Peak Oil: Will We Freeze or Roast?

When I was in graduate school in the early 1990s, M. King Hubbert was a name known only to fellow energy nerds. Now, he's so popular you can get regular news alerts.

Hubbert developed a mathematical model describing how production from an oil well or entire oil producing region tends to increase at a predictable rate, until it hits a - predictable - peak and then declines. Hubbert used his model to predict the year of peak oil output for the United States, and it has been used more or less successfully for other oil producing regions since then.

In addition to forecasting output growth for particular regions, the Hubbert Curve and peak oil theory can be applied to oil production for the world as a whole. But as recently as 2005, the International Energy Agency (IEA) dismissed the concept. Mainstream energy agencies tended to assume that oil production could increase indefinitely as new investment and technology are brought to bear. If a peak exists, they argued, we are nowhere near it.

This matters because when the world's leading climate scientists prepared their 2007 report on global warming trends and impacts, they turned to the IEA for their best estimates of fossil fuel consumption. The IPCC works by consensus, and its reports tend to refer only to the most authoritative sources. The IEA estimates showed that conventional fossil fuel use would continue to grow without end, and this prediction is reflected in all the pessimistic warnings about global temperature increases and climate change.

Times have changed. The IEA is now predicting that we will reach global peak oil between 2020 and 2030 (more pessimistic scenarios argue that we reached the global peak last year). So oil production will top out much earlier than anticipated.

Less petroleum production means fewer petroleum-related greenhouse gas emissions. In fact, manyindependent models suggest that, once peak oil (and coal) is factored in, we simply can't burn enough traditional fossil fuels to reach the worst-case global warming levels.

Let me repeat that: Most climate models that incorporate peak oil theory predict a temperature rise of less than 2 degrees Centigrade. A major change to be sure, but far less than the IPCC's "business as usual" scenario for global warming.

So, this is good news, isn't it? Climate change is solved because fossil fuel production will decline sooner than predicted, right?

Not so fast. What are we going to use for our vehicles when the oil starts to run out? Shall we simply switch off the lights and freeze?

In 2006, Alex Farrell and Adam Brandt, researchers at the University of California at Berkeley's Energy and Resources Group, published a paper that examined the cost, availability and climate change implications of substitutes for conventional petroleum. These are liquid fuels derived from heavy, difficult to process resources like tar sands, oil shale, and coal.

The Berkeley team found that it would be commercially viable to produce synthetic petroleum from these heavy fuels at oil prices of less than US $50 per barrel. What's more these resources are so abundant that they would keep pump prices relatively low.

In other words, peak oil means less petroleum, but not an end to fossil fuels. For those who worry that peak oil means society will collapse into "Mad Max" - style anarchy, that's good news.

The bad news is that these fuels have a much greater climate change impact than conventional oil. Using tar sands and heavy oil results in about 50% more CO2 per unit of energy than regular petroleum. Synthetic fuels made from coal nearly doubles the greenhouse gas emssions, and using oil shale could result in up to 3X the emissions per unit of energy. To quote the authors:

"Overall...the oil transition is not a shift from abundance to scarcity: fossil fuel resources abound. Rather, the oil transition is a shift from high quality resources to lower quality resources that have increased risks of environmental damage, as well as other risks."

Sadly, peak oil is not the solution to climate change. If anything, a poorly planned response to peak oil could accelerate global greenhouse gas emissions growth.

There is an alternative. We have the technical know-how to produce energy from low- or zero-emission sources. Solar, hydropower, wave and tidal, wind, and geothermal energy are clean sources of hydrogen and electricity, and carefully chosen biofuels can provide high energy-density liquid fuels.

Scaling up these clean energy technologies at the rate required to compensate for peak oil and limite climate change is a challenge. But as discussed in an earlier article, the required investments by governments, corporations and communities are no larger than other causes on which we have spent billions. The need is arguably as great, if not greater, because poorly planned energy investments made today will have a huge impact for decades to come.

Paying It Forward

I've worked in countries all over the world and speak a few languages. As a result, I like to think I'm a pretty self-reliant traveler.

But during my most recent trip to Central America a complete stranger helped me out. The specific details aren't important, but what's notable is that a person whom I'd never met before walked up, took the time and effort to make my day a little better, and then walked away.

"Thanks!" I called after her, pleasantly surprised at this small kindness. "Isn't there something I can do to repay you?"

"I'm happy to help," she responded. "Pay it forward instead." And then she was gone.

Paying it forward means helping other people when it's not in your own immediate financial interest. It means going out of your way to make the world a slightly better place - even if you may not see the benefit yourself.

Paying it forward is a concept that is immensely relevant to our efforts to combat climate change.

Will we choose a slightly less convenient mode of transportation or pay slightly more for cleaner energy when the benefits go to future generations or to people in far-flung corners of the world? Will we take action now to avert a danger that may not come to pass in our own lifetimes?

The conventional wisdom is that most people will answer "no" to these questions. Most efforts to engage the public in the climate change debate therefore take narrow-minded self interest as their starting point. Environmental groups strive to document the effects of climate change in our own backyards. Pressure groups lobby government to penalise companies that don't reduce emissions. And companies like Carbon Clear find ways for businesses to see a direct benefit from their carbon reduction measures.

People clearly do act in their own self interest. But many observers worry that these attempts will not be enough to avert the worst effects of climate change. They point out that governments will not enforce tight limits and that companies and individuals may put their bottom lines ahead of the environment. The worriers may be right. But something else is happening.

People are paying it forward.

Around the world, more and more companies and individuals are setting voluntary emission reduction targets, and volunteering to pay for livelihoods-enhancing emissions reduction projects in developing countries. These are clean energy initiatives that are often not included in government regulated carbon trading schemes, and that would not have happened without these voluntary carbon payments.

In Nicaragua, Carbon Clear's customers are helping traditional brick and tile producers reduce their energy costs and protect the country's rapidly shrinking forests. With deforestation responsible for about 25% of global greenhouse gas emissions and a major environmental threat in Nicaragua, new technology is making a real difference to both planet and people.

Our project is not covered under the government-backed carbon credit mechanism. If we were limited to those tools this fantastic initiative in Nicaragua would never have happened. It is only alternative carbon certification schemes like the Voluntary Carbon Standard and Gold Standard - backed by companies and individuals willing to take voluntary action - that enable us to make this contribution to the lives of people in rural communities around the world.

Last year the voluntary carbon market doubled in size, while governments struggle to develop a post-Kyoto climate change agreement. And the voluntary market continues to grow this year despite a global economic crisis.

Something special is happening.

More and more people are paying it forward.

More of us are taking action beyond government regulation and narrow self-interest. That's good news in the fight against climate change, and good news for communities around the world.

(Carbon Clear homepage)

From Credit Crisis to Carbon Crisis

The original version of this article appeared in the November 2008 (No. 68) issue of The Environmentalist

As governments across the globe find a new role shoring up troubled financial institutions, those of us who advocate bold moves towards a sustainable energy transition have taken notice. The USA and the UK committed more than $700 billion and £400 billion, respectively, to the financial bailout. Consider the benefits if equivalent amounts were committed to securing a lower-carbon future.

When the Invisible Hand Gets it Wrong
There has been a major upheaval in the relationship between government and the private sector. The worldwide financial crisis has been sudden, systemic, and severe. The deep-seated belief that competition and free markets led by Adam Smith’s “invisible hand” will promote society’s interests has been shaken.

What happened? Economists argue that the invisible hand does not do a good job handling externalities – situations where private actors pay the cost and society benefits, or vice versa. In these situations government needs to step in. This was the case during the lending freeze, with banks afraid to lend to one another and the credit market on the brink of collapse. With no other solution in sight, governments stepped in to try and rescue the world’s financial system.

While the financial meltdown has been sobering (or punitive depending on your personal stake), the policy flip side is that we have witnessed how quickly events can catapult governments into concerted and coordinated action.


Past Precedents
The energy sector is no stranger to support from governments. Nuclear energy currently comprises about 17% of the UK’s electricity mix, and serves as an interesting example.

Put plainly, the economics of nuclear power would be questionable without governments’ financial support. In both the US and the UK, governments have artificially limited private companies’ legal liability for nuclear accidents. Despite concerns in some circles about another Three Mile Island or Chernobyl, in the US a nuclear power plant’s annual insurance bill might only run to $400,000. This is because Government shoulders much of the burden for catastrophic accidents.

Similarly, the cost of disposing of waste from the UK’s existing nuclear reactors is likely to cost £74 billion, discounted over a whopping 130 years (that's easily more than half a trillion pounds if you don't discount the cost to future generations). These environmental costs clearly fall outside of the time horizon for private sector investment. As a result, most nuclear power plants would never have been built without governments’ pivotal role taking on future liabilities.

Climate change is another area where governments have a critical role to play. Climate change - a “negative externality” from fossil fuel use - has been partially addressed through emissions-trading schemes that allow CO2 to be priced in a regulated market [see our article “Emissions Trading – Going Global?” in the environmentalist issue 60, 16 June 2008].

However, global emissions continue to rise, evidence that the market price of CO2 is not yet high enough and stable enough to encourage significant private investment in abatement measures. Similarly, renewable energy remains a small percentage of the UK’s and America’s energy mix, even though there are compelling environmental reasons and a strong economic basis to increase its use.

According to the Stern Review, the cost to limit severe temperature increases is estimated at 1% of global GDP. Inaction has far greater costs –Stern estimates damage costs from climate change exceeding $70 trillion over time. At an estimated $3.5 trillion, the cost of the global financial bailout looks like loose change in comparison. But private firms lack the incentive and ability to make the required investments on their own.

Investing in a low-carbon future
What would it look like if we could invest even a fraction of the global bailout amount into rapidly building a low-carbon economy? Here are just a few hypothetical examples of what could be done.

In the USA, about 40 million households rely on electric water heaters. For a $282 billion investment, the US government could replace all of these inefficient electric heaters with solar water heaters at no additional cost to homeowners. This investment would reduce CO2 emissions by 48.7 million tonnes each year. Moreover, each household would save about $220 per year, pumping an additional $9 billion per annum into the economy. These savings would likely increase as the price of electricity rises over time.

In the UK, the government has made a commitment to expand the use of wind power to generate electricity. Installing 33 GW of offshore wind would meet 20% of the country’s electricity needs. This measure would cost about £30 billion – a fraction of the British financial bailout – and reduce the need for a new generation of coal fired power plants. Government funding would mean firms would not need to raise expensive venture capital, and could pass the savings on to utility customers in the form of lower electricity bills. Moreover, with most renewable energy projects employing more people per GW of installed capacity than coal and nuclear power plants, such an initiative would boost jobs growth and provide broader benefits to the UK economy.

For an investment of just over $740 billion (1/5 the cost of the global bailout) the US government could target all families earning less than $35,000 and replace half their old vehicles with plug-in hybrids – for free . This investment would reap huge environmental, economic, and social benefits. Each family would save about $840 annually in petrol costs. Fuel savings from this initiative would total nearly $24 billion each year, and would be recycled into the economy. In addition, it would reduce annual CO2 emissions by over 65 million tonnes. With this level of increased household income and reduced emissions, such a government investment provides a reasonable pay-off, while achieving other sustainability objectives.

Meanwhile, in the developing world, two billion people – roughly 400 million families – cook over primitive wood stoves. For an investment of less than $10 billion (about £6 billion), we could replace every traditional cook stove in the world with efficient and cleaner burning models. This move would reduce labour burdens, improve health, help protect the world’s forests and reduce global CO2 emissions by over half a billion tonnes each year.

Conclusion
For these examples, we assumed that governments would pay the entire cost and give the product – electricity from wind turbines, household solar water heaters, hybrid cars, and cook stoves – away for free. We chose this assumption to show that even such radical measures cost less than the recent financial bailout. In reality, even partial subsidies could drive a massive shift towards a low-energy future.

In today’s challenging economic climate, the private sector has neither the resources nor the appetite to even contemplate this scale of investment. Nevertheless, the public benefits - cost savings, job creation, combating climate change, and reduced dependence on imported fossil fuels - are huge. Because governments enjoy a longer time horizon, they can realise these benefits by acting creatively on a grand scale.

The financial bailout was justified because the threat to private banks put the entire global economy at risk. But we face other threats as well. The social, environmental and economic risks from climate change are vast. The measures we have proposed here are merely illustrative, but they show that we have the means to make fast and meaningful reductions in global greenhouse gas emissions.

What we need now is the will.

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

New Carbon Clear Website Launched

Carbon Clear's new corporate website is now up and running. The site provides increased functionality, much more detail about our carbon offset projects, and a clearer description of Carbon Clear's range of carbon footprint and carbon reduction services to companies.

There are still a few tweaks and additions to come over the next several days - including a Frequently Asked Questions page and a comprehensive glossary for all the "carbon jargon" you're likely to come across. So take a look, and check in again over the next few days as we continue to improve the site. And as always, let us have your comments and suggestions.

Electricity Generation Decreases in China

Last year, I mentioned on this blog that China had finally passed the United States as the largest greenhouse-gas emitting nation. Among the largest emissions sources in China are coal-fired power stations and construction (the joke is that the construction crane is the national bird).

Now the economic downturn is acting as a brake on China's growth. According to the New York Times, Chinese power generation has declined for the first time since 2002.




Researchers estimate this drop in electrical production will result in 1.9 and 2.6 billion tonnes fewer CO2 emission between 2008 and 2012 than under a "business as usual" scenario.

While this is good news for the climate, we shouldn't necessarily celebrate. You can reduce emissions from electricity generation by using fewer electricity-consuming services (where fewer services means more suffering). You can also reduce emissions from electricity generation by using electricity more efficiently (without the need to suffer). Finally, you can reduce emissions from electricity generation by using lower-carbon power sources like wind and solar.

Unfortunately, China's carbon footprint is shrinking due to more suffering -factories are closing and people are losing their jobs. We could see similar reductions through greater investments in renewable energy and energy efficiency - indeed, China hosts more carbon offset projects than any other country.

There are a host of ways to reach a low-carbon future. It would be a shame if it were associated only with job loss and economic hardship.

(Carbon Clear homepage)

Carbon Offsets: A "Last Resort"?

The original version of this article appeared in the September 2008 (No. 64) issue of "The Environmentalist".

The voluntary carbon offset market trebled in size between 2006 and 2007. Sales have been growing steadily throughout 2008, with no end in sight. Climate change is clearly on the global agenda, and more and more companies are buying carbon offsets to help meet their environmental objectives. Nevertheless, many environmentalists appear lukewarm – at best – on their use. In this article, we explore these concerns and consider the role of carbon offsets in corporate footprint reduction plans.

What Are Carbon Offsets?
Increasing energy efficiency and installing rooftop solar panels are two of the many ways that organisations and households can reduce their carbon footprint. When you spend time and money on these measures at your corporate HQ in say, Liverpool, it’s considered an internal emissions reduction. Paying to enact similar measures somewhere like Lagos makes it an external emissions reduction – a carbon offset. It’s important to bear in mind that emissions reductions help the climate regardless of location. Whether in Liverpool or Lagos, it’s the size of the CO2 reduction that matters to the global climate, not the location.

So why do companies offset? The key idea is simple: some footprint reduction measures cost more than others. All else being equal, it makes sense to focus first on the cheapest and fastest ways to cut carbon, wherever they occur. When Carbon Clear works with companies to cut their carbon footprint, we help them implement a wide array of these internal reductions.

However, the lowest-hanging fruit may be in someone else’s factory or home. The Kyoto Protocol established the idea of carbon offsetting to help maximise greenhouse gas savings at the lowest cost to the economy. Carbon offsets help organisations with emissions reduction targets to meet part of their obligation by funding emissions reductions in developing countries.


Are Offsets Effective?
Stories like the Financial Times’ May 2007 exposé on a handful of “carbon cowboys” have contributed to the impression of carbon offsets as a potentially ineffective footprint reduction tool.

The reality, of course, is that there are both good and bad carbon offsets. An effective carbon credit can generally pass four key tests:

• The carbon credit comes from a project with real and measurable emissions reductions;
• emissions reductions can be measured against a credible baseline by independent third party auditors;
• the project that generated the carbon credit would not have happened anyway; and
• the emissions reductions are permanent –they won’t be reversed at some point in the foreseeable future.

The most widely respected carbon credit standards include the Clean Development Mechanism (CDM), the Gold Standard, and the Voluntary Carbon Standard (VCS). Each evaluates projects against these criteria, and is administered by an independent not-for-profit secretariat to ensure impartiality. Their ultimate aim is to ensure that each carbon credit represents one less tonne of CO2 in the atmosphere.

Many people worry about carbon offsets with tree planting schemes. In reality, credits from planting and protecting trees accounted for only 15% of voluntary offsets sales last year, with most of those offset sales in the United States.

Meanwhile, carbon offset providers have been working to improve the quality of carbon offsets. Carbon Clear earlier this year helped found the International Carbon Reduction and Offsetting Alliance (ICROA) to encourage best practice in the voluntary carbon reduction industry. ICROA specifies the standards that carbon credits must meet, requires members to offer carbon offsets as part of an integrated “reduce and offset” approach, and obliges members to submit to regular audits to demonstrate compliance with the ICROA Code of Practice. Organisations that choose to reduce internal emissions and offset with ICROA members include Eurostar, Land Rover, Sky, and Ford.

When to Offset
Even where offsets are recognised as an effective way to fight climate change, they are labelled a “last resort”. There seem to be two reasons for this approach. First is the concern that offsets are somehow less effective than internal reductions when it comes to fighting climate change. As Chris Shearlock, environment manager for the Co-operative Group noted recently, “When we build a wind farm in England we’re applauded, but when we build one in India we’re criticised.” But as we have already seen, a tonne of CO2 reduction has the same climate change benefit wherever it occurs, and stringent standards can ensure the quality of purchased reductions.

The second reason offsets tend to be considered a “last resort” is the belief that internal measures somehow demonstrate a greater commitment to fighting climate change. In the 6 May 2008 “EMA in Practice” article of The Environmentalist, the question was raised “whether a company should be purchasing offsets or actually working to reduce emissions of their own operations.” Implicit in this line of argument is an assumption that offsetting comes at the expense of any and all internal emissions reductions. Allowing companies to offset, the thinking goes, means they won’t take action at home.

But is this true? Will a company that can reduce emissions and cut costs by increasing efficiency really forego that option in order to purchase carbon offsets? Our experience is that companies would rather cut their energy bill than incur an extra expense. What is more, having to pay for offsets draws the attention of the finance director and operations manager. Announcing a goal to become “carbon-neutral” and understanding the cost of carbon provides an even stronger business incentive to achieve cost-effective ways internal reductions.

Carbon Clear's view is that the either-or approach to emissions reductions is a red herring that makes it harder for corporate teams to make informed decisions and raises more questions than it answers.

One of these questions is deceptively simple: how much of a reduction is enough? If a company wants to become carbon-neutral, what level of internal reduction is required before they can offset with a clear conscience? Is this level of internal reductions the same for an office-based consultancy, an investment bank, and a heavy manufacturing plant? And with only a decade or two left to achieve major global reductions, how long can companies take to achieve their internal reductions before they can fund additional reductions beyond their boundaries?

The second question is also difficult to answer: how much should it cost?

HSBC’s corporate greening programme includes installation of solar panels on the roofs of their Canary Wharf headquarters and their DirectLine building in Leeds. We calculate that HSBC (or if HSBC is leasing, then whomever owns the panels) is paying more than £100 (€125) per tonne to reduce emissions with PV panels, even using conservative assumptions and taking into account the savings on their electricity bill.

By comparison, economist Nicholas Stern places the 2007 social cost of climate change at around €40 per tonne of CO2 and HSBC could buy high quality carbon offsets for around €20 per tonne. In other words, HSBC could fight climate change six times more cost-effectively by sourcing carbon credits beyond their corporate boundary.

Carbon Clear recommends that companies seek the most cost-effective and credible reductions, wherever they may occur. In many cases, the best reductions will come from internal operational improvements. In other cases, they will come from changes in the corporate supply chain – either by switching suppliers or encouraging existing suppliers to reduce their own carbon footprints. And in many other cases the most cost-effective will come from high quality offsets that achieve external reductions beyond the corporate boundary.

There are other reasons companies may choose to focus on either internal emissions or offsets. Both types of emission reductions bring a wealth of co-benefits beyond fighting climate change. Investing in sustainability initiatives close to the corporate headquarters can help businesses reach out to employees, customers, and other stakeholders. The stakeholder engagement benefits of these high-visibility measures might justify paying a premium for those reductions.

Similarly, investing in emission reduction projects overseas can provide much-needed livelihoods benefits to poor communities suffering energy poverty. Providing clean energy technologies in developing countries can simultaneously contribute to a company’s corporate social responsibility objectives and help local people make the transition to a lower-carbon future.

Conclusion
In July, Sir Nicholas Stern warned that the cost of failing to curb climate change had doubled (Environmentalist News 21 July 2008). Our view is that “last resort” language only serves to limit the range of tools we can bring to bear to tackle this global problem. A multi-pronged approach that includes both internal reductions and carbon offsets can provide the flexibility needed to achieve large, global emissions reductions.

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

Happy New Year from Carbon Clear

Happy New Year from the Carbon Clear team. In 2008 we helped more companies than ever control their carbon impact. We're looking forward to a great 2009, and hope you are, too.

(Carbon Clear homepage)

Dell, Carbon Footprints, and Boundaries

I saw this one coming.

Dell Computers has been criticised in The Wall Street Journal and other newspapers over its recent "carbon neutral" claims.

Dell made headlines first by setting a goal to become "carbon neutral" and then again by announcing that it reached its target ahead of schedule. However, critics argue that the company's reported footprint only covers a fraction of the emissions associated with their computers.

Dell's carbon footprint includes emissions from its on-site boilers, company cars, building electricity use, and staff business travel. These categories comply with the requirements of ISO 14064, which states that organisations must include emissions from on-site energy generation, own vehicles and purchased electricity. 14064 states that organisations may choose to include third-party emissions from suppliers, customers and other stakeholders. Dell chose not to include these emissions sources, and this decision has landed them in hot water.

As we have noted previously, setting a narrow boundary may result in a smaller reported carbon footprint (and a smaller carbon offset bill), but can represent a false saving. In this case, Dell excluded all of the outsourced emissions from the suppliers who manufacture their computer parts, as well as the energy emissions from consumers using the computers. While these emissions are not Dell's direct responsibility, the Wall Street Journal's criticism stems from the fact that at least some of them are material to the company's business success. What's more, these emissions are so large that excluding them appears to have saved the company money on its offsetting bill. Unfortunately, this decision has had a reputational cost.

As we predicted way back in December 2007: "Much of the pressure to measure carbon footprints comes from investors, customers, and regulators, and they expect this information to be made publicly available. An unreasonably narrow boundary may attract criticism from outside reviewers concerned about potential corporate 'greenwash'."

One point the WSJ gets wrong is their claim that "there is no universally accepted standard for what a footprint should include, and so every company calculates its differently". In fact, the International Standards Organization (ISO) issued ISO 14064-1 in Spring 2006, and companies around the world are using it and the related GHG Protocol to calculate emissions consistently.

Carbon Clear uses these standards to calculate corporate carbon footprints. We employ a number of specialised tools to help companies to determine which third-party emissions are material - and thus should be included in their own footprint, and which they can be relatively comfortable placing outside their boundaries. As was the case with Dell, we are good at anticipating and addressing the problems that stem from incomplete carbon management planning and helping to protect our clients from reputational risk. Our aim, as ever, is to help companies measure and reduce their carbon footprints in a robust and credible manner.

Carbon Clear's View on Radiative Forcing

At Carbon Clear we pride ourselves on work that is backed by sound science and ethics. This is true for everything we do, including our carbon calculations. Effective immediately, we have changed the way we account for the carbon footprint of airplane flights.

There has been a great deal of controversy about the global warming impact of high altitude airplane flights. Most scientists recognise that emissions from burning jet fuel at altitude leads to a greater warming effect than if that fuel were consumed at ground level, but the exact amount o that impact depends on a number of complicated assumptions. This has led to different carbon calculators using multiplication factors ranging from 1.0 to 4.0 to account for this increased warming. Defra, the UK's main environment agency, uses a factor of 1.0 on its online carbon calculator, and the European Environment Agency looks set to follow suit.

Until recently, Carbon Clear has followed Defra's example with an emissions factor of 1.0 - a litre of fuel was assumed to have the same warming impact wherever it is consumed. However, after consulting a range of expert stakeholders, we now base our aircraft emissions factors on work commissioned by the Intergovernmental Panel on Climate Change, or IPCC entitled "Aviation and the Global Atmosphere". The IPCC's work represents the consensus opinion of climate scientists from around the world.

While the IPCC report notes that it is prudent to provide a range rather than a single number, the most likely estimates centre around a Radiative Forcing Impact (RFI) from high altitude flights that is approximately 2.7 times the global warming impact of ground transport. This means that we need nearly three times as much carbon reducing activity to compensate for the effects of customer flights. We will monitor the RFI debate and encourage a policy and scientific consensus so that we can continue to provide the best possible advice to our customers.

Every individual and company has a role to play in tackling climate change. At Carbon Clear we're committed to helping you control your carbon impact.

(Carbon Clear website)

Emissions Trading - Going Global

The original version of this article appeared in the June 2008 (No. 60) issue of The Environmentalist.

Greenhouse gas emissions impose a serious cost. For over a century, the main cost of releasing carbon dioxide (CO2) from factories and vehicles has been borne by the environment, in the form of gradually rising global temperatures and the cumulative impacts of climate change. The 2006 Stern Report suggests that climate change, left unchecked, could cost as much as 5% of GDP.

However, the main emitters – operators of vehicles, factories, and power plants –have rarely had to bear the full environmental cost of their actions. Without clear price signals, polluters have had little incentive to reduce their CO2 emissions.

This situation is changing. Since 2005 governments around the world have been phasing in pricing systems that give polluters a financial incentive to reduce their CO2 emissions. The most popular approach, called cap-and-trade, sets a gradually diminishing quota on allowable greenhouse gas emissions, based on historic performance. Firms that emit more CO2 than their allowance must pay a hefty fine or purchase pollution rights from another firm at a mutually agreed price. Firms that emit less than their allowance can sell their excess allocation. In other words, regulators use market mechanisms to find and implement the fastest and most cost-effective emissions reductions, wherever they occur.

The EU-ETS
The most established CO2 emissions trading system is the European Union Emissions Trading Scheme (EU ETS) launched in 2005 to help European nations meet their commitments under the Kyoto Protocol. EU-ETS focused initially on those large industrial emitters collectively producing almost half of the EU’s CO2 emissions from about 11,500 sources: iron and steel, certain mineral industries (including the cement industry), energy production (including electric power facilities and refining), and pulp and paper.

The trial phase of the ETS ran from January 2005 until December 2007. The second phase of the scheme, launched in January 2008, reflects the EU’s 8% binding reduction target by 2012, and imposes a lower emissions cap than did the first phase.

There are two main ways the EU scheme can expand: by including additional sectors, and by including additional countries and linking to other cap and trade schemes. The EU system is open to cooperation with compatible systems in other countries. This year, EU ETS will undergo its first enlargement when Norway, Iceland and Liechtenstein join.

The European Union is including aviation emissions into the system from 2011 and considering expanding the system to further industrial sectors and other greenhouse gases from 2013. For companies across Europe, the price of carbon is getting higher.

The UK’s Carbon Reduction Commitment
While the EU-ETS is a cap-and-trade system designed to help European countries meet their Kyoto obligations, the UK Government wants to use cap-and-trade to achieve even greater reductions. The proposed Carbon Reduction Commitment (CRC) is a cap-and-trade system aimed at large, non-energy intensive companies whose emissions may not be covered under the ETS. These companies’ UK energy consumption exceeds 6,000 MWh per year – equivalent to an energy bill of around £500,000.

Participating companies would include supermarket chains, hotels, office buildings, and government departments. These businesses account for nearly 10% of the UK’s annual emissions.

Under the CRC, companies will self-report their direct and indirect energy emissions (see our December 2007 Environmentalist article “Whose footprint is it anyway?” for an overview of emissions categories). Companies covered by the CRC will have to purchase their initial allowances and will eventually be assigned an emissions reduction target. Firms can then trade any allowances surplus to their requirements or purchase extra if there is a shortfall. CRC participants will also be able to buy (but not sell) allowances from the EU-ETS instead of from their counterparts within the CRC.

The Government intends to publish a league table comparing CRC participants’ progress in reducing emissions, and will refund all or part of the allowance fees in proportion to each company’s league rankings. It is expected that the need to purchase credits, the promise of a cash rebate linked to performance, and the threat of being branded a climate change laggard in the league tables will provide incentives for rapid emissions reductions.

The carbon price is influencing behaviour. In recent conversations with large companies, Carbon Clear's advisory team has found that anticipation of the CRC is encouraging more firms in Britain to measure their carbon footprint and identify rapid emissions reduction opportunities.

Cap-and-trade in the USA
In December 2007, the Climate Security Act (S. 2191) was approved by the US Senate Environment Committee- the first global warming bill to make it out of any committee in the US Congress. Sources responsible for eighty-six percent of US emissions would be covered by the Bill, with targets to reduce emissions by 18%-25% by 2020, and by 62% by 2050. The Bill contained provisions for selling, transferring, retiring, and borrowing emissions allowances.

The Senate Bill establishes a Carbon Market Efficiency Board to determine the number of emissions allowances under this cap-and-trade scheme and set up allowance auctions. Unlike the UK's CRC, which rebates the proceeds from the sale of allowances, the Carbon Market Efficiency Board would use auction proceeds to support energy efficiency and other low carbon technology investments.

In addition, while the US cap-and-trade scheme is not part of the Kyoto Protocol, it allows up to 15% of a company’s emissions reduction obligations to be met through the purchase of international credits from other recognized trading systems.

While the Climate Security Act ultimately failed in the face of an election-year economic downturn and spiraling fuel prices in the first half of 2008, it generated considerable political support and provides a template for future legislation.

Preventing “carbon leakage”
Across the industrialised world, cap-and-trade schemes and voluntary carbon-neutrality pledges are helping companies incorporate the price of carbon into their business decsions. But the same does not hold true everywhere. Countries with less stringent requirements may see a net gain in heavy industry, where the cost of carbon can have a major impact on profitability. Where this happens, emisions reductions in industrialised countries may be negated by increases in other parts of the world.

Without a global climate change agreement, “carbon leakage” to rapidly growing developing countries such as India and China is inevitable. German Chancellor Angela Merkel has urged EU leaders to back measures to prevent industries such as cement and steel from leaving the EU as tighter limits on CO2 emissions are imposed in the Community after 2012. Two options are under consideration for post-2012 Europe:

1. Granting free emission allowances to industries which are particularly exposed to international competition, or
2. imposing a "carbon tax" on imports from countries with no CO2 emission constraints of their own.

It remains to be seen whether these proposals survive local lobbying and the give-and-take of international negotiations.

Cross-system linkages?
Cap-and-trade systems are operational or under development in Europe, North America, Australia, and other parts of the world. Linking these various cap-and-trade systems could contribute to a global carbon market.

A larger carbon market with an increased number of participants helps to increase liquidity in the market. There are more actors able to achieve lower-cost emissions reductions and more willing to pay a premium for spare carbon credits. Greater liquidity can lead to an improved allocation of resources and more cost effective and rapid emissions reductions overall.

With a larger carbon market, there is less burden-shifting, that is, a lower likelihood of CO2 emissions leaking to countries that lack a strong regulatory framework.

There are, however, challenges to linking the European and US cap-and-trade systems. In particular, how would Europe react to more flexible standards that could cause the price of carbon in the EU to plummet? How readily would the US give up the flexibility required to achieve cost-effective emissions reductions across a large and diverse economy spanning multiple climactic and time zones? And how will both systems accomodate the need to purchase external carbon credits from developing countries that require financial help achieving reductions?

While challenges abound, a broader carbon market can help to accelerate the transition to a low-carbon economy. Without a clear price for carbon, we risk a major misallocation of our resources and threaten to pass on the costs of climate change to future generations.

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

John Holdren to be Obama Science Advisor

The Boston Globe (and lots of other newspapers) reports that Prof. John Holdren has been appointed science advisor to the incoming Obama Administration.

Holdren, a physicist by training, is a professor of environmental policy at Harvard University, director of the Kennedy School's Program on Science, Technology, and Public Policy, and director of the Woods Hole Research Center. He is also a past-president of the American Association for the Advancement of Science.

John was the head of the University of California at Berkeley's Energy and Resources Group, back when I was a grad student there. He taught ER100, the very first energy analysis course I ever took (among many others), and I was honoured to have him as a mentor.

John's appointment is good news in the ongoing effort to tackle climate change. He takes a clear-headed, evidence-based view to understanding environmental and energy challenges, and it's encouraging to know that he'll be at the heart of science policy in the new American administration.

Yesterday's Technology

Yesterday's Financal Times included a story about increased pressure to develop and build clean electric vehicles. These cars emit no pollutants from the tailpipe (in fact, there is no tailpipe), and have a potentially important role to play as we transition to a low-carbon future.

Most people think of electric cars as either boring, tiny golf carts or racy space-age vehicles like the Tesla pictured here. But the most interesting point in the FT article was the observation that this technology is nothing new.

The first electric carriage was invented between 1832 and 1839, and electric vehicles were widely used in Europe and the U.S. in the late 1800s and early 1900s. In fact, they held many land speed records during this period, and the wives of Thomas Edison and Henry Ford drove electric vehicles. Here's a photo of Thomas Edison with an electric car in 1913:


Sixty-seven years later, an electric car built in 1980 could travel up to 70 miles per hour for 70 miles without recharging. A widespread switch to electric vehicles could drastically reduce our dependence on petroleum, and lead to a huge reduction in greenhouse gas emissions. And there's no technical reason we can't achieve this goal. As one of the people interviewed in the FT story notes, "They could make these yesterday. They could stamp them out if they had to."

The same goes for many other low-carbon solutions. Reducing emissions is not rocket science. At Carbon Clear we're committed to helping companies identify proven, practical emissions reduction approaches, and then rolling them out in a cost-effective way.

The Outsourced Carbon Footprint

The full version of this article appeared in the March 2008 (No. 55) issue of The Environmentalist.

In our last article, we discussed how ISO 14064 provides useful guidance when choosing the boundaries for a corporation’s or organisation’s carbon footprint. In particular, while ISO 14064 only requires that companies include their direct emissions and their emissions from purchased energy, we argued that a more thoroughly prepared footprint will also look at the indirect emissions from the supply chain.

In this article, we explore how supply chain decisions can affect the company carbon footprint. We also look at how outsourcing production to other countries, while justifiable on cost or quality grounds, can have a significant effect on emissions – both negative and positive.

The “Low-Carbon” Service Sector
The UK economy has steadily shifted away from manufacturing and mining to a service economy underpinned by financial and retail-related services. Services, which are responsible for approximately 74% of national output, tend to be less energy intensive than agriculture, mining and manufacturing.

Defra reports that direct UK greenhouse gas emissions have fallen 12.6 percent since 1990, largely as a result of more efficient energy use, a switch away from coal-fired electricity, and the shift to a service-based economy.
















However, the total volume of manufactured goods consumed in the UK has not decreased. In most cases, manufacturers have shifted to outsourced production. In the process they have transferred their – and the country’s – emissions to the international supply chain. For large retailers, the supply chain may generate thirty times the company's own emissions. A similar effect may hold at the national level.

Outsourced Emissions
There are three ways that including the outsourced supply chain can increase a company’s carbon footprint:

1. an activity that had been excluded from direct emissions once outsourcing began must now be reincorporated into the emissions total;
2. transport between the point of manufacture and UK distribution and retail points results in additional emissions that must be included;
3. many countries that have become a hub for outsourced manufacturing emit more carbon per unit of electricity than the United Kingdom.

The last point bears further exploration. According to the International Energy Agency, the average kilowatt-hour (kWh) of electricity in the UK resulted in 472 grams of CO2 emissions in 2004. In the United States, one kWh resulted in 576 grams of CO2. However, in China, each kilowatt- hour resulted in 851 grams of CO2 emissions, and in India the figure was 942 grams. All else being equal, then, outsourced manufacturing can lead to a significantly higher corporate carbon footprint.

On the other hand, all else may not be equal. Lower labour costs in developing countries mean that companies may use less energy-intensive manufacturing techniques, leading to a net reduction in CO2 emissions. In the end, every company and production process requires its own analysis to determine how outsourcing affects the carbon impact of the supply chain.

Measuring Embodied Carbon
The British Standards Institute, working in collaboration with the Carbon Trust and other stakeholders, has developed a draft standard for measuring supply chain emissions. The draft standard is PAS 2050 - Specification for the measurement of the embodied greenhouse gas emissions in products and services.

In order to ensure that different products and services are evaluated consistently, PAS 2050 takes a comprehensive approach to measuring emissions, including, in the words of the document author, “all emissions (or portion of emissions) that are released as part of all processes involved in creating modifying, transporting, sorting, disposing of and/or recycling the product.”

This comprehensive approach requires companies to address their supply chains. For example, a producer of chocolate candy bars would have to include emissions from growing cocoa overseas – including irrigation and fertilisers, transporting the raw cocoa beans to the mill, producing the milk, blending the chocolate, producing the packaging, warehousing and distribution. With major retailers like Tesco pledging to include carbon labelling on all their products, we predict that more and more companies will be working with their supply chain to understand their carbon exposure.

Outsourced Emission Reductions
Outsourcing is not merely an added source of greenhouse gas emissions that companies must add to their corporate carbon footprint. Outsourcing is also a widely accepted way for companies to achieve substantial emission reductions.

Under the EU Emission Trading Scheme (ETS), companies that are not able to meet their binding greenhouse gas emission targets must purchase external reductions in the form of carbon credits – typically classified as European Union Allowances (EUAs) or Certified Emission Reductions (CERs).

Companies that have voluntarily committed to reducing their corporate emissions or making a product or service “carbon neutral” have access to a wider range of external reduction options to accompany their internal reduction measures. In addition to CERs and – less commonly in the voluntary market – EUAs, companies may choose balance out their unavoidable emissions with so-called voluntary emission reductions (VERs). A number of standards have been developed to increase transparency in the voluntary market and ensure that outsourced emission reductions are as environmentally effective as internal reductions.

Conclusion
Companies choose to outsource business processes for a wide variety of reasons: proximity to markets, raw material prices, labour costs, a desire to encourage job creation in poorer countries, access to technical expertise, regulatory and tax regimes, and others. In this article, we have argued that carbon impacts should be an important consideration when managers decide whether and how much to outsource.

Because outsourcing can lower as well as increase a company’s carbon footprint, and because the results can be counter-intuitive, managers may need to undertake a detailed analysis of their supply chain when weighing the carbon cost of outsourcing.

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

Carbon Clear Among Most Recognised Offset Suppliers

A recent report ranks Carbon Clear as one of the top ten most recognised carbon credit suppliers, in a poll of large and multinational companies.















As the report authors note: "The market is clearly becoming better regulated, at least in part through project developers and carbon retailers' efforts to create best practise procedures and also though the UK governments' long awaited best practise guidelines for carbon offset providers. Demand for different types of offsets shift based on factors ranging from availability to price to public perception, and as a result business customers of the voluntary offset markets play a major role in shaping the future of carbon trading."

The poll, commissioned by credit wholesaler EcoSecurities, not surprisingly ranks that company highest. Still, we're pretty pleased to be in the top ten - our experience, reputation and project quality help us stand out from the crowd.
(Carbon Clear homepage)

Whose Footprint Is It, Anyway?

A longer version of this article first appeared in the December 2007 issue (No. 53) of The Environmentalist.

Public awareness of climate change is at an all-time high, and companies and individuals are under pressure to measure and reduce their carbon footprints. However, we buy goods and services from one supplier and often pass items, whether finished products or waste, on to other people. So how do we know where one footprint ends and another begins? Establishing relevant boundaries around your carbon-emitting activities is a crucial step in calculating your true emissions. Define your activities too narrowly and you offload your rightful carbon responsibilities onto your customers or suppliers. But broaden the boundaries too much and you risk taking responsibility for emissions over which you have little or no control. What is a sensible approach?

A good starting point is the ISO 14064 -1:2006 standard Greenhouse gases- Part I: specification with guidance at the organizational level for quantification and reporting of greenhouse gas emissions and removals. This standard includes formal definitions to help organisations determine where their responsibility begins and ends. Another carbon management standard, PAS 2050 - Specification for the measurement of the embodied greenhouse gas emissions in products and services- can also help an organisation determine where its boundaries begin and end. But before taking a closer look at boundaries, let’s take a step back and think about the overall purpose of carbon footprinting.

Given the recent hype, one might be forgiven for thinking carbon footprinting is simply more corporate “greenwashing”. In reality, developing a reliable and consistent method for measuring greenhouse gas (GHG) emissions helps companies benchmark their performance and identify opportunities to make real reductions in emissions through changes and improvements in business practices and processes. The Carbon Trust outlines the main benefits of carbon management for companies including cost savings, operational efficiency, mitigation of regulatory impacts, capability building, new business opportunities, and enhanced corporate reputation.

In addition, a consistent approach among companies allows customers and other interested parties to make relevant comparisons and use GHG emissions as selection criteria for procurement and purchasing decisions. It also helps companies to evaluate alternative processes for managing GHG emissions and to address corporate environmental targets.

Describing a “Fit for Purpose” Carbon Footprint Report
A credible carbon footprint report is analogous to a credible corporate financial report in that it should give a fair and accurate view of the organisation’s performance and serve as a useful decision making tool for management and other stakeholders. The following principles reflect the thinking that goes into preparing a “fit for purpose” carbon audit report:

a) Relevance - includes emissions sources appropriate to the needs of the intended user
b) Completeness - includes all relevant GHG emissions and removals
c) Consistency - enables meaningful comparisons in GHG-related information
d) Accuracy - reduce bias and uncertainties as far as is practical
e) Transparency - disclose sufficient and appropriate GHG-related information to allow the intended user to make decisions with confidence

When Carbon Clear conducts a carbon audit, the carbon management team applies a 6-step methodology:

1. Identify management’s motivation for measuring the company carbon footprint, and specify key stakeholders
2. Identify organisational boundaries
3. Determine key activities within those boundaries that drive the company’s carbon emissions
4. Measure those activities and apply relevant emissions coefficients to determine the total footprint
5. Identify top-level and detailed recommendations for cost-effective emissions reductions
6. Ensure that carbon footprint results are reported accurately

Without clearly defined, relevant boundaries for GHG emissions, an organisation cannot begin to take meaningful action to measure or reduce their emissions. For example, an office or service-based organisation, which decides to exclude indirect emissions (associated with services and products in its supply chain) might underestimate its footprint by a large factor. For large retailers, the supply chain may generate thirty times the company's own emissions.

ISO 14064 defines four categories of GHG emissions based on management’s control or influence over business activities. These categories are labelled direct emissions, energy indirect emissions, and other indirect emissions.

Direct GHG emissions, as the name suggests, result from activities undertaken directly by the organisation and its staff. These include the operation of company-owned vehicles and on-site power generation, as well as the management of lands and property owned by the organisation.

Energy indirect GHG emissions are the GHG emissions from the generation of imported electricity, heat or steam. The organisation is the direct end-user of the energy, even though the emissions may have occurred at a power station hundreds of miles away.

Other indirect GHG emissions arise as a consequence of the organisation’s procurement activities and other decisions, but arise from sources that are owned or controlled by another organisation. The category of indirect greenhouse gas emissions is potentially huge, and is the most common source of confusion when the organisation attempts to set boundaries for its carbon footprint.

Boundary setting: the ins and outs
A carbon audit is often the initial step in a company’s emissions reduction programme. However, the carbon audit report is also a communications tool, and company representatives may be tempted to set their emissions boundaries as tight as possible in order to produce a smaller footprint. After all, with major institutions basing procurement decisions in part on the bidders’ relative carbon footprints, no one wants to be the biggest polluter.

We argue that this may be a false saving. Many organisations will use their initial carbon footprint as a baseline against which to measure future performance. Exclude too many activities from the baseline and you may lock out a range of cost-effective emissions reduction options throughout the supply chain.

There is a further reason to consider broadening the boundaries of a corporate carbon audit. Much of the pressure to measure carbon footprints comes from investors, customers, and regulators, and they expect this information to be made publicly available. An unreasonably narrow boundary may attract criticism from outside reviewers concerned about potential corporate “greenwash”. In such a case, it is critical that a company clearly states the assumptions and rationales behind its boundary decisions.

Establishing appropriate boundaries for a corporate carbon audit is critical if the corporate world is to do its part to help reduce the severity of climate change. Going beyond direct emissions to encompass indirect emissions can give a company insight into its key emissions sources, and identify a broader range of carbon reduction options. Even better, establishing these broader boundaries can increase the credibility of the carbon audit report itself, and open up new opportunities for engagement with customers and clients.

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

I'm back...

Apologies for the light posting...busy. To make up for it, I'll be supplementing our regular blog posts with some articles that I've written for the IEMA journal The Environmentalist over the past year with colleague Suzy Hodgson.

UK Announces New Department for Energy & Climate Change

Britain's Labour Government on Friday announced the creation of the Department for Energy and Climate Change. The new department, to be headed by Minister Ed Milliband, is the result of a wide-ranging cabinet reshuffle by Prime Minister Gordon Brown.

Many environmental groups have hailed the formation of the new government department, noting that until now one agency had responsibility for sourcing the nation's energy and a separate agency was responsible for dealing with the resultant emissions. The hope is that putting both priorities under one roof will help to align incentives and spur faster action towards a lower-carbon future.

I share their hope, but the simple fact is that climate change is not just an energy issue. Nearly every activity generates greenhouse gas emissions - transport, construction, farming, and the like. One could just as easily argue for a Department for Transport and Climate Change tasked with helping to ensure that the development of the nation's transport infrastructure (third runway at Heathrow, anyone?) was aligned with government greenhouse gas emission targets.

At Carbon Clear, we've found that the most effective approaches to climate change build emissions reduction strategies into every aspect of business or household activity. Our aim is to help companies reduce greenhouse gas emissions wherever it makes sense.

Preparing for the Future

When we discuss the impacts of climate change, most people have visions of melting glaciers, polar bears, and shifting dunes. These are serious problems, to be sure, but they seem for the most part to be something that will happen to someone else, far away.

Few people consider effects that will hit much closer to home. Take weeds, for example.

Lewis Ziska, an ecologist with the U.S. Department of Agriculture, wanted to understand how weeds are affected by a warmer world. Short on funds to expand his research lab, he hit on an ingenious solution:

"Then it occurred to Ziska that the complaints made by residents of nearby Baltimore about summer in their city — the exhaust-laden air and the way in which buildings and pavement soak up solar energy to create an abnormally warm “heat island” — could be put to good use. When he checked, he found that in fact the temperatures in Baltimore run 3 to 4 degrees Fahrenheit warmer on average than those of the surrounding countryside, and the concentration of CO2 in the local atmosphere (440 to 450 p.p.m., or parts per million by volume) is well above the current global average. This, coincidentally, matched almost exactly what the panel on climate change predicted for the planet as a whole 30 to 50 years in the future in its “B2 scenario,” a middle-of-the-road projection that envisions continuing greenhouse gas increases but also some success in abatement programs."

Ziska collected soil with weed seeds from an organic farm and created identical growing beds on the farm, in a nearby suburb with moderately higher temperatures and CO2 levels, and in the high-temperature, high-CO2 heat island. Then he let the weeds grow. The results over the next five growing seasons were breathtaking.

In nearly every case, Ziska found that weeds benefit much more from increased CO2 concentrations than do agricultural crops and domesticated plants. In the high-CO2 plot, the weeds grew much faster and up to twice as large as the weeds on the farm. Many were more resistant to common herbicides. And when trees eventually began growing on the untended plots, the high-CO2 plot was dominated not by oak and maple, but by stubborn invasive species like ailanthus and mulberry.

What's more, the weeds produced more pollen in a high-CO2 environment. When Ziska grew ragweed at the CO2 concentrations predicted for the end of the century, they produced twice as much pollen as they do today, and of a form more likely to cause allergic reactions. Poison ivy grew faster and produced a more intense form of rash-inducing oil. This means that climate change is bad news if you're an allergy sufferer, if you're a farmer, or if you simply enjoy having a weed-free lawn or vegetable plot. The future may look a bit brighter if you manufacture herbicides or produce anti-allergy medications, but it looks there will be more losers than winners. There are, of course, many other implications to the rise of the weeds, which I'll leave as an exercise for the reader.

The growth of weeds in a warmer world is rarely discussed, and yet the potential impacts on people, farmers, corporations, and local ecosystems is huge. And this is only one of many interlocking impacts.

My team at Carbon Clear spends a lot of time helping companies understand how climate change can affect their business over the coming years and decades. We do this in part to help our clients prepare for the future. But we also look at these impacts to help people understand that greenhouse gas emissions can impose a high price - both at home and abroad. Faced with massive global change, early action to reduce greenhouse gas emissions is often the most sensible investment we can make.

The Power of Feedback

About twenty years ago I came across an electrical engineering textbook entitled Feedback Control Systems. It was a highly technical piece about how to design thermostats, automatic doors, alarms and the like. The key to such devices, of course, is that they monitor local conditions and adjust their operation when those conditions change. These feedback systems can be surprisingly simple, but imagine our lives if they didn't work properly. Imagine the waste and frustration if the automatic door at the supermarket had to guess when a trolley was approaching, or if the heating unit in your home couldn't detect the temperature.

One of the things I like about my five year-old hybrid car is that it includes the driver in an energy efficiency feedback system. In everyday terms, there's a simple but informative fuel economy display mounted in the dashboard. This system doesn't take control - the petrol and electric motors will work together and provide a boost if I need to out-accelerate the huge truck bearing down on me. But the feedback is always there, and I can use it to change my behaviour. If I get caught up in the rush-hour road rage, the display shows my fuel economy dropping - 48 mpg, 45 mpg, 43 mpg... And that's my cue to take action. By maintaining a steady speed, coasting on the downhills or slowing down gradually at traffic lights, I can see the numbers go up - 50 mpg, 60 mpg or more. Since my last tank of fuel, I've been averaging 57.2 mpg. Getting regular, visible feedback on my performance gives me a strong incentive to change behaviour and reduce waste.

When Carbon Clear measures your company's carbon footprint, we are helping you design a powerful feedback tool for tracking environmental and financial performance. Our standards-compliant analysis identifies those activities - flights, vehicle fleet, outsourced manufacturing, etc. - that make up the lion's share of your carbon footprint - and are probably costing you money. Of course, knowledge alone is not enough. We help companies take action, developing plans to tackle those emissions sources that will give the fastest or most cost-effective reductions. And we'll help measure progress over time.

Every company has the potential to achieve significant, absolute reductions in their carbon footprint. At Carbon Clear we'll help you get there. Measuring your carbon footprint is the first step.

Will High Oil Prices Save the Planet?

The scientific academies of thirteen countries yesterday issued an unprecedented joint statement urging faster, more decisive action to limit greenhouse gas emissions. The carbon reduction specialists at Carbon Clear applaud that sentiment, and are committed to helping businesses and individuals, measure, reduce, and offset their carbon emissions. And yet more remains to be done.

Many pundits are hoping that help will come from the rising cost of fuel. With oil prices skyrocketing, firms around the world have a strong incentive to reduce consumption. Emissions reductions are sure to follow - won't they?

At first glance, the signs are encouraging. Fuel purchases in the U.S. are down 7% from a year ago, and consumers can't seem to ditch gas guzzling cars and trucks fast enough. Last week, auto giant General Motors announced that it was closing four truck and SUV production lines and was considering abandoning its signature Hummer SUV brand. Meanwhile, the company has announced the launch of two new small cars, and a new electric-hybrid vehicle called the Volt.

The airlines are economising, too. Northwest Airlines is parking its workhorse DC-10 airplanes, in favour of newer A330 models that are 38% more efficient. Southwest Airlines claims to have saved millions in fuel costs simply by cleaning its engines more frequently, and Delta is flying its planes 20 mph slower to save fuel.

To be sure, high oil prices strengthen the economic case for demand reduction in the form of increased fuel efficiency or fewer journeys. But they also strengthen the economic case for increasing supply - in the form of oil substitutes. While some substitutes, like biofuels, show promise to reduce greenhouse gas emissions when used correctly, others are the stuff of environmental nightmares.

In the remote regions of Canada's Alberta province lie vast deposits of thick, tarry sand and soil. These tar sands hold the equivalent of 175 billion barrels of oil - nearly as much as Saudi Arabia. The challenge has been getting to it. In order to convert the oil in the tar sands to usable form, the solid granules must be mined, crushed, diluted and cleaned - and then manufactured into synthetic oil in an energy-intensive refining process. According to an estimate reported by the Financial Times, this process means that oil from the tar sands has five times the carbon intensity of conventional fossil fuels. On an individual level, while a round-trip flight from London to New York might normally result in 1.3 tonnes of CO2, a flight fuelled by tar sands-derived kerosene would result in a whopping 6.5 tonnes of CO2. Driving 10,000 miles in a car would result in a 15-tonne carbon footprint. And this says nothing of the vast tracts of forest wilderness that must be cut up to reach these fuel resources.

But the global implications are even more serious. Alberta's 175 billion barrels of oil equivalent, if it were all consumed, would result in the release of about 35 billion tonnes of CO2.

That's 30% more than all the CO2 released from fossil fuels worldwide last year.

Extracting oil from the tar sands is dangerous and expensive work. So long as oil was relatively cheap, the tar sands were safe. But at $120 a barrel, $200 a barrel, or even more, the tar sands begin to look like a viable option. Six million hectares of oil sands - 43% of the total - have already been leased to oil companies for exploration and development. The oil majors are lobbying regulators to include these resources on their balance sheets, signaling their intent to exploit them.

With high oil prices likely here to stay, more energy efficiency measures will be pursued, but the tar sands are more likely to be tapped as well.

And that's bad news for the environment.

A high oil price can be a mixed blessing. We need to bring other tools to bear in the fight against climate change. We'll present some more ideas in subsequent posts.

(Carbon Clear website)