Greenhouse Gas Reporting – Here and Now.

The future is now. On January 1^st, Ontario's Greenhouse Gas Emissions Reporting Regulation took effect - requiring between 200 and 300 facilities (such as electricity generators, steel & cement manufacturers, and petroleum refiners) emitting 25,000 tonnes or more per year of carbon dioxide equivalent (CO2e) to report their emissions on an ongoing annual basis. The regulation is intended to obtain accurate emissions data to inform the development of Ontario's proposed cap-and-trade system.

Ontario has also announced that while small emitters (facilities emitting between 10,000 and 25,000 tonnes per year) are not currently required to report under the Regulation, the Ministry will develop a program to encourage voluntary reporting in anticipation of inclusion of these smaller emitters in the future in emerging North America–wide requirements, with which Ontario will likely align.

The 25,000-ton limit is comparable to the emissions from burning 131 rail cars of coal or the annual energy use of about 2,200 homes, while a typical coal-burning power plant emits several million tons of carbon dioxide a year.

Ontario's reporting threshold aligns with the U.S. Environmental Protection Agency's mandatory GHG reporting threshold of 25,000 tonnes - which impacts 14,000 large US sources of carbon dioxide. The Regulation represents a further step towards implementation of a cap and trade system in Ontario which will be harmonized to the requirements of a North America–wide system. Ontario has pledged to work with the federal government and other provinces as well as with the other provinces and U.S. states that are members of the Western Climate Initiative ("WCI") to harmonize Canada's carbon regime with the emerging U.S. carbon regime.

Greenhouse gas reporting is no longer a question of "If?" or "When?"...its right here, right now.

Airline Sustainability: The Sky is the Limit

Sixty years ago, civil aviation (private and public air travel) was an industry that was responsible for a minute proportion of all forms of transport. In recent decades, there has been rapid growth in aviation as a form of mobility, and subsequently there has been significant growth in energy use. Today it is an integral part of the world economy, accounting for approximately 9% of global GDP and carrying over 2 billion passengers each year.

Most aviation fuels are jet fuels originating from crude oil. Crude oil is a non-renewable energy resource and reports indicate that the world’s crude oil production is close to the maximum level and that it will start to decrease after reaching this maximum. Aviation fuel production is predicted to decrease by several percent each year after the crude oil production peak is reached - resulting in a substantial shortage of jet fuel by 2026. At the same time, it is predicted by the aviation industry that aviation traffic will keep on increasing. This is of particular importance for the airline industry as the price of fuel represents as much as 40% of an airline's expenses. Between 2001 and 2005, airlines lost over $35 billion (US dollars) and high fuel prices will continue to challenge airline profitability.

Aviation fuel consumption also brings about environmental concerns as it contributes to the increase in atmospheric CO2 concentrations. Although the aviation industry claims that it generates only 2% of global CO2 emissions, it is one of the fastest-growing carbon polluters around. The Federal Aviation Administration predicts that passenger levels will double in 10 years and perhaps triple by 2025 and that CO2 emissions will increase by more than 110 % between 2005 and 2025.

With regard to aircraft emissions, strong public pressure to reduce the environmental impact has resulted in improvements in both technologies and the way airline systems operate. A sustainable approach is necessary to ensure continuing growth in the aviation industry where cost reduction is critical and environmental performance is improved.

Improving the fuel efficiency of aircrafts is an important aspect of technological development, since it directly improves airlines’ direct operating costs. Technological improvements involve aerodynamic changes, weight reductions, more fuel efficient engines, and increased operational efficiency. For example, the Boeing 787 Dreamliner is attempting to incorporate energy efficiency into its design. The airplane is expected to use 20% less fuel than its contemporary counterpart. The key technologies include lightweight structures, highly efficient engines, and aerodynamic improvements to the body and wings. As much as 50% of the primary structure on the B787 will be made of composite materials. The advanced engines for the new airplane are expected to contribute as much as 8% of its increased efficiency. According to the Boeing Company, it will be possible to eliminate 1500 aluminum sheets and 40,000–50,000 fasteners by manufacturing a one-piece fuselage section, and to attain greatly improved aerodynamic and structural efficiency.

Another way for airlines and passengers to reduce their environmental impact is to become carbon neutral. Becoming carbon neutral involves the purchase of carbon offsets to neutralize the pollutants added to the environment. Carbon offsetting occurs when an individual or organization emits a given amount of greenhouse gas (GHG) but invests in measures that will pull the equivalent volume of GHG out of the atmosphere or prevent other emissions from taking place at all. Carbon offsets include programs such as wind power, solar power, and other such projects that focus on energy efficiency and renewable resources. Carbon offsetting is becoming prominent in the airline industry. For example, Virgin America offers the opportunity to buy carbon offsets based on the length of your flight. Also, Ethiopian Airlines has planted 7.5 million trees in Ethiopia, one for each passenger flown since 2005 at no extra charge to their customers.

As consumers become more aware of the environmental effects of aviation on global air quality and demand airlines to reduce their engine emissions to climate change, the industry will need to make adjustments in order to stay competitive. Innovations in aircraft technology and carbon offsets are two important steps toward sustainable air transport that have the potential to generate industry profit growth while protecting the environment.

Clean Energy Initiatives: A Winning Situation For All

During the Copenhagen Climate Change Conference last week, a global 10 billion US dollar annual fund was proposed to assist developing countries in averting their carbon emissions prior to when the new treaty comes into effect in 2012. Critics claim that this proposal is insufficient and one proposal put forward involves shifting some of the International Monetary Fund’s investments into financing clean-energy projects in the developing world.

In the developing world, agriculture is a primary economic activity, accounting for about 30 percent of their GDP. Lack of access to adequate, affordable, and convenient sources of energy is one of the key challenges faced daily by rural inhabitants. Worldwide, 2.4 billion people rely on biomass for cooking and heating while another 1.6 billion have no access to electricity whatsoever. The UN reports that such an energy gap "entrenches poverty…and erodes environmental sustainability at the local, national and global levels."

It is undeniable that access to clean, reliable, and affordable energy is critical to sustainable development. Research indicates that sustainable energy technologies and programs can directly contribute to development as they offer an income source, improve health, air and water quality, and provide amenities such as heat and light.

In particular, renewable energy can be beneficial for developing countries. In rural areas transmission and distribution of energy generated from fossil fuels can be complicated and costly. Producing renewable energy locally can reduce such a financial burden.

There is increasing awareness that conventional, ‘top-down’ development approaches have failed to deliver results that satisfy the needs of the developing world. An alternative to top-down development approaches is provided by initiatives that aim at increasing local participation. This ‘bottom-up’ approach has been adopted by organizations such as Wisions, and Grameen Shakti who acknowledge that local participation allows projects to better reflect local needs rather than sole instruction from the professionals who are working with them.

The Ashden Awards for Sustainable Energy is an organization that awards and brings to light inspiring sustainable energy solutions in the UK and the developing world and helps to ensure that these solutions are promoted more widely. Grameen Shakti, a non-profit organization in Bangladesh, was a recipient of the award in 2006. The organization’s goal involves “rescuing rural poor from energy poverty which undermines their social and economic development” by empowering rural people through access to environmentally friendly and sustainable energy at affordable costs, while providing them with income-generating activities, and access to a better quality of life. Grameen Shakti is involved in a range of activities related to small-scale photovoltaic (PV) systems, including: marketing, sales, servicing, training, research and development, credit provision, payment collection, and credit guarantees.

Through small micro-credit loans, self-employment is provided to the country’s rural families. Buyers of PV systems have reported increases in income and productivity by extending working hours after dusk and due to the introduction of computers powered by PV. Grameen Shakti is training technicians in PV installation and maintenance, thereby creating employment for local people, facilitating technological transfers, and developing skilled technicians in rural areas. Funding for the micro-credit system comes from the World Bank and Global Environment Facility via the Infrastructure Development Company Limited (IDCOL).

Energy is central to economic development: there is a clear correlation between energy consumption and living standards. And, microfinance is one solution that can meet large and small scale needs. Unlike commercial loans, no collateral is required for a micro-loan and it is usually repaid within six months to a year. Those funds are then recycled as other loans, keeping money working and in the hands of borrowers. Government investments into renewable energy projects in the developing world will also benefit the global economy. The EU's Project Catalyst estimates such global investment will generate about $100 billion by 2020. It is evident that clean energy initiatives world yield financial and social benefits to citizens and businesses alike.

Peak Water: Crisis or Opportunity?

Many experts report that global water supplies are dwindling and that it poses a risk to businesses which will have impacts more far-reaching than oil. While alternative sources for oil exist, there is no substitute for water: it’s a necessity for human survival and many industrial processes.

One of the most important considerations for business is access to clean water. It’s used for things such as power generation, cooling of air conditioning systems, amenities, process needs, and so on. Companies across industrial sectors could be affected by water shortage issues directly and indirectly through their supply chains, with even non-water intensive companies realizing higher costs as suppliers deliver higher costs.

The impacts of climate change on water will be felt in the form of droughts and changing precipitation patterns while population growth and rising consumption patterns will increase demand and further stress water supplies. In fact, the Organization for Economic Co-operation and Development (OECD) forecasts that, as early as 2030, 47% of the global population will be living in areas of high water stress.

This water challenge provides businesses the opportunity to develop and implement solutions both locally and internationally. Companies need to plan now for the impact of water shortages on their business operations. However, for most companies, water does not appear on the bottom line as awareness and understanding of water-related risks and opportunities is lacking.

In an attempt to bring companies together and to take action, the Water Disclosure Program was created which aims to “provide critical water-related data from the world’s largest corporations to inform the global market place on investment risk and commercial opportunity.” In 2010, a questionnaire will be sent to 300 of the world’s largest water-intensive companies which will assess the risks and opportunities companies face in relation to water; water usage and exposure to water stress in companies’ own operations and in their supply chains; and companies’ water management plans and governance. The data will be utilized to move investment towards sustainable water use.

It’s a reality that corporate reputation represents a large percentage of a company’s market capitalization. Companies that treat water risks as a strategic challenge will be far better positioned in future as investors are already urging companies to measure, disclose and reduce their environmental risks. And, people are more likely to invest in a company that has a high rating in terms of environmental and social performance.

Being proactive and using water proactively will reduce the water footprint of any business. In fact, studies reveal the commercial sector has the potential to save on average 39% of their water use. So what can businesses do to reduce their water consumption? Toilets and urinals account for more than one-third of the water consumed in office buildings. Installing waterless urinals and low flow dual flush toilets use only a small fraction of water when they are adjusted to the minimum amount of water required per flush. Water saving bathroom fixtures can also eliminate a large percentage of gallons annually for businesses. Adding aerators to existing faucets can cut water consumption in half but faucets should first be checked for leaks. Lastly, water use on outdoor landscapes can be reduced if the sprinkler timer is adjusted with the seasons and if it is watered early in the morning or late at night to minimize loss.

“An organization's ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.” - Jack Welch

Looking Ahead to the Copenhagen Climate Change Conference: The Future of Energy

With the Copenhagen Climate Change Conference approaching, it will be interesting to see how the topic of energy will be addressed. There is considerable evidence demonstrating that the overconsumption of fossil fuels has contributed to climate change. In fact, the last two decades alone have seen more energy consumed than all human history combined. Another issue correlated with the overconsumption of fossil fuels is oil depletion (better known as ‘peak oil’). The decline of oil has produced a decline in the ‘net energy’ of conventional oil. This means that not only is less oil being produced, but the remaining oil is more difficult and costly to extract. Combined, these issues compromise human health, global economies and the environment on a massive scale.

One would hope that such threats to human existence would arouse action from government leaders but so far, the response of most governments has been inadequate. Solutions have included desperate attempts to find the few, untapped oil reserves and mining the Canadian tar sands. These proposed solutions perpetuate the problem rather than solve it.

Renewable energy use is one alternative that has been postulated to mitigate issues of climate change and fossil fuel depletion. As such, its implementation needs to be high on the policy agenda of nations. However, the reality is that renewable energy technologies will not be able to completely replace oil and satisfy growing energy demands. A real answer to the current energy issue must involve renewable energy plus efforts toward conservation, efficiency, and reduced consumption.

On a positive note, the impending energy crisis provides businesses an opportunity to adopt sustainable practices that are not only eco-friendly, but also cost efficient. Businesses should first identify the specific outcomes they want to achieve. Outcomes could include saving money for the year, having a longer-term goal to replace outdated equipment, or demonstrating green credentials to customers and suppliers. Next, businesses should perform an energy audit. A professional energy audit will demonstrate how efficiently energy is being used and highlight opportunities for energy cost savings. It can also show ways to improve productivity. Energy audits include everything from basic audit of the efficiency of the products and appliances used on the premises to a detailed analysis of machinery, cooling towers, waste systems etc. Lastly, businesses can adopt green building technologies and materials by using more energy-efficient lighting, the latest in innovative window glazing, higher R-value insulation, as well as room occupancy sensors.

It’s a simple fact that when businesses manage their energy well, their profits improve. Energy use is not a fixed cost. There is plenty businesses can due to reduce their consumption patterns while still maintaining their profit margins.

Carbon Foresight signs Copenhagen Communiqué on Climate Change

Carbon Foresight has joined a prestigious group of international businesses in signing the Copenhagen Communiqué on Climate Change. The Communiqué was initiated by The Prince of Wales’s Corporate Leaders Group on Climate Change (CLG) in June of 2009 and has been endorsed by the likes General Electric, Sun Microsystems, Deloitte, and many others.

Carbon Foresight signed the communiqué in the lead up to the United Nations Climate Change Conference, or COP 15 in December to call for a strong political response and clear guidelines for states and organizations globally. Without clear political objectives and legislative mandates, organizations are not likely to go beyond their current business strategies and further integrate sustainability into their core business strategy, drive clean technologies, develop environmentally beneficial products, or increase their operational efficiencies.

The Copenhagen Communiqué calls for an ambitious, robust and equitable global deal on climate change that responds credibly to the scale and urgency of the crises facing the world today – and includes the following recommended actions:

• Any agreement must establish a global emissions cap and long-term reduction pathway for all greenhouse gas emissions and sources, for the period 2013 to 2050 (with interim targets). These targets will need to be guided by science to ensure global greenhouse gas concentrations are stabilized below critical thresholds. When stating this, we understand that there is an emerging consensus behind an objective of limiting global average temperature rise to less than 2 degrees Celsius compared to pre-industrial levels and that this will require global emissions to peak and begin to decline rapidly within the next decade.
• Developed countries need to take on immediate and deep emission reduction commitments that are much higher than the global average, and which are backed up with credible strategies to de-carbonize their economies. The developed countries need to demonstrate that low-carbon growth is both achievable and desirable.
• Developing countries will need to play their part by drawing up their own emission reduction plans in line with their common but differentiated responsibilities and capabilities. The least developed economies need additional assistance including increased and adequate financing, and expanded cooperation to help them adapt to and join the new low-carbon economy.

Key supporting elements of any agreement should include:

• Credible measurement, reporting and verification of emissions which are vital to measuring progress against the objectives of an effective climate treaty.
• Measures to deliver a robust global greenhouse gas emissions market in order to provide the most effective, efficient and equitable emission reductions. It would be comprised of a growing series of national or regional “cap-and-trade” markets linked together, in which the “caps” are brought down in line with the targets that have been adopted for emission reduction.
• Additional policy measures, because a strong carbon price alone will not be enough to deliver the level and nature of change required across each economy. Measures will be needed; to deliver a step-change in energy efficiency, to promote the rapid development, demonstration and wide deployment of low-carbon technologies and also to stimulate new markets for low-carbon goods and services.

The strength of an agreement will be judged on its ability to drive substantive action both inside and outside the UN process, at national and international levels, but in line with the principles agreed in Copenhagen. A strong, effective and equitable international climate framework will stimulate the domestic policy interventions, bilateral and regional deals that are needed as a matter of urgency to deliver on intermediate and long-term reduction targets and accelerate construction of the low-carbon economy.

The problem of climate change is solvable – many of the technologies required are available today while others can be developed if the right incentives are in place. The policies needed are relatively clear, and the costs of transition are manageable, even in the current economic climate.

The one thing we do not have is time. Delay is not an option.

SAP aims to slash greenhouse gas emissions

Software giant SAP AG plans to cut its greenhouse gas emissions in half during the next decade as part of a broad sustainability initiative. The Walldorf, Germany-based company (NYSE: SAP) is striving for a 51% reduction of its direct and indirect emissions of carbon dioxide and other heat-trapping gases by 2020. Hitting the target would return SAP to its year-2000 emissions level of 250,000 metric tons of CO2.
In addition to slashing its carbon emissions, SAP plans to roll out software that would help its more than 80,000 customers in 120 countries track their energy consumption as well as manage environmental risks in their supply chains. The firms account for about 5 billion metric tons of greenhouse gases, which is one-sixth of the total amount generated by humans and 10,000 times the amount generated by SAP. Read on...