Proposed Greenhouse Gas Rules Will Harm the U.S. Defense Industrial Base

COMMENTARY Defense

Proposed Greenhouse Gas Rules Will Harm the U.S. Defense Industrial Base

Nov 8th, 2021 3 min read
COMMENTARY BY
Maiya Clark

Research Associate, Center for National Defense

Maiya is a research associate in The Heritage Foundation’s Center for National Defense, focusing on defense industrial base issues.
Cpl. Ivan Ramirez maintains an MV-22 on the flight deck of the amphibious assault ship USS Makin Island (LHD 8) in the Indian Ocean. Mass Comm. Specialist Kristopher S. Haley / U.S. Navy

Key Takeaways

Earlier this month, the administration asked for comments on its proposal to require contractors to publicly disclose their greenhouse gas emissions.

Even with Congress's proposed $25 billion plus-up, the defense budget is still strained, especially in this era of resurgent great-power competition.

The Pentagon’s current business practices already “strain the industrial base and reduce incentives to supply to DoD.”

For years, Congress and senior Pentagon leaders have attempted to streamline acquisition to make it easier to do business with the Department of Defense. But the Biden administration’s preoccupation with climate change is poised to lead defense acquisition in the opposite direction by piling on new requirements and increasing costs.

Earlier this month, the Administration asked for comments on its proposal to require contractors to publicly disclose their greenhouse gas emissions. They would also require contractors to adopt “science-based reduction targets” to reduce their emissions.

The regulations might go even further. The Administration is exploring the idea of using this data in contracting decisions, to give preference to suppliers with lower greenhouse gas emissions. This change would severely hamstring the Defense Department’s attempt to compete more effectively with China and other bad actors.

All together, these changes would create three main problems.

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For one thing, they would directly raise the cost of defense items—at a time when the defense budget is not even keeping up with inflation. The additional expense of measuring, reporting, and reducing contractors’ greenhouse gas emissions would in turn be passed along to their customer: the Department of Defense. When the Pentagon has to pay more for an item, it will likely be unable to buy as many as planned.

The defense budget already fails to meet the needs of our military, so these added costs would be felt that much more keenly. When factoring in inflation, the Administration’s proposed 2022 defense budget was 0.6% lower than the previous year’s budget. And even with Congress’s proposed $25 billion plus-up, the defense budget is still strained, especially in this era of resurgent great-power competition. The last thing the Pentagon needs is a self-inflicted “green” tax on its acquisitions.

Second, making acquisition decisions based on firms’ emissions levels—rather than that product’s ability to meet the warfighter’s needs—isn’t just absurd; it’s dangerous. Our servicemen and women deserve the best equipment, and our national defense depends on their using the most effective tools available. Other considerations should not distract from this central purpose.

Finally, adding burdensome regulations to the already onerous Federal Acquisition Regulation would create a difficult or even impossible task for contractors, leading some firms to simply exit the defense market. The largest defense contractors for the biggest programs, like Lockheed Martin for the F-35 or Huntington Ingalls for the Ford-class aircraft carrier, would somehow have to collect emissions data for their tens of thousands of subcontractors and suppliers. Meanwhile, those subcontractors and lower-tier suppliers may find the regulatory burdens make defense contracts an unprofitable business area and would stop bidding for defense contracts and subcontracts as a result.

The Pentagon’s current business practices—with complex procurement processes, long contract timelines, and costly certification requirements—already “strain the industrial base and reduce incentives to supply to DoD,” according to a 2018 interagency task force report on the U.S. defense industrial base. The number of vendors in key defense industrial base areas like missile and space systems, ammunition, and weapons has declined over the last 10 years as a result, making the defense industrial base more fragile.

The Defense Department already is forced to rely on sole-source suppliers for a range of items: combat vehicles like the M2 Bradley tank, traveling wave tube amplifiers for satellites, and metal castings for Navy ships, to name a few. Lack of competition leads to less innovation and higher prices, while lack of redundancy creates risk. Adding elaborate regulations on contractors’ emissions will only exacerbate these problems.

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All in all, the defense industrial base is both fragile and vitally important for America’s security. Thus far, it has managed to overcome natural obstacles like the COVID-19 pandemic, as well as policy-created obstacle such as funding uncertainties inherent in continuing resolutions. It is currently grappling with imposed vaccine mandates for employees. New emissions regulations would be yet one more obstacle for the defense industrial base to overcome.

Policymakers should think long and hard about whether the nation wants Department of Defense that prioritizes virtue-signaling over warfighting. 

A version of this op-ed first appeared in the Washington Examiner