“What’s your company’s carbon footprint?” It’s a hot question and one for which there are no quick or easy answers. It requires a detailed understanding of what your company does to contribute greenhouse gases into the atmosphere, how much from each business sector and location, and what options you have for mitigation. Often it requires a look beyond your own operations to the emissions created by your entire supply chain.
According to the September 2006 Carbon Disclosure Project (CDP) by Innovest Strategic Value Advisorys, 75 percent of companies are measuring their carbon footprints.
Protocols issued by carbon registries help organizations analyze their footprints. Although these protocols vary, they generally suggest estimating only direct emissions and emissions from purchased energy, with less focus on supply chain emissions, according to a recent study by scientists as Carnegie Mellon University. (Matthews HS, Hendrickson CT, Weber CL. 2008. The Importance of Carbon Footprint Estimation Boundaries. Environ. Sci. Technol. 42 (16): 839-5842)
To read a detailed White Paper about measuring your carbon footprint, click here
The Greenhouse Gas Protocol (GHG Protocol), the most widely used international accounting tool for government and business leaders to understand, quantify, and manage greenhouse gas emissions. The GHG Protocol is a partnership between the World Resources Institute (WRI) and the World Business Council for Sustainable Development.
According to WRI, the GHG Protocol provides the accounting framework for nearly every GHG standard and program in the world - from the International Standards Organization to The Climate Registry - as well as hundreds of GHG inventories prepared by individual companies. The GHG Protocol also offers developing countries an internationally accepted management tool to help their businesses to compete in the global marketplace and their governments to make informed decisions about managing GHG emissions. The GHG protocol is not intended to quantify the reductions associated with GHG mitigation projects for use as offsets or credits – the GHG Protocol for Project Accounting provides requirements and guidance for this purpose.
The Environmental Protection Agency provides a series of calculators for determining GHG inventories from shipping and other transportation. For example, EPA’s highway vehicle emission factor model, MOBILE, predicts average gram-per-mile emissions of evaporative hydrocarbons (HC), carbon monoxide (CO), oxides of nitrogen (Nox), carbon dioxide (CO2), PM, and toxics, for each of eight categories of vehicles for any calendar year between 1970 and 2020, and allows the user to specify different conditions (e.g., temperature, traffic speed, etc.) that might influence emissions levels.
According to EPA, the draft NONROAD model calculates past, present and future emission inventories (i.e., tons of pollutant) for all non-road equipment categories, such as farm and construction equipment, outdoor power equipment, recreational vehicles and boats. The model excludes commercial marine, locomotives and aircraft. Fuel types included in the model are: gasoline, diesel, compressed natural gas and liquefied petroleum. The model estimates exhaust and HC, CO, NOx, particulate matter (PM), sulfur oxides (SOx) and CO2. According to EPA, the user may select a specific geographic area (i.e., national, state or county) and time period (i.e., annual, monthly, seasonal or daily) for analysis.
The SmartWay Transport Partnership offers two environmental and energy tracking models relating to freight transport—one for freight carriers and another for shippers.
The retail food industry has widely embraced a software program published by Verisae.
Action Plans for Effective GHG Management
Once a company has determined its carbon footprint and decided to take action, there are various options for reducing GHG emissions.
According to Jeff Hittner and Karen Butner, www.climatebiz.com, before considering purchasing carbon credits or offsets (more about these below), companies can have a major impact on their carbon emissions by examining from a carbon perspective their own facilities and operations. Their examples of such site or operational improvements include the following.
Asset management – this involves making equipment, structural or operational changes for greater energy-saving or to reduce carbon and methane emissions at packing plants, further processing plants, wastewater lagoons, warehouses, machinery, vehicle fleets, and data centers.
Examples of actions that can be implemented immediately, include:
- increased awareness of sleep modes for equipment;
- setting all printers/copiers to double sided printing;
- replacing disposable dishes with reusable ones;
- installing work area motion sensors for lighting;
- taking direct business flights instead of those that stop en route;
- providing shower and changing rooms for employees who bike to work; and
- providing workers transportation to public transit stops.
Other actions may be taken over time, such as:
- purchasing high definition or “HD” video conferencing systems or replacing equipment with models that have greater energy efficiency;
- incorporating energy efficiency, natural lighting and shading, or other “green” elements into buildings as they are retrofitted or built; and
- switching a portion of your energy consumption to a renewable source (such as electricity produced by solar energy or wind, or fuels in which animal fats/vegetable oils replace petroleum).
Sourcing and shipping optimization – examining the distance and frequency you source from current suppliers, with an eye toward optimizing carbon emissions as well as cost, service and quality considerations.
Supply chain optimization – looking across all players in your company’s supply chain, both internally and externally, to increase efficiencies, reduce costs and carbon emissions.
Voluntary Emissions Trading
Some industries frequently look to emissions trading to complement their efforts to increase efficiency. In recent years, this practice has been primarily voluntary, as various industries and individual companies sought to position themselves proactively in anticipation of carbon cap-and-trade legislation, GHG regulations and/or carbon taxes. Firms earn these credits by reducing their carbon emissions beyond established goals. A trade occurs when a company seeking to further reduce its GHG emissions purchases emission credits from a company or an organization that can certify sequestered or reduced greenhouse gas emissions beyond its own obligations to do so. This transaction can benefit both participants. Purchasers are able to reach goals that require more emissions reductions than they can achieve, cost-effectively, through their own operational changes.
Meanwhile, sellers receive an added return on their investments in emissions reductions. In addition, a few large energy-intensive companies have developed internal trading mechanisms to reach company-wide goals as cost effectively as possible. In the U.S., there are two types of tradable carbon credits, credits – sold through private trades or on the Chicago Climate Exchange (CCX) – and Renewable Energy Certificates (RECs or “Green Tags”).
An offset is any project that negates the impact of a company’s emissions by avoiding or sequestering an equal amount of emissions at another site. Similar to emissions trading, offsetting enables companies to look beyond the limits of their own operations to find projects that are cost-effective. Offsets are an especially important tool for companies hoping to neutralize the impact of their operations, or offer products that can be labeled “Climate Neutral.” Other companies may be prompted to invest in offsets by existing or anticipated legislation or regulations. Learn more about Carbon Offsets.
At the international level, the World Bank has set up the Community Development Carbon Fund to link small-scale carbon projects with companies looking to fund offset projects. There are many other sources of offsets, including funds, banks and various trusts and they include projects that reduce greenhouse gas emissions in many sectors, including green buildings, industrial efficiency, cogeneration, materials substitution, forest sequestration through rainforest preservation and reforestation, transportation efficiencies, as well as renewable energy projects. Other sources include productive uses of trapped methane. Revenues generated by offset purchases provide funding for many projects that reduce GHG emissions.
Regulated Carbon Exchange
One current exception to voluntary trading is the Regional Greenhouse Gas Initiative, which is a cap-and-trade program that will began to regulate carbon dioxide emissions from ectricity production in 10 New England and Mid-Atlantic states in 2009. Cap-and-trade systems are regulated, and CO2 emissions are limited through a permitted system. Stakeholders buy and sell rights to the ermitted emissions via credits. But because the system is government-mandated, the credits are more valuable than in a voluntary system.
The Obama Administration and Congressional leadership in 2009 declared their intent to enact climate change legislation and GHG regulations. AMI will monitor these changes and update members and this website as necessary.