The muddled proceedings of the United Nations Climate Change Conference in
Copenhagen place an exclamation mark on major challenges facing the baking
industry and all of U.S. business going into 2010. That challenge is the
unusually poor visibility regarding a host of policy issues critical to the
business community.
As difficult as it was to predict how the summit would end before the agreement
was announced late Dec. 18, guessing the outcome was childs play compared with
figuring out how that may translate into U.S. policy and what kind of climate
change (cap and trade/cap and tax) legislation could be enacted in the coming
year.
For manufacturing companies like baking highly sensitive to air emission
restrictions, such opacity impedes clear thinking when considering major capital
investments. Similar doubts rule regarding a number of additional key policy
issues, most notably health care, with its great ramifications for employment
costs, and to a hardly lesser degree food safety legislation. Even the Federal
Reserves near-zero interest rate policy, while nice for its effect on
short-term rates, has the effect of diminishing visibility about the cost of
money going into the future.
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