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Carbon Management – A Practical Approach for Business Jack Holden, Head Of Carbon Management, Ecos Corporation Casey- Cardinia Business Breakfast Pakenham 12 th June 2008. Outline. Global warming and carbon emissions overview Carbon trading and how it affects business
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Carbon Management – A Practical Approach for Business Jack Holden, Head Of Carbon Management, Ecos Corporation Casey-Cardinia Business Breakfast Pakenham 12thJune 2008
Outline • Global warming and carbon emissions overview • Carbon trading and how it affects business • Short term energy & carbon trends • Actions for business • The carbon neutral trap!
2007 Hottest year ever in Victoria Driest ever for Murray Darling rivers 2005 Strongest hurricane ever recorded (Wilma) Highest daily rainfall event in India ever recorded The most Hurricanes ever Climate ChangeWhat are we observing so far? Hurricane Wilma, courtesy of United States National Oceanic and Atmospheric Administration
Mumbai Deluge 26/7/2005 • 1000mm rain in one day
Direct Observations of Recent Climate Change1850 - 2005 Global mean temperature Global average sea level Northern hemisphere snow cover IPCC Forth Assessment Report WGI
The history of CO2 and temperature change shows great variations. A dynamic system.
We’ve built this civilisation in an unusually stable, temperate period. It wasn’t always thus. Sea level 125 m lower Sea level: Fairbanks, R.G., 1989, A 17,000-year glacio-eustatic sea level record; influence of glacial melting rates on the Younger Dryas event and deep-ocean circulation: Nature, v. 342, no. 6250, p. 637-642.
We’ve built this civilisation in an unusually stable, temperate period. It wasn’t always thus. Sea level 4 – 6 m higher Sea level: Fairbanks, R.G., 1989, A 17,000-year glacio-eustatic sea level record; influence of glacial melting rates on the Younger Dryas event and deep-ocean circulation: Nature, v. 342, no. 6250, p. 637-642.
Conclusion: The earth’s climate is a naturally unstable system. We’ve thrown a large CO2 bomb into it. It has now gone off. ?
~4 t CO2-e/person Greenhouse emissions per person -2003 ~26t CO2-e/person
Business Case For Managing Carbon Commercial Drivers Regulatory Drivers
Commercial Drivers. • Investors, employees and customers • GM to sell Hummer brand, Mitsubishi closes in Adelaide • SUV sales down 60% in US since 2002 • ANZ had a divorce from Gunns (costs $1M/day) • Tesco & Walmart environmental disclosure requirements • Health & beauty industry destocking harsh chemicals
Consumer AwarenessReduce your carbon emissions - Walk to the pub
Regulatory DriversNational Greenhouse Energy Reporting Act (NGERS) • Mandatory reporting of carbon emissions • Begins 1st July 2008. • Only 700 to 900 companies, 300 first time reporters • Corporate penalty is $220K, CEO’s penalty is $44K • “operational control”?
The fuel you burn (petrol, gas, diesel) creates scope 1 emissions • The electricity you buy creates Scope 2 emissions
The carbon emissions embedded in the goods and services you buy are Scope 3 emissions
Emissions Trading (1) • Make bad things more expensive than good things • Carbon markets are created by governments – they are not real • Government mandates a cap (tonnes of CO2/year) • “Liable parties” are polluters (defined by size and emissions source)
Emissions Trading (2) • All direct emissions from facilities above 25K tonnes/year in the following sectors • Power stations yes • Manufacturing yes • Mining yes • Construction & property yes • Transport probably • Waste not sure • Agriculture & forestry too hard for now
How does emissions trading work? • Polluters buy permits (or credits) from the government to cover emissions • May be some free permits • Polluters then surrender permits to governments to cover emissions & • Can sell any surplus to other polluters who are short • Some activities like forestry may create extra permits • Reducing emissions saves $$ but no credits created
What it means for business • If you are not a “liable party” (one of the top 500 -1000 emitters) then you won’t need permits • Increase costs of:energy use - reduce or switch to cleaner fuels carbon intensive goods and services
Where will it hit hardest? • Large impact from carbon price • Coal, aluminium, steel, cement • Moderate impact from carbon price • Oil, Gas, transport, paper • No carbon price • Solar Water Heating (much cheaper soon) • Wind & Solar electricity (needs to get cheaper) • Geothermal (big potential – but not yet) • Nuclear, hydro (other impacts) • Timber • Recycled products
Carbon Price in Energy Costs • Caps may start in 2010 on biggest polluters • $20/tonne of carbon 5c per litre of fuel and 20% increase in Victorian electricity retail price • $40/tonne of carbon +10c litre + 40% Victorian electricity
Carbon Management for Business • Reduce energy use Improves profitability everyday • Cleaner fuels Increases costs. Depends on energy intensity of your business • Carbon Offsets Increases costs. Only if clients want it.
Carbon Accounting for Business • Use existing data systems for collecting energy data (finance or inventory) • Convert (kwh, Mj, litres) from the invoice data to carbon units (www.greenhouse.gov.au) • Build into existing reporting and performance management process • Build an emissions reporting system that suits you before your clients build one that doesn’t
Energy Efficiency Pays • Compact fluro globes ~$6 each • Each saves $15 each year • Household saving in first year = $135 • Then saves $225/year for 5 years • Reduces about 1.4 tonnes CO2 • 15 lights in an average house
Annex 3 Easy Being Green Weekly Globe Installations
Take Home Messages • Saving energy will make even more money now • Action matters – not targets • Carbon accounting will matter soon but it isn’t hard. • Businesses can be very influential as consumers/ clients and advocates • Develop your sustainability strategy before someone else does.
