Carbon Clear Blog

Sustainability reporting part 2: It's an ongoing process not a goal

noreply@blogger.com (Jamal (@JGoreCarbon)) — Fri, 01 Nov 2013 11:58:00 +0000

(This article originally appeared on the 2DegreesNetwork website.)

If you're a committed environmentalist, it’s likely that the push for continuing improvement in sustainability is welcome. But it's also potentially nerve-wracking. It means that, as a sustainability professional, you can never rest on your laurels, and you may have to go back to your board to reset your targets - perhaps more than once, as definitions of "good enough" evolve.

All this becomes easier once you realize that sustainability isn't an end-goal. In an earlier post we discussed the evolutionary nature of carbon emissions and sustainability reporting and concluded that sustainability is a process and a way of working.

Most companies are not in business to consume resources, generate rubbish or emit pollution. They are in business to deliver a product or service to their customers. Resource consumption, waste generation and pollution result from the way they choose to deliver those products and services. Airlines emit carbon dioxide (CO2) into the atmosphere not because they are in the CO2 production business, but because liquid fossil fuels are affordable and have a very high energy density. Commercial farms release vast quantities of nitrous oxide (N2O), a potent greenhouse gas, not because they are in the N2O production business, but because farmers must fertilise and plough their fields.

So what's the best way to set your targets to reduce waste, resource consumption, and pollution?

Airlines could establish a realistic emission reduction target, set it in stone, and make a series of engineering and operational tweaks to achieve that target. However, they will likely not escape continuing criticism from environmental campaigners, passengers and other stakeholders whose concerns about climate change will only grow as they learn more about this threat. Airlines (and their internal sustainability champions) who view sustainability as a way of working instead of a fixed target may take a different view.

Yes, interim targets are a useful way to achieve quick wins and get buy-in across the company. But a company that is fixated on making their environmental performance 10% better will be blindsided by a competitor that innovates to make their performance 10 times better. For an airline 10X better might mean innovating to create a zero-carbon fuel or a designing a completely different type of aircraft.

Whether literal or metaphorical, 10X better means there is no end in sight: you don't know yet how the company is going to achieve its sustainability goal, or the goal so big and long term that you won't be around anymore when it finally gets there. Either way, it means changing the way you think about sustainability. In fact, it may mean rethinking how your company works, as GE did with its Ecomagination initiative.

Each of your company's sustainability achievements is a vital stepping stone rather than an end-point. That doesn't mean it's easy. Acknowledge the hard work required to attain that goal, and celebrate when you've reached it.

Then use that energy to set off towards the next goal. And enjoy the continuing journey.

Sustainability reporting part 1: It’s an evolution not a revolution

noreply@blogger.com (Jamal (@JGoreCarbon)) — Fri, 18 Oct 2013 11:26:00 +0000

(This article originally appeared on the 2DegreesNetwork website.)

It's not easy being the head of climate change or sustainability for a large company. If you're typical, you work with a tiny team and limited budget, and have discovered that making sustainability mainstream can be a long, slow process.

What's more, you're often asked to hit a moving target. Initiatives that seemed cutting edge five years ago are standard practice today. In another five years they'll be considered woefully insufficient.
Take carbon footprinting as an example. In 2007, when Marks and Spencer announced their Plan A initiative, a handful of leading companies measured greenhouse gas (GHG) emissions from their office energy use, plant and equipment, and vehicles. If they looked at their Scope 3 emissions at all, the focus tended to be limited to business travel. By 2012, many publicly listed companies reported their carbon footprint, and the leaders were incorporating their supply chain, customer and product lifecycle emissions into the total. In that same year, CDP announced that they would henceforth give even greater weight to Scope 3 supply chain reporting in their investor questionnaire. Those former leaders that "only" report Scope 1 and 2 emissions would soon find themselves at the bottom of the pile.

We see this progression in the rise of "net positive" initiatives from the likes of Coca-Cola, Kingfisher, Rio Tinto, Ikea and BT. There is something of a sustainability arms race underway. It used to be enough to report on your environmental impact. Then companies began to report about how effectively they were minimizing their impact. But to be a leader today, your targets require you to leave the environment better than when you started.

You can also see this evolution in Carbon Clear's annual FTSE 100 carbon maturity rankings. In order to differentiate between leaders and laggards, each year we have had to take an increasingly nuanced view of companies' approaches to climate change. To take just one area of focus as an example: Does your company measure and report its GHG footprint? Of course it does. Does it follow ISO 14064-1 or the GHG Protocol? Absolutely. Does it include Scope 1, 2, and material Scope 3 emissions? Probably. Does it seek third party assurance? Er, maybe.

Offsetting is a consideration in our carbon maturity rankings, and a little nuance goes a long way here as well. Does your company use carbon offsetting to achieve cost-effective net reductions? Most likely, yes. Are you fully carbon-neutral for at least Scope 1 and 2, or for your corporate travel? Possibly. Have you declared carbon neutrality against the BSI PAS-2060 specification and gotten third-party assurance for your claim? If you're in the FTSE100 and you’re not M&S, probably not.
And so on. This continuously evolving methodology makes it more challenging to perform time-series comparisons that track a company's movement up the Carbon Clear rankings. Without this evolution, however, most companies would end up bunched together. With little to distinguish one firm from another, the rankings would get less useful over time.

Assessing how well companies report their sustainability will remain an evolutionary process just as the actual act of reporting also develops. Neither reducing carbon emissions nor making your business more sustainable are end goals in themselves. There is always more to be done and it’s all about the journey.

In November Carbon Clear will be holding a webinar on 'Carbon reporting schemes: Minimize the pain and maximize the benefits', which will explore the different reporting schemes, how they fit together and how to effectively manage your data to minimize your workload. Find out more and register.

Carbon Clear's Third Annual FTSE 100 Carbon Performance Report

noreply@blogger.com (Jamal (@JGoreCarbon)) — Wed, 09 Oct 2013 11:34:00 +0000

It's that time of year. The results have been announced. The press releases, released. The winners are crowing and the also-rans licking their wounds.

Each year, Carbon Clear's publication, "Carbon Reporting Performance of the FTSE 100" attracts more attention from the press and from leading corporations. In a short span of time, this report has become a trusted tool for understanding which companies are taking seriously their response to climate change. The need for such a tool is as important as ever. As I pointed out last year:

"When we talk with large companies, the vast majority speak proudly of their climate change initiatives. In reality, there is a significant spread in the depth and breadth of carbon management programmes in the corporate world."

Our research separates the stars from the wannabes.

A few trends leap out from this year's research results:

Integrated reporting is becoming mainstream, with just over half of companies mentioning their carbon footprint in their annual report;
56 of the FTSE 100 are reporting at least part of their Scope 3 GHG footprint;
29% of companies have set carbon targets that go beyond 2020;
The number of companies that claim to be carbon neutral has increased by 46% since last year.

There are a host of other interesting findings, but for these and the list of top-performing companies, you'll have to read the report.

It's important to point out that this is not a "name and shame" exercise. Carbon Clear's research provides a useful diagnostic that can help companies benchmark their performance against their peers, address weaknesses, and increase their ambition.

If you're in the FTSE 100 (or even if you're not), we can provide a customised overview that explores your company's performance and helps you plan your next steps. Please contact the team at Carbon Clear for more information.

(Back to Carbon Clear homepage)

Waking Up to Climate Change Action

noreply@blogger.com (Jamal (@JGoreCarbon)) — Mon, 23 Sep 2013 12:50:00 +0000

Something extraordinary is happening.

After endless debate about whether climate change is occurring and whether we should think about doing something about it, the conversation has shifted.

After decades of refusal by the largest polluting countries to tackle their greenhouse gas emissions, the policy debate is moving forward.

After years in which climate change was relegated to a few pages in companies' CSR reports, businesses have changed their approach.

At every level of society, people are waking up to the fact that climate change is happening, and recognizing that doing nothing is a losing option for nations, businesses and communities.

The headlines tell the story, in no particular order:

19 June 2013 - Utility-scale PV costs in the U.S. drop to $3/Watt, and are expected to reach $0.36/Watt by 2017. This compares to $2.20/Watt for onshore wind, $1.00 for combined-cycle natural gas, and $8/Watt for the coal-fired carbon capture and storage plant under construction in Mississippi.
19 September 2013 - Russia urges discussion of geoengineering in upcoming Intergovernmental Panel on Climate Change report.
11 September 2013 - UK Astronomer Royal calls for research into geoengineering options as worry grows about the pace of carbon reductions.
15 September 2013 - the UK's Liberal Democrat party makes a controversial vote in favor of nuclear power to fight climate change.
20 September 2013 - Many electric utilities have looked to carbon capture and storage as a reason to keep building fossil fueled power plants in a carbon-constrained world. Now that the Obama Administration is rolling out rules limiting emissions, lobbyists are changing their tune.
12 September 2013 - Overall Scope 1 and 2 greenhouse emissions have fallen 14% since 2009 at the 500 largest listed companies, even as performance lags for the most energy-intensive firms, according to the CDP. Importantly, more and more companies include a discussion of climate change risks and opportunities in their annual investor report, instead of in their less-read CSR reports.
And then there's fracking.

A few themes jump out from these, and many other headlines in the news.

First, the economics of clean energy increasingly make for unlikely bedfellows. Utilities are arguing against CCS while supposedly "green" political parties are voting in favor of nuclear power and hydraulic fracturing.

Second, serious and respected thinkers are beginning to advocate increasingly desperate measures to address climate change - up to and including radical geoengineering approaches.

Third, the business world is increasingly split on their approach, with one influential group racing ahead to capture the opportunities presented by a lower-carbon economy.

There is an influential, large and ever-growing group of people and organizations that "get it" - they know climate change is a fact of life and are thinking seriously about how to respond. This is an extraordinary turn of events, and one that will lead to major shifts in how we do business in future.

The message from this steady drumbeat of news headlines is clear. The need to reduce emissions and tackle climate change is a fact of life, now, not for some point in the hazy future. Those businesses that have yet to build a robust climate change response into their corporate strategy are missing an opportunity to reduce risk and to build business value.

Don't Wait for "Someone Else" to Fix It

noreply@blogger.com (Jamal (@JGoreCarbon)) — Thu, 01 Aug 2013 13:06:00 +0000

Several years ago I was in Senegal when the car I was in got a flat tire, in the middle of nowhere. We couldn’t get the wheel off because the key to remove the bolts was missing. And it was getting dark.

As it turns out, our problem was short-lived. My Senegalese colleague stood at the side of the road waving his arm and every single car that passed us stopped to help. The road wasn't very busy, but within a few minutes we’d found a driver with a matching key. We changed the tire and were back on our way.

If you get a flat on I-95 in America, or the M4 in Britain, other drivers will rarely stop. They assume you will have paid for your AAA (or AA) membership, or will use your phone to call a tow truck for assistance. In other words, “Why should I help? Someone else will come along, and they'll be better equipped.”

Cellphones were not very common in Senegal at the turn of the millennium. Neither were professional roadside assistance companies. As a driver you knew that if someone was broken down on the side of the road, they needed your help. And you knew that if your car broke down you would have to turn to other motorists for assistance.

When it comes to climate change, too many of us pretend that we're all driving down I-95 or the M4 with a cellphone and paid-up roadside assistance. We continue on our way, confident that someone else will take care of it.

Too many companies and individuals make only token efforts at carbon management. More and more businesses may measure their carbon footprint, but scratch below the surface and you'll find the exercise confined to a small team - and for a worryingly large number of firms, data quality remains an issue. Fewer than one in ten FTSE 100 companies use carbon neutrality to take immediate responsibility for their greenhouse gas impact, with many making pledges to get around to it sometime in the next 35 years. And efforts to spread carbon management throughout the corporate value chain are only just beginning.

When it comes to the corporate response to climate change, we can't pretend that token gestures will be enough. In reality, we're all driving on that lonely road in turn-of-the millennium Senegal. Tackling climate change is every company's responsibility. Don't wait for "someone else" to deal with it.

The Shale Gas Panacea (Part 2) - Does the UK have '43 Years of Gas'?

noreply@blogger.com (Jamal (@JGoreCarbon)) — Thu, 18 Jul 2013 16:25:00 +0000

In a recent blog post, I provided a canned summary of the reasons shale gas has become such a burning issue. That previous article covered issues surrounding potential environmental impacts, the relative attractiveness of shale gas compared to coal, and the potential for fugitive methane emissions.

In this post, I want to explore what exploitation of shale gas might imply for our efforts to transition to a low-carbon economy.

As a thought experiment, if we were to suddenly replace all the UK's coal consumption with natural gas, we would reduce greenhouse gas emissions by 42 million tonnes, a saving of nearly 10% from the national footprint total of 458 million tonnes CO2e.

Leaving aside the potential environmental impact of extracting this much shale gas, could we do it? One would think so, judging from breathless headlines like this one in the UK from The Times:

Let's dig into that "43 years" statistic.

The Times article summarizes the findings from a British Geological Survey (BGS) report on the Bowland-Hodder Shale Formation in northern England. According to the BGS, the mid-range estimate for the total gas in place in the Bowland Shale Formation is 1,329 trillion cubic feet (37.6 trillion cubic meters). However, not all of that gas will be recoverable at a reasonable price using foreseeable technology. A reasonable guess might be that 10% will be recoverable - call it 130 trillion cubic feet.

2012 gas consumption in the UK was approximately 3 trillion cubic feet - a figure that has actually declined slightly since 2000, as utilities burn more coal to produce power.

Divide the recoverable gas estimates (130 tcf) by current consumption (3 tcf/year) and you get 43 years. Not exactly cutting edge analysis, but easy to explain.

But is this number useful for anything besides headlines?

The first assumption we might question is that gas consumption will remain constant for the next four decades. In the U.S., an influx of cheap gas has encouraged utilities to reduce coal consumption and shelve plans for new coal-fired generation; gas consumption increased by one-third in less than a decade. If, as we expect, shale gas in the UK is cheaper than conventional gas supplies, gas consumption will rise to displace at least some of the UK's coal-fired power plants. If gas were to completely replace coal and energy consumption otherwise stays flat, natural gas use could rise by nearly 50%, as indicated in the EIA chart below:

If, as expected, electric vehicles make significant gains over the next few decades, then natural gas use could rise still further as gas-fired electricity displaces petroleum. Even this simple analysis shows that natural gas use could rise dramatically - even if overall UK energy demand does not increase.

However, the Office of National Statistics expects the country's population to rise 30% over the next four decades. Without significant efforts to improve reduce energy demand and shift to renewable energy sources, this projected population increase makes the assumption of constant gas demand even more untenable.

At this point in the analysis, we are piling guesses on top of guesses. Coming back to our original question, yes, we could completely displace UK coal consumption and drive significant emission reductions, but not for as long as the headlines would have you believe.

And what happens once we've used up that shale gas bounty? Either we lurch back to a heavy dependence on coal, causing greenhouse gas emissions and air pollution to skyrocket, or we switch to lower carbon sources of power like PV, wind, wave, and geothermal - or nuclear.

Interestingly, it would likely take 15-20 years to fully build out renewables on a truly massive scale, along with the electricity transmission and smart grid infrastructure required to make best use of decentralized and intermittent renewable resources. Likewise, it would probably take 20-30 years for nuclear power to stage a significant comeback in the United Kingdom. Whether we employ renewables, nuclear or both is an important debate, but on for another day.

The shale gas revolution, should we choose to exploit it, has the potential to buy us some time. If we can resolve the far-from-trivial environmental and other challenges facing hydraulic fracturing, we can achieve significant greenhouse gas emission reductions today, even as we build a longer-term low-carbon energy infrastructure for tomorrow.

The Shale Gas Panacea (Part 1)

noreply@blogger.com (Jamal (@JGoreCarbon)) — Thu, 11 Jul 2013 16:36:00 +0000

If you want start an argument, just ask a group of environmentalists what they think about shale gas.

Then pass the popcorn.

Conventional natural gas is pumped from vast underground pools like the deposits found under the North Sea, in Russia and in Saudi Arabia. Geologists have long known that there was also a huge amount of gas and oil trapped in tiny bubbles in sedimentary rock called shale, spread across vast territories around the world. However, traditional drilling techniques could not access this gas in a cost-effective manner; by comparison, it was far more cost effective to build and operate a drilling rig in the North Sea than drill for shale gas in Montana.

Two technological breakthroughs changed all that. The introduction of horizontal drilling meant resource extraction companies could drill a network of wells covering a huge area from a single drilling site, without displacing overlying farms, fields and even towns. Hydraulic fracturing, or "fracking", meanwhile, provided a means of crushing shale rock using high-pressure fluid, without strip mining the area. Once the rock is crushed, any pockets of gas or oil trapped in the rock would flow out along the path of least resistance - typically back along the tunnel created by the drill.

Suddenly, it became possible to extract tremendous quantities of shale gas and shale oil, overturning common assumptions about the availability of fossil fuels. As a result of the shale gas boom, natural gas prices in the United States are a fraction of the international gas price.

By 2015, the U.S. is expected to overtake Saudi Arabia as the world's biggest gas producer as energy companies tap the Marcellus, Bakken and other shale basins. In the UK, meanwhile, analysts are reporting breathlessly about the potential of the Bowland Basin, which some claim can supply the country with gas for the next 43 years. I'll be taking a closer look at that number next time, but for now let's agree that there's a lot of gas down there.

Why might this be good news for environmentalists? Per unit of energy, natural gas has a much lower greenhouse gas emissions intensity than coal or oil. In the United States, an abundance of cheap shale gas is ruining the economics of coal-fired power plants. In 2005, gas accounted for 19% of the country's electricity production; in 2012 this figure was 30%. Largely as a result, America's greenhouse gas emissions are falling rapidly - even before President Obama's proposed regulation of power station emissions comes into effect. Here in the UK, low prices for EU ETS permits reduce the incentive for power station operators to reduce emissions; it's cheaper to burn coal and buy a permit than use expensive gas. In addition to its CO2 emissions, coal combustion also releases mercury into the environment and contributes more to ambient air pollution than does burning gas. A massive influx of cheap gas could reduce output at the UK's coal-fired power plants, and force operators to shelve plans for new coal-fired generation. A cleaner environment and lower greenhouse gas emissions would be the result.

Why might the fracking revolution be bad news for environmentalists? For one thing, we need to be clear about what fuel shale gas is displacing. Not all that American coal is staying in the ground: as demand for coal falls in the U.S., its price has plummeted. As a result, it has been cost effective for some European utilities to buy (relatively) cheap American coal instead of more expensive European and Middle Eastern gas. Coal imports from the U.S. were up 23% in 2012. Seen at a global level, shale gas production may be displacing...gas, not coal.

In addition, hydraulic fracturing is not a tidy process. The hydraulic fluid is a potent chemical brew and has the potential to contaminate local groundwater supplies. Changes to underlying rock formations have led to a spate of earthquakes in some areas after the introduction of fracking. And many environmentalists are concerned that the gas may not always flow as intended - unplanned releases of inflammable gas can pose a safety hazard, and with a 100-year global warming potential 21 times greater than CO2, natural gas releases from fracking could undo some of the benefit that comes from displacing coal. Other studies argue that this fear is overblown, and energy companies have both the capability and financial incentive to minimise leaks.

While this debate will rage on, I predict that there will be some fracking in the UK, and it will continue to grow in the U.S. The question, then, is whether we can mitigate potential harmful environmental impacts, and use this resource boon as wisely as possible.

We'll return to this issue in a subsequent article.

Obama's $2.7 Billion Climate Science Salvo

noreply@blogger.com (Jamal (@JGoreCarbon)) — Thu, 04 Jul 2013 13:16:00 +0000

Last week U.S. President Obama announced a new initiative to spur action on climate change. Unlike previous efforts, this Climate Action Plan bypasses a legislature that has been largely paralyzed and relies on existing legislation and the President's executive authority.

There has already been a great deal of commentary about this new plan, and especially the proposal to regulate emissions from new and existing power plants. I discussed the power plant proposals last year and will return to this issue again. Today, we'll focus on a component of the Climate Action Plan that has received much less attention: science.

Many of the remaining critics of robust government action to reduce greenhouse gas emissions argue that the science is still not solid enough to provide a foundation for decisions that will fundamentally alter the U.S. and global economy. President Obama has provided a two-fold response. First, in his speech he made a strong moral argument in favor of the precautionary principle:

So the question now is whether we will have the courage to act before it’s too late. And how we answer will have a profound impact on the world that we leave behind not just to you, but to your children and to your grandchildren.

As a President, as a father, and as an American, I’m here to say we need to act.

This moral call to arms is important - we need to act on the courage of our convictions. But it probably won't silence the critics, even if it turns out that the United States is able to cost-effectively make the transition to a low-carbon economy and create tens of thousands more green jobs.

The President's second response to the remaining critics of climate science, then, was a masterstroke. The Climate Action Plan announces over $2.7 billion of funding to develop "actionable climate science". Government agencies will provide research grants to better understand and document climate change risks and impacts, make more and better government climate science data freely available, and provide toolkits that boost climate resilience.

For climate change skeptics, the President's response is a classic example of the adage, "be careful what you wish for". The Climate Action Plan threatens to unleash a tsunami of new data. The Office of Management and Budget's peer-review process for publication of important scientific research is in some cases more rigorous than for scientific journals. The peer reviewed scientific literature showing a positive link between human activity and climate change impacts vastly outnumbers publications showing the reverse. Thus, it's likely that the deluge of new research resulting from this "actionable climate science" initiative will tilt scientific and popular opinion even further away from those who advocate business-as-usual.

Research does not deliver instant results, but it's good to see which way the wind is blowing. Across the globe, businesses are beginning to assess their own climate-related risks, impacts and opportunities - often as part of their annual CDP disclosure process. The new climate research agenda from the U.S. will provide further tools to help businesses understand their climate change exposure and take action.

This article was originally published on the 2degrees Network.

The New Normal

noreply@blogger.com (Jamal (@JGoreCarbon)) — Tue, 02 Jul 2013 10:19:00 +0000

David Kadlubowski/The Arizona Republic, via Associated Press

I think we have had more than enough "teachable moments" around climate change. On Sunday, June 30th, 19 firefighters died fighting a wildfire in Arizona, the greatest number of firefighters lost in a single incident since September 11th, 2001.

Fires are a fact of life in the arid American southwest, but they are growing more frequent, hotter, and more severe. The reason: a warming planet.

As Climate Central reports, Arizona's average temperature has been rising by 0.72 degrees per decade since 1970. When winters are cold, precipitation falls as snow, which seeps into the soil as it melts. When winters are warmer, more precipitation falls as rain and runs off into streams and rivers. Less water seeps into the soil, leading to the drier conditions that help fires spread. The warmer winters also give the growing season a head start, leading to thicker undergrowth that can serve as kindling.

The New York Times notes that wildfires in the first decade of the twenty-first century covered on average twice as much U.S. acreage than in the 1990s. This figure is expected to increase as hotter, drier weather becomes commonplace with rising global temperatures.

As I've said before, this is what climate change looks like. Welcome to the new "normal".

It is too late at this point to completely avoid damaging climate change. However, we still have an opportunity to reduce emissions and forestall the most catastrophic impacts. We don't need any more "teachable moments" - now is the time to take action to control our carbon impact.

The 'Critical Decade' and Unburnable Carbon

noreply@blogger.com (Jamal (@JGoreCarbon)) — Tue, 18 Jun 2013 12:45:00 +0000

There has been a massive disconnect between the concerns about catastrophic, multi-billion dollar climate change impacts and the types of measures that most governments propose for tackling the challenge.

In the U.S., for example, the Environmental Protection Agency's climate change impacts website features a photo of a town submerged by floodwaters:

and yet the agency summarizes its approach to fighting climate change as a collection of "common sense measures to reduce greenhouse gas pollution", and encourages people to take steps "such as walking or biking to work". The message seems to be, yes we are facing a catastrophic, life-changing threat, but everything will be fine if we make a few small changes here and there. One gets the feeling they're not telling us something.

Australians have a reputation for speaking plainly. Even so, the language in a recent report from the Australian Government's Climate Commission was unusually bracing:

"[M]any consequences of climate change are already evident, and the risks of further climate change are better understood. It is clear that global society must virtually decarbonise in the next 30-35 years. This means that most of the fossil fuel reserves must stay in the ground." [emphasis mine]

Such frank language on climate change is rare from a government agency. It represents what one former U.S. politician called "an inconvenient truth". It is even more extraordinary coming from the world's leading coal exporting nation.

Extraordinary claims require extraordinary evidence. Fortunately, a number of organizations have already done the math.

Our atmosphere is finite - if the entire atmosphere were a sphere at standard air pressure, it would be just 2,000 km across. The illustration below gives a good sense of the limited volume of the Earth's atmosphere. When we change atmospheric chemistry by releasing billions of tonnes of greenhouse gases, we change how it absorbs and re-radiates heat.

Climate scientists agree that if we are to have fighting odds of keeping temperature increases this century below 2 degrees C (meaning climate change will be bad but not totally catastrophic), total greenhouse gas emissions between 2000-2050 cannot exceed 1,000 gigatonnes CO2e.

1,000 gigatonnes (1 trillion tonnes) seems like a lot - until one recognizes that 13 years in, we have already used 40% of that allocation. That means we can only emit another 600 gigatonnes over the next 37 years. At the current rate (which is increasing, not decreasing), we will surpass the 1,000 gigatonne threshold in 2028. This is, as the Australians put it, the "critical decade" for slowing growth and embarking on the path to zero emissions.

Just how high could emissions go if we do nothing? According to the International Energy Agency, world fossil fuel reserves are approximately five times greater than our 2 degrees emissions allocation, not counting further emissions from deforestation, land use change, and chemical processes. That would mean temperatures that are five degrees or even higher than today's. Think an ice-free Arctic, dust bowls across the American midwest, methane releases from the permafrost and potentially runaway climate change. In other words, business as usual will take us far into uncharted territory. As the Australian Climate Commission notes with characteristic bluntness: "It is clear that most fossil fuels must be left in the ground and cannot be burned."

With international climate change negotiations once again at an impasse, it is time for more frank language. Barring a technological miracle in the next few years, expect other governments to begin echoing the Australians' clear messages.

However, there is no need for businesses and communities to wait. Carbon Clear has found that organizations that take action beyond or in advance of government compliance schemes can gain first mover advantage in the race to decarbonize. It is clearer than ever that a low-carbon transition is upon us. How will you spend the rest of the "critical decade"?

State of the Voluntary Carbon Markets Report Launched

noreply@blogger.com (Jamal (@JGoreCarbon)) — Thu, 30 May 2013 13:19:00 +0000

The State of the Voluntary Carbon Markets 2013 has been published today (30 May) at the Carbon Expo conference and exhibition in Barcelona.

The report aims to assess the current situation of the voluntary carbon market by surveying key market players and examining trends and experiences over the past year.

The 2013 report shows that the value of the voluntary carbon market increased as a percentage of the total market, mainly because the value of Voluntary Emissions Reductions (VERs) remained buoyant in comparison to Certified Emissions Reductions (CERs).

The report states that during the past year, the private sector has provided $523 million of funding for projects that cut carbon emissions. $80 million of this has been used to fund and develop projects that distribute clean cookstoves and water filtration devices. These projects cut carbon, but also have numerous other social and environmental benefits including creating jobs, improving families’ health, reducing pressure on resources, and reducing household expenditure.

In response to the report, Jamal Gore, Managing Director of Carbon Clear said:

“Carbon Clear has long been a supporter of carbon offset projects that provide jobs, improve health and strengthen communities around the world. As the developer of the Darfur low-smoke stoves project – the first registered carbon project in a conflict zone, we are delighted that demand for cookstove projects has doubled. This growth shows that customers continue to value these types of high-impact, charismatic carbon projects.”

The executive summary of the report is here.

More information about the Carbon Clear Sudan Cookstove Project is available here.

World Bank President: "End Fossil Fuel Subsidies"

noreply@blogger.com (Jamal (@JGoreCarbon)) — Tue, 07 May 2013 11:51:00 +0000

Last June I commented on the lack of joined-up thinking when it comes to fossil fuel subsidies. World Bank President Jim Yong Kim seems to share this sentiment.

According to the Thompson Reuters news agency, Kim spoke out against fossil fuel subsidies during a U.N. meeting of climate and environment ministers in Bonn, Germany. As he rightly noted, “They are regressive, negatively impact the environment and act as a barrier to progress on clean technology."

The World Bank has long been a champion of free markets, so perhaps it should not be a surprise when the World Bank's President calls for an end to government subsidies.

What is even more noteworthy, then, about Kim's speech, is that he followed up his criticism of subsidies with a call for more government involvement to price greenhouse gas emissions. Carbon dioxide, nitrous oxide, methane and other GHGs are atmospheric pollutants whose uncontrolled release is causing the planet's average temperature to rise. This in turn is affecting the frequency and intensity of storms, floods, droughts, glacier retreat, the spread of pests and disease and species loss. For 90% of the planet's population, governments have given a free pass on emissions, by failing to force companies and individuals to incorporate the price of pollution into their everyday decisions.

Kim advocates a change of direction, encouraging governments to adopt one or more carbon pricing mechanisms, "whether this is through a tax on carbon, indirect taxation, regulation or the creation of a carbon market."

President Kim's comments are noteworthy because they come from an institution not known for encouraging governments to meddle in the market. They bring to mind an observation I and my colleagues at Carbon Clear have made many times before: climate change is that rare global problem that humanity actually has the power to tackle. We know what causes it, we know what it will take to address it, and we have at our disposal the technological and policy tools to make the transition to a low-carbon future. We even know how to turn climate change from a challenge to an opportunity. What we need now is the courage and conviction to act.

An End to Magical Thinking on Climate Change?

noreply@blogger.com (Jamal (@JGoreCarbon)) — Fri, 03 May 2013 09:16:00 +0000

Mickey Mouse (c) Disney

Quick quiz: What's the link between the recent measles outbreak in the UK, fiscal austerity as a way to restart economic growth, and the news that global CO2 emissions are about to surpass the 400 parts per million mark for the first time in millennia?

Answer: All three reflect the dominance of magical thinking - or rather, the willingness of citizens and policy makers to make decisions based on supposition and gut feel rather than an understanding of cause and effect or relying on data.

Humans are notoriously bad at math. It is extremely challenging for most people to identify more than five items in a group without counting them out. We can rarely perform more than the most basic calculations in our heads. Statistics, percentages, data analysis - these concepts do not come naturally.

This is a problem because society needs to base its important decisions on sound information. When we make major decisions using bad information, the results can be catastrophic. As a result, we need to be very careful when we make decisions that affect the rest of society. Science and data are the order of the day, checking and double-checking, not gut feel or wishful thinking. Unfortunately, that does not always happen.

In 1998, news outlets in the UK reported the results of a study that claimed a link between the measles-mumps-rubella (MMR) triple vaccination and autism. Other researchers immediately questioned the study, and no one demonstrated a verifiable cause-and-effect relationship between the vaccine and the condition. It didn't matter. Thousands of parents, responding to screaming headlines, refused to have their children immunised, believing that somehow avoiding vaccinations would make them safer.

Fast forward to 2013. The original report has been thoroughly repudiated, and the doctor who published the research has been struck off the General Medical Council register. Meanwhile, over 1,000 children have contracted measles, a dangerous and easily preventable illness and many more are at risk. The British government is now spending vast sums on a massive vaccination "catch up" campaign to halt the spread of measles, as well as mumps and rubella. These are diseases that were nearly wiped out in Western countries a generation ago. They have made a comeback thanks to over-reliance on shoddy data, and now all of us are paying to clean up the mess, not least the families of children who have contracted this horrible disease.

In 2010, Harvard economists Carmen Reinhart and Kenneth Rogoff published a research paper claiming a link between countries' national debt levels and economic growth. In particular, they argued that growth falls dramatically when debt levels exceed 90%. No matter that the paper had not undergone peer review, that other economists questioned the report and that other researchers were unable to replicate the results. And no matter that it was hard to work out a cause-and-effect mechanism that would kick in only above a certain threshold. The report was seized upon by fiscal hawks at think tanks and in governments across Europe and in the United States to justify massive government spending cuts. The resulting "age of austerity" has seen a change of government in Italy, riots on the streets of Athens, cuts to public services and benefits in the United Kingdom, and across-the-board budget cuts in everything from air traffic control to national parks in the United States. One might argue that politicians would have embarked on these measures in any event, but the fact remains that this paper provided intellectual cover and was cited far and wide to justify fiscal cutbacks.

Fast forward to 2013. The original report claiming a link between debt levels and economic growth has been debunked due to questionable methodological techniques and a particularly glaring Excel formula error. Even the International Monetary Fund, which championed "structural adjustment" and similar austerity measures for developing countries in the 1980s and 1990s, has begun to rethink its initial support of fiscal austerity. In the meantime, economic output remains anaemic, unemployment has skyrocketed across southern Europe, and in the UK slow growth means that government debt has risen not fallen.

Whether it's in social sciences like economics and sociology, or in the physical sciences like biology and physics, we can make the most confident predictions when there is a logical link between cause and effect, when the research is subject to peer review, and when other resaerchers using the same data reach similar conclusions. To quote the late astronomer Carl Sagan,

"What counts is not what sounds plausible, not what we would like to believe, not what one or two witnesses claim, but only what is supported by hard evidence rigorously and skeptically examined. Extraordinary claims require extraordinary evidence."

And so to climate change.

Scientists have for decades been researching the link between human-induced greenhouse gas emissions, rising global temperatures, and changes to the global and regional climate. Every ten years, the UN-mandated Intergovernmental Panel on Climate Change (IPCC) publishes a summary of these research findings, along with recommendations for government action. The IPCC is comprised of thousands of the world's best climate scientists - physicists, meteorologists, chemists, computer modelers. Their research is published and subject to international peer review. They flag past errors and describe how they have subsequently updated their findings. The findings and recommendations represent the consensus view of over 120 governments, are cautiously worded and full of caveats regarding potential uncertainties.

The IPCC assessments reports are a triumph of science and data over gut feel. The process is slow, methodical and cautious. After all, climate change is a global problem that affects almost every aspect of how we live, work and play. It is important to make sound decisions based on good information.

So what to make of the news that global CO2 concentrations are about to exceed 400 parts per million for the first time since the Pliocene Era, 3.5 to 5 million years ago?

More magical thinking, I'm sorry to say. Politicians worry that setting ambitious targets to tackle climate change will cause economic hardship and continue to subsidise fossil fuels, ignoring the costs of climate related disasters like heatwaves and drought, floods and storms, and irreparable damage to our forests and other ecosystems. Journalists looking for balance have given equal voice to a handful of climate skeptics and recognised scientists who quote the peer reviewed IPCC data. And the general population, unable to see directly the link between their lifestyles and rising global temperatures and lacking any direct incentives to take action, refuses to change its behaviour.

But all is not lost. The sudden push to vaccinate children in the United Kingdom shows that we can overcome magical thinking to make rational decisions. The rapid shift in opinion against a once ubiquitous study on debt and economic growth shows that people can change their minds and consider alternatives when new data becomes available.

The IPCC 5th Assessment Report will be released in late October 2013. As the impacts of climate change become more apparent to people around the world, I'm hopeful that governments, businesses, communities and individuals will review the IPCC findings, abandon gut feel, and seize this latest opportunity to tackle climate change and embrace a lower-carbon future.

Previously: Science- It Works on Mars and on Earth
Previously: Welcome to the Reality-Based Majority

Voluntary Offsets and the Backloading Brouhaha

noreply@blogger.com (Jamal (@JGoreCarbon)) — Fri, 26 Apr 2013 08:55:00 +0000

My previous posts about "backloading" and the EU ETS have focused on the implications for the compliance markets in Europe and elsewhere. In compliance markets, government regulators set the rules governing the supply of emission reduction allowances and offset credits. They also govern demand by setting the emissions targets that firms must meet by making internal reductions or purchasing permits and offsets.

Now I'd like to focus on what the backloading debate means for the voluntary carbon markets. The short answer is that backloading will have little direct impact, but the reasons are worth a longer discussion.

The voluntary market is much smaller than its government-created sibling, but it is difficult to overestimate its importance. The voluntary market is self-regulating. Its carbon offset credits are issued by independent standards bodies, and an increasing number of its largest market makers follow a Code of Practice governing how they do business.

This self regulation makes the voluntary markets exceptionally flexible and a source of innovation that helps improve the slower and more bureacratic compliance markets. All four of the protocols initially approved in California's cap-and-trade system were developed initially under the Climate Action Reserve, a voluntary carbon standard. A number of the carbon credit innovations that were pioneered by bodies such as the Gold Standard and the Verified Carbon Standard have allowed the United Nations carbon credit system to expand beyond large, industrial project types like refrigerant destruction, large hydropower and waste heat recovery. The project types favored by the voluntary carbon market, like clean cookstoves, village lighting, forest conservation and water purification can deliver greater sustainable development and have helped bring the benefits of carbon finance to poorer nations.

Voluntary market innovation is not limited to the projects. It's notable that California's fledgeling carbon market California has decided to use for its cap-and-trade transactions two private sector registries that were created for the voluntary carbon market to - due in large part to their responsiveness, quality and cost-effectiveness. And when the British government launched a short-lived effort to develop its own voluntary offset quality scheme, the market launched a more thorough and far-reaching system, twelve months faster, and for only one-tenth of the cost.

But perhaps the most important point that helps understand what makes the voluntary market special is that its carbon offset buyers choose to buy carbon credits! Voluntary market buyers take action of their own accord beyond or in advance of legislation to tackle their climate change impact.

This difference more than anything helps explain why the backloading brouhaha has little direct impact on the voluntary market. In the compliance market, emitters tend to reduce their emissions just enough to avoid paying penalties. If they cannot meet their reduction targets, they tend to buy just enough offset credits (called CERs) and allowances (EUAs) to avoid those penalties. And when those firms find they have exceeded their reduction targets? They sell their surplus allowances, even if their footprint is still far above zero. The economic recession made it very easy for many companies in the EU ETS to meet their reduction targets, nearly eliminating demand for allowances and offsets. Supply and demand - too many permits and insufficient demand drives CER and EUA prices in the compliance markets towards zero.

Compare that to buyer behaviour in the voluntary carbon market. The demand drivers for carbon credits could not be more different. Here companies pledge to reduce their net emissions - often
to zero - through a combination of internal reductions and voluntary offset credits. When voluntary customers fail to meet their reduction targets, they must buy more carbon credits to make up the difference. When they exceed those targets, they buy fewer credits - but they keep buying. Their reduction goals are sufficiently ambitious that it would be nearly impossible to reduce demand for offset credits to zero - at least for the foreseeable future.

Buyer behaviour in the voluntary market differs from the compliance market in another way. Absent the carrot and stick of government regulation, buyers use their carbon management programmes as a way to demonstrate good citizenship. As a result, many companies seek carbon offset credits from projects that do much more than reduce greenhouse gas emissions. Emission reduction projects that improve local livelihoods help corporate offset customers achieve their broader CSR goals. After all, which would you rather have on the cover of your CSR report, a photo of an industrial gas destruction project, or a photo of a family enjoying the benefits of solar powered lighting and safe drinking water? It is the value of these co-benefits that helps maintain prices in the voluntary carbon market, even during an economic recession.

With such different motivations for buyer behaviour compared to the compliance market, it is little wonder that the impact of policy measures like backloading would have little direct impact on the voluntary market.

However, compliance market policy failures can have an indirect impact on prices in the voluntary market. Actors in the compliance market have begun to take notice of the relative buoyancy of voluntary prices. In September 2012 the UN Framework Convention on Climate Change included the following statement in its meeting notes:

"Project participants and others engaged in the [Clean Development Mechanism] will soon be able to voluntarily cancel their CERs into an account in the CDM registry at the UNFCCC secretariat in Bonn, Germany. This could encourage expanded use of CERs for voluntary emission reduction, such as by companies using credits as part of a social responsibility programme, by event organizers wanting to offset their emissions, or even by individuals wishing to reduce their carbon footprint."

Just a few months later Christiana Figueres, the head of the UNFCCC, made the following Tweet:

It appears that a number of people are hoping that the relatively buoyant voluntary market can support CDM by serving as a source of demand for compliance credits. This is a great idea in theory. However, the primary CDM market was created to feed national and regional compliance schemes. The promise of CDM has mobilised a tremendous amount of climate finance to feed the compliance market. In 2011, the latest year for which figures are available, CDM was five times larger than the voluntary carbon market. Since that time, we have seen record issuances of carbon credits on the CDM.

It would be wonderful if demand in the voluntary market expanded rapidly enough to absorb the surplus from the CDM (or at least from the CDM's more community-oriented and renewable energy projects). The short-term impact of such an influx, however, would be to overwhelm completely the absorptive capacity of the voluntary market, driving prices towards zero and removing incentives to develop new and innovative voluntary projects. It would be akin to fitting all the passengers from the Titanic into one lifeboat. Rather than rescuing the compliance market, we would damage the voluntary carbon market, perhaps irreparably.

It's clear, then, that for all its inherent strengths, the voluntary carbon market remains vulnerable to poorly executed attempts to rescue elements of the compliance market. The most robust and sustainable fix for the compliance market's woes remains in the realm of politics. More specifically, national and regional leaders must show the courage to set ambitious reduction targets that accelerate the pace of action to fight climate change. The depressed prices on the EU ETS show that companies have been able to meet their current emissions reductions obligations more easily than we ever thought possible. Deepening emission reduction targets will accelerate the transition to a lower-carbon economy and strengthen the carbon markets by driving demand for compliance carbon credits and provide a sustained boost to prices.

Meanwhile, the voluntary carbon markets will continue doing what they do best: driving innovation and providing a vehicle for companies who want to take action beyond compliance to demonstrate their environmental leadership.

(Jamal Gore is Managing Director of carbon management firm Carbon Clear.)

More on Fixing the EU ETS

noreply@blogger.com (Jamal (@JGoreCarbon)) — Wed, 24 Apr 2013 08:48:00 +0000

The other day, I pointed out that the collapse in the carbon price on the EU ETS compliance market was down to politics, not an inherent failing of cap-and-trade. I concluded by pointing out that we need courageous political leaders willing to take faster action against climate change.

It seems I'm not alone in reaching this conclusion. Here's the article lead from yesterday's Point Carbon news website:

Of course, the voluntary carbon markets are relatively less likely to be held hostage by politics. Companies around the world increasingly are going beyond any compliance obligations to set ambitious emission reduction targets and buy quality carbon offset credits that reduce GHG emissions outside their organisational footprint boundaries. Carbon Clear is committed to helping companies control their carbon impact - we look forward to working with you.

The EU ETS, Backloading and the End of the Carbon Markets

noreply@blogger.com (Jamal (@JGoreCarbon)) — Mon, 22 Apr 2013 12:49:00 +0000

According to the news reports, the carbon markets are in trouble. Prices on the world's largest market, the EU Emissions Trading Scheme (ETS) are at an all-time low. Generic compliance-grade offsets from the United Nations Clean Development Mechanism trade for pennies. And the European Parliament just voted on April 16th to reject a move called "backloading" that would have helped to prop up carbon prices. Investment banks are closing their carbon trading desks, and clean energy project developers are looking at other revenue streams beyond carbon to support their activities.

What went wrong? And does this spell the end of the carbon markets?

The first thing to note about the carbon markets is that they are an artificial construct. Climate change is a problem mainly because governments, companies, and households normally are unaware of the cost their own environmental pollution. Carbon dioxide is colourless, and odourless, and the warming effects of greenhouse gas emissions can take fifty years or more to become evident. Absent many direct feedback mechanisms, few organisations would put a price on their emissions without government intervention.

Building on the experience of air pollution emissions trading in the US, governments around the world have begun setting up greenhouse gas emissions cap-and-trade schemes. Regulators create carbon markets by setting an overall cap on emissions (thus stimulating demand) and by setting rules on how emissions allowances and carbon offset credits can be used (thus creating a regulated source of supply). This basic approach has been the same whether the carbon markets are set up in California, Australia, China, New Zealand or the European Union. Remember, emissions anywhere contribute to climate change everywhere, and a reduction anywhere has the same general climate change benefit.

In the EU, regulators established an overall emissions cap and then set companies free to meet that cap in the most cost-effective manner, so long as they followed the rules. The goal was to fulfil the European Union's greenhouse gas reduction targets under the Kyoto Protocol at the lowest overall impact to the economy. The EU ETS is a price discovery mechanism that allows firms covered under the cap to determine who can reduce emissions most easily. Those firms that can cost-effectively meet and exceed their reduction targets can sell any savings below their cap on the market. Firms that for whatever reason are unable to meet their targets must buy excess permits from their more carbon-efficient counterparts, purchase certain allowable types of international offsets (which represent certified reductions in developing economies' GHG emissions), or else pay a hefty fine.

And it worked! While early predictions were that the marginal cost of emission reductions under the ETS would be at least €25 during the current compliance period, prices are instead hovering just above €3. Put another way, companies in the European Union have been able to meet their GHG emission targets during this period at minimal overall cost to the economy. Cutting carbon has been cheaper and easier than we ever thought possible. That's the good news story.

The bad news is that this low price has done little to spur low-carbon investment. €3/tonne is equivalent to barely half a Euro cent or 0.4 pence per kWh on household and business electricity tariffs. When buying pollution permits becomes the cheapest option for meeting regulatory targets, few firms will spend the money to improve energy efficiency or switch from coal to natural gas and renewables. Such a state of affairs is particularly troubling for investments in energy infrastructure. A company that builds a coal fired power plant instead of a series of wind farms is locking in 30-50 years of carbon-intensive energy production. What we need, then, is a carbon price that is high enough to provide incentives for green investment, but not so high that it creates economic hardship.

So how did this happen? What went wrong?

Put simply, regulators did not anticipate the recession of the past five years. The emission targets set in 2007 assumed that economic growth - and GHG emissions - would continue to rise each year in the absence of the Emissions Trading Scheme. In the real world, the housing market collapsed, companies shed employees and closed offices, and output from the emissions-intensive steel and cement industries collapsed.

The result was like asking an Olympic sprinter to run 100 meters in 20 seconds - it was far too easy. Those challenging emission reduction targets suddenly became achievable with little or no effort, which meant that few companies needed to buy excess permits and many had surplus allowances for sale. Supply and demand - when sellers outnumber buyers, expect the price to fall.

What's the solution? If achieving a higher carbon price is the goal, regulators can either boost demand for emission reduction credits or restrict supply. Increasing demand is best accomplished by setting even stricter carbon targets. If a firm can easily achieve a 1.4% annual reduction, regulators could set a 2% or even 3% reduction instead. This approach has the added benefit of accelerating emissions reductions in the near term - when we most need them - while providing greater incentives for long term investment.

For various reasons EU regulators decided that boosting demand was a political impossibility in the near term and that a better short term fix was to focus on supply. The preferred tool, "backloading", restricted the number of allowances members states could sell into the current depressed market. This would create a modest shortfall, forcing firms to use up some of their excess allowances. Member states would sell those "backloaded" allowances several years from now when, presumably, the economy had improved and increased corporate GHG emissions would better soak up some of the supply without depressing prices.

Notice that the backloading proposal did not propose to change the EU's overall emissions reduction ambition. It merely shifted in time the overally supply balance of emission allowances. Even this move, however, creates winners and losers and EU parliamentarians argued bitterly on behalf of their respective constituencies' short-term interests. Some even argued that the EU Parliament should not meddle in the market - ignoring the fact that the EU ETS is itself a creation of the EU Parliament.

In the end, the backloading proposal was rejected. With no prospects for increasing near term demand for carbon credits or decreasing supply, prices on the EU ETS have continued to slide. [Update 24April - prices have recovered slightly on news that the backloading proposal may be reintroduced this summer.]

The important point here is that the current problems with the EU ETS are not due to the carbon markets. They are working exactly as they were designed, finding the lowest-cost emissions that can meet government targets. The problems facing the EU ETS are political. The market has shown that it can meet current targets much more cheaply than envisioned. Just imagine what could be achieved with a cap that drove the carbon price to €25-€30, a price that was politically palatable just a few years ago. But the European Parliament has not set a more ambitious target.

Imagine how many investment decisions might be swayed with the slightly higher carbon price that would come from backloading. But the backloading vote failed. The decisions about more ambitious emission reduction targets, backloading and other approaches are being made not by carbon traders but by country governments and EU parliamentarians.

The lessons for other governments that are contemplating or implementing market based emission reduction schemes are clear:

Do not abandon carbon trading - it gives companies the flexibility to meet emission reduction targets at least cost, and often cheaper than you can imagine.
Don't be afraid to set ambitious targets.
Remember that the carbon market is a regulatory construct. Companies crave certainty and do not want rules to change too often, but success fighting climate change requires regulators to leave enough flexibility to respond to unforeseen events.

As I've noted previously, fixing the compliance carbon market in the EU will require inspired political leadership. Citizens are calling for urgent action on climate change. The carbon market has the tools to deliver this action. What is needed now is the political will.

A Plague of Giant Mosquitoes

noreply@blogger.com (Jamal (@JGoreCarbon)) — Wed, 13 Mar 2013 14:07:00 +0000

Florida is bracing itself for an onslaught of "monster-sized" mosquitoes this summer.

Psorophora ciliata, often referred to as gallinippers, are the largest and one of the most aggressive species of biting mosquito in the United States. They are nearly 20 times larger than typical mosquitoes, hunt both day and night, can bite through clothing and leave painful wounds.

Last year's hurricane season led to large flooded areas across the state, the perfect habitat for gallinippers to lay their eggs. Entomologists expect a bumper crop of gallinippers as a result, which is bad news for everyone.

What does this have to do with climate change and carbon reduction? Well, the IPCC and Environmental Protection Agency expect climate change to bring more frequent storms and heavier downpours in that part of the country. And Psorophora ciliata requires flooded, low-lying areas for its eggs to hatch. A plague of gallinippers should therefore not be a surprise to anyone who follows the EPA predictions.

I can't say with perfect confidence that climate change is behind the rise of the monster mosquitoes. But as I've said before, this is what climate change looks like.

More on the CRC and Carbon Offsets

noreply@blogger.com (Jamal (@JGoreCarbon)) — Tue, 19 Feb 2013 10:52:00 +0000

One of the reasons participation in the UK's Carbon Reduction Commitment Energy Efficiency Scheme is a poor alternative to offsetting your company's carbon emissions is that the Government has no obligation to use your CRC "tax" payments to spur greenhouse gas reductions. A second reason is because, by DECC's own admission, the £12 per tonne permit price "may have a marginal effect on decisions to invest in energy efficiency relative to overall energy prices".

Pulling back to look at the big picture provides us yet another reason why companies participating in the CRC should not abandon carbon offsetting as a tool to fight climate change: the CRC ignores a huge portion of most companies' carbon footprint.

The CRC focuses on emissions from stationary energy consumption - particularly the use of electricity and gas in buildings. In traditional carbon reporting parlance, the CRC focuses on Scope 1 and 2 energy emissions. It does not cover other types of Scope 1 emissions - from refrigerant leaks, from land use and forestry activities, or from burning fuel to power a company's vehicles. The CRC is also silent on most Scope 3 emissions, which come from third party activities undertaken on the company's behalf. This includes taxis, commercial air travel, hotels, and outsourced goods and services. Finally, even that limited CRC footprint is focused only on a company's UK operations - all emissions from overseas assets are excluded.

From the point of view of government regulators, these exclusions make sense. After all, the UK would risk an international outcry if it unilaterally imposed a carbon tax on company operations in, say Germany or China. And with buildings responsible for the lion's share of UK emissions, there is a strong case for focusing on this area.

For many companies, however, an emphasis solely on the CRC footprint marks a retreat from best practice. The GHG Protocol and ISO 14064 reporting standards require firms to report all Scope 1 emission sources, not just energy, and recommend further that firms measure and report their Scope 3 emissions whenever possible. Therefore, relying on the CRC footprint would not be enough to demonstrate a firm's low-carbon leadership - even if the CRC were to begin driving investment into emission reductions on a massive scale.

For professional services firms the situation is even worse. Business travel often represents more than 50% of the carbon footprint of a major accounting firm, consultancy or auditor. As a recent infographic in the New York Times demonstrates, frequent long-haul flights can easily swamp an individual's or company's other emission reduction efforts. The problem for professional services is that these companies are selling time and brainpower. They are often most effective when they can sit side by side with their clients to solve business problems. And when their clients are all over the globe, that means they have to travel. A lot. Many of these companies are CRC participants, but their CRC performance says little about their overall GHG impact.

Let me be clear: the CRC has helped us make progress in our efforts to decarbonise the UK economy. It has raise awareness of climate change among finance directors and other corporate leaders in a way that would be difficult to accomplish with voluntary measures alone. Furthermore, it gives government the tools to drive further reductions in future. However, corporates who wish to demonstrate their low-carbon leadership must go further. They can set ambitious near- and long-term reduction targets that go beyond compliance, and they can invest in verified carbon offset credits that achieve guaranteed emission reductions, right here and now.

Jamal Gore is Director at carbon management specialist firm Carbon Clear. All opinions are his own.

Carbon Offsets and the CRC "Tax"

noreply@blogger.com (Jamal (@JGoreCarbon)) — Fri, 08 Feb 2013 17:28:00 +0000

One of the more surprising findings from Carbon Clear's 2012 research into the carbon performance of the FTSE 100 was the fact that only a small fraction of the country's largest companies offset their greenhouse gas emissions. In follow up conversations with some of these firms, representatives gave me a number of reasons why they don't offset, but one rationale has been cropping up with increasing frequency. To paraphrase: "We don't need to offset to demonstrate our low-carbon committment because we're paying the CRC tax."

Such a view might seem reasonable, but falls short of the mark.

The CRC requires large firms that are not covered under the EU ETS to report their energy emissions and pay a £12/tonne permit fee to the Government. In an ideal world, those accumulated payments would go towards a range of emission reduction activities, from tree planting and forest restoration to incentives for clean energy investment, to support for energy efficiency in homes and offices. However, CRC revenues, estimated at over £1 billion, are not earmarked for green initiatives. The money goes into general revenues.

I'll say that again: There is no direct link between CRC payments and Government spending on emission reduction measures.

At best, the CRC drives emission reductions by helping companies become more aware of their energy consumption, and by very slightly increasing firms' energy bills. These measures will undoubtedly have some impact. But with energy a relatively minor expense at most companies covered by the CRC, and permit fees equal to only about 10% of electricity costs, these incentives are relatively weak.

Many sustainability experts hoped that the CRC's Performance League Table (PLT) would provide a reputational driver that encourages firms to reduce their emissions, but there is little evidence to suggest the PLT has had much impact. In its first year, PLT rank was assigned based on implementation of Early Action Metrics that would help a company collect better data, not on emission reductions.

The second round of league table results has been delayed for several months, apparently because so many companies have asked to refile their data with the Environment Agency. What is more, the currently delayed league table will be the last of its kind after Government announced in December 2012 that this element of the CRC will be scrapped. So much for reputational incentives.

All of this makes very tenuous the link between CRC participation and ambitious efforts to tackle companies' climate change impact. To be clear, the CRC has helped to put climate change and carbon reporting on the corporate agenda in the UK, and many firms will use the increased awareness of their energy consumption to drive savings. However, most of the resultant savings will be at the margin, and as we have noted previously the vast majority of a company's greenhouse gas emissions will continue unabated, and then remain in the atmosphere for decades or centuries.

There are only two real ways to tackle a company's carbon impact when it matters most - that is, right now. The first is to reduce net emissions within the company's footprint boundary - through energy efficiency, behaviour change, process improvements, reforestation and other measures. The second is to reduce emissions outside the company's footprint boundary, at the same rate or greater than the company's own emissions - by supporting verifiable emission reductions from another source. That second approach is called "offsetting".

Taken together, ambitious internal reductions and high quality offsetting form the core of a comprehensive carbon management strategy.

The CRC remains a legal requirement for many UK companies and it can make a contribution to the low-carbon agenda. But tax or not, the CRC is not a substitute for carbon offsets when it comes to fighting climate change.

Carbon Offsets - The Air Passenger Duty Excuse

noreply@blogger.com (Jamal (@JGoreCarbon)) — Tue, 29 Jan 2013 15:57:00 +0000

Aircraft are one of the fastest growing sources of greenhouse gas emissions worldwide. While the per-kilometer carbon emissions from flying economy class are about the same as those from driving alone in a car, an airplane can cover any given distance much, much faster. You might generate the same CO2 emissions from a single 12-hour flight as you would from a year of driving. The climate change impact becomes even greater when you consider the indirect warming impacts of high altitude flights, which can double the overall warming compared to burning those same fossil fuels on the ground.

What is more, aircraft flights are often discretionary - at least compared to other greenhouse gas sources like producing food, heating our homes and generating electricity. As a result, flight emissions tend to come under special scrutiny by sustainability teams, environmental campaigners, and - importantly - politicians.

Which brings us to Air Passenger Duty (APD).

In December 2006, the then-Chancellor, Gordon Brown, announced that the Government would double Air Passenger Duty rates for UK flights. The rates were raised again in 2009, and then in 2010, and again in 2012. They are scheduled to rise again in April 2013. APD was originally introduced in 1993 solely as a means of raising revenue from the relatively lightly taxed airline industry. However, Brown justified doubling the APD on environmental grounds, and hinted that it would be earmarked to "secure extra resources...for our priorities, such as public transport and the environment." According to the BBC, the Government continues to make environmental claims for APD rises, and campaigning organisations like Greenpeace argue that increases help ensure that airlines pay their proper environmental cost.

Air Passenger Duty costs £13 for a short-haul flight, rising in tiers up to a maximum charge of £92 for flights over 6,000 miles, and brings in over £2 billion in revenue. The duty is several times the cost to purchase carbon credits that would balance out those flight emissions. It might seem reasonable, therefore, for the average passenger or company travel coordinator to avoid purchasing carbon offsets, on the assumption that they have more than paid for the environmental cost of their flights already.

It might seem reasonable, but it would be wrong.

Anyone familiar with the story of the Carbon Reduction Commitment Energy Efficiency Scheme will be unsurprised to learn how the Government uses the revenues from thAPD. A quick recap:iIn December 2011, the Chancellor announced that CRC revenues at £12/tonne CO2 would no longer be "recycled" back to participating companies as an incentive to save energy. Nor would they be "hypothecated" and earmarked solely to environmental and energy efficiency initiatives. Instead, the funds now go into the general revenue pool for use as the Government sees fit.

The same applies to Air Passenger Duty. While the purchase of a quality carbon offset credit directs funds towards a real emission reduction that has been verified by an auditor, Air Passenger Duty payments go into the general tax revenue pool, where they are added to funds from every other source. There is no requirement to hypothecate those revenues towards emission reduction activities, and no direct link between APD revenues and Government spending to tackle climate change.

APD is not even structured to provide strong incentives to reduce emissions. Because it is levied on a per-passenger basis and not per plane or per litre of fuel, APD provides little direct incentive for airlines to fly fewer, fuller planes, or to fly newer, more fuel efficient aircraft.

With an increasing number of experts concerned that we are on track to disastrous climate change, it is more important than ever that we use all the tools at our disposal to reduce global emissions. However, APD has only a marginal impact on aircraft emissions. The revenue is not reinvested directly into emission reduction activities and its pricing structure does not drive down passenger numbers effectively. In its current form, then, APD is not a credible alternative to offsetting your flight emissions with carbon credits.

If you can avoid flying, then by all means do so But if you must fly, there is no real alternative to carbon credits to offset those emissions.

That Time I Took Advice From a Petroleum Engineer

noreply@blogger.com (Jamal (@JGoreCarbon)) — Mon, 14 Jan 2013 13:40:00 +0000

One of the most important conversations I ever had came about entirely by accident.

One sunny afternoon in the early 1990s I found myself sharing a picnic table with a graduate student from Stanford University's Petroleum Engineering Department (the university changed the department's name in 2006 to Energy Resources Engineering). It was my senior year and the Exxon Valdez oil spill in Alaska was still a recent memory. I was understandably curious to learn why someone would choose to pursue this career path.

"Petroleum is amazing stuff," he said. "Nature has given us these amazing long-chain hydrocarbons. We can break them apart, recombine them and make almost anything. Burning it is probably the least creative thing we can do!"

"That may be," I responded, but those long-chains hydrocarbons are also a great energy source, and we seem to be burning an awful lot of them, when we're not spilling them in the ocean."

"Yes," he conceded, "But we don't have to! We can make electricity any number of ways, and there are plenty of other things we can burn to generate heat. Besides, it's better for the environment. So let's use those other resources for energy and do something more useful with the petroleum."

And so here I am, 20-odd years later. As a justification for his chosen career path, that petroleum engineer's argument may have been self-serving. After all, the vast majority of the petroleum that goes to refineries is still burnt as fuel - only a minority of petroleum engineers get to play with the substance as a chemical feedstock.

But he described very nicely the rationale behind everything I've done since then.

Burning fossil fuels for energy is easy, but it isn't particularly smart. Making a transition to a low-carbon future means finding ways to live a satisfying life without imposing unacceptable long term costs on families, communities, and the planet. I founded Carbon Clear nearly eight years ago to help accelerate that transition. Since then, we've helped hundreds of companies improve their response to the challenges posed by climate change.

I wonder whether that aspiring petroleum engineer remembers me or that casual afternoon conversation at Stanford all those years ago.

I certainly remember him.

Related posts:
Making Renewables Work: Understanding Energy Density

Airlines, The EU ETS and Biofuels

Peak Oil: Will We Freeze or Roast?

UK Mandatory GHG Reporting - Data Collection Begins NOW

noreply@blogger.com (Jamal (@JGoreCarbon)) — Mon, 07 Jan 2013 12:09:00 +0000

Happy New Year from the Carbon Clear team.

A reminder for companies affected by the UK's mandatory greenhouse gas reporting regulations: If your fiscal year follows the calendar year, your 2013 financial report must include carbon footprint data for the entire year. That means you should already be recording your greenhouse gas emissions data against Defra's new requirements.

Not sure if you're covered by the regulations? Don't know what to include in your footprint report? Want to be certain your approach follows best practice? We're here to help you make the right start - just get in touch.

Previously:

Defra's Mandatory GHG Reporting: Some Answers, Even More Questions

Mandatory Carbon Reporting: From Compliance to Competitive Advantage

Mandatory Carbon Reporting: Lessons from the CRC

Mandatory Carbon Reporting: What's the Big Deal?

The Day After Tomorrow

noreply@blogger.com (Jamal (@JGoreCarbon)) — Sun, 30 Dec 2012 22:33:00 +0000

The latest issue of Scientific American provides an excellent summary of the state of the Arctic polar ice cap, or what's left of it.

For those of us concerned about climate change, and everyone else, the ice caps are of tremendous importance. Those vast white expanses reflect most of the sunlight that strikes their surface back into space, whereas the surrounding seawater absorbs most of the solar energy and re-radiates it as heat. The logic is straightforward: more ice = less warming; less ice = more warming.

According to Mark Fischetti's SciAm article, the amount of sea ice that remained after the annual Arctic summer thaw (aka "minimum ice cover") fluctuated around six million square kilometers for the two decades before 2000. Then it began to shrink -due, presumably to global warming. When the IPCC published its last assessment report in 2006, the scientific consensus was that the shrinking ice would mean ice-free summers towards the end of the century.

Then something happened. In 2007, the summer melt began to accelerate, and the ice that reformed in the winter was not as thick. Since then the ice has continued to retreat. In 2012 the minimum ice cover hit a record low of 3.4 million sq. km - barely 50% of the average a few decades ago. A few years ago the IPCC thought we'd have an ice free Arctic summer by the end of the century. Now climate scientists think we could see it as early as 2020-2030.

2020-2030! That's no time at all - practically the day after tomorrow. We don't have much time left if we want to avoid that outcome.

And I do think we should do everything we can to slow the arctic ice melt. Another article, by Charles H. Greene in the same issue of Scientific American points to more links between climate and weather. In particular, Greene describes how a warming Arctic affects the jet stream and allows it to fluctuate more widely in response to seasonal oscillations like El Nino and the North Atlantic Oscillation. When the jet stream dips further south than normal we get unforgiving wintery weather. When it surges northward we get record heatwaves in March. Given the oscillations currently in place, Greene argues that "the deck may be stacked for harsh outbreaks during the 2012–2013 winter in North America and Europe."

What does a "harsh outbreak" look like? Here's how it looked in Eastern Europe earlier this year, under 10-15 feet of snow:

Not fun. 35 people died in that part of Romania in two days. Images like that remind me of the 2006 Hollywood disaster flick "The Day After Tomorrow". While that was a movie, and not a prediction, warnings about the near term impacts of Arctic warming are getting worryingly specific. The lesson- the faster the ice melts, the more things look like a disaster movie.

But catastrophic climate change is not inevitable - not even now, after yet another global climate summit where progress is measured in half-steps. Individuals, businesses, communities and nations can take action now to slow the buildup of greenhouse gases in the atmosphere. Simple no-cost actions to change behaviour, money saving investments in energy efficiency, resilience-boosting renewable energy investments and use of the carbon markets to spur similar measures around the world - all of these make a difference. There is no need to wait for a global treaty in order to set ambitious targets and embrace a lower-carbon future.

We can start today. Or, if you prefer to get things started on New Year's Day, we can start the day after tomorrow.

Defra's Mandatory GHG Reporting: Some Answers, Even More Questions

noreply@blogger.com (Jamal (@JGoreCarbon)) — Wed, 19 Dec 2012 11:28:00 +0000

The UK's Department for the Environment, Food and Rural Affairs (Defra) has been holding consultation workshops over the last three days to get feedback on the proposed guidance document for the Mandatory Greenhouse Gas Reporting legislation that will go through Parliament next year. Carbon Clear and other members of the industry organisation we helped found, ICROA were on hand to lend our expertise and learn more about Defra's intentions.

There have been a few changes to the proposed legislation since the consultation draft was released in July. Most notably, companies now have to include their GHG emissions totals in their Directors' report only for fiscal years ending after 1st October 2013. This is a change from the 1st April date that Defra originally proposed, but there is no time for complacency.

If your company's fiscal year follows the calendar year, you need to start collecting your data as of 1st January - two weeks from now. Are you ready?

Defra clarified that the GHG footprint report should state totals in terms of carbon dioxide equivalent (CO2e), but that companies should be including emissions data from the 6 main Kyoto gases (carbon dioxide, methane, nitrous oxide, perfluorocarbons, sulfur hexafluoride, and hydrofluorocarbons). The newest addition to the Kyoto greenhouse gas list, nitrogen trifluoride (NF3) has been excluded from the list - according to Defra's representative at the consultation, they cannot include it until Parliament amends the Climate Change Act.

One of the concerns we heard during the initial consultation process was that Defra seemed to be reinventing the wheel - coming up with its own footprint boundary definitions that do not match the ones used by popular standards like ISO 14064-1 and the WBCSD/WRI GHG Protocol. It turns out there is a reason for the discrepancy - the new requirements integrate with the country's largest pieces of existing legislation, the Companies Act. What is more, the reporting legislation does not oblige businesses to use a specific standard. As a result Defra has attempted to develop their carbon measurement rules using terminology consistent with the Companies Act, and in a way that does not give preference to any one existing footprint standard. Easier said than done!

This approach means that there is still considerable ambiguity in the legislation and even in the guidance documents. Questions remain about the use of intensity ratios, Defra's definition of Scope 2 emissions, whether and how companies can include their emissions from agricultural and land use activities, and range of other subjects. While the final draft of these documents will address some of these points, they will still leave room for interpretation by companies, assurance providers and - importantly - enforcement authorities.

Defra has, importantly, clarified the enforcement aspect of the legislation. They note that the Conduct Committee of the Financial Reporting Council will enforce the provisions of the legislation, and can use section 456 of the Companies Act to obtain a declaration that the annual report of a company does not comply with the requirements of the Act. They also note that Section 397 of the Financial Services and Markets Act means a person who makes a misleading or false statement is liable to a fine or up to six months' imprisonment. These enforcement measures make it more important than ever for companies to ensure their carbon footprint report meets the requirements of the law.

Carbon Clear will continue working with companies throughout the year to help them assess their readiness for Mandatory Greenhouse Gas Reporting, and put in place measures to comply with the requirements of the law. Please contact our carbon advisory team to find out what you should do next.

After Doha: Living in a 3-Speed World

noreply@blogger.com (Jamal (@JGoreCarbon)) — Wed, 19 Dec 2012 10:12:00 +0000

It's December, and that means we're once again picking through the results of a two-week United Nations climate change conference in search of meaning.

The UNFCCC website contains the text of all the official decisions reached in Doha. There's enough in there to keep the climate policy wonks busy for days.

But what does all of this mean for day-to-day practitioners involved in the fight against catastrophic climate change? It means, among other things, that we are living in a three-speed world. The UN negotiations are meant to pave the way for a unified international emissions reduction framework, with a global emissions reduction target that trickles down to individual country governments, and then to organisations and communities. When the Kyoto Protocol was drafted back in 1992, the plan was for a coordinated approach that ensures everyone made a fair contribution to truly ambitious global emission reductions.

With each subsequent climate change conference - from Bali to Copenhagen to Cancun to Durban to Doha - the limitations of this approach have become apparent. Government negotiators bicker over details small and large, for reasons of national sovereignty, economic advantage or sheer principle. The negotiating text, consequently, has splintered into parallel tracks, each of which must be agreed by consensus by 194 countries plus the EU - no majority voting here! With each subsequent round, the pace of negotiations has slowed, and the level of ambition seemingly has diminished.

In our three-speed framework, we'll label UN-speed "super-slow".

The news is slightly better at the country level. The UK has set an ambitious 2050 reduction target and gradually is devising measures to meet a series of 5-year carbon budgets. Australia has implemented an economy-wide cap and trade scheme to achieve its emission reduction targets. So have New Zealand, South Korea and California (a U.S. state with an economy larger than many nations). Meanwhile, a host of other countries are developing national and regional cap and trade schemes, implementing some form of carbon tax, or are rolling out various greenhouse gas reporting regulations and financial incentives. And of course, the European Union has deepened the reduction targets linked to the granddaddy of GHG cap and trade mechanisms, the EU ETS.

These are encouraging moves, and can take us part-way towards our global emission reduction targets. The problem is that these are piecemeal efforts that are dependent in most cases on the whims of elected legislatures. It is difficult for companies that operate under this system to make long term plans when the scheme may change with the next election. What is more, the lack of international coordination encourages "environmental arbitrage", with some companies threatening to base their business investment (and employment) decisions on the relative cost of climate change legislation in different jurisdictions. Real or not, these arguments about economic competitiveness discourage many governments from taking more ambitious action to drive emission reductions. At the country level, then we have real signs of progress, but fragmentary and subject to reversal. Let us call national-speed "medium-slow" but inconsistent.

And then there is the business community. Taken together, the footprints of the 350 largest listed companies on the FTSE are greater than the UK's total direct emissions. As our carbon maturity assessment showed, many companies are going far beyond their legal obligations to tackle their climate change impact. Some companies have already achieved reductions of 20% or more and have set reduction targets that drastically outstrip those contemplated by governments or the United Nations. In the U.S., Walmart has reached out to its global supply chain of over 100,000 businesses to help them evaluate and improve their environmental performance.

In the UK, meanwhile, Unilever is working with its customers to help them use its products in a more sustainable manner and Centreparcs has rolled out an incentive scheme to help employees save energy at home. Other British firms, like Marks & Spencer and Sky, have gone "carbon neutral" taking immediate responsibility for 100% of their emissions* even while they work towards longer term footprint reductions.

We may be nearing a tipping point in which the business community as a whole embraces the need for an ambitious low-carbon transformation, but most of the action to date has been confined to a handful of global leaders, and primarily consumer facing brands. The emissions-intensive extractive industries have done significantly less to measure, report, reduce and offset their footprint beyond the bare minimum required by legislation, and efforts within other industry sectors remains spotty at best.

Let us call business-visionary-speed "fast", even as we acknowledge that there are not nearly enough companies in this category.

The Doha climate change negotiators reaffirmed this three-speed model of the world. COP 18 in Doha gave us a global commitment to extend the existing Kyoto Protocol mechanisms until a new global agreement is negotiated in 2015, and this new post-Kyoto agreement is expected to come into force no later than 2020. Encouragingly, some countries and negotiating blocs unilaterally increased their reduction targets. Distressingly, many of the biggest polluters - China, the U.S., Japan, Russia and Canada - have refused to commit to "Kyoto 2", but will continue to participate in negotiations. All of this is better than no effort to reach a comprehensive agreement at all, but it lacks the sense of urgency required to keep us within the 2 degree warming target required to stave off the worst climate change impacts.

While the global-level debates dragged on nearly 48 hours beyond the official deadline, individual country governments moved faster. Maldives pledged to become carbon-neutral by 2020, while Norway has made an unconditional 30% reduction pledge below business as usual over the same period. A host of companies, meanwhile, have pledged even greater reductions and a growing number are declaring themselves carbon-neutral every day.

Speaking in 2011, Christiana Figueres, Executive Secretary of the UNFCCC acknowledged the importance of the business community in this three-speed system, noting, "It is essential that from the outset we take into account the needs of the private sector, as, in the end, it will be the engine for action."

I think Secretary Figueres's observation captures the most important lesson from the recent Doha climate change conference. This three-speed system is a reality. We will - we must - continue working towards binding agreements that ensure every nation is doing its part to reduce global emissions levels. But the importance of that effort does not diminish the impact that pioneering nations can have when they set their own targets to drive emission reductions in advance of a global pact. If anything, it is more important than ever for those countries to show leadership so that the rest of the international community can follow suit.

And the sometimes stuttering pace of national regulations does not dim the light shone by visionary corporate leaders, who go beyond compliance to achieve ambitious emission reductions in their operations, with their suppliers and customers, and through the use of offsets beyond even the boundaries of their own footprint. Corporate leadership in our three-speed system can give country governments the courage to increase the scale of their ambition and encourage a faster transition to a low carbon world.