51% of the companies are emitting unsustainable levels of CO2, according to a Climant Counts carbon report
51% of the companies are emitting unsustainable levels of CO2, according to a Climant Counts carbon report, an organization that measures the role corporations play on climate.
The purpose of this study was to analyze the greenhouse gas emissions of 100 global corporations from different sectors between 2005 and 2012 to determine their performance against science-based goals that seek to limit climate change to 2° Celsius (3.6° Fahrenheit).
Another interesting data point of this study is that 25 of the 49 companies that scored sustainably decreased their emissions even as their revenues grew. “It is a proof that decoupling of growth and emissions is possible, at least in the short term,” said Climate Counts in a statement.
The best-placed in the ranking were software company Autodesk, consumer products giant Unilever and pharmaceutical Eli Lilly.
The main criteria to include corporations to the study were the regularity with which they have reported their greenhouse gas emissions over the last years. Many companies, particularly in less developed countries, do not report their carbon footprint.
Also, the report said that “One of the premises of this report is that while sovereign nations must come to an agreement on how to reduce global CO2 emissions, there is an increasing role to be played by the business community”.
Countries that are parties to the U.N. Framework Convention on Climate Change (UNFCCC) are currently negotiating a new global agreement to tackle rising CO2 emissions.
The new agreement would include emerging economies, which didn’t have any targets under the current deal (the Kyoto Protocol).
China began trading in Guangdong’s carbon permit market, which is expected to be the world’s second-largest market after the European Union in terms of carbon dioxide emissions covered. It is far larger than either the Australian or Californian emissions trading schemes.
The Chinese government has approved seven pilot carbon trading exchanges in total, with Shenzhen being the first to launch in June followed by Beijing and Shanghai. However, Guangdong, which is home to over 100 million people and has an economy larger than Indonesia, far outweighs the other pilot projects launched to date.
Aside from being the largest carbon market to operate in China yet, Guangdong is also the first to use auctions to distribute emissions permits, rather than offering them all initially for free.
The debut trade on the China Emissions Exchange in Guangzhou went through in line with market expectations at 61 yuan ($10.04), with cement firm Hailuo buying 20,000 carbon permits from the new energy arm of state-owned power producer Huadian Energy Co Ltd.
Xie Zhenhua, vice director of the National Development and Reform Commission, China’s economic planning agency, said the carbon markets will “play a very significant role” in China’s efforts to reduce its carbon emissions. China has vowed to reduce its carbon emissions per capita of GDP, known as emissions intensity, by 40–45 percent by 2020 compared with 2005 levels.
Guangdong’s carbon scheme caps CO2 emissions from 242 of the province’s major power generators and cement, iron and steel producers at 350 million tons per year, with a further 38 million tons set aside in reserves for new entrants and potential adjustments.
Companies are forced to pay for 3 percent of their expected emissions in the first year of the scheme, with that share gradually rising in the future.
Also, the Guangdong government said that it would expand the market to cover five new sectors, including textiles, paper production and metals, although it gave no timeline.
China is the world’s biggest emitter of greenhouse gases. But China is also a world leader in renewable energy, including wind and solar power. China is working hard to increase hydropower and nuclear power capabilities as well in an effort to reduce reliance on coal, and is making major economic reforms that will open energy markets to natural gas development and imports that have been priced out due to coal-power subsidies.
Six EU member states moved closer in the past week towards handing to industry this year’s quota of free carbon permits.
The Czech Republic, Denmark and Hungary have updated and resubmitted allocation plans to reflect global cuts to the amount of permits they originally requested for 2013, a measure the Commission said is required to keep the bloc’s total emissions under legal limits for the 2013-2020 period.
Spain, Bulgaria and France have also completed the first stage. However, 11 nations, including Germany, Poland and Italy, still have made no progress in the process. And, precisely, these nations are the major emitters and they represent 49 percent of the allowances to be handed out. Another interesting data is that thirteen countries, accounting for 32 percent of the total number of permits to be distributed to industry, have reached the second step in the four-step process. And none has progressed further.
The lengthy and bureaucratic process coupled with the nearing holiday season makes it doubtful that most companies will receive their permit quotas this year.
Industrial manufacturers regulated by the EU’s Emissions Trading Scheme (ETS), such as steel and cement producers, get free carbon allowances to help them compete with rivals in other countries that have looser environmental regulations.
But this year’s EU-wide allocation of free permits, which was scheduled to occur in February, has been delayed largely due to late submissions by governments. That has prevented companies from being able to estimate the cost of complying with the ETS, to sell surplus permits to raise cash or to use them as collateral for finance.
The U.S. Department of Energy opened an $8 billion loan guarantee program in order to support innovative advanced fossil energy projects that avoid or reduce greenhouse gases, such as advanced resource development, carbon capture, low-carbon power systems, and efficiency improvements.
The loan guarantee is a part of President Barack Obama’s Climate Action Plan. “Under the Obama Administration, the Energy Department is taking an all-of-the-above approach to American energy to ensure we develop all our abundant energy resources responsibly and sustainably,” said Energy Secretary Ernest Moniz.
“Currently providing 80 percent of our energy, coal and other fossil fuels will continue to be a critical part of our energy portfolio as we move toward a low-carbon future. By helping to accelerate the introduction of innovative, clean fossil energy technologies ready for deployment at commercial-scale today, investments under this solicitation will help ensure we continue to have access to affordable, clean energy from all our domestic energy resources tomorrow”, he explained.
Currently, the Department of Energy’s Loan Programs Office (LPO) supports a large, diverse portfolio of more than $30 billion supporting more than 30 closed and committed projects, which range from thermal energy to electric vehicles.
The European Parliament has voted finally to remove surplus permits from the carbon market from next year to prop up allowance prices on the EU Emissions Trading Scheme (ETS), ending months of argument over the plan.
The full assembly voted in Strasbourg to approve the backloading proposal, which will allow regulators to make a one-off delay to scheduled sales of 900 million carbon permits.
The European Commission wanted to intervene in the market to lift carbon prices to a level that prompts companies to cut their greenhouse gas emissions, for example by investing in energy efficiency or switching to renewable energy sources. If the carbon prices are low, it is more difficult that companies invest in that.
Analysts predict prices could at least double due to backloading, but expect it will be years before they rise above the 20-euro level needed to prompt industry and utilities to invest in greener energy.
Despite this initiative, some lawmakers believe the bloc’s carbon market will be irrelevant without further reform. “It’s clear that backloading is not enough. The market is still oversupplied by 2 billion permits, but this buys us time to have a discussion on how to reform it,” said Matthias Groote, the German Socialist lawmaker.
The European Commission proposed backloading as a limited first step to rescue the ETS, its flagship tool to curb emissions of heat-trapping gases blamed for climate change.
In January, it is expected that the Commission will publish a legislative proposal on deeper ETS reforms.
Peru has great potential to secure progress in the global climate negotiations at COP20 in Lima in 2014
Peru is well placed to ensure the UN makes progress on climate change next year, according to Guy Edwards, Research Fellow at the Center for Environmental Studies at Brown University, and Timmons Roberts, Ittleson Professor of Environmental Studies and Sociology at the same University.
Although the conference in Warsaw managed to secure some progress on a range of issues, Peru will have to do some very heavy lifting to ensure the delicate timetable of agreeing a new climate deal in Paris in 2015 is kept on track.
Peru has great potential to secure progress in the global climate negotiations at COP20 in Lima in 2014. Peru is a bridge builder between developing and developed countries and is considered a leading actor on climate change. In 2008, it was the first developing country to announce a voluntary emission reduction pledge, offering to reduce the net deforestation of primary forests to 0 by 2021 and produce 33 percent of its total energy use from renewable sources by 2020.
In 2010 Peru’s Ministry of Environment published its Plan of Action for Adaptation and Mitigation of Climate Change (Plan CC). Also Peru is part of the Association of Independent Latin American and Caribbean States (in Spanish, AILAC) alongside Chile, Colombia, Costa Rica, Guatemala and Panama. AILAC attempts to build consensus between developed and developing countries on the need for all to take ambitious action on climate change.
So, en route to COP20, Peru has a year to make a vital contribution to restore confidence and ratchet up global climate action. Otherwise, the goal of producing a draft text in Lima to be decided in Paris at COP21 in 2015 will be simply unreachable.
Peru could focus on some key strategies. For example, Peru can be more active in the Dialogue without undermining its neutrality. And, as a medium-sized country, Peru can avoid the polarizing debates between the North and South that undermine the talks.
Also, when Peru put forward its voluntary pledge, it established a new climate discourse. This discourse needs a boost and a major platform to test its utility. COP20 can be that space. Peru, alongside its AILAC partners, can put ambition front and center by promoting their collective pledges. AILAC may also consider increasing their own pledges and activities in the interest of generating confidence in the process and promoting low-carbon growth.
Support for projects in developing countries can transform the lives of the poor communities. For that reason, some companies invest money in this kind of initiatives.
A decade ago, a project was launched to finance safer, cleaner cook stoves through a scheme that combined carbon reduction and corporate social investment. This pilot has since expanded to about 50 such projects worldwide. ClimateCare is the specialist behind the initiative and his director, Edward Hanrahan, is proud of that.
Nearly 45% of the world’s population prepares meals on open fires. This is dangerous, dirty and very polluting. So, this initiative can help to reduce emissions. One example is The Gyapa Improved Stove project in Ghana. It has improved the lives of 2.4 million Ghanaians, cutting more than 1m tonnes of carbon emissions and creating more than 800 jobs in the process.
Sustainability-minded companies can derive dual benefits from their support for such an integrated project. First, there is the clear humanitarian benefit derived from safer cooking. Second, the company can offset some of its own carbon emissions.
Funding is flexible, says ClimateCare’s director. The total volume of carbon reductions and other project outcomes are calculated annually and, in a typical funding arrangement, a company will buy offset credits in accordance with its internal offsetting targets.
On the other hand, one of the challenges of investing in social development projects is calculating impacts. The advantage of an integrated climate and development project is that mechanisms are built in from the start, to measure the annual emissions reductions that finance the project.
Another key consideration for companies investing is to look at their internal management structures. To be successful, development projects must be aligned to the aims of the business. And, ideally, projects will be designed to appeal to employees and customers alike. Involving employees in selecting which project to support is often a powerful way of gaining internal engagement.
The European Union looks set to agree to cut its greenhouse gas emissions 45% by 2030. Although it currently a target to cut gases that cause climate change 20% by 2020, which is set to be reviewed in January 2014, MEPs are thinking now in the longer term.
However, the situation is not easy. RTCC has published an article explaining that. According to some experts, EU has not conducted any analysis into how it could reduce its emissions beyond 45% by 2030. “The exercise towards 2030 goals should at least include this higher or upper end reduction in the modelling to offer transparency on how it impacts the economy and how it relates to ambitious renewable energy and energy efficiency targets” said to RTCC Tomas Wyns, a climate policy expert at the Centre for Clean Air Policy in Europe.
So, the Climate Commission is under pressure to produce a more ambitious set of new measures for 2020 and 2030. EU’s Low Carbon Roadmap towards 2050 says that to reach an overall aim of an 80-95% reduction by 2050, the EU must reduce its emissions more than 40% by 2030 and 60% by 2040.
Exactly how the new agreement will be arranged has yet to be decided. Many hope that, like the 2020 package, this will include a three-tiered approach, incorporating separate targets for emissions reductions, energy efficiency and renewable energy.
Belgium is one of the many member states pushing for three separate targets. Its Environment Minister Melchior Wathelet told RTCC ambitious targets in each of the “three pillars” are important.
“We have to make real investment, we have to make progress. That’s true in CO2 emissions, but especially maybe in energy efficiency because we know what we can do”, said Melchior Wathelet, Environment Minister of Belgium.
On the other hand, Ville Niinistö, Finland’s minister for the environment, told that it was important that the new deal took into account the growing potential for renewable energy in Europe. “There are a number of magnificent examples how for example photovoltaic has increased in productivity in countries like Germany and Finland,” he said. “Biomass has increased and biofuels have also been very encouraging so we look forward to raising our share of renewables in the energy mix, which is about 30% today.”
The statistics indicate carbon trading is growing. International Emissions Trading Association (IETA) says sector has increased since 2002 and as of December 2013, 17 countries have carbon pricing mechanisms either running or planned. These cover greenhouse gas emissions of 10 GtCO2e/y, equal to 21% of the 50 GtCO2e emitted globally.
The UN’s Clean Development Mechanism (CDM) and the European Union’s Emissions Trading Scheme (EU-ETS) have dominated global markets until now. However, both have suffered from plummeting carbon prices in the past year, a result of the economic crisis and the over-supply of credits.
So, both markets are likely to be eclipsed by China, which will see it become the world’s epicentre of carbon trading. By 2014 it could cover 700 million tonnes of emissions and by 2020 it could be worth US$ 3.5 trillion. But there are more key markets around the world.
To summarize, these markets will dominate the sector in the coming decade: Chinese Certified Emissions Reductions; Mexican carbon credits MEXICO2; Alberta carbon pricing; EU Emissions Trading Scheme; Australian Direct Action Plan; US Regional Greenhouse Gas Initiative; Kazakhstan Emissions Trading Scheme; Californian Cap-and-Trade; Québécois Cap-and-Trade; New Zealand Emissions Trading Scheme; Norwegian Greenhouse Gas Emissions Trading Act; South Korean Emissions Trading Scheme; Swiss Reduction of CO2 Act; UK Emissions Trading Scheme; Tokyo Cap-and-Trade; Japanese Cap-and-Trade; Indian Emissions Trading Scheme.
The European Union agreed a compromise in order to enforce stricter rules on carbon dioxide emissions for EU cars. The new outline agreement delays until 2021 the 100% implementation of a limit of 95 grams of carbon dioxide per kilometre (CO2/km) for all new cars, the previous deadline having been 2020.
It also changes the rules on flexibility, giving more leeway to German luxury car manufactures such as Daimler and BMW, whose emissions are higher than those of smaller, lighter carmakers such as Fiat.
Germany has won some of the concessions it sought. Apart from the phase-in, under which 95 percent of new car sales will have to comply in 2020 and 100 percent in 2021, the agreement also changes the rules for ‘supercredits’.
These allow manufacturers that make very low emission vehicles, such as electric vehicles, to claim extra credits for them, so they can continue to produce more heavily polluting vehicles as well.
An agreement reached in June had set a limit for use of supercredits at 2.5 grams per year, but the new deal sets a cap of 7.5 grams of carbon dioxide for the years 2020-2022, so a manufacturer could opt to use all the flexibility in the first year.
Environmental campaigners, who have strongly criticized the German stance, gave a very cautious welcome to the deal. “Carmakers will only meet this target up to three years later, thanks to a combination of a phase-in of the standards and the use of accounting tricks known as ‘supercredits’”, said Greenpeace.