Why managing your carbon impact is inevitable

I believe that every business in the UK will be managing its carbon impact in 5 years. Many companies are already doing so, but there are many that are not. Those against it usually argue that investment in non-core activities is difficult, especially in this time of fiscal austerity. While this may be an understandable response, I believe it is short-sighted. Reducing your carbon impact will save you money and strengthen your business, and the sooner you do it, the sooner you can build expertise and enjoy the benefits.

Let’s look at the business case for a moment. Carbon management consultants like us have been harping on about cost savings for years. It’s not just rhetoric, nor is it rocket science. Any organisation that can work out ways to use energy more sensibly will knock a massive chunk off its electricity, gas and fuel bills. As energy prices won’t be going anywhere but up in the future, the savings accumulate accordingly.

Then there is legislation. The coalition turned the CRC Energy Efficiency scheme into a tax as part of its Comprehensive Spending Review, with the additional tax bill for the smallest participants now estimated at over £40,000 a year from 2012. On top of that they face fines for non-compliance if they don’t accurately measure their emissions. So the better you manage your carbon, the smaller your tax bill. And it’s unlikely to stop there. A recent government consultation on corporate law and governance is the first part of the coalition’s commitment to ensure that social and environmental duties are included in company reporting.

The good news is that consumers like to see companies ‘doing their bit’. They might not want to make massive changes in their own lifestyles or pay a premium for green credentials, but they do show a preference for sustainable products and services. A 2009 Europa survey found that more than 8 in 10 EU citizens felt that a product’s impact on the environment is an important element when deciding which products to buy. Brands embracing the low-carbon agenda are associated with a ‘can do’ approach, social responsibility, and innovation.

The flip side of this is, of course, that companies not tackling their environmental impact are at risk of losing out to their more forward-thinking competitors. In a 2010 PwC survey of the FTSE 350, 85% of companies are now disclosing their carbon emissions. They need to, because ethical and environmental procurement is becoming mainstream. So even non-consumer-facing businesses are vulnerable to loss of competitiveness if they supply, for example, to a major retailer such as a supermarket, or to the public sector.

Not convinced? You won’t be alone. But in 5 years time I believe you will be at a disadvantage if you don’t take these messages seriously. I think there is a good chance you’ll wind up managing your carbon anyway, eventually. Best practice suggests adopting a low-carbon approach to build value and bring in new business today. Why wait?

Mark Chadwick is CEO of Carbon Clear, a London-based carbon management consultancy.

What’s on your plate? Agriculture, meat, and carbon

(The following article originally appeared in the 15 November 2010 (no. 108) issue of the IEMA journal "the environmentalist", and is posted here with permission from the publisher.)

Most greenhouse gas reduction initiatives – including those promoted on these pages – have focused on energy industry and transport as these sectors comprise the bulk of measurable human-induced emissions.  In addition, international climate negotiations (UN-REDD) have focused increasing efforts on reducing emissions from deforestation and degradation.

In general, agriculture has received less attention in carbon management policy and legislation, despite the fact that more of the earth’s surface is dedicated to farmland than to cities.   Agriculture is estimated to account for anywhere from 10% to 40% of global anthropogenic GHGs.

One agricultural topic that has received more attention is the environmental consequence of the globalization of food as a commodity product. Should the carbon impact of our globalized food system and meat-intensive diet be part of the debate?  Are there farming practices closer that could reverse this pattern?

                                                                                                               

Loving our Livestock

Modern society seems to have a love-hate relationship with livestock.  An ice cream manufacturer might use images of grazing cows to symbolise fresh, natural products, and yet food scares from BSE to E. coli infections highlight some of the apparent risks of industrial agriculture.

A similar contradictory relationship exists when it comes to greenhouse gas emissions from agriculture. Intensive livestock rearing generates both direct and indirect greenhouse gas emissions, while improved practices can result in quantifiable emission reductions and support the transition to a lower-carbon economy.    The extent to which agriculture is a source or sink for GHGs depends on existing regional land-use and management practices. An important related question is what the alternative uses for the land would be, and whether those uses would generate even greater emissions than agriculture?  

The beef carbon footprint

Greenhouse gas emissions arise at every step in getting a hamburger or steak to our tables, from preparing the soils, to growing the animal feed, to housing and feeding animals, managing their waste, transporting the animal to market, to meat processing, packing, refrigeration, transport, and finally cooking. 

At each stage, GHG emissions are released - and can be mitigated.  How cows are raised– e.g. whether grain fed or pasture raised-makes a difference. Most cattle are fed a diet rich in corn and alfalfa. These grains are often grown using artificial fertilisers produced through energy intensive means and harvested with mechanised farm equipment.    However, the lower GHG intensity of grass-fed cattle is not always better if pastures are overgrazed and cause soil degradation and soil carbon loss.  And the demand for grazing lands can put pressure on nearby forests resulting in significant emissions from deforestation.

The multi-stomached cow, while well equipped to digest otherwise inedible grasses, burps largevolumes of the greenhouse gas methane – anywhere between 100 and 700 litres per animal per day.  The animal waste is also a source of methane emissions if it is stored in large lagoons where it decomposes anaerobically. And depending on the application of manure and/or nitrogen fertilizers for feed crops, nitrogen can be released into the atmosphere as N₂0.  Both methane (CH₄) and nitrous oxide (N₂0) are particularly significant greenhouse gases as the former has a global warming potential 21 times that of CO₂ and the latter, 310 times that of CO₂.

By adding up all of these emissions sources and dividing by the amount of meat produced, it is possible to estimate the carbon footprint of each piece of beef.  According to a 2009 analysis, a 150 gram burger is responsible for approximately 2 kg CO₂ equivalent the same as driving 15 km in an average car.

The cumulative effect of our burger eating is huge.  According to the U.S. Environmental Protection Agency report, “Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2004," beef cattle accounted for 71% of methane emissions in that country in 2004. The FAO estimates that cows and other livestock worldwide are responsible for total 18 percent of greenhouse gas emissions, a bigger share than for transport. As incomes rise in poorer countries, so does global meat consumption, potentially undermining efforts to reduce emissions.

Carbon Management on and Off the Farm

While attention is turning increasingly to the problem of carbon-intensive global livestock production, campaigners, policy makers and journalists have said less about the opportunities for better management practices on domestic farms.  It is possible to adapt the well-tested “reduce, reuse, recycle” hierarchy to our production and consumption of food to find ways to reduce the greenhouse gas impact of the food we eat.

Accordingly, the first approach is to reduce demand of high emissions foods like beef by reducing food waste.   Careful meal planning and better storage can significantly reduce the amount of food purchased and sent to landfill without being eaten.  A second approach is to encourage a shift in favour of lower-carbon protein sources like pork (single-stomach pig), poultry and legumes will reduce GHGs.  In the short term, however, it will prove difficult to separate people from their beef burgers and Sunday roasts.  What is more, these efforts may be swamped by changing diets in the developing world.

Improving practices and finding farm & carbon management synergies

Is it possible, then, to raise cattle that emit less methane, and to reduce emissions associated with feeding them?  Here the results to date have been promising.  Studies have shown that changing pasture can reduce gaseous emissions by 20%, and including garlic in cattle feed can reduce emissions by 50% and lead to healthier cattle[1].  Optimizing the diet of animals not only improves the efficiency of weight gain for animals (i.e. meat) but also reduces the methane emissions. About 6% of the energy input to the cow is released as methane gas from the cow.

Best practices on farms have great potential to mitigate GHGs and improve carbon sequestration. Biomass and carbon comprises much more than the plants and animals immediately obvious on the farm. Land-use practices such as ploughing or tillage intensity can determine the extent to which soil is a sink or source for GHGs. Ploughing up grassland releases up to 84 tonnes per hectare CO2e in England and up to 330 tonnes CO2e per hectare in Scotland.[2] On the other hand, grazing animals can help maintain grasslands if grazing in controlled and pastures are rotated.  By reducing land clearing and minimizing soil disturbance, soil’s role in storing carbon and available nitrogen for plants can be maximised and soil structure and microbial activity can be enhanced to increase agricultural productivity.

In short, best practice pasture management can help soils sequester carbon while, on the other hand, poor practices (e.g. overgrazing, excessive nitrogen use, and forest destruction) will lead to increases in GHGs.  “Using existing technologies and best management practices, US agriculture could sequester 350-550 million tonnes of CO2e per year and current N2O and CH4 emissions could be decreased by 20-40%.”[3] 

Reducing or eliminating nitrogen-based artificial fertilisers as part of a programme of integrated farm management can reduce greenhouse gas emissions from soil.  Spreading manure on croplands has the dual benefits of replacing artificial fertilisers and reducing the volume of methane-generating waste lagoons.

Where waste lagoons are unavoidable, they can aerated to break down the waste aerobically, producing CO2 instead of the more powerful greenhouse gas methane.  An alternative is to capture the methane and flare it or use it to generate renewable heat and electricity.  Feed-in tariffs and standard contracts in the UK and US provide generous incentives for farmers to generate power in this way, in order to displace fossil fuel-fired generation (as described in our article in issue 104 of  ‘the environmentalist’.

A final approach is to look at local land use practices.  The decision about the best use of a given parcel of land is made jointly by landowners, local communities, government and other stakeholders.  Allowing livestock grazing may be considered the best way to preserve open space, which also allows recreation and provides habitat for native species.  The challenge then is to ensure that the practice helps to reduce net emissions rather than contributing to them.

Reducing over-grazing and using perennial grasses helps to maintain soil structure and reduce soil carbon emissions.  Managing sites for some woodland growth can aid carbon sequestration and conservation. Indeed, livestock can be part of a program to control invasive species and encourage native ones.

As farmers in the USA have learnt, wind farms are often a perfect complement to livestock grazing.  Around the town of Klickitat, Wisconsin, landowners have given wind developers permission to install over 600 turbines, generating enough power to supply 300,000 to 400,000 homes.  In this way, local farmers are making a significant contribution to the low-carbon economy. What is more, the landowners earn approximately $18,000 (about £11,000) per year for each turbine on their land – a significant boost to modest local incomes.[4] 

Conclusion

Domesticated livestock have been with humanity since before written records began. It is important that we recognise the carbon cost of our intensive agriculture and food choices, and continue to seek ways to balance our meat consumption with our need to combat climate change.


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

References:

1 Soil Carbon and Organic Farming, Soil Association, November 2009 http://www.soilassociation.org/

2 Climate Change and Greenhouse Gas Mitigation: Challenges and Opportunities for Agriculture, US Council for Agricultural Science and Technology, May 2004

3 Nathan Fiala, “The Greenhouse Hamburger”, Scientific American, February 2009.

4 http://www.decc.gov.uk/assets/decc/statistics/climate_change/1_20100414165435_e_@@_GHGnatstatsrelease140410rev1.pdf

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[1] http://www.thebeefsite.com/news/29884/afbi-study-on-methane-emissions-in-ruminants

[2] Ibid

[3] Climate Change and Greenhouse Gas Mitigation: Challenges and Opportunities for Agriculture, US Council for Agricultural Science and Technology, May 2004

[4] http://www.eenews.net/Greenwire/2010/10/18/

Carbon Neutrality: In From the Cold

(Ed: This article was originally written by Jamal Gore and Suzy Hodgson in October 2009 for the IEMA journal "the environmentalist", but was never published. Nevertheless, its content remains relevant. Enjoy!) 

Companies around the world are increasingly taking action to reduce and offset their greenhouse gas emissions. A few years ago, businesses took pains to publicise their reduction programmes, so much so that in 2007 the term “carbon neutral” gained an official dictionary entry.  However, in more recent years companies have appeared less willing to draw attention to their low-carbon initiatives.

Sorting a market muddle

Some of this reluctance stems from confusion and even cynicism about “carbon neutral” claims.  While most agree that carbon neutrality requires measurement, reduction and offsetting, many claims have been plagued by a lack of transparency.  In one highly publicised example, a computer company was criticised for making its offices and business travel “carbon neutral”, while ignoring the much larger emissions from the manufacture and use of its core product.  Few companies that have gone carbon neutral publicly disclose all aspects of their carbon footprint.

As a result, it has been difficult for stakeholders to understand how organisations’ footprints are measured, and whether internal reductions or offsets have been used to achieve carbon-neutral status.  Without an objective standard and faced with accusations of “greenwash” many companies have understandably wished to keep a low profile.

We think this is a missed opportunity.  By promoting their carbon reduction initiatives, businesses have an opportunity to engage staff and customers and are more likely to stay the course during difficult economic conditions.  

The UK Government and the British Standards Institute (BSI) seem to agree, stepping forward with parallel solutions to address this market failure.  In late 2008, the Department for Energy and Climate Change (DECC) launched an informal process to develop guidance on using the term “carbon neutral”. The main aim was to provide clarity for former Prime Minister Tony Blair’s target to make all Government estates “carbon neutral” by 2012, but also to provide greater clarity for other organisations and serve as a reference to reinforce the Government’s Green Claims Code.

At roughly the same time, BSI began working on a new Publicly Available Specification (PAS 2060:2010) to give guidance on making carbon neutral claims.  BSI was responding to a perceived need from businesses for a consistent approach to carbon neutrality.  BSI intends to serve the interests of a wide range of industrial sectors, both in the UK and abroad, with a PAS that is useful, relevant, and authoritative and potentially serves as a precursor to an ISO standard.

Both the DECC guidance document[1] and the BSI specification[2] have the potential to create a more level playing field for organisations working in this area.  The two documents are generally in lockstep in their references to accepted standards and protocols for carbon footprint quantification and reporting of greenhouse gas emissions (see our article “Whose footprint is it anyway?” in issue 53 of the environmentalist.), and both outline the key stages of carbon management, i.e. determining the subject scope, measuring the footprint, implementing a reduction plan, requantifying the residual carbon footprint, and offsetting.

Setting the scope

 As readers of our previous articles may recall, the boundaries for an organisation’s carbon footprint set the stage for the rest of the carbon management process.  Without a credibly scoped footprint, the organisation’s reduction programme may fail in the court of public opinion.

BSI and DECC take similar approaches to scoping emissions, using the GHG Protocol and ISO 14064 as their starting point.  DECC recommends that at a minimum, emissions within Scope 1 (sources under the organisation’s direct control) and Scope 2 (from purchased energy) be included. In addition, DECC recommends that organisations include their “significant” Scope 3 [other indirect] emissions with guidance for determining significance. 

As DECC does with the word “significant”, BSI provides guidance for determining “materiality” for Scope 3 emissions, stating that “those Scope 3 emissions deemed to be material to the subject shall be included.” To remove doubt about what must be included, BSI states that where the subject is an organisation, “the boundaries shall be a true and fair representation of the organisation’s greenhouse gas emissions (i.e. shall include all emissions relating to core operations including subsidiaries owned and operated by the organisation.)” 

Clearly, “significant” and “material” do leave room for managerial discretion in determining Scope 3 emissions.  DECC and BSI both recognise that organisations will differ in the extent to which they are responsible for, or can influence the emissions of third parties who pollute as a result of the organisation’s activities. Nonetheless, organisations are required to document their decisions transparently. However, differences in interpreting Scope 3 mean that the DECC guidance and BSI specification do not make it easy to rank carbon-neutral organisations in a league table. 

Reductions done right

 Both the DECC guidance document and BSI’s specification require organisations to put in place a programme of internal reductions in order to make a credible claim.  DECC requires three “separate” and distinct management steps - measurement, reducing, and offsetting, specifically stating “a carbon neutral claim consisting only of calculating emissions and offsetting should not be made.”  This requirement addresses those critics of carbon offsetting, who see it as a substitute for reducing emissions within the organisation’s boundaries [see our article “Carbon offsets: a last resort?” in issue 64 of the environmentalist].

BSI takes a different approach. While PAS 2060 requires an ambitious plan for internal reductions, it acknowledges that it may take several years for these plans to bear fruit.  PAS 2060 allows companies to recognise, as part of this longer-term target, reduction activities begun before the carbon reduction claim.  This approach reflects that organisations can often reap significant reductions in the first year, but that subsequent reductions might require significant investment and be realised more slowly.  Requiring a set reduction every year might inadvertently discourage companies from making investments in ambitious long-term emission reduction activities.

Interestingly, neither guidance document specifies a minimum level of internal emissions reduction.  Instead, they require that organisations announce a reduction plan and publicly disclose their progress each year, allowing stakeholders to scrutinise activity and form their own opinions regarding their appropriateness.

Offsets – an essential component

 As for carbon offsets, DECC and BSI acknowledge that, while internal reductions are an important way to demonstrate an organisation’s commitment and set the organisation’s course to a lower-carbon future, internal measures alone are unlikely to lead to zero net emissions. 

Both guidance documents outline the methodology and strict requirements for offsets.  These criteria include requirements that all offsets used to achieve carbon neutrality are:

• Genuine
• Additional
• Without leakage
• Permanent
• Independently verified by a third party
• Transparent (i.e. supported by publically available project documentation on an established registry)

Beyond this point, the two guidance documents diverge.  Recognising the national and international organisations likely to use PAS 2060, BSI does not specify particular offset quality standards, but provides a list of popular schemes that meet these criteria, including the Clean Development Mechanism, Voluntary Carbon Standard, and Gold Standard.  Regardless of the standard, BSI requires organisations to publicly disclose the type and quantity of offset credits used to balance out their residual emissions.  Again, BSI relies on public opinion to drive good behaviour.

DECC, on the other hand, recognises only those offsets that have been accredited under the Government’s Quality Assurance Scheme.  At present, only “compliance” credits from the Kyoto Protocol and the EU ETS can be accredited under this scheme. These credits typically cost twice as much as voluntary credits certified under other schemes – and sometimes even more. While DECC recognises that voluntary carbon credit standards have the potential to meet the criteria for generating quality offset credits, and often provide social and environmental co-benefits, the Department states that it is currently unable to vouch for their quality.  Organisations that wish to use unaccredited offsets are required to demonstrate that they have performed due diligence and met the criteria described above.

Which to use?

As the above points demonstrate, the DECC and BSI documents share a number of common elements: GHG Protocol/ ISO 14064 footprints, a plan for measurable internal reductions, high quality carbon offsets, and public disclosure throughout.

But, the differences between these two documents mean that they are not interchangeable.  DECC is more prescriptive in the timing of internal reductions and the types of offset credits organisations can use to achieve carbon neutrality.  The more flexible BSI approach will appeal to organisations that operate across national boundaries, and to large organisations making significant long term capital investments to achieve their internal reductions, or whose offsetting bill is so large that a reliance on compliance credits might force them to abandon the effort altogether.

On the other hand DECC’s approach, , may be more attractive to organisations that are already demonstrating year-on-year reductions and using compliance credits for their offsetting, or who prefer to rely on an implicit Government endorsement of their lower-carbon initiatives to deal with stakeholder scepticism.  The more prescriptive approach and implied hierarchy of the DECC guidance may offer the impression of increased rigour, even as it excludes some would-be users.

Conclusion

Because these two documents allow organisations to choose the scope for their measurement, reduction and offsetting programmes, they do not facilitate direct comparisons between organisations making carbon neutral claims. Even so, they both have the benefit of making these claims more specific, transparent, and readily verified.  As a result, we expect this guidance help reduce stakeholder scepticism and make it easier for organisations to speak more confidently about their carbon reduction initiatives.

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[1] Department of Energy and Climate Change, Guidance on carbon neutrality, 30 September 2009

[2] PAS 2060:2010 Publically Available Specification for the demonstration of carbon neutrality.

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Happy New Year from Carbon Clear

Best Wishes from the team at Carbon Clear.  2010 was a good year for us, with new offices launching in Spain, Turkey and the United States.

As usual, we have worked to stay on the leading edge of carbon management best practice, and contributed to efforts to support the global transition to a low carbon economy. In addition to providing carbon footprint, CRC, and reduction advice and supporting carbon offset projects, in 2010 we:

• contributed to the launch of the BSI specification on "carbon neutrality" (more on that in an upcoming post);
• guided, via the General Policy Working Group, the first full compliance audit for members of the International Carbon Reduction and Offset Alliance (ICROA);
• became a Core Member of the Carbon Finance Working Group for the Global Alliance for Clean Cookstoves;
• spoke and presented at a wide array of workshops and conferences around the world; and
• did lots more that I'll probably recall on the way home tonight.

In addition, I volunteered to author two chapters ("Energy" and "Climate Change") in the forthcoming second edition of the Institute of Environmental Management and Assessment (IEMA) Practitioner's Handbook.

We expect 2011 to be at least as fruitful, and look forward to working with you.

(Carbon Clear Homepage)