Making Sense of GHG Reduction Targets

Over the past few months, my work at the University of Edinburgh and Carbon KPI has been digging deeper and deeper into the world of business and climate change.

The wheels are turning and progress is starting to be made, especially here in Europe. But many of us continue to ask, is it enough? Can our current work be scaled up to the level required? And how do we make sense of everything going on with limited consistency in reporting and standardization in this area?

Making sense of the climate change and business world really is a complex and confusing process. The landscape is rife with contradiction and debate. For instance, it is no simple measure to compare one company's reduction target against another, or even to compare it against our own government's national targets. All too often, companies themselves aren't certain how to do this; which poses a risk of unintentionally setting a target that is too small.

Recently my work, which is spearheaded by Dr. Craig Mackenzie, involves analyzing similar companies within a sector. We have utilized a number to techniques to enable comparability and this has resulted in some significant findings. In particular, company targets, has brought about some very interesting discoveries.

Dr. Mackenzie's approach has enabled us to compare the quality of one company target against another, even if the companies have differing target years, baseline years for measurement, and are setting targets for specific areas (i.e. an energy efficiency target for UK facilities, versus a total company target).

In the marketing world, this is an important fact to know, especially in order to avoid the risks of greenwashing. A 50% reduction target for 2020 sounds great, but do we really know if that's better or worse than a 20% reduction for 2012? 50% definitely sounds better, but until now, no one has been able to say convincingly which one is better. In fact, there has been uncertainty whether many reductions targets being set were even at the government compliance level or beyond. Obviously setting a target to meet governmental compliance is the 'least you can do' approach and does not deserve to be marketed as a green initiative.

I want to give credit to the Carbon Trust, an independent government funded UK company, which aims to accelerate the move to a low carbon economy by working with organisations to reduce carbon emissions and develop commercial low carbon technologies. The Carbon Trust Standard (CTS) is an initiative that I hope grows exponentially as it sets clearer standards for consistency in reporting and carbon management.(1)

The CTS provides an approach that does much to resolve the 'Absolute' versus 'Intensity' target debate. For a long time, I have been a staunch supporter of only absolute reduction targets. After all, real GHG reductions are what is needed for us to avert the worst impacts of Climate Change.

Intensity targets do have merit, especially for individual companies. Intensity targets can be much more effective for companies to operate against because they stimulate efficiency gains. In contrast, absolute reductions won't necessarily mean things are getting better. For example, a company can realise absolute reductions by selling off a polluting part of their operations, or during an economic downturn when they are simply producing less stuff.

In the ideal world I would imagine companies using intensity targets that are linked to a higher level absolute reduction target for the entire sector.

What the Carbon Trust Standard has managed to do is outline what % intensity target is sufficient enough to be recognised by the Standard (any level of absolute reduction is recognised). This minimum intensity reduction level has been set to ensure that intensity targets achieved at least meet the average GDP growth rate for the UK. This is a great foundation and I'm excited to be a part of expanding the approach from here.

Our work at Carbon KPI is merging the CTS approach to targets with our own and taking it to the next level. We aim ensure companies make and meet targets that are eligible not only to meet the CTS, but also national and international targets as well. We are looking forward to releasing our findings next month and are hopeful that it may influence future responsible business practices.

Note-our first sector specific Carbon Benchmark on the Supermarket industry will be released in April 2009

(1) I am supportive of the Carbon Trust Standard (CTS) rules, but like many things I hope they evolve to become more robust. For instance, the CTS rules currently omit the use of offsets in achieving company reduction targets. I agree that internal reductions need to be done first and foremost, but there is a great deal of debate on this topic, especially if countries are allowed to include offsets as part of their national reduction targets. But this is a topic for another blog..

IPCC Worst Case Scenario Isn't Bad Enough to Meet Our Current Reality

I was amazed to read this WWF report the other day and not have heard any commentary on it earlier. Given that it was published in November, it was likely buried under the news of a new hope in the form of President Obama in the US and a badly disrupted global economy keeping the journalists busy.

Dr. Martin Sommerkorn produced the Global Greenhouse Reality 2008 with some stark evidence.

“Scientific evidence accumulating since the IPCC’s Fourth Assessment Report reveals that global warming is accelerating, at times far beyond projections outlined in earlier studies, including the latest IPCC Report. New modelling studies are providing updated and more detailed indications of the impacts of continued warming.”

“Anthropogenic CO2 emissions from fossil fuel are growing four times faster since 2000 than during the previous decade (1990-99: 0.9 per cent/yr; 2000-2007: 3.5 per cent/yr), and above IPCC’s worst case emission scenario(A1FI – intensive dependency on fossil fuels) that predicts 4°C global warming (2.4-6.4°C) for 2100 (Global Carbon Project, 2008).” (page 13 in the link above has a good chart of this)

Yes, our current reality is ABOVE the worst-case scenario outlined by the IPCC.

Worst cases scenarios are not supposed to be reached or worse, surpassed, they’re a theoretical “what if” area. The IPCC is doing the world a disfavour with watered-down forecasts. While academic reputations may be protected from public ridicule by producing conservative climate reports. Governments and the general public need to hear the whole truth if we are going to be able to respond rationally.

Several new studies continue to make the case that we have the opportunity to avoid the worst consequences of global climatic change. But we need to act sooner than later.

We have a window of opportunity to use this faltering global economy and capitalise on the temporary slowdown in greenhouse gas emissions as industry, development, and consumption levels fall. However, the economic downturn is also affecting clean energy markets and money flows to transition to a low carbon economy, measures including government economic intervention will need to be considered.

Economic intervention is only one of several approaches needed and to get a real handle on the problem. We need to start the conversations about limiting population growth, defining what is responsible consumption, and imbedding an accurate price on externalities such as Carbon emissions.