Global Climate Change Breaking Down the Carbon Issue Shirin Belur, Brooke Golden, Elizabeth...
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Transcript of Global Climate Change Breaking Down the Carbon Issue Shirin Belur, Brooke Golden, Elizabeth...
Global Climate ChangeBreaking Down the Carbon Issue
Shirin Belur, Brooke Golden, Elizabeth Lombardi, Jennifer Malkin, Iris Rave
Climate Change: Causes
• Over the past century, the Earth has increased in temperature by about .5 degrees Celsius
• Scientists believe this is because of an increase in concentration of the main greenhouse gases: carbon dioxide, methane, nitrous oxide, and fluorocarbons
• Carbon dioxide is undoubtedly the most important greenhouse gas in the atmosphere
The Climate Change Debate: Carbon
U.S. greenhouse gas emissions come mostly from energy use.
Fossil fuels such as oil, coal and natural gas supply most of the energy needed for industries & households.
Energy-related carbon dioxide emissions, resulting from petroleum and natural gas, represent 82 percent of total U.S. human-made greenhouse gas emissions.
The Climate Change Debate: Carbon
U.S. greenhouse gas emissions come mostly from energy use.
Fossil fuels such as oil, coal and natural gas supply most of the energy needed for industries & households.
Energy-related carbon dioxide emissions represent
82 % of total U.S. human-made greenhouse gas emissions.
Greenhouse Gas Emissions by Sector
Largest Contributors:
1. Power stations
2. Industrial Processes
3. Transportation Fuels
Key Stakeholder Groups• Advocacy
– For: Conservation Fund– Against: Carbon Trading Watch
• Trading Markets– CCX, EU
• Offset Providers– Non-Profit: Carbonfund.org– For-Profit: Climate Care
• Business– Highly Regulated: Energy– Voluntary: Food & Retail
• Government– International, U.S., State
• Consumers– Engaging in offsets of personal
behavior• Impacted Communities
– Offset programs built in the community (wind, solar and reforestation)
Advocacy
Trading Markets
ImpactedCommunities
Offset Providers
Business
Government
Consumers
CARBON OFFSETS
Ways to Reduce Carbon
• Constrain use (efficiency)
• Carbon offsetting
• Use of renewable energy sources as substitutes in operations
What are Carbon Offsets?
The process of reducing a ton of carbon dioxide emissions in another location for the emissions you cause in either your home, office, commute, travel or other activities that use energy and cause emissions.
Enable anyone to reduce their climate footprint by supporting projects, typically energy efficiency, renewable energy, sequestration, biomass, etc. that reduce carbon dioxide emissions to offset one’s own climate footprint.
Power Pool
Generic Electricity Purchase
Households/ Businesses
PA Biomass Marketing PartnersProgram sponsor, marketing support; no purchase obligations
GreenTags – EmissionsReductions Rights $ payment
to project for Green Tag futures
$ TaxDeduction
$ to purchaseCO2 offsets forhousehold emissions
Non-Profit Accepts Green Tag Donations
& Retires Emission Reductions
DonatedGreen Tags
BROKERS:Contracts for Green Tags, providesprogram design & fulfillment & certification
$
Offsets- How they Work
Carbon Trading
Carbon Emissions Trading is the trading of permits to emit carbon dioxide
– Provides an incentive for firms to reduce emissions: they profit from selling credits to less efficient firms
World’s only mandatory trading program is European Union Emissions Trading Scheme, (Kyoto Protocol) which caps emissions that EU countries can emit.
Trading has increased by nearly 300% in recent years
Carbon Trading- How it works
1. A country caps emissions at a certain level
2. Issues permits to firms and industries to emit a stated amount of carbon dioxide over a time period
3. Firms trade these credits in a free market.
4. Firms whose emissions exceed the amount of credits they possess are heavily penalized.
The Debate: Pros and ConsPros
– Helps to maintain current or slowly reduce GHG emissions to historic levels.
– Forestry projects can have additional socio-economic and environmental benefits, such as biodiversity.
– Promotes voluntary enactment (by states and cities) of the Kyoto Protocol.
– Raises visibility of Climate Change issue.
Cons– Does not promote energy
conservation, allows companies and individuals to take a “business as usual” approach.
– Key offenders profiting most from trading scheme
– Not scientifically possible to equate the atmospheric absorption CO2 by trees with CO2 emissions from fossil fuels.
• And, trees may burn or be destroyed, thereby releasing CO2 back into the atmosphere.
– Lack of regulations for voluntary offset programs, no systemic framework or guidelines to ensure programs are credible.
Role of Business on this Issue
Businesses of all sizes and types play a role in climate change.
More than a quarter of U.S. GHG emissions are from transportation, a component to nearly all businesses.
According to the U.S. Department of Energy, office buildings account for 19% of all commercial energy consumption.
In the U.S., about two-thirds of electricity results from the burning of emissions producing fossil fuels.
Operational Exposure & Brand Value at Risk Due to Climate Change by Sector
Greenhouse Gas Emissions Linked Directly to Sector Operations
HIGH Carbon Sectors
Airline– International aviation emissions are currently not covered by the Kyoto Protocol– Despite their high exposure to climate change, their tangible value at risk
depends on the format and timing of future regulation– Fuel is high cost (represents 15% of revenues), but maximizing engine efficiency
doesn’t necessarily mean minimizing CO2 emissions– No airline has sought to take leadership position on carbon responsibility– Brand value at potential risk from climate change is 50% of market value
Oil & Gas– Energy intensive manufacturing sector– Shell and BP are well known for embracing climate change as CSR issue– Little consumer interest in company’s own emissions– Brand value at potential risk from climate change is 2-3% of market value
HIGH Carbon Sector Case Study: Oil & Gas
BP– Leads energy sector with its commitment to climate change
– Pursuing efficiency in our own operations through wind and solar projects
– Creating cleaner products for customers
– Contributing to an informed debate through policy initiatives
– Innovative internal carbon trading scheme that resulted in a 20% emissions reduction between 1998-2001
– BP Global Choice scheme in Australia – customers can purchase offsets for their vehicle fuel use
MEDIUM Carbon Sectors
Food & Beverage Production– Long term potential supply chain risk due to weather disruptions
– Brand value at potential risk from climate change is 50% of market value
Food Retail– Exposed to rising costs of transportation and heating, refrigerating and lighting
their premises
– Growth in demand for fresh and exotic products all year round requires increased refrigeration of the supply chain and greater proportion of products being flown in from abroad
– Brand value at potential risk from climate change is 5% of market value
MEDIUM Carbon Sector Case Study: Food Retail
Whole Foods– Largest wind energy credit purchase in the history of the United States and
Canada
– Only Fortune 500 Company purchasing wind energy credits to offset 100% of its electricity use
– Purchasing more than 458,000 megawatt-hours (MWh) of renewable energy credits from wind farms. This purchase will avoid more than 700 million pounds
of carbon dioxide pollution this year.
Our Recommendations1. Companies should take an industry-relevant approach to carbon offsets.
• High: Risk mitigation through legitimate/aggressive offset targets and active participation in policy development.
• Medium: “Push” strategy to raise overall level of awareness and provide critical mass for climate among key stakeholders.
• Low: Remain active in carbon offset discussion, critically review operations for other areas of risk-exposure.
2. Companies need to take a three-pronged approach (Efficiency, Offset, Renewables).
• Carbon offsets cannot be a stand-alone strategy for Climate Change.
3. Increased regulation around regulatory and voluntary offset programs.
• Universal guidelines, improved traceability
• Validate reforestation credibility and offset value.
Where is the Debate Headed…
• Climate change will become a mainstream consumer issue by 2010 (purchasing decisions)
– Drivers: Severe weather, regulatory impact, politics, commercial adaptation
• Carbon and environmental impact will become a standard in CSR reporting
• Companies in high carbon industries will gain by leading on this issue and integrating into their operations and reporting structures
Key Facts
A ton of CO2e is Emitted When you:
- Travel 2,000 miles in an airplane
- Drive 1,350 miles in a large SUV
- Drive 1,900 miles in a mid-sized car
- Drive 6,000 miles in a hybrid car
- Run an average US household for 60 days