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Carbon Management – A Practical Approach for Business Jack Holden, Head Of Carbon Management, Ecos Corporation Casey-Cardinia Business Breakfast Pakenham.

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Presentation on theme: "Carbon Management – A Practical Approach for Business Jack Holden, Head Of Carbon Management, Ecos Corporation Casey-Cardinia Business Breakfast Pakenham."— Presentation transcript:

1 Carbon Management – A Practical Approach for Business Jack Holden, Head Of Carbon Management, Ecos Corporation Casey-Cardinia Business Breakfast Pakenham 12 th June 2008

2 Outline Global warming and carbon emissions overview Carbon trading and how it affects business Short term energy & carbon trends Actions for business The carbon neutral trap!

3 Digging out of a Carbon Neutral Trap

4 Climate Change What are we observing so far? 2007 Hottest year ever in Victoria Driest ever for Murray Darling rivers 2005 Strongest hurricane ever recorded (Wilma) Highest daily rainfall event in India ever recorded The most Hurricanes ever Hurricane Wilma, courtesy of United States National Oceanic and Atmospheric Administration

5 Mumbai Deluge 26/7/2005 1000mm rain in one day

6 Global mean temperature Global average sea level Northern hemisphere snow cover IPCC Forth Assessment Report WGI Direct Observations of Recent Climate Change 1850 - 2005

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8 Hotter days

9 Less rainfall

10 Carbon Cycle

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13 The history of CO 2 and temperature change shows great variations. A dynamic system.

14 Weve built this civilisation in an unusually stable, temperate period. It wasnt always thus. Sea level 125 m lower Sea level: Fairbanks, R.G., 1989, A 17,000-year glacio-eustatic sea level record; influence of glacial melting rates on the Younger Dryas event and deep-ocean circulation: Nature, v. 342, no. 6250, p. 637-642.

15 Sea level 4 – 6 m higher Weve built this civilisation in an unusually stable, temperate period. It wasnt always thus.

16 Conclusion: The earths climate is a naturally unstable system. Weve thrown a large CO 2 bomb into it. It has now gone off. ?

17 Adapted from Department of Climate Change, 2008

18 Greenhouse emissions per person -2003 ~26t CO 2 -e/person ~4 t CO 2 -e/person

19 Business Case For Managing Carbon Commercial Drivers Regulatory Drivers

20 MEGA COMPANIES ARE ACTING

21 Commercial Drivers. Investors, employees and customers GM to sell Hummer brand, Mitsubishi closes in Adelaide SUV sales down 60% in US since 2002 ANZ had a divorce from Gunns (costs $1M/day) Tesco & Walmart environmental disclosure requirements Health & beauty industry destocking harsh chemicals

22 Consumer Awareness Reduce your carbon emissions - Walk to the pub

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24 Regulatory Drivers National Greenhouse Energy Reporting Act (NGERS) Mandatory reporting of carbon emissions Begins 1 st July 2008. Only 700 to 900 companies, 300 first time reporters Corporate penalty is $220K, CEOs penalty is $44K operational control?

25 The fuel you burn (petrol, gas, diesel) creates scope 1 emissions The electricity you buy creates Scope 2 emissions

26 The carbon emissions embedded in the goods and services you buy are Scope 3 emissions

27 Emission Types Scope 1 (fuel) – in control Scope 2 (electricity) – in control Scope 3 (supply chain emissions) – not in control but maybe influence

28 Emissions Trading (1) Make bad things more expensive than good things Carbon markets are created by governments – they are not real Government mandates a cap (tonnes of CO2/year) Liable parties are polluters (defined by size and emissions source)

29 Emissions Trading (2) All direct emissions from facilities above 25K tonnes/year in the following sectors –Power stations yes –Manufacturing yes –Mining yes –Construction & property yes –Transport probably –Waste not sure –Agriculture & forestry too hard for now

30 How does emissions trading work? 1.Polluters buy permits (or credits) from the government to cover emissions 2.May be some free permits 3.Polluters then surrender permits to governments to cover emissions & 4.Can sell any surplus to other polluters who are short 5.Some activities like forestry may create extra permits 6.Reducing emissions saves $$ but no credits created

31 What it means for business If you are not a liable party (one of the top 500 - 1000 emitters) then you wont need permits Increase costs of: energy use - reduce or switch to cleaner fuels carbon intensive goods and services

32 Where will it hit hardest? Large impact from carbon price –Coal, aluminium, steel, cement Moderate impact from carbon price –Oil, Gas, transport, paper No carbon price –Solar Water Heating (much cheaper soon) –Wind & Solar electricity (needs to get cheaper) –Geothermal (big potential – but not yet) –Nuclear, hydro (other impacts) –Timber –Recycled products

33 Carbon Price in Energy Costs Caps may start in 2010 on biggest polluters $20/tonne of carbon 5c per litre of fuel and 20% increase in Victorian electricity retail price $40/tonne of carbon +10c litre + 40% Victorian electricity

34 Carbon Management for Business 1.Reduce energy use Improves profitability every day 2.Cleaner fuels Increases costs. Depends on energy intensity of your business 3.Carbon Offsets Increases costs. Only if clients want it.

35 Carbon Accounting for Business Use existing data systems for collecting energy data (finance or inventory) Convert (kwh, Mj, litres) from the invoice data to carbon units (www.greenhouse.gov.au)www.greenhouse.gov.au Build into existing reporting and performance management process Build an emissions reporting system that suits you before your clients build one that doesnt

36 Energy Efficiency Pays Compact fluro globes ~$6 each Each saves $15 each year Household saving in first year = $135 Then saves $225/year for 5 years Reduces about 1.4 tonnes CO 2 15 lights in an average house

37 Also business opportunities in cutting carbon

38 Easy Being Green cut over 4 million tonnes in 18 months

39 But you have to understand the risks

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41 Easy Being Green Weekly Globe Installations Annex 3

42 140 redundancies as carbon price dropped 50%

43 The Carbon Neutral Trap Know what you are digging into

44 Take Home Messages Saving energy will make even more money now Action matters – not targets Carbon accounting will matter soon but it isnt hard. Businesses can be very influential as consumers/ clients and advocates Develop your sustainability strategy before someone else does.

45 Innovation Pays

46 Most of the time


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