult to ascertain the exact figures and rankings of polluting companies, a 2021 report by the Guardian states that just 100 companies are responsible for 71% of global emissions. ExxonMobil, Shell, BP, and Chevron are among the highest-emitting investor-owned companies since 1988. The Carbon Majors Report, published by the Carbon Disclosure Project (CDP), a non-profit organization, also identifies that 25 state companies and entities account for over half of global industrial emissions since 1988.
The Carbon Majors Database report names 10 companies that emit the most carbon dioxide, but does not list them. However, it is known that five of the biggest oil and gas companies spent $200 million lobbying to block or delay policies addressing climate change. These companies include ExxonMobil, Shell, BP, and Chevron, which have faced criticism for their environmental records.
The Climate Accountability Institute in the US revealed that just 20 companies have contributed to 35% of all energy-related carbon dioxide and methane worldwide, totalling 480 billion tonnes of carbon dioxide equivalent since 1965. These 20 companies are driving the climate emergency, and their operations continue to expand.
The "corporate carbon damages" from publicly owned companies likely run into the hundreds of billions for American firms, according to an estimate by one of the study authors. Nearly 90% of this calculated damage comes from four industries: energy, utilities, transportation, and manufacturing materials.
It is important to note that while these companies are major contributors to pollution, the responsibility for these damages is shared between the firms producing the products and the consumers who purchase them.
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The impact of manufacturing on air quality
Industrial pollution is defined as the contamination of the environment, including air, water, and soil, caused by industrial activities. These activities typically involve manufacturing, processing, and extracting raw materials, which produce waste and emissions harmful to the environment and human health. Some examples of these pollutants include PM2.5, silica dust, coal dust, methane, carbon monoxide, sulfur dioxide, nitrogen oxides, and VOCs.
The manufacturing sector is a significant contributor to air pollution. When producing goods, manufacturers emit carbon dioxide and other greenhouse gases by burning fossil fuels and through certain industrial processes. In 2021, the manufacturing sector accounted for 72% of emissions in the industrial sector in the US, with combustion emissions from manufacturing totaling 0.6 BMT of CO2. Historically, fewer policies have targeted greenhouse gas emissions from the manufacturing sector compared to the transportation and electric power sectors. However, policies like the Clean Air Act do regulate local area pollution from manufacturing, targeting pollutants such as particulate matter and ozone.
Despite the positive impact of environmental regulations, inadequate laws and delayed adoption of cleaner practices continue to affect air quality. Additionally, increased production to meet global demand has led to higher emissions. The costs of carbon damage from manufacturing are significant, with American firms incurring hundreds of billions of dollars in damages, according to a study.
To address air quality issues caused by manufacturing, a combination of regulatory measures, improved enforcement of environmental standards, adoption of sustainable practices, and reduced demand for emissions-intensive products is necessary.
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Frequently asked questions
Manufacturers in America produce 12% of all combustion-related emissions. The manufacturing sector's emissions are heavily concentrated in a handful of industries, with the chemical and refining industries accounting for 59% of emissions from manufacturing in 2021.
The transportation sector is the largest source of direct greenhouse gas emissions in America, with over 94% of the fuel used for transportation being petroleum-based. The second largest source is the electricity sector, with emissions from electricity production used by other end-use sectors.
Economists estimate that the cost of carbon emissions produced by corporations globally could amount to 44% of their profits. A study estimates that the carbon damage costs of American firms are in the hundreds of billions.
Some of the highest-emitting companies in America include ExxonMobil, Shell, BP, and Chevron.
