The Pentagon Wants To Regulate Defense Contractors’ Greenhouse Gas Emissions. Experts Say That’s Counterproductive

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Micaela Burrow Investigative Reporter, Defense
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  • The heavy burden implied in the Pentagon’s plans to monitor and regulate the greenhouse gas emissions of large defense contractors could backfire by hedging out competition, experts told the Daily Caller News Foundation.
  • While Congress and the Pentagon have taken steps toward awarding contracts more efficiently, taxpayers will bear the brunt of climate costs, experts said.
  • Higher costs associated with these woke compliance contrivances will eventually result in either higher taxes,” Pete Earle, an economist at the American Institute for Economic Research, told the DCNF.

The Pentagon wants to oversee the climate impacts of businesses that provide weapons and services for the U.S. military, inflating costs and worsening problems already eroding the defense-industrial base.

The Department of Defense’s (DOD) proposed rule would require all of the 5,766 “major” and “significant” contractors to disclose their yearly greenhouse gas emissions on a standardized basis and meet federally-mandated targets. While Congress is egging defense contractors to upscale production to meet deterrence challenges in Europe and Asia, experts told the DCNF the rule could be counterproductive and shift the burden of meeting the Fed’s climate goals to U.S. taxpayers.

“Higher costs associated with these woke compliance contrivances will eventually result in either higher taxes,” Pete Earle, an economist at the American Institute for Economic Research, told the DCNF.

The Biden administration’s Pentagon has elevated climate to the forefront of national security. Defense Secretary Loyd Austin declared “climate change” a national security priority in January 2021 and later instated the DOD’s first-ever climate czar. (RELATED: ‘Ugly Asterisk’: House Democrat Takes A Victory Lap After Helping Kill Manchin’s Energy Bill)

In keeping with those priorities, the Pentagon could weigh a company’s climate scores in making acquisition decisions, Maiya Clark, a senior research associate at the Heritage Foundation, told the DCNF.

Take two prime contractors competing for a DOD slot to produce a submarine, for example. “One contractor makes a better item than the other, but the other contractor has a better emission score. DOD could potentially award the contract to the contractor with the lower emission score rather than the one with the better product,” said Clark.

“That’s just an unacceptable result for our national defense and for the warfighter,” she added.

The rule requires “significant” contractors, those registering contracts worth between $7.5 million and $50 million yearly with the government, to disclose emissions generated directly or indirectly from facilities owned by the company. Larger contractors would also be required to report “Scope 3” emissions, those generated at all points of the value chain, according to National Law Review, and develop reduction targets in line with the government’s standards.

The rule will assist the government in identifying and minimizing climate risks, inspiring contractors to take action on climate and thus improve the “resilience of the Federal supply chain,” according to the filing. A global shift away from systems relying on carbon-intensive energy sources will result in “enhancing U.S. competitiveness and economic growth, promoting environmental justice, and creating well-paying job opportunities for American workers,” it said.

Congress’ historically expensive defense budget for 2023, widely anticipated to become law this week, includes a new provision for multi-year contracting for smaller items like ammunition. The amendment aims to help DOD accelerate acquisition of 155mm munitions, javelin anti-air missiles and other equipment the administration has drained from U.S. stockpiles to support the Ukrainian war effort.

It also comes as Congress is increasingly worried about a potential conflict with China, whose rapid nuclear buildup and saber-rattling against Taiwan is seen by many on the Hill and in the administration as indicative of a planned military operation.

However, the rule could impede parallel initiatives to streamline and speed up the contracting process, Clark explained.

It could also add an additional regulatory burden that will eventually be passed down to taxpayers, experts told the DCNF. Smaller entities with fewer resources to devote to tracking emissions may choose not to do business with the government at all.

Rulemakers estimated a public cost between $3.3 and $3.9 billion in the decade after enforcement. Major contractors that do not qualify as small businesses could pay as much as $4.6 million in the first year — plus a $9,500 fee every five years to certify their “science-based” reduction target — with significant contractors and small businesses hovering near $1.7 million.

“There is already a lack of competition in the defense industrial base,” said Clark. The shrinking number of companies dominating the Pentagon’s contract awards could end up introducing supply chain vulnerabilities if only one company can produce a part needed to support a crucial weapons system, like an engine for an F-35 fighter jet.

“Policies that bring massive defense contractors closer to the U.S. government are a manifestation of the military-industrial complex that President Eisenhower warned of half a century ago,” Earle told the DCNF.

Some climate watchers warn that the Pentagon dwarfs other entities in terms of pollution.

“The Department of Defense, the entity that is the U.S. war machine, is the largest institutional contributor to global warming on planet Earth,” David Vine, a professor of political anthropology at American University in Washington, D.C., told The Guardian in March.

It’s unclear exactly how much the prime defense contractors, many of whom already post emissions data and attest to Paris Accords goals, will adjust operations to meet the Pentagon’s rule requirements, as the rule has until January to be finalized. Lockheed Martin, for example, the DOD’s highest-grossing contractor, tracks Scope 1 and 2 emissions, self-reporting a 47% reduction compared to a 2015 baseline in its latest annual statement.

When reached for comment, Lockheed referred the DCNF to the company’s reporting. The DOD did not respond to the DCNF’s requests for comment.

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