Friday, 14 May 2010

Coalition Support for Carbon

After days of fraught negotiations and political wrangling, we finally have sight of the Tory/Lib Dem plans for a low-carbon economy in a coalition government. The signs look good. Particularly encouraging is a commitment to push the EU for full auctioning of Emission Trading Scheme (ETS) permits. Putting the jargon aside, this has great potential to make Europe’s efforts to fight climate change both more efficient and effective.

At the moment, the European Union simply gives away a large portion of its ETS permits to the big polluters. These permits authorise the holders to pollute the atmosphere, to agreed levels, at no cost. Yes – for free. This is absurd. The cost to the environment is clearly not zero. It’s mad that this forms the heart of an emission reduction scheme.

The current arrangements also have two very unwanted consequences: It encourages companies to grossly overstate their predicted emissions in order to sell those they don’t use to make a
windfall profit, while at the same time removing any economic incentive for them improve their energy efficiency.

Auctioning the total quota of ETS permits would ensure that companies only receive the number they feel they will really use – and removes the incentive to be greedy in order to sell on excess permits at a profit. Equally important, it will make economic sense for companies to make efficiency changes that cost less than the equivalent amount of ETS permits. So if a new technology, like a boiler upgrade, costs £5 per tonne of carbon saved, versus a carbon price of £10 per tonne, making the technology investment becomes the sensible thing to do.

The other way of making ETS permits an effective stick (or carrot) for polluters to improve their energy efficiency is to put sufficiently few up for auction. This will push the price of the permits high enough to ensure that many companies take big action to pollute less – the whole point of the ETS in the first place.

Let’s hope the coalition will support these intentions with solid action, both at home and at the EU, where the ultimate decisions of the fate of the EU ETS will be made.


Environmental Industries Commission have kindly provided a summary of the main issues in the coalition document:

  • The two parties agree that cuts of £6bn to non-frontline services can be made within the financial year 2010-11. Other policies on which they agree include further support job creation and green investment, such as work programmes for the unemployed and a green deal for energy efficiency investment.
  • The parties also agree to seek an agreement on taxing non-business capital gains at rates similar or close to those applied to income, with exemptions for entrepreneurial business activities.


  • Measures to promote energy from waste through anaerobic digestion;

Environmental finance

  • The creation of a green investment bank;

Sustainable buildings and energy efficiency

  • Home energy improvement provisions paid for by savings from lower energy bills;
  • Retention of energy performance certificates and the scrapping of Home Information Packs

Government Procurement

  • A commitment to reduce central government carbon emissions by 10% within 12 months

Carbon management

  • The provision of a floor price for carbon, as well as efforts to persuade the EU to move towards full auctioning of Emissions Trading Scheme permits


  • Mandating a national recharging network for electric and plug-in hybrid vehicles;
  • The establishment of a high-speed rail network;
  • The cancellation of the third runway at Heathrow;
  • The refusal of additional runways at Gatwick and Stansted;
  • The replacement of the air passenger duty with a per-flight duty; a proportion of any increased revenues over time will be used to help fund increases in the personal allowance.

Energy generation

  • The establishment of a smart grid and the roll-out of smart meters;
  • The establishment of feed-in tariff systems in electricity, as well as the maintenance of banded Renewables Obligation Certificates;
  • Measures to encourage marine energy;
  • The establishment of an emissions performance standard that will prevent coal-fired power stations being built unless they are equipped with sufficient CCS to meet the emissions performance standard;
  • Continuation of the Labour government's proposals for public sector investment in CCS technology for four coal-fired power stations;
  • Increasing the target for energy from renewable sources, subject to the advice of the climate change committee.

The Liberal Democrats to maintain their opposition to nuclear power while permitting the government to bring forward a national planning statement for ratification by parliament so that new nuclear construction becomes possible. This process will involve the Government completing the drafting of a national planning statement and putting it before parliament, and a specific agreement that a Liberal Democrat spokesman will speak against the planning statement, but that Liberal Democrat MPs will abstain.

Thursday, 6 May 2010

Managing the Climate Change Message

(The following article was originally published in the 19 April 2010 issue (Number 96)  of the Institute for  Environmental Management and Assessment journal 'the environmentalist'.)

For the first few months of 2010, people and organisations working to fight climate change have found themselves on the defensive. What happened? And how can we regain a sense of momentum in our efforts to reduce carbon emissions?

A few years ago, documentaries such as ‘An Inconvenient Truth’ increased public awareness and seemed to mark a turning point in efforts to fight climate change. At last, citizens, politicians, celebrities, and corporations were united in their desire to reduce greenhouse gas emissions. With only a few exceptions, climate change sceptics were a small quiet camp. The main question was how swiftly, not whether we would, reduce global emissions.

Economy, politics, and bad press

Times have changed. A severe economic downturn has forced corporate decisionmakers and households alike to focus on financial survival and cut investments that don’t produce an immediate return. With jobs on the line and household savings squeezed, individuals are less likely to pay extra for environmentally friendly products, and organisations often choose to reduce budgets for seemingly discretionary activities like carbon management.

However, economics alone cannot explain the recent shift in sentiment. Climate change politics also plays a large part. While the failure to reach a legally binding successor to the Kyoto Protocol did not mark the end of  coordinated global efforts, it was widely portrayed in the media as a major setback in efforts to enact tough
climate change legislation. It did not help that leading politicians in the US and UK, sensing the mood of their  constituents, have dropped all mention of climate change from their public statements. Environmental activists,  apparently exhausted after their preparation for Copenhagen, have also been quieter than usual.

Meanwhile, journalists and climate  sceptics have seized upon highly publicised errors and unfortunate mis-statements by a small number of climate scientists to cast doubt on the entire subject of global warming and climate change mitigation. It is no surprise that a key scientific report such as the IPCC’s 900+ page, Working Group II’s contribution to the Fourth Assessment Report based on over 8,000 peer-reviewed publications and reviewed by 1,181 experts from 92 countries would contain some errors, nor that people would make some statements in private email conversations that they would not wish to make in public1.

Unfortunately, after the first story about stolen climate change email messages broke, most of the attempts to  clarify the situation were taken out of context and exaggerated to generate sensational headlines. While few  members of the general public are equipped to evaluate the detailed scientific arguments, the belief that ‘there’s no smoke without fire’ means that a scandalous-sounding story can derail the main message – even when overwhelming evidence points in a different direction.

What is neither a story, nor a scientific controversy are the facts. The facts remain that humanity’s greenhouse gas emissions are warming the atmosphere and changing the chemistry of the oceans at an unprecedented rate.

Climatologists also agree that there are many short-term periods for  which the temperature and weather data will not fit their models. Where scientists disagree is on the precise nature of the complex feedback effects  between natural systems, and the rate at which climate change impacts will become apparent. This distinction  has been lost in the headlines, which imply that climate science is in disarray, or worse, that scientists are in a  conspiracy to mislead the public about global warming.

Shifting priorities
It is perhaps unsurprising in the context of economic recession, political torpor and confusing headlines that  climate change is seen as a lower priority than other issues amongst individuals and corporate leaders.  A recent MORI poll of UK adults taken in February 2010 shows that the economy remains the most important issue facing the country, as it has been since September 2008. Just under half of the public (48 per cent) place the economy among the most important issues facing Britain. Pollution and the environment ranks number 11 of most important issues listed by British adults behind the economy, race relations and immigration, law and order issues, unemployment, defence, the National Health Service, education and schools, morality and behaviour, inflation, and poverty and inequality.

More tellingly, only seven per cent of British adults listed pollution and the environment among the most important issues facing Britain.

Across the Atlantic, meanwhile, a recent study by the Pew Research Center found that the belief that global warming is occurring had dropped from 71 per cent in April 2008 to just 56 per cent in October 2009. As the report’s authors note, “When asked in open-ended formats to name the most serious problems facing the country, virtually no Americans volunteer global warming”.

A different message

The decisions we make today – about the vehicles we drive and the power stations we build – will have an  impact on the climate for years to come. It is clear that environmental managers, policy-makers and climate  change activists face an uphill battle if they wish to rely on concern about climate change to alter behaviour.  Scientific scenarios and statistical analyses alone are unlikely to sway public opinion and, as highlighted by  recent media coverage, may actually exacerbate the problem.

We believe that a shift may not occur until it is too late; that is, until we have passed a global tipping point and  the impacts from irreversible climate change have become a crisis – obvious for all to see.  How can environmental managers communicate with stakeholders and drive change in such an environment?

We can offer several suggestions:

  • Don’t get bogged down in the science. The overall trends are clear; where uncertainty occurs, it is in the precise nature of the impacts of climate change – which range from modest to catastrophic. Action to reduce
  • greenhouse gas emissions is akin to purchasing an insurance policy. Catastrophic events may be rare and
  • hard to predict, but we can still take reasonable steps to protect against them, and few would argue we should have no insurance at all.
  • Manage expectations. The policy-making process in most modern democracies is slow and incremental. Slow 
  • progress does not mean nothing is happening, nor does it mean that we can afford to give up. While politicians 
  • will eventually put in place more measures to reduce greenhouse gas emissions, companies and organisations 
  • still have the power to go beyond regulation when it comes to cutting carbon.
  • Link with ‘higher priority’ issues. As the MORI poll in the UK and the Pew study in the US indicate, people tend to focus on issues of immediate concern. The extent to which climate change can be linked to other pressing concerns like jobs and economics may determine how positively the message is received by stakeholders.
  • Focus on the benefits. As we have noted in previous articles, organisations that manage their carbon emissions often realise benefits from reduced energy bills, better-optimised supply chains, greater staff engagement and happier customers. Decision-makers need not be strident environmentalists to support such results.

With the economy first and foremost in people’s minds, communication that focuses on the effects of climate change alone may not have much resonance with the majority of British people. The extent to which dealing with climate change and carbon reductions can be tied to other higher ranking concerns (ie jobs) will help
create a more pressing message.

Many organisations that have continued to embrace carbon reduction initiatives are communicating exactly these messages to their decision-makers and external stakeholders. Marks & Spencer, for example, launched their ‘Plan A’ environmental initiative in 2007 as an environmental and social improvement campaign. In its second year, the company found that those improvements were cost-neutral, but in year three they saved the company £50 million.  As one industry analyst notes, “If [new Chief Executive Marc] Bolland has to look for immediate cost savings, you can bet he’ll seek to accelerate Plan A”.

Unilever, meanwhile, recently received the top ranking for its sustainability initiatives and report, in its group of the largest food and beverage companies. The company saved over €10 million just from IT measures like data centre management and video conferencing, implemented under its environmental initiative. These  examples show that green initiatives are usually easier to sell to decision-makers and shareholders when they pay for themselves and deliver positive publicity.


Public opinion may wax and wane, but climate change will remain as a mid to long-term threat. As a result, environmental managers must use their persuasive skills to ensure that we continue to cut carbon.

Recognising that climate change can underscore other costs and benefits that people prioritise can help communicate the need to take action. By aligning climate change messages with financial and insurance (ie risk management) benefits, environmental managers can help to mainstream carbon management into organisational decision-making.

Suzy Hodgson AIEMA is a Principal Consultant and Jamal Gore MIEMA, CEnv is Managing Director at carbon management company Carbon Clear Limited.