The recent discussion around US greenhouse gas regulation focused on cost: Lower vehicle prices, reduced regulatory burden, an estimated $1 trillion in savings. That framing is clear. Regulation has a cost. But the deeper economic question isn’t regulation vs growth. It’s early transition vs delayed transition. And the evidence increasingly shows delayed transition is more expensive.
The cost we see and the cost we don’t
Regulation is visible. Climate risk is slower, compounding and less politically immediate. But it carries real financial weight. Economists attempt to quantify this through the social cost of carbon, a measure of the long-term economic damage associated with each tonne of emissions.
- The US has experienced over $2 trillion in climate-related disaster losses since 1980 (NOAA).
- The IPCC Sixth Assessment Report confirms emissions are driving escalating physical impacts. Evident in the growing number of billion-dollar climate disasters in the US, from extreme heat and wildfire to disruptive winter storms affecting infrastructure, energy systems and transport networks.
- The Swiss Re Institute estimates severe climate scenarios could reduce global GDP by up to 18% by 2050.
Early transition spreads cost. Delayed transition stacks physical damage, volatility and rushed policy response on top.
The automotive argument and what transition really means
One headline claim is that deregulation could reduce car prices by ~$2,400 per vehicle.
But strategically, lowering the cost of petrol vehicles is very different from accelerating EV competitiveness. The long-term industrial prize isn’t cheaper internal combustion engines. It's leadership in EVs, batteries and clean supply chains.
According to the IEA Global EV Outlook 2024:
- EV lifecycle emissions are already significantly lower than petrol vehicles in most major markets.
- Battery costs have fallen ~90% since 2010.
At the same time, another headline claim that surfaced this week was “Manufacturing has gone to China – and it’s dirtier.” This deserves nuance.
Yes, China’s grid remains more carbon-intensive than the US today. Coal still plays a major role. But the IEA World Energy Investment 2023 report shows China is now the largest investor in clean energy globally. China leads in:
- EV production
- Battery manufacturing
- Solar panel manufacturing
- Annual renewable installations
So while its current energy mix is still carbon-heavy, its industrial scaling of clean technologies has moved faster and at a greater scale over the past decade.
The economic race isn’t about protecting legacy vehicles the longest. It’s about capturing the next dominant industry. Early movers build supply chains, drive cost curves down and export technology.
Late movers import it.
What this means for corporate strategy
The same early vs delayed transition logic applies to enterprise decarbonisation, where organisations are embedding carbon cost directly into planning through internal pricing mechanisms. Climate risk is already affecting: insurance pricing, asset valuation, energy procurement strategy, and supply chain resilience.
The question organisations are increasingly asking isn’t “Will transition happen?” It’s “How do we manage risk in a world where it accelerates?”
In travel programmes, the choice is similar to the automotive debate. You can optimise short-term cost by sticking with the status quo. Or you can design for where regulation, carbon pricing and customer expectations are heading. Organisations that start early:
- Build supplier leverage
- Shape employee behaviour gradually
- Avoid sudden policy shocks
Those that delay often face sharper cost adjustments later – financially and reputationally.
The real economic choice at national or corporate level isn’t growth vs climate. It’s whether you transition deliberately now or react later under greater pressure and higher cost.
History tends to reward the early movers.
If you’re working on reducing travel emissions and want deeper insight into how travel decisions impact them and where real opportunities for reduction exist, get in touch.
