In BOB We Trust

One of the most common criticisms of renewable energy sources is that their electricity is intermittent.  Solar photovoltaic (PV) panels only produce electricity when the sun is shining, and wind turbines will only generate power when the wind is blowing at the right speeds - not too gently, and not too hard. This intermittency makes it more difficult for households, companies or electric utilities to precisely match supply and demand when using most renewable energy sources.

If we want to use electricity from renewables at other times, we need storage.  I've written in the past about different storage technologies, including "virtual storage on the electric grid".  It seems a town in Texas has taken things more literally.

Electric Transmission Texas recently announced completion of a 4 MW sodium-sulfur battery in Presidio, Texas.  The battery has been nicknamed "BOB" - short for "Big Old Battery" - by local residents.  And big it is.  BOB is the largest battery of its kind in the United States and the first in Texas.  It is designed to reinforce the local electricity supply while a replacement for the existing 60-year old long-distance transmission line is constructed between now and 2012.  In the event of a power outage, BOB can supply the city with continuous power for up to eight hours, until grid power is restored.

At a capital cost of around $25 million, BOB certainly isn't cheap, but neither is the $44 million cost of connecting Presidio to the regional electricity grid 60 miles away.  For that cost, the city could build around 10 MW of solar power generation, or around 20-30 MW of wind power - assuming local wind conditions were favourable.

ETT and the city of Presidio are clearly planning for the future.  BOB has a planned opertaional lifetime of 15 years, but ETT expects the upgraded transmission line to be complete by 2012.  After that date, BOB will be available as a facility for other utilities that need to store electricity (presumably from intermittent renewables) to match consumer demand.  Depending on the rates they charge for this service, BOB's owners could generate handsome profits from their giant battery system.

BOB is an example of the technological innovation that is making low-carbon renewable energy a realistic option for providing reliable power around the world.  At Carbon Clear, we're working to support innovations in the supply of sustainable energy.  We're eager for you to join us.

(Carbon Clear website)

Gold, Silver, Bronze…and Green? Just how carbon friendly were the 2010 Winter Olympic Games?

The Olympic caldron lighting up the city for 17 days straight has gone out, and the once crowded streets are quiet. The 2010 Vancouver Games are over. Much like the day after Christmas, when we wake up and confront the reality of our expanding waste-lines and dwindling bank accounts, over the next week VANOC should be doing the same, only from a carbon perspective. What was the reality of the games’ carbon impact? Did VANOC meet its goal of carbon neutrality?

There is no doubt that both VANOC and the games’ sponsors put forth great effort to roll out robust energy and waste management initiatives aimed directly at reducing carbon during the development, construction and operations phases of the games. Among many others, some of those efforts included a fleet of hydrogen vehicles transporting guests and participants in and around Whistler, energy efficient facilities powered by the province’s hydroelectric energy, the use of existing facilities rather than building new ones, and a LEED certified Olympic Village.

But alas, one cannot yet be carbon neutral without the purchase of offsets. Knowing this, prior to 2010 VANOC enlisted the David Suzuki Foundation to estimate the carbon footprint of the event. They did so charting the impact at approximately 390,000 tons; the games were directly responsible for 118,000 tons, for the building and operations of the venues, while another 268,000 tons were attributed to sponsors, spectators and partners. VANOC then did the uncharted for an Olympic committee, they purchased offsets from B.C. based projects to offset their 118,000 tons, and set up a fund for participants, sponsors and spectators to contribute to, so that the remaining 268,000 tons would be offset following the games’ conclusion.

Even with this pro-active approach, as we all know events never go as planned, and that ‘never going as planned’ has a carbon impact that should be counted. As it is now famously known, we saw snow trucked or flown into sites like Cypress and Grouse Mountains, just outside the city limits of Vancouver, to compensate for the spring-like weather in the Canadian city. Further, others have posed question to what will happen to so many of the materials and supplies used during the games? Some will be recycled and reused, but others? How is that carbon being attributed? And finally, that fund set up to offset travel and other carbon intensive activities of spectators, sponsors and the athletes? What happened to it? Did the fund meet its goal of offsetting the remaining 268,000 tons? How should we view these activities and circumstances such as these in light of VANOC’s carbon neutrality goal?

The fact is VANOC should be applauded for their efforts in trying to keep the games low carbon. But, just as we hold ourselves accountable after the holiday season, by reconciling our bank accounts and stepping on the scale on January 1^st, so too should VANOC. Get back on that carbon scale and see how you did Vancouver. Once you know (and offset any remaining emissions), then it’s time to boast your green medal.

What Now for Corporate Carbon Management?

The following article was originally published in the 15 February 2010 issue (Number 92) of the Institute for Environmental Management and Assessment journal 'the environmentalist'.

Much has been written about the lack of a comprehensive global treaty at the December 2009 Climate Change Summit in Copenhagen, but relatively less attention has been focused on some of the positive outcomes.

Government leaders agreed at the summit to work together to limit global average temperature rises to less than 2 degrees Centigrade.  They also agreed a framework for addressing the deforestation that accounts for at least twenty percent of global greenhouse gas emissions.  The Copenhagen Accord negotiated between the Brazil, China, India, South Africa and the United States calls on developed countries to set specific carbon reduction targets for the year 2020, to define specific actions for reaching the targets, and to report on each country’s emissions and actions at least every two years.  It also calls for the USA, United Kingdom and other developed countries to provide new and additional funding in order to help the developing world pay for climate change mitigation, adaptation, technological development, and capacity building.  Taken together, these are important positive steps that take us closer to a low-carbon future.

To date, however, the pledged commitments from the largest polluting nations do not add up to deliver the level of reductions scientists believe is required to forestall the worst climate change impacts.   Bolder action is required.  Faced with politicians’ unwillingness to commit to more ambitious goals, it is more important than ever for individuals, communities, and organizations to take voluntary action to reduce their own carbon footprints.

Copenhagen – a backdrop for leading companies
The writing is on the wall – the risks of ignoring climate change are high, and if companies wait for multi-lateral treaties before they act, they are likely to miss vast market opportunities for new products and processes designed for a low-carbon economy.

The private sector seems to be getting the message. As we discussed in “Beyond Compliance” (issue 84), leading multi-national companies are not waiting for global treaties to embark on carbon reduction initiatives.  The writing is on the wall – the risks of ignoring climate change are too high, and if companies hold out for multi-lateral treaties, they are likely to miss the vast market opportunities in designing new products and processes for a new low-carbon economy. A wide array of companies used the Copenhagen summit as a backdrop against which to reaffirm their commitment to greenhouse gas reductions and position themselves as low-carbon leaders.

For example, as an official vehicle supplier to the climate summit, the BMW Group provided locally emission-free hydrogen-powered models, models with extra-fuel-efficient diesel engines, and all-electric models vehicles for the talks. Since this past summer, users in Berlin and other cities have been field testing new BMW electric car models as part of a 600-car worldwide trial, evidence of the company’s commitment to remaining a transportation leader in a lower-carbon future.

Low carbon to zero carbon – companies race ahead of governments
Many leading companies not only have a low-carbon plan in place with targets exceeding those discussed at Copenhagen, but are already planning for a zero-carbon future. Northern Europe’s largest utility, Vattenfall AB, with CO2 emissions from electricity and heat production of 82.5 million tonnes in 2008  and 4.7 million retail customers in Denmark, Finland, Germany, the Netherlands, Norway, Poland, Sweden, and the UK, has projections to produce 100% zero-carbon energy by 2050.

Last month [January-ed.], Wal-Mart announced the completion of three more solar power projects in California, as part of its plan to nearly double its solar energy use in California. “The completion of these facilities marks another important step in our drive to become more sustainable and achieve our goal of being supplied 100 percent by renewable energy,” said Kimberly Sentovich, vice president and regional general manager for Wal-Mart.

British Telecom, having already reduced its carbon footprint by 58% in the UK through extensive use of renewable energy, has set a target to achieve an 80% reduction in its carbon intensity worldwide by 2020.  BT is one of the UK's largest purchasers, with an environmental influence that extends well beyond that of its own staff and workplaces.

A similar story is unfolding around the world, as firms realize that reducing their carbon footprint leads to improved financial performance, increased staff and customer satisfaction and a greater commitment to environmental stewardship.

One of the drivers for this emphasis is investor pressure.  The Carbon Disclosure Project (CDP), a not-for-profit organization funded by some of the world’s largest institutional investors, asks listed firms to disclose their carbon footprint, explain their exposure to climate change impacts, and detail the steps they are taking to reduce their greenhouse gas emissions.  Because much of the data submitted to the CDP is made public, companies often find themselves in a race to keep pace with other companies that have responded to the organisation’s queries.

Regulation as backstop
While many companies continue to take further strides in renewable energy and low-carbon initiatives, governments across the globe are not standing still, and the impact of their decisions cannot be ignored. The failure to reach a legally-binding agreement at Copenhagen means that government actions remain uncoordinated, but they still have the potential to impose material business risks for firms that have to date been slow to take action.  At the same time, they continue to raise the bar for firms that want to go beyond compliance.

The European Union’s Emissions Trading Scheme (EU ETS) has stimulated many European utilities and companies to embrace renewable energy technologies, while the associated carbon offset markets have helped fund technologies such as wind and solar in developing countries and emerging economies like China and India.  Since 2005, the EU ETS has served as a much-needed prod for companies, requiring large emitters to measure their footprint and consider the cost of carbon in their planning and investment decisions. 

The French Government, meanwhile, is planning to supplement the EU ETS with a carbon tax on transportation and industry to drive faster reductions.  Large U.S. polluters, anticipating the eventual emergence of a national cap and trade scheme in that country, are postponing or canceling plans for new coal fired power plants.

The UK continues to provide a leading policy framework for greenhouse gas reductions, with measures such as the Carbon Reduction Commitment (see our CRC article in issue 76).  The British Department for Energy and Climate Change estimates that by 2020, the CRC will increase competitiveness by reducing CO2 emissions by 4 millions tonnes each year and by achieving cost savings of about a billion pounds sterling each year. 

Belgian Climate Minister Paul Magnette believes that raising the EU's emissions reduction target from the current 20 percent cut in carbon emission to a 30 percent cut by 2020 could give European firms a "first mover advantage" in the change shift to a green economy – which could lead their peers in India, China and the United States to follow their example.   Not wanting to be left behind, U.S. companies are pushing for stronger government guidance.  On 21 January 2009, more than 80 leading U.S. companies released a letter calling on the government to enact legislation that “will unleash innovation, drive economic growth, boost energy independence and decrease...carbon emissions.”

Conclusion
In October 2009, British Prime Minister Gordon Brown referred to the importance of the Copenhagen Summit by announcing that "there is no Plan B".  Given the promising but limited outcomes, we must hope he was wrong.  We may not be able to rely on government action alone to deliver the emissions cuts we need to stave off the worst impacts of climate change.  Fortunately, companies, organizations and individuals are discovering the benefits of going beyond compliance and taking voluntary action to achieve ambitious greenhouse gas emission reductions.

As Tony Hayward, Chief Executive, BP noted, “It’s dangerous to promise too much too soon… [the Copenhagen meeting] was “just one step on what will be a long journey to a lower carbon world – and that journey will be hard and long.”

This new decade may well usher in a new level of corporate activity and government commitment in tackling climate change - whether this will be enough to deliver the deep carbon reductions that scientists say are required remains to be seen.

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

Moral Hazard and the Need for "Plan B"

When UK retailer Marks & Spencer launched its flagship sustainability programme, it branded the initiative "Plan A - because there is no Plan B".  The idea behind the name is intuitive and compelling: our economy and society are dependent on the natural resources and services provided by the earth.  Depleting those natural assets puts everything else at risk.

Last year, government representatives and spokespeople from advocacy groups began using the phrase in a different context.

In the first half of 2009, a team from the University of East Anglia called on the British government to support an investigation of geoengineering options.  Geoengineering involves combatting the effects of climate change via large-scale changes to the earth's reflective albedo (injecting sulfur dioxide into the stratosphere or launching space mirrors to block sunlight) or artificially removing large quantities of carbon dioxide from the atmosphere.  The East Anglia researchers, like many climate scientists, were concerned that we are reaching one or more "tipping points" beyond which rapid and uncontrollable climate impacts become unavoidable.

Speaking on behalf of the Department for Energy and Climate Change, Minister Joan Ruddock stated that geo-engineering is a Plan B approach, and a diversion "when we should all be focused on Plan A."[1]

In October 2009, Prime Minister Gordon Brown gave a speech in the run-up to the climate change summit in Copenhagen.  Referring to the need for a legally binding international agreement to reduce emissions, he stated that "there is no Plan B".

Government insistence that there can be no discussion of a Plan B (or C, or D for that matter) reflects concern about moral hazard.  Moral hazard is a widely used concept in behavioural economics.  It holds that people and organisations behave differently when protected against risk than they would when fully exposed to that risk. For example, someone with homeowner's insurance might be less careful about protecting their property against theft or fire when they know the insurance company will reimburse their losses

Seen in this light, Minister Ruddock's unwillingness to entertain research on geoengineering reflects concern that the ability to "repair" the climate might cause us to forego efforts to prevent the damage in the first instance.  Likewise, Gordon Brown wanted to increase the pressure to secure a replacement to the Kyoto Protocol during the December 2009 climate summit.  Given the rancorous debates in the months and years prior to Copenhagen, telling people there are alternatives to Copenhagen would almost guarantee a continuation of the stalemate.

The problem, of course, is that fires and thefts sometimes happen despite our best efforts.  When they do, it helps to have insurance.  Despite a Herculean effort by the British government and other parties, Copenhagen did not result in a binding emissions reduction treaty to replace Kyoto.  If Brown was correct, we're doomed.

As it happens, there was a Plan B after all.  There is also a Plan C, a Plan D, etc.  On the last day of the summit, the US, China, Brazil, India and South Africa negotiated the Copenhagen Accord, which focuses on the largest polluting nations, and relies on public pledges and peer pressure instead of legal treaties to drive emissions reductions at the national level.  Governments around the world also agreed to reconvene in Mexico City in late 2010 after a series of preparatory meetings in order to try again to reach a legally binding agreement.  And meanwhile, carbon management companies like Carbon Clear, the Carbon Disclosure Project, the UNEP Climate Neutral Network and other initiatives continue to work with businesses, NGOs and governments around the world to achieve dramatic CO2 reductions.

Publicising the existence of "Plan B" raises the risk of moral hazard, but misleading the public when there is the very real possibility that Plan B will be needed breeds cynicism and distrust.  Imagine the response if the Prime Minister again went before an audience and declared that the Mexico summit is our last chance because "there is no Plan B".

We cannot predict the future.  Climate change is a complex phenomenon that involves the interaction of nearly two-hundred governments, tens of thousands of organisations, billions of people, and a bewildering array of natural environmental phenomena.  As I've said many times before, climate change is too big a problem to solve with one hand tied behind our collective backs.  We need to embrace as many possible solutions as we can, as swiftly as we can.

There is no single solution, no single Plan A that can be guaranteed to solve the problem.  If Plan A doesn't work out, we need to have Plan B ready.  Or as a medieval Arab scholar once noted, "Trust in God, but tie your camel."

(Image credit: Paolo Buggiani)

(Back to Carbon Clear website)

[1] - Presentation by Tim Lenton to the All-Party Parliamentary Group on Climate Change on 14 July 2009

Truth or Lies

Too many politicised blogs take positions on global warming, referring to scientific studies and purporting to be fair and unbiased, but clearly having an agenda. At Carbon Clear, we try to help companies make informed decisions about how to respond to climate change.  But that requires sound data.

I’ve been reminded of the classic book by Darrell Huff How to Lie with Statistics, first published in 1954 and now as relevant as ever.  

Sometimes intentional, sometimes inadvertent, it’s not hard to arrive at erroneous or misleading conclusions using data inappropriately and misrepresenting reality.  Moreover, depending on your inherent biases and interests, you can construct the world as you like it by picking and choosing data points to support your worldview.  Take global mean temps over the past 20 years based on NASA’s Global Land Ocean Temperature Index.  Using this table, and selectively choosing data points, I can make two conflicting statements about climate change, both of which are true.

• Annual global mean temps 1990 to 1996 dropped by almost 1%.
  
• Annual global mean temps rose from 1989 to 1998 by about 2%.
  

So a reality check for these statements is needed.  Are these time periods relevant? Are the data points (i.e. years chosen) representative of long-term trends?   The short answer to these questions is no and no.   Changes in global mean temps over short time periods are unlikely to reveal anything significant in climate change science given the temperature amplifying effects of El Nino or the countervailing cooling effects of volcanoes.   So let’s let the scientists do the science and interpret the data – we have a large enough role trying to communicate clearly climate change issues.  And while we ask questions, let’s try and ensure that the science is not misused or abused.

(Carbon Clear Website)

A Warning from Haiti

The earthquake in Haiti is a frightening omen of what could happen in the future with climate change disasters.

Numerous studies have shown how the world's poorest will suffer disproportionately from climate change.  The increased likelihood of storms, floods, and desertification with resulting damage and destruction to homes, farms and lives leads to even greater suffering through future food shortages, famine and disease.

Compare Haiti, a poor country to a rich earthquake-prone region like California.  In California an earthquake of a similar magnitude on the Richter scale led to fewer than 100 deaths.  Haiti by contrast may suffer up to 100,000 deaths.

Once the world helps the people of Haiti get back on their feet, let's not forget the other poor countries that are extremely vulnerable to  future climate change disasters.  We can make sure that resources are available to help the poorest people in the most vulnerable parts of the world.

Carbon Management Consultant Suzy Hodgson will be joining Carbon Clear's blog team.  This is her first post.

Carbon Taxes vs. Cap-and-Trade

In 2009, the promise of serious climate change legislation in the United States and the scheduled UN Climate Change summit in Copenhagen helped to focus attention on the tools governments can bring to bear to reduce greenhouse gas emissions. We've talked in the past about the potential for massive government subsidies to bring about a rapid transition to a lower-carbon economy. But with coffers emptied by bank bail-outs, few Western governments seem serious about this approach.

Instead, there has been a marked increase in discussion about the merits of cap-and-trade mechanisms versus carbon taxes. (See this post for a discussion of how cap-and-trade works). To be more accurate, there have been a lot of comments on blogs, news sites and NGO websites arguing that carbon taxes are a superior solution compared to setting a cap and letting polluters trade amongst themselves.

One argument claims that cap-and-trade will not lead to actual emission reductions. Another is that cap-and-trade has been subject to manipulation and lobbying by special interests that weaken its effectiveness. Yet another is thatinvestment bankers and speculators will use a cap-and-trade system to reap vast profits. A tax on carbon - preferably at the well-head, mine mouth or port would in theory avoid this turn of events.

My considered view is that these arguments are misinformed, at best. First, the theory.

Economists use a demand curve to illustrate the relationship between the price of a product and the quantity of that product customers are willing to purchase. An idealised demand curve might look like the figure below:



There is a finite pool of carbon that can be released into the atmosphere without triggering potentially catastrophic global impacts. However, the cost of emitting greenhouse gas emissions has historically been borne by society as a whole, not by polluters. Polluters, faced with a low or zero carbon cost, have been consuming far too much of the total allowance (Q1 on the illustrative demand curve).

There are two ways in which we can force polluters to move up this demand curve and reduce their consumption.

A cap sets a limit on the quantity of carbon (Q2) and watches the price rise to the appropriate point on the curve (P2) as polluters invest in emissions reduction technology and buy or sell their allowances. A tax, on the other hand sets the price (P2) and watches demand shift in response as polluters make investments to lower their tax bill. In theory, both achieve exactly the same result. So much for the first argument - in theory, a carbon tax and a carbon cap can achieve exactly the same emission reductions at exactly the same cost.

But what is the reality?

As America's attempts to pass climate change legislation illustrate, the theoretically elegant cap-and-trade model is unlikely to make it unscathed through the meat-grinder of special interest politics. No politician, after all, wants to alienate potential voters or donors. The House and Senate climate change bills have introduced a bevy of set-asides, subsidies, free allowances, and other measures to ease the sting that would be felt by politically influential constituencies.

Do these concessions make the resulting cap and trade legislation less effective?

Yes, but the legislation is still projected to drive significant emission reductions, and without some concessions to special interests, it is unlikely the legislation would pass at all. The same holds true in Europe. The first phase of the EU ETS gave away allowances for free and make a number of other concessions in order to ease passage. In both the EU and the US, the aim is to gradually tighten the provisions over time and close loopholes in order to drive greater emission reductions.

Would a carbon tax be preferable, as some critics of cap and trade argue? With a carbon tax, there are no allowances to give away for free, and you don't have commodities brokers making money trading carbon credits.

So is it better? France provides a useful case study, as the government there announced a carbon tax just last autumn.

Within weeks of the initial announcement a French magistrate struck down the plans. It seems the legislation exempted companies covered under the EU Emission Trading Scheme despite the fact that they are responsible for the lion's share of the country's emissions, and their EU allowances had been given away for free. In addition, other sectors, like transport, received subsidies or rebates that reduced the impact of the tax.

What is more, a report comissioned by the government recommended that the carbon tax be set at €32 per tonne CO2 equivalent in order to drive significant reductions, and increasing to €100 per tonne by 2030. The French government, however, decided to reduce the tax rate to €17 to make it more palatable politically. Faced with a setback in the courts, the French are already at work to close some of these loopholes. It is a safe bet, however, that the government will continue to make concessions to special interests.

There's another challenge with carbon taxes. As impossible as it may seen in the wake of a rancourous Copenhangen conference, using carbon taxes instead of national caps makes it more difficult to secure international consensus on climate change policy.

The main reason is that nations will disagree on the appropriate carbon tax rate to achieve their individual reduction targets. Imagine if instead of pledging to achieve a reduction target, each country pledged to impose a domestic carbon tax. The U.S. might argue that India's carbon tax is set too low to drive a low-carbon shift, while the Japanese might not believe, for example, that the Australia will keep its promise to raise carbon tax rates during an economic downturn. The EU, meanwhile, might argue that China is keeping its carbon tax rate low to benefit local industry, and impose a punitive import duty to reflect what it feels is a more accurate price for Chinese carbon in products.

As for bankers and speculators profiting from climate change legislation, someone is going to have to lend companies the money to invest in all the new technology that will lower their carbon tax bill. It is not a tremendous stretch to imagine those loans collateralised against the anticipated future tax savings, and then securitised and sold off to third parties.

It appears, then, that the critics are right. A theoretical carbon tax is indeed superior to a (real world) cap and trade system that has loopholes for special interests. In fact, a theoretical tax is perfect, except for one problem - it has to work in the real world. It is not clear that a real-world carbon tax would offer much improvement.

Scrapping all the work done to date on making cap and trade effective would, at best, delay progress and result in an equally compromise-riddled carbon tax. At worst, it could embolden opponents of rapid action to fight climate change, and cause governments to abandon both approaches in favour of much less effective piecemeal efforts.

We can't afford to make the perfect the enemy of the good.

(Carbon Clear Website)

"Wasting" Energy

Is there a downside to saving energy?

The New York Times reports that transport authorities in several U.S. cities are concerned about the safety implications of their rapid switch to low-energy traffic lights. These traffic lights, which uses LEDs instead of incandescent bulbs, consume only a fraction of the electricity of traditional lights. Incandescents, after all, lose about 90% of their energy as heat. When it comes to reducing emissions from the hundreds of thousands of traffic lights around the country, the switch to LEDs is good news.

But what happens when it snows? When snow falls on a traditional traffic light, the heat from the bulbs can usually melt the snow, keeping the light visible. LEDs, by contrast, are much cooler and much less snow melts away. As the Times reports, snow-covered LEDs can pose a safety hazard - last April, one person died and four others were injured when a pickup truck ran through a snow-obstructed LED traffic light and struck another vehicle.

Thousands of miles away in Nepal, households are confronting a related issue. Their new, energy efficient stoves waste less heat. This means householders can cook with less fuel and reduce costs and labour burdens. In the winter, however, their houses can get colder than normal - all that "waste" heat had been keeping the room warm.

There are many other examples where "waste" energy from appliances and equipment actually serves a useful purpose. Without careful planning, the more efficient alternative may neglect this service.

This does not mean that we shouldn't continue implementing energy efficiency programmes and cutting carbon wherever possible. However, it does highlight the importance of careful planning to anticipate these potential trade-offs and taking action to reduce their severity. This is already happening with LED traffic lights. Rather than reverting to incandescents, officials realised that the waste energy only provided an extra snow-clearing service for a handful of days each year, and that there were other alternatives available:

"Transportation officials have been dispatching workers with brooms to clear the lenses[...]They are also experimenting with a solution that is less labor-intensive and more permanent, outfitting some of the lenses with sloping snow shields to make it harder for snow to stick."

The transition to a low-carbon economy means we have to do things differently. Careful planning can help ensure a smooth shift and deliver maximum benefit.

(Carbon Clear website)

Mind the Gap

Apologies for light posting towards the end of 2009. Lots of people were speculating and pontificating, so better to wait for the din to fade.

Beyond Compliance

This article originally appeared in the October 2009 issue (no. 84) of 'the environmentalist', the magazine of the Institute for Environmental Management and Assessement (IEMA).

In the run-up to Copenhagen, governments around the world are proposing carbon reduction targets as part of their negotiating positions. New Zealand has set a preliminary goal to reduce emissions 10 to 20% by 2020; Japan has set a 15% reduction target – albeit from a different baseline. Meanwhile, proposed legislation in the U.S. sets a 17% target by 2020 and the EU has pledged to reduce emissions 20% by that date.

However, many leading global companies have set their own corporate targets for emissions reductions that make these country pledges seem modest and meagre. Wal-Mart’s climate change strategy sets a 20% reduction target by 2012 and Unilever have set a 25% reduction by that same year. British-French rail company Eurostar set a 25% reduction target for 2012, and reached its goal three years ahead of schedule. Meanwhile, supermarket chain Tesco promised a 50% reduction in its footprint by 2020, and Marks and Spencer pledged to go completely carbon neutral by 2012.

In this article, we explore why large companies commit to such ambitious reduction goals, and consider what this means for carbon reduction both at home and abroad.

Why do large companies go beyond compliance?

Companies embark on carbon reduction initiatives in order to exploit opportunities and to manage their risks, including costs, customer retention, regulation and/or exposure to weather and resource variability.

As described in “The end of the low-carbon agenda?” (Issue 72), many companies are attracted to the lower energy and transport bills associated with driving carbon out of the business. Marks & Spencer, for example, originally pledged to spend £200 million on its “Plan A” eco-initiative, but has since found the programme to be cost-neutral and expects the ultimate savings to outweigh its planned investment. In this context, a low-carbon initiative can engage staff in what would otherwise be a traditional cost-reduction exercise.

Multinational companies face more direct risks from climate change. Long supply chains and inefficient suppliers leave firms vulnerable to rising energy prices – especially as governments regulate emissions in transport. Meanwhile, weather-related disruptions – storms, floods, drought, can threaten companies’ “just in time” logistics networks. Climate change risks are increasingly being incorporated into businesses’ planning strategies. As Unilever states, ‘”there will be serious consequences for our business operations, including threats to our agricultural supply chain and the availability of water in some of our markets. The costs of addressing climate change now, while considerable, are likely to be far less than waiting and allowing the problem to get worse.”

With climate change now a popular concern, companies that voluntarily embark on carbon reduction initiatives are earning a reputation as environmental leaders. The Sunday Times “Best Green Companies” list is widely seen as the benchmark for sustainability leadership in the UK, and a company’s commitment to carbon reductions is one of the main criteria that the newspaper uses to evaluate performance. Companies strive to be on this and other “green lists” because environmental leadership can often translate into increased customer loyalty and sales growth, as well as employee satisfaction.

Anticipating regulatory trends is not a new concept for large corporations. For example, chemical companies have long understood that environmental risk management is essential to their continued profitability.

When the chemical industry launched its Responsible Care code of practice in 1988, only 13% of its practices were required by US government regulation. Four years later, the US government had made 80% of these company-initiated practices a regulatory requirement. Companies that had voluntarily adopted the Responsible Care principles were well placed to comply with the eventual increase of government regulation.

Climate change policy has followed a similar course: despite growing pressure, governments have been relatively slow to adopt emissions reduction targets. Meanwhile, leading companies have seen the advantages of a low-carbon economy. These companies have been steadily measuring, reducing, and offsetting their carbon emissions over the past five years – with telecommunications firm BT launching its carbon reduction initiative back in 1992.

The global supply chain

Unlike utilities and manufacturers, large retailers often have relatively low “direct” or “Scope 1” emissions (emissions from sources under a company’s direct control), and their emissions from purchased electricity and steam are not particularly high. However, these companies maintain extensive supply chains, and influence a carbon footprint that may be 20 to 60 times greater than their direct and energy indirect emissions.

Unilever, for example, reports the carbon footprint from their own factories, offices, laboratories and business travel at approximately four million tonnes of CO2 equivalent per year. Their wider (“other indirect” or “Scope 3”) footprint from sourcing agricultural and chemical raw materials is around ten times larger, and when consumer use and product disposal are included, this footprint can expand to 30 to 60 times greater than their direct emissions. As a result, many companies find that they can achieve more ambitious emissions reductions if they involve their suppliers – and even their customers – in their low-carbon initiatives.

These companies often wield tremendous influence over their suppliers due to their immense purchasing power. Wal-Mart, for example, is the largest single customer of many suppliers around the world. Even Proctor & Gamble, the world’s largest consumer goods maker, counts Wal-Mart as its largest customer. When Wal-Mart asks its suppliers to measure their carbon footprint or identify ways to reduce emissions, they are more likely to get a response than would be a smaller customer. As Marks & Spencer’s Mike Barry puts it, “They know that if they want to want to be pursuing business with us in the future, they have got to come on the journey with us.” To this end, Marks & Spencer has helped its suppliers set up four “green” factories that use significantly less energy and contribute to the firm’s lower carbon footprint.

Not only are these changes pushed up the supply chain, but also down to the end user. After launching their “Plan A” sustainability initiative, Marks & Spencer found that up to 75% of the carbon footprint of their clothing came from washing, drying, and ironing. As a result, the company has begun designing and labelling its clothes for washing at lower temperatures and launched a customer communications campaign.

As described in our article “Counting the Cost of Outsourcing” (Issue 55), many of the emissions from developing countries are attributable to outsourced manufacturing on behalf of Western companies. Indeed, adjusted for exports, China’s carbon footprint is significantly lower than the United States’. 70% of the products sold in Wal-Mart stores are made in China, and the company has supply relationships with 5,000 Chinese enterprises.

What happens when massive Western companies demand that their foreign suppliers go beyond compliance and reduce emissions? It may be too early to tell, but we would expect this supply chain pressure to lead to greater demand for green electricity and energy efficiency improvements at factories in China, India and other developing countries.

There is another source of external emissions reductions that major companies are pursuing: carbon offsets. Carbon offsets are purchased emissions reductions that occur outside an organisation’s boundaries. In this regard, generating measurable reductions by investing in a wind or solar project in China is only one step removed from investing to help an apparel factory in China reduce energy.

Indeed, large corporates in the U.S., U.K. and mainland Europe are embracing carbon offsetting to help them go beyond compliance and achieve net emissions reductions far faster than they could through incremental internal measures. By supporting projects in developing countries that do not have national caps on their carbon emissions, these companies are helping to accelerate the transition to a lower-carbon mode of economic development.

Different paths to a lower-carbon future

It is clearly in large companies’ best interest to announce and pursue ambitious carbon reduction goals. These initiatives can drive significant reductions in thousands of supplier companies in developing countries and provide an incentive for a rapid transition towards lower-emissions practices in those countries.

This ongoing trend raises an interesting possibility. The post-Kyoto climate change negotiations are currently bogged down over the issue of developing country reduction commitments. Developed nations like the U.S. and U.K. argue, correctly, that emissions from China, India and other poorer nations are so large that serious action to fight climate change will be stymied without their active involvement. The developing nations argue, also correctly, that current warming is due to richer nations’ historical emissions and rich countries should demonstrate their own commitment to reduce their footprint before lecturing others.

Wal-Mart, M&S and other companies are showing that it is not either-or. The world economy is so intertwined that actions taken in developed nations can lead to significant emissions reductions overseas. Indeed, while a binding emissions cap would provide the force of law, it is likely that supply chain pressure and demand for offsets will also drive significant cuts.

Major structural change to our carbon-based economy is inevitable as we shift to different ways of meeting our needs while tackling the challenges of climate change. Large corporates have led the way in showing how a commitment at home can lead to a reduced footprint overseas. As pressure mounts on carbon caps in developed countries, we can expect to see it spread into faster action around the world.

Suzy Hodgson, AIEMA, is a principal consultant and Jamal Gore, AIEMA is the managing director at specialist carbon management company, Carbon Clear Limited.

Breathing Room

Most of the news that comes to us from the climate change front lines is alarming. Over the last few years greenhouse gas emissions and temperatures have continued their upward trend. Emissions have risen so much over the past decade that what used to be considered a worst-case scenario is now our most probable future.

But the future is not cast in stone - at least not yet. As reported in the Financial Times, the International Energy Administration (IEA) has found that global CO2 emissions had fallen faster in the past year than any year over the past four decades.

In one sense, the IEA report is a good-news-bad news-story. CO2 can stay in the atmosphere for a hundred years or more, so lower emissions mean a lower overall concentration of greenhouse gases. And that means less warming in the future. The bad news is that much of the reduction we are seeing is due to economic pain.

Emissions fall when factories reduce output, businesses go bankrupt and workers lose their jobs. As we noted in a blog post several months ago, the last thing we want to do is reinforce the perception that lower CO2 emisisons means financial misery. It is this perception that makes it so hard for governments to negotiate a climate change treaty that will help us achieve the ambitious global cuts that are needed to forestall dangerous warming in the future. The recent reductions are not nearly enough to stave off the worst effects of climate change, so a global agreement remains the order of the day.

There has, however, been another effect from the economic recession. Not only have existing factories and power plants reduced their output, but a large amount of new construction has been put on hold. New coal-fired power plants have an operational life of fifty years or more, so a decision to launch a new fossil fueled power station would lock us into decades of carbon-intensive energy production - at a time when we should be moving in the opposite direction.

Postponing construction of these power stations gives us some breathing room. We're not committed yet. There's still time to choose an alternate path, preferably one that doesn't lock us into a worst-case scenario of spiraling emissions and environmental misery.

Many renewable energy and energy efficiency investments have also been hit by the economic crisis, but not everything has ground to a halt. We continue to learn more about how our carbon emissions affect the climate, and about the likely impacts of climate change on planet and people. We continue to learn more about promising technologies and approaches that reduce the tradeoff between helping the environment and securing a decent quality of life. And we learn that governments are taking climate change seriously - regulations will force businesses to factor the cost of carbon into their business decisions. Each new piece of information reinforces the knowledge that we can and must do more - not less - to cut emissons.

So one possible silver lining to the recent economic pain is that it has given us an opportunity to make more informed decisions and hopefully avoid making long term decisions we might eventually come to regret.

The future is not cast in stone. As the economy recovers and the investment climate improves, let's use what we've learned to re-evaluate our options and make faster progress towards a lower-carbon future.

(Back to the Carbon Clear website)

The 230 MPG Car

According to the news reports, General Motors has done the impossible. The NYT and hundreds of other press sites have covered the auto maker's announcement that the forthcoming Chevy Volt hybrid car will run 230 miles per (US) gallon of gasoline. Given our interest in low-carbon solutions, that was enough to make the team at Carbon Clear sit up and take notice.

The announcement was a shot across the bow of Toyota, which sells the best-selling Prius hybrid car, and generate more buzz around the long-anticipated Volt. According to the US Environmental Protection Agency's fuel economy website, the Prius gets 48 mpg in city driving, better than anyone else, but pathetic compared to the Volt's 230 mpg.

General Motors based their claim on the fact that the Volt is a plug-in hybrid that can run for 40 miles in electric-only mode, and the battery can be recharged overnight from a household electrical outlet. The gasoline (petrol) motor only kicks in to recharge the electric batteries when the car is driven more than 40 miles in typical conditions. Since the typical American car only travels 33 miles per day and the battery gets recharged overnight, argues GM, the gasoline engine will rarely get called into service. The car might travel on average for 230 miles before an entire gallon of gasoline is consumed.

Voila, 230 mpg.

I can see how this number might be technically accurate. But does it tell customers what they really need to know?

The Volt is expected to cost between $30,000 and $40,000 - considerably more than a conventional car of the same size. I can think of four reasons why people would spend the extra money:

1. They have money to burn and are caught up in the hype,
2. They want to reduce consumption of imported fossil fuels,
3. They want to reduce CO2 emissions from driving,
4. They want to spend less on fuel.

Let's set aside the first rationale, as it falls outside the normal scope of this blog. How does the Volt rate on the other three?

Rationale #2: Most of the electricity in the United States comes from coal, natural gas, nuclear, and hydropower. The coal, gas, and water, and (much of) the uranium are sourced domestically. So a car that gets mosts of its power from grid electricity rather than gasoline wins on this count. If the 230 mpg figure is accurate, then the Prius uses nearly five times (okay 4.79 times) as much gasoline compare to the Volt. Winner: Volt.

Rationale #3: How does the Volt compare on greenhouse gas emissions? According to the GM press announcement, the Volt can typically travel 40 miles on electricity alone, and its built-in battery has a useable capacity of 8.8 kilowatt-hours. So its daily energy consumption is 8.8 kWh for 40 miles of travel. That's 0.22 kWh/mile.

Greenhouse gas emissions from electricity vary widely depending on the fuel source, but on average the emissions from electricity consumption in the U.S. average 599.9 grams CO2 per kWh. Multiply that number by the Volt's 8.8 kWh daily electricity consumption and we get 5,279 grams of CO2 emissions per day. That's about 132 grams CO2 per mile, or 82 grams CO2 per kilometre. (These are what the carbon reporting standards call "Scope 2" or "energy indirect" emissions: you're using the energy, but the CO2 is coming out of someone else's pipe.)

According to the UK's Car Fuel Data website, the Prius emits 89 grams CO2 per kilometre. Winner: Volt, but not by nearly as wide a margin.

We can look at the CO2 data another way. Let's see how much petrol would have to be consumed to release the Volt's 82 grams CO2 per mile. The US Energy Information Administration says that a gallon of gasoline emits 19.567 pounds CO2/gallon. Converting to metric makes the math easier and gives us 2,346 grams CO2 per litre of gasoline.

Now we have Chevy Volt grams of CO2 per mile, and gasoline grams of CO2 per litre. Manipulating the numbers gives us an equivalent fuel economy of 67.5 miles per (U.S.) gallon. The US EPA says the Prius gets 48 miles per (US) gallon. The UK says the Prius gets 72 miles per (UK) gallon - equivalent to 60 miles per (US gallon). Winner: Volt.

Rationale #4: How much does it cost to drive the Volt? According to the US Energy Information Administration, the average cost of electricity in the year to April 2009 was 9.09 cents per kWh. From our earlier calculations, we learned that the Volt uses 0.22 kWh per mile. So the Chevy Volt's energy costs 1.9998 (let's call it two) cents per mile.

How efficient would a gasoline powered car need to be to achieve the same per-mile fuel costs? The handy US Energy Information Agency website tells us that the average US gasoline price in the week ending August 10th, 2009 was $2.65 per gallon. With two cents (the Volt's per-mile energy cost), we would be able to buy a whopping 0.0135 gallons of gasoline for our car. And if our car were to travel a mile on that amount of fuel, it would need a fuel economy of 75 miles per (US) gallon. Using the larger UK gallons, we would need a fuel economy of 90 mpg to match the driving cost of the Volt.

By comparison, the Prius gets a US EPA rating of 48 mpg, and a UK VCA rating of 72 mpg. Winner: Volt.

Summary: If GM's driving distance and battery capacity numbers hold up in the real world, the company appears poised to take the green consumer car title away from Toyota (and push Honda from second place down to a lowly third). My calculations show a significant greenhouse gas and fuel cost saving compared to the latest model Toyota Prius. The Volt gets the equivalent of between 67 and 75 mpg, depending on whether you're looking at CO2 emissions or dollars per mile. The advantage over the Prius is nowhere near the five-fold difference being trumpted in GM's press releases, but it is real.

• CO2 emissions per mile: 40% lower using EPA figures for Prius (8% lower using UK figures)
• Energy cost per mile: 57% lower using EPA figures for Prius

GM has thrown down the gauntlet. I'm eager to see if Toyota and other car producers will rise to the challenge and produce even more efficient vehicles.

(Carbon Clear website)

U.S. Military: Climate Change a Security Threat

One of the most vexing challenges related to climate change has long been finding a way to get people to pay attention. Climate change is caused by the release of invisible gases and the impacts are felt over relatively long timeframes.

We simply are not evolved to pay attention to such intangible, long-range threats. We respond much better when the danger is immediate, proximate, and something that we've encountered before.

Like war, for example.

This week, the U.S. Defense Department issued a report arguing that U.S. failure to lead the way on greenhouse gas reductions could expose the country to a raft of military security challenges.

Storms, droughts, floods, and disease can lead to riots, wars and conflict, mass population movements, and government instability in strategically important countries around the world. Dealing with these challenges, on a recurring and increasingly basis, is but one of the costs imposed by unchecked climate change.

The timing of this report is helpful. The ambitious plans that were initially drafted in the U.S. House of Representatives are in danger of being watered down or even shelved. Putting the case for taking action into terms that we humans are better evolved to understand and recognise may help shift the terms of debate and lead to rapid action.
(Carbon Clear website)

Two Degrees

During last week's Group of 8 summit in L'Aquilla, Italy, leaders from the largest greenhouse gas emitting nations met to set the stage for December's climate change conference in Copenhagen. Together these 17 countries are responsible for 80% of global CO2 emissions.

Meetings like this are useful because they allow governments to broadcast their negotiating positions and begin edging towards compromise positions.

There's a lot that didn't happen during this meeting. China's president left early, the developing nations refused to commit to a reduction target, and while the industrialised nations agreed to reduce emissions 80% by the year 2050, they failed to state the base year - so we are left asking, "80% of what, precisely?".

And yet, there was a ray of hope. The G8 communique contained the following interesting passage:

"We reaffirm the importance of the work of the Intergovernmental Panel on Climate Change (IPCC) and notably of its Fourth Assessment Report, which constitutes the most comprehensive assessment of the science. We recognise the broad scientific view that the increase in global average temperature above pre-industrial levels ought not to exceed 2°C."

I believe this is the first time that a communique from heads of state has mentioned a temperature target. Most discussions to date have focused on emission levels, but I have always found this to be a bit abstract. Emissions affect the concentration of greenhouse gases in the atmosphere. Greenhouse gas concentrations affect the temperature, and the temperature change leads to the climactic changes about which we are all concerned.

Emissions levels are important, but they are hard to understand - they can't be seen or touched directly.

Temperature is another matter - a warming world can be felt by both people and ecosystems. So these world leaders have jumped two steps up the chain to talk about tangible outcomes - limiting temperature rises to two degrees Centigrade (about 3.6 degrees Fahrenheit).

Two degrees is about the maximum temperature that scientists think we can bear without reaching a "tipping point" into unpredictable and potentially catastrophic climate change impacts. Beyond that point, and we may enter a system where warming triggers feedback effects like methane releases from the sub-arctic tundra, CO2 releases forest die-offs, and less heat reflected back out to space due to melting glaciers.

Focusing on outcomes instead of processes gives us more flexibility to look at a range of options. It sets an ultimate test for any measure or negotiating position that is proposed in the run-up to Copenhagen: how effective

is this measure in keeping warming within two degrees?

So much for the good news. The bad news is that it's almost too late.

Alan Meyer of the Union of Concerned Scientists says that we've already warmed the planet by 0.8 degree, and time lags from the greenhouse gases already released mean that temperatures would rise another 0.6 degree even with no further pollution. So we have set a target to limit increases to 2 degrees, and we're already at 1.4.

We have to do more, and soon.

(To the Carbon Clear website)

PRESS RELEASE: Total wins 'Environmental Innovation Award 2009'

The following press release features Carbon Clear's fuel card partnership with Total.

Institute of Transport Management, 18 June 2009

TOTAL wins ‘Environmental Innovation Award 2009’

Birmingham 17th June 2009 – Awareness of environmental issues in business and among the general public has reached new heights as a result of a constant barrage of reports and studies into the contribution of human activity to climate change. In the fleet and automotive sectors, companies are facing strong pressure to develop products and systems which reduce emissions at the same time as maintaining high performance and productivity levels. As part of its fleet Awards programme, the Institute of Transport Management (ITM) has been investigating fuel cards as a means of reducing carbon emissions and increasing fleet efficiency. On the basis of information collected by the research team, the Awards Committee is hereby delighted to announce that TOTAL is to be presented with an ITM ‘Environmental Innovation Award 2009’ for its TOTALCARD green product.

The TOTAL Group is a major player in the global petroleum industry and is actively involved in both upstream and downstream operations: oil and gas exploration, development and production, and liquefied natural gas (LNG), plus refining, marketing and the trade and shipping of crude oil and petroleum products. It also produces base chemicals (fertilisers and petrochemicals) and speciality chemicals for both consumer and industrial markets (adhesives, resins, electroplating and rubber processing). The company additionally has interests in coal mining and power generation. On the basis of a clear corporate vision and decisive leadership, the company has grown to become the fourth largest integrated and publicly traded company oil and gas company in the world, able to boast sales of more than £150 billion per year and the second biggest capitalisation in Europe, registering in excess of €130 million.

Its TOTALCARD services help fleet operators to fine tune fleet efficiency through web-based, PIN-protected management systems which operate through a nationwide network. Managers can avail of a thorough yet intelligible analysis of fuel use, including spending, miles per gallon and time of purchase. The system gives managers much greater control over the activities of the fleet, resulting in cost savings as well as a better environmental profile. Indeed, TOTAL is fully committed to exploring the potential for environmentally friendly fuel products, and has recently launched a dedicated green card to assist fleet managers in meeting the latest emissions regulations.

TOTALCARD green enables easy calculation of CO2 emissions, implementation of reduction programmes, access to follow-up reports and carbon offsetting. The emissions calculation is based on fuel expenditure and is available to managers online. Collection of such data forms the background for a three-part CO2 reduction plan: price incentives for advanced fuels which decrease consumption by 3.8 percent; ongoing monitoring of daily expenditure, fuel consumption per vehicle and unusual transactions; comprehensive and practical advice relating to the key principles of investing in advanced fuels and lubricants, vehicle maintenance and driving behaviour. Following implementation of the action plan, managers can access online data on emissions levels, percentages of advanced fuels used and resultant savings. Additional emissions can be offset by the Carbon Clear programme to which TOTAL itself contributes in proportion to the fuel volumes of TOTALCARD green clients.

Announcing the Award to TOTAL, ITM Media and PR Director Mr. Patrick Sheedy said: ‘TOTAL has been successful with the ITM Awards programme in the past, winning fuel card titles since the start of the decade. With its latest product, TOTAL tackles the environmental issue head-on through a dedicated green fuel card. Considering the increase in the burden of emissions regulation on businesses today together with public pressure to improve green credentials, fleet companies really do need a helping hand to reduce CO2 output. Having thoroughly examined the fuel cards currently on the market, the Institute is confident that the strongest environmental offering comes from TOTAL, with its TOTALCARD green. This latest fuel card from TOTAL will be a hugely useful tool for fleet managers who must watch emissions at the same time as keeping an eye on the bottom line. It also underlines TOTAL’s dedication towards ensuring a healthy energy future for the planet.”

Mr. Sheedy concludes: “I congratulate TOTAL on winning this Award and hope that other businesses in the transport industry will pay heed and model their own environmental policies on those of TOTAL. I look forward to witnessing the development of further pioneering products and services from TOTAL in the near future.”

(Carbon Clear homepage)

More Hot Summers - More Air Conditioning?

(This article was originally published in issue number 80 (June 2009) of the IEMA journal the environmentalist.)

One of the main challenges in the fight against climate change is dealing with unexpected feedback effects. In many cases, a warming globe creates impacts that lead to even more warming. In this article, we explore the feedbacks between climate change and building heating and cooling systems, and discuss some of the options available to environment managers.

The Met Office has predicted a sweltering summer for 2009. According to the UK’s Chief Meteorologist, “….we can expect times when temperatures will be above 30°C, something we hardly saw at all last year.”

Hot summers are becoming more common as climate change takes hold. While summers in 2007 and 2008 were cooler in many northern latitude countries, the summer of 2003 was the hottest in Europe for at least five centuries and in the UK, six out of the seven warmest years since 1659 have occurred since 1990.

And it’s not just a European phenomenon - eight of the past ten summers in the USA have been warmer than the average for the 20th century.

Climate Change and Building Energy

These hot summers have energy implications: according to Government figures, the USA's residential energy demand was approximately 10 percent higher than what would have occurred under average climate conditions for the season, and it is likely that in the UK, electricity consumption will rise as a result of an increase in air conditioning. Since most of our electricity in both countries comes from fossil fuels, increasing air conditioner use makes it more difficult to meet challenging emissions reduction targets.

In the USA 65% of commercial buildings have air conditioning, compared to 27% in Europe, although a higher percentage of buildings constructed after 1991 rely on air conditioning. One rule of thumb is that a 2°C temperature increase translates into a 25% rise in air conditioning loads. If summers continue to get hotter, will the UK adopt the Continental tradition of afternoon siestas to deal with the heat, or follow the USA’s heavy reliance on round the clock air conditioning?

An indication of what might lie in store for the UK can be gained from looking at air conditioning trends in New England. Historically, electricity demand was greater during the region’s snowy winters due to heating demands and a greater reliance on electric heaters. In summer demand would drop as residents relied on windows and fans to keep cool. But around 2000, peak electric loads shifted to the summer due to the increased use of- and the perceived need for-air conditioning. Now, even in northern New England, peak load has shifted to the summer due to more regular use of air conditioning, and a switch away from electricity for winter heating.

Making matters worse are the unpredictable shoulder seasons of autumn and spring. Lag-times in heating and cooling mean gas-fired heating systems may be competing with air conditioners in those months where cool mornings transition into warm afternoons. Simultaneous heating and cooling is not uncommon, especially in small and mid-size buildings which do not have active management and may not have been properly commissioned. Increasingly variable weather during these seasons due to climate change may mean even greater energy consumption.

Can these trends in increased summer electricity demand be reversed, or will our hotter summers continue to be accompanied by a rise in air conditioning and the related emissions from electricity production? Can we take action to break this positive feedback loop?

Small buildings and air conditioning use

Historically, smaller buildings had a single boiler and thermostat. Now even modest buildings of 4,000 square feet (372 square meters) typically include heating, air conditioning and ventilation systems and automated controls with numerous control devices. These systems are generally design/build – meaning the same firm that designs them, installs them. This approach may result in a lack of independence and transparency in the set up and deployment of the building controls.

Typical problems in small retail and office premises can include:

• Lack of documentation (i.e., no sequence of operation or controls wiring diagrams)
• Comfort problems (intermittent overheating in the winter or overcooling in summer)
• Loss of original intent as subsequent contractors modify the system with limited understanding of existing functionality (e.g., programmable thermostats not set properly for use)

This problem of proper commissioning and air conditioning use can be illustrated in an ongoing project evaluating a 4,200 square foot (380 sq meter) office building in northern New England. A review of the monthly consumption of purchased electricity showed that this building’s electricity usage was 40% higher in August than in January due to air conditioning use even though 2007 was not a particularly hot summer in New England The annual electricity usage amounted to 31,850 KWh causing almost one tonne of CO2e emissions . This indicated an average electricity energy intensity of 8.5 kWh per square foot. Regional best practice indicates an average electricity energy intensity of half this amount, 4.12 kWh per square foot. . Optimization of controls could reduce the building’s electricity usage by at least 15% overall - in this case, cutting annual greenhouse emissions by approximately 150 kg of CO2e.

The Heating Ventilation and Air Conditioning (HVAC) systems of small and mid-size commercial buildings typically do not work as effectively and as efficiently as they might. The deficiencies can result from a lack of expertise in control system diagnostics and operations in the staff and in contractors who typically are on site to perform routine maintenance. In particular, smaller buildings and companies often cannot afford to maintain a facilities manager or employee with facilities management expertise.

These results are not unique to the US. A pilot study in the UK evaluated 20 retail premises for temperature and relative humidity. The results showed that higher summer thermostat settings could improve both thermal comfort and the energy efficiency of air conditioning units. However, despite increased energy costs and the public’s mounting concern over climate change, few UK retail outlets have any plan for managing air conditioning use.

These deficiencies lead to on-going costs, lost personnel time due to comfort problems, increased operating costs as contractors are brought on site to address comfort issues, energy waste, and avoidable carbon emissions.

The building as a system

While proper operational control of energy use is often the starting point for making cost-effective improvements and reducing carbon emissions, it is also helpful to recognize a building as a dynamic system – with energy consumption influenced by its site and orientation, building envelope micro-climate, occupant behaviour and landscaping and the surrounding vegetation.

For example, ground soil and groundwater are both warmer in the winter and cooler in the summer than ambient air temperature. Ground source pumps use these temperature differentials to pre-cool incoming air and reduce the energy requirement of air conditioners in summer, and do the reverse in winter.

Construction materials can play an important role: masonry has a higher thermal mass than glass and steel, and therefore maintains a more even temperature. The lag time between heating and cooling can be used to maintain interior temperatures and reduce air conditioning loads.

Building occupants can be motivated to reduce internal heat gains in the summer by ensuring lights, computers, printers and other electrical equipment is turned off when not in use. Meanwhile staff can be encouraged not to overcool buildings simply because air conditioning is available – many companies are already encouraging casual wear on hotter days to reduce cooling requirements.

Landscaping can provide a shade canopy in the summer, lock up carbon through photosynthesis, and reduce ambient temperatures through evapo-transpiration. Broad-leaf deciduous trees in particular have canopies which reduce passive solar gain in the summer while allowing it when needed in the winter.

This type of holistic view is easier for new-builds, where such considerations can be factored in at the planning stage. Options for cost-effective improvements are more limited with existing buildings. However renovation does present real opportunities to improve the building envelope to manage heat flow. Natural ventilation can be improved by considering the placement of internal partition walls that do not impede cross ventilation, and windows can be retrofitted to make better use of nighttime cooling to lower cooling requirements during the day.

Conclusion

Nearly every human activity has an effect on the climate. Buildings occupy a critical role in modern society, and climate feedbacks threaten to amplify their impact. However, with careful planning, we may be able to break the link between buildings and global warming.

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

Conjunction Junction

Time for some definitions:

• and.  (-conjunction used to connect gramatically coordinate words, phrases, or clauses) along or together with; as well as; in addition to; besides; also; moreover.

• or. (-conjunction used to connect words, phrases, or clauses representing alternatives) "books or magazines", "to be or not to be".
  

'And' and 'or' are both conjunctions, but they serve nearly opposite functions.  Compare these two sentences:

1.  "Given the threat of climate change, should our company reduce internal emissions as much as possible or use carbon offsets?"
2. "Given the threat of climate change, should our company reduce internal emissions as much as possible and use carbon offsets?"
   

One little word can result in such a huge change in thinking.  Using "or" when we talk about climate change means we take a suite of viable solutions off the table.  Using "and" enables us to consider a wider range of options.

As I noted in a blog post exactly one year ago, there is no single source of greenhouse gas emissions, and there is no single solution.  We have to seek the most ambitious, fastest emissions reductions possible, wherever they may occur.  When it comes to carbon, we need internal reductions and offsets.

(Carbon Clear homepage)

Eurostar celebrates two years of 'Tread Lightly'

High-speed rail operator Eurostar on Monday celebrated the two-year anniversary of its 'Tread Lightly' environmental initiative, and issued a progress report on its five-year carbon reduction target.

In 2007, the company pledged to reduce carbon dioxide emissions per passenger journey 25% by 2012.  At the same time, they embarked on a 10-point plan to reduce their other environmental impacts, and to make passenger journeys carbon neutral by offsetting the remaining CO2 emissions.

In the first two years of 'Tread Lightly', Eurostar has exceeded their carbon reduction target, achieving a 31% reduction through increased passenger numbers and a switch to lower-carbon electricity sources.  While the company expects per passenger emissions to increase slightly due to a recession-linked fall in passenger numbers, they have nevertheless raised their overall emission reduction target, to 35% by 2012.  As CEO Richard Brown notes, "This is challenging and requires significant investment of resources."

Eurostar's initiative is notable for its dual approach - they have pledged to reduce and offset, and are delivering tangible, verifiable results on both fronts.

Carbon Clear is proud to be Eurostar's carbon credit provider for the offset component of 'Tread Lightly'.  As a business, Eurostar has offset more than 70% of the unavoidable emissions attributable to their operations.  Their partnership focused approach has been a good match to our own, where we work together to support carbon projects that deliver robust, additional emissions reductions while helping communities in poorer countries make the transition to a low-carbon future.

Total Launches New Fuel Card

(from the  company press release)

Total is launching a new fuel card which will enable fleets to track their CO2 emissions based on actual performance, rather than claimed figures.

TotalCard Green provides fleet managers with real-world fuel consumption reports based on the petrol or diesel bought, and then calculates the fleet’s actual CO2 emissions.

Total, which has 850 filling stations throughout the England and Wales, then offers advice on implementing a CO2 reduction plan (correct vehicle maintenance, use of advanced fuel and lubricants and advice on driver behaviour) and provides price incentives on advanced fuels such as its Excellium product which is claimed to reduce fuel consumption by nearly 4%.

The fuel company will follow up the plan with reports to show the differences in both litres fuel and carbon emissions made by following the plan.

Samuel Vermeersch, TotalCard development manager, said: “We know that more and more companies are looking at ways to reduce their carbon footprint and we strongly believe our card will help them optimise their fuel spending and make carbon management much easier for them.”

As part of the scheme, Total will contribute to the Carbon Clear carbon offsetting pro-gramme, based on the fuel volumes bought with the new card, and offer customers the chance to offset their emissions through the company.

For more information on the card, go to www.totalcardgreen.co.uk

The Carbon Reduction Commitment – A New Role for Environmental Managers

The original version of this article appeared in the April (No. 76) issue of the IEMA journal 'the environmentalist'.

On 12th March the UK Department for Energy and Climate Change released the draft user guide for the Carbon Reduction Commitment (CRC). In this article, we provide an introduction to the CRC and explain what it means for environmental managers.

In a recent newspaper interview, Energy and Climate Change Minister Joan Ruddock asserted that the government had thoroughly announced this impending legislation and that businesses are well aware of their obligations. Based on feedback from Carbon Clear’s ongoing winter and spring workshop series, we are not so sure.

Approximately 20,000 UK firms will have to submit a CRC information disclosure to the Environment Agency by Summer 2010, while roughly 5,000 will have to pay registration fees and participate in the full scheme.

CRC information notices and registration requests are sent to the billing address on record with each company’s electricity provider. As a result, government information on the CRC is now landing on the desk of the facilities manager or the accounts payable department, not with the energy or environment manager.

Despite its innocuous-sounding name, companies should not take the Carbon Reduction Commitment lightly. As with any new regulatory requirement, failure to prepare poses serious financial and reputational risks. At the same time, environmental managers are well-placed to help their companies use the CRC to achieve real emissions reductions, cut costs, and identify new sources of competitive advantage.

The CRC in A Nutshell
The Carbon Reduction Commitment is designed to help the UK Government meet the 80% greenhouse gas reduction target set out in the Climate Change Act. It is a mandatory, auction-based emissions trading scheme targeted at large, non-energy-intensive companies - supermarkets, office blocks, and the like. Every company, charity, and government body with at least one half-hourly electricity meter needs to be aware of the CRC.

Like the EU Emissions Trading Scheme (EU-ETS), the CRC uses market forces and competition to drive corporate carbon reductions at the lowest overall cost (see our article “Emissions Trading, Going Global?” in issue 60 of the environmentalist). In the introductory phase of the CRC (April 2010-March 2013), participants will buy emissions allowances equal to their carbon footprint at a price of £12 per tonne CO2.

But once the CRC enters the “capped” phase in April 2013, government will limit the number of allowances and auction them to the highest bidder. At the end of the recording year, firms that end up with more allowances than they require to meet their obligations can sell them into the secondary market, while firms with a shortfall will have to purchase more or face a punitive fine.

One of the innovations in the design of the CRC is that revenues raised through the Government’s sale or auction of allowances are recycled back to participants via a publicly viewable league table. Companies with a better-than-average league table score may receive more money back than they put in, while those that score poorly will receive less. In addition, we anticipate that customers will use the league table to help identify lower-carbon suppliers of goods and services.

In the first year of the CRC, a company’s ranking in the league table is determined solely by how much of the organisation’s emissions are covered by voluntarily installed automatic metering (AMR), and how much of the organisation’s emissions are covered by a Carbon Trust Standard or Energy Efficiency Accreditation Scheme certificate. In subsequent years, league table rankings will be based primarily upon the organisation’s absolute emissions reductions compared to all other participants, and the relative improvement in emissions compared to company growth.


Your CRC Carbon Footprint
The carbon footprint that an organisation reports under the CRC is only a subset of the total organisational footprint included in an ISO 14064 or WRI/GHG Protocol emissions inventory (see our articles “Whose footprint is it anyway?” in issue 53 and “Counting the cost of outsourcing” in issue 55 of the environmentalist). In particular, the CRC only focuses on what ISO 14064 calls direct and energy-indirect emissions (Scopes 1 and 2 under the GHG Protocol). These are emissions from on-site energy production and emissions from purchased electricity and gas. Supplier and customer emissions are excluded.

Next, the CRC excludes emissions from transport vehicles and the onward supply of energy to other organisations. The next set of exemptions are for organisations that are fully or part-covered under a Climate Change Agreement (CCA) or the EU ETS. Excluding these emissions from the CRC footprint ensures that organisations are not forced to report emissions that are already regulated.

Carrots and Sticks
The CRC could have major financial implications for companies, especially in a challenging economic climate. DECC expects the CRC to lower annual corporate energy bills by nearly a billion pounds by 2020 as companies find the most cost effective ways to reduce their emissions. These savings translate into improved profitability and a stronger economy. Moreover, lower emissions means a smaller outlay for allowances in subsequent years, and the CRC’s recycling mechanism means that companies that perform above average on the league table may get back from the scheme more money than they put in.

On the other hand, getting it wrong poses risks. Approximately 20,000 companies with at least one half-hourly meter will be required to submit an initial Information Disclosure – failure to do so will result in a one-off fine of £1,000. The 5,000 or so organisations required to participate fully in the CRC will face an immediate fine of £5,000 if they do not register by the deadline, and will face an additional fine of £500 for each subsequent day of delay.

Failure to provide a footprint report by the deadline also results in an immediate fine of £5,000, and a further fine of £0.05 per tonne of CO2 per day, rising to £0.10 per tonne of CO2 per day after 40 days. Once the scheme is up and running, failure to provide an annual report results in the same level of fines, plus a bottom ranking in the league table.

Where emissions are incorrectly reported, a fine of £40 per tonne of CO2 incorrectly reported will be levied. Failure to purchase sufficient allowances will also incur a £40 per tonne CO2 fine. Outright falsification of evidence is considered a criminal offence, punishable by imprisonment of up to three years and a fine of up to £50,000.

Implications for Environment Managers
This is only a summary as the CRC guidance document is 84 pages long, and the background consultation document tops out at over 200 pages of detailed explanation. However this brief overview demonstrates how important it is for environmental managers to understand the requirements and to lead their organisations’ response to the CRC.

Under the CRC, environmental management is elevated to a strategic role that, if executed properly, can deliver measurable competitive advantage to the company. But if the requirements are not properly addressed, significant costs will be incurred.

The financial carrots and sticks in the CRC and the reputational spur of a public league table may make a number of otherwise borderline or low-priority environmental initiatives more attractive. For instance, environmental managers may now be able to fast track boiler retrofit or lighting replacement schemes that might otherwise be starved of investment, or get the go-ahead to install onsite renewables where the cost of carbon under the CRC makes them economical.

The CRC may also spur the formation of cross-functional teams that integrate environmental management into every corner of the organisation. For example an organisation’s CRC team might include:

• the environment manager: to identify best practice emissions reduction measures, co-ordinate the team, calculate the organisation’s carbon footprint and manage reporting and record-keeping with the facilities manager;
• facilities: to implement technology-based energy saving measures throughout the company;
• human resources: to help develop a staff “green team” to mainstream low-carbon thinking into the corporate culture;
• finance: to evaluate the trade-off between energy efficiency investments and purchasing allowances, and then find the required cash. For example, a company with a 100,000 tonne CRC footprint will need to come up with £240,000 to purchase allowances during the first compliance period;
• communications: to manage the media response to the company’s public league table ranking relative to its competitors which could be brand enhancing or damaging; and
• a director-level representative to raise the profile and priority of the initiative and report progress to the Board of Directors.

A Model for the Rest of the World
The UK is the first nation to implement a national beyond-Kyoto cap and trade emissions scheme. It is unlikely to be the last. Just two days before DECC released their guidance document, the U.S. Environmental Protection Agency announced that it is planning its own emissions reporting system.

This reporting scheme, a precursor to national cap-and-trade, targets approximately 13,000 facilities (rather than organisations) across all sectors, responsible for between 85-90% of the country’s greenhouse gas emissions. As proposed, the regulation requires the reporting of only direct GHG emissions (scope 1) but is asking for public comment on including energy indirect emissions (scope 2) among other aspects in its lengthy 1,410 page proposal. The final rule is expected within the year, followed by a cap and trade scheme to be in place by 2012. EPA’s enforcement action could result in a fine of up to $32,500 per day for violators.

Our informal enquiries indicate that other nations are watching the UK and USA closely to determine whether some version of the CRC or the imminent USA programme will work in their own countries and how a global system of reporting and trading of GHG emissions may function in a global marketplace.

Conclusion
Government regulation on corporate carbon emissions is not the only reasons firms may wish to support green initiatives in the midst of an economic downturn. As we described in our article “The end of the low-carbon agenda” in issue 72 of 'the environmentalist', environmental programmes also help to demonstrate the company’s commitment to sustainability, improve staff morale and retention, and attract new customers. Regulations like the Carbon Reduction Commitment provide an added incentive, and help environmental managers quantify the potential risks and benefits in a language that other parts of the company can easily understand.

Suzy Hodgson, AIEMA, is a principal consultant and Jamal Gore, AIEMA is the managing director at specialist carbon management company, Carbon Clear Limited.