Insourcing
Insourcing
It was easy to claim that the green economy was great till such time that the products were being made elsewhere. Now that the West wants everything made at home, the green credentials need a re-look.
I had written earlier this year that Globalisation was America’s attempt to clean up its environment.
In September 1962, Rachel Carson published a book called Silent Spring. She was undergoing treatment for Cancer when the book was finally released. The book echoed the zeitgeist of the times. The country was roiled in war, hippy culture was at its peak, anti-war protests were à la mode and the environment was turning to shit.
[…]
The furore that the book caused eventually led to the creation of the Environmental Protection Agency (EPA). On the back of the EPA, another act called the Comprehensive Environmental Response, Compensation and Liabilities Act of 1980 was passed, CERCLA. The law later came to be known as Superfund and 1329 sites across the US were classified as Superfund Sites. Places that were hopelessly polluted by industrial activity.
Since the Ukraine war was instigated, Americans have been extremely anti-China. The fact that China has been unwilling to abandon Russia completely has grated on the US. Their policy of “If I say, you do” was not heeded. Therefore Taiwan suddenly became a hot potato.
Pushing back against China necessitates bringing all the manufacturing back to the US. None of the countries in Asia can truthfully run their factories without sourcing from China. Africa has neither the skill nor the capital required at the scale sought, not to mention their extreme indebtedness to China.
So after decades of outsourcing, insourcing production began. After the after effects follow:
A federal agency plans to reassess its environmental permit for Hyundai’s $7.6 billion electric vehicle plant in Georgia after a conservation group complained that regulators failed to properly examine the sprawling factory’s potential impacts on the area’s water supply.
The Army Corps of Engineers said in a letter Friday that state and local economic development agencies that applied for the project’s 2022 permit never mentioned Hyundai wanted to withdraw up to 6.6 million gallons (25 million liters) per day from the underground aquifer that’s a major regional source of drinking water.
Source: Fast Company
What the article does not mention is that after the water has been used what comes out of the factory will make what is left behind unusable.
The US has on the one hand fomented war for cheap thrills (sorry to create shareholder value for Lockheed Martin, Halliburton, et al) and on the other hand insisted on a unipolar world where either surrender to US hegemony or be treated as an enemy. Seeing this opportunity, the industry is pushing back against regulations. These are the wages of insourcing.
Last month, a coalition of major industries, including mining, oil and gas, manufacturing, and timber, sent a letter to the White House chief of staff, Jeffrey D. Zients, warning that “no room would be left for new economic development” in many areas if the E.P.A. went ahead with a standard as tough as it was contemplating, endangering the manufacturing recovery that President Biden had pushed with laws funding climate action and infrastructure investment.
Twenty years ago, generating electric power caused far higher soot emissions, so “there was room” to tighten air quality standards, said Chad Whiteman, vice president of environment and regulatory affairs at the Chamber of Commerce’s Global Energy Institute, in an interview. “Now we’re down to the point where the costs are extremely high,” he said, “and you start bumping into unintended consequences.”
Source: New York Times
Not only has the US itself imposed sanctions on China, but it has also been asking others including the EU and Canada to do so. The EU followed suit almost immediately now Canada has also toed the line.
Canada announced Monday it is launching a 100% tariff on imports of Chinese-made electric vehicles, matching U.S. tariffs imposed over what Western governments say are China’s subsidies that give its industry an unfair advantage.
The announcement came after encouragement by U.S. national security advisor Jake Sullivan during a meeting with Canadian Prime Minister Justin Trudeau and Cabinet ministers Sunday. Sullivan is making his first visit to Beijing on Tuesday.
Trudeau said Canada also will impose a 25% tariff on Chinese steel and aluminum. “Actors like China have chosen to give themselves an unfair advantage in the global marketplace,” he said.
Source: Fast Company
With the climate-conscious West making it harder for companies to continue to produce EVs in China, automobile companies are switching. 60% of the metals needed to make batteries come out of China because no other nation is willing to harm its environment as much as China is. Now, with access to that capacity dwindling and having to deal with tariffs, companies are changing their strategies.
Now, a slowdown in the growth of electric car sales has led General Motors, Ford Motor and Volkswagen to walk back ambitious targets for those vehicles. And sales of hybrids are robust, underscoring what may be the enduring reality check of 2023: Many Americans are hugely receptive to electrification, but they’re not ready for a fully electric car.
[…]
Analysts say stubbornly high electric car prices and worries about public charging are pushing some car shoppers to hybrids, including renters or urbanites who can’t charge a battery-powered car at home. Hybrids deliver savings at the pump with no need to plug in for hours or plan trips around charging stops. Their batteries are much smaller and cost a lot less than the batteries in fully electric vehicles.
Source: New York Times
Of course, if you tell people they need not make any change to their lifestyle or habits it will go down more easily! This has been true since the dawn of time.
Ford has announced that there might be some delays in the launch of its upcoming EV lineup yet again. The delayed EVS include some models which were slated to launch next year but now have been pushed back by years.
This includes its yet-unnamed three-row SUV, which was initially slated for release next year but has now been pushed back to 2027. Similarly, the next-generation electric pickup, codenamed “T3,” is facing a delay from late 2025 to 2026.
Source: First Post
These companies are in no position to source the metals needed for their battery production given all the genital waving that the US is engaged in.
Making a petrol-powered car is far less polluting than an electric vehicle. So long as that part of the lifecycle could be outsourced, EV was the way to go. Now, that they are all insourcing, they make a choice.
The entire green economy narrative was flawed from the get-go. It has been said many times that the green economy only exists to Save Capitalism and not the planet. Now that the production side of the green economy is finding its way back to the West, hard choices are being made.