Monday, November 14, 2011

Proof that corporate reputation matters in a world in climate crisis

The Environment Agency's Performance League Tables for the Carbon Reduction Commitment (CRC), may not be the most accurate register in the world, but it's worked in one respect: it's got the organisations whose energy efficiency performance is published in it anxious about their reputation.

Isn't that the point of the CRC? Naming, praising and shaming are highly effective ways of making people get their acts together.

The Environment Agency's website does say that all participants were given a chance to check and verify their data until 27 September. Some hadn't noticed their own mistakes until it was too late.

But others were concerned about the inadequacy of the criteria used by the EA that completely ignores energy-conscious behaviour which ought to be recognised.

For example, BT, which scored 95% on its Early Action Metric, argues that the CRC league table should also give credit for consuming better energy, not just less energy.

Its Director of Energy and Carbon, Richard Tarboton, complained to me that the telecom giant's use of wind turbines, solar arrays, and other low carbon energy sources, are not recognised in the current CRC league table.

He has issued a call for the Government and power industry to implement an accredited 'energy source label' in order to create customer demand and increase the share of renewable generation.

He even says that this would provide "an opportunity to merge CCL (Climate Change Levy) and CRC into one scheme, thereby reducing the administrative burden" for all concerned. Such a change would be revenue neutral to the HMR, Richard says.

Waste company Veolia Environment, ranked 1,299th, is also furious at its ranking.

Since the company also generates its own renewable energy from its waste plants, for example from landfill gas, which exceed what it consumes, its net emissions as defined under the CRC are actually negative.

But the CRC scheme design did not envisage there would be zero or negative emitters when calculating an Early Action Metric (EAM) score, and so Veolia Environment's early actions are not properly reflected in the Performance League Table.

In another example, Pepsico, ranked at the same level, became in January the first company in the world to use the Carbon Trust's Carbon Product Footprinting as a management tool to drive green growth across its supply chain, and this should have earnt it some Early Action Metric points.

Many companies with high rankings in the table obtained the same support from the Trust.

Furthermore, the Environment Agency gives no credit in the criteria for improvements companies have made as part of a Climate Change Agreement.

If organisations are not rewarded and recognised for their efforts, then there is less motivation for them to change their behaviour.

If they are not exposed for their lack of effort, so that the public and stakeholders can lobby them for improvements, then the same applies.

As Harry Morrison, Managing Director of Carbon Trust Certification said this week, all this fuss at least means the issue is being "forced into mainstream business thinking".

And, heaven knows, we need all the effort we can make.

The latest news around climate change and efforts to tackle it are even more alarming than last month's.

This week, the International Energy Agency warned in its World Energy Outlook that there is a high risk of the world being locked into a high carbon future which would cause cumulative carbon dioxide emissions over the next 25 years to create a long term disastrous average temperature rise of 3.5°C - far higher than the red-line level of 2°C.

It says "delaying action is a false economy, as, for every dollar of investment in cleaner technology not invested by the power sector before 2020, an additional $4.30 would need to be spent after 2020 to compensate for the increased emissions".

Everywhere, emissions are rising despite the recession.

More and more polluting coal plants are being built around the world.

In America more fossil fuels were burnt in 2010 than in 2009, while renewable electricity remained approximately constant, the Lawrence Livermore National Laboratory reported.

In the UK, too, last year, greenhouse gas emissions increased by 3.5%; more than double the 1.3% growth in the economy, according to PwC Low Carbon Economy Index.

Up to now, the Government has boasted that it has decoupled economic growth from a growth in greenhouse gas emissions.

Now it emerges that it has achieved the amazing feat of increasing emissions while stalling the economy. So it's still decoupled, but in the wrong way!

It also emerged this month that the Government expects that no new nuclear plants are likely to be built before 2025, and that the Great White Hope, carbon capture and storage, is possibly a shimmering mirage.

Both of these technologies are too expensive and technically immature to make any difference by 2020, i.e., in the all-important five year-long window of opportunity which the IEA says is all we have left.

Its World Energy Outlook 2011 makes it abundantly clear: energy efficiency and renewable energy are really the only games in town.

The UNFCCC Durban climate summit is fast approaching, amidst a stormcloud of anxiety from low-lying 'vulnerable countries', whose ministers are wailing this week about the total lack of climate finance committed to support developing countries to mitigate and adapt to climate change between the years up to 2020.

At least one ray of sunshine this week is that EU finance ministers signed off an estimated total of 4.68 billion euros in 2010 and 2011, as part of a commitment to provide 7.2 billion euros from 2010-2012 to help developing countries adapt to climate change and curb emissions, despite Europe's frightening debt crisis.

Jonathan Grant, director of PwC sustainability and climate change, said this week that the world needs nothing short of a revolution in the way it produces and uses energy.

A revolution is sparked by millions of individual efforts and a sense of overwhelming crisis.

The CRC may seem relatively small beer, and it needs improving, but it's part of the global revolution that is required to surmount this crisis.

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