Carbon Management Strategies: Insetting Part 2

The Differences Between Insetting & Offsetting 

Continuing with the previous blog concerning Insetting and Offsetting, we have attempted to give a summary of the key differences between the two options which are highlighted as follows [1]: 

Development

Offsetting 

Emissions reduction projects developed by “project developers”.

Insetting 

Emissions reduction potential is identified by businesses exploring their supply chain, staff, and customer GHG footprints.

Verification and Certification

Offsetting 

Projects are verified and certified through programmes such as the Clean Development Mechanism, Voluntary Carbon Standard, or Gold Standard to name a few. 

Insetting 

Agreement between stakeholders on how emission reductions will be achieved through collaboration action. How the resulting benefits will be shared and communicated. The total emissions reductions may be uncertain at the point of agreement of inputs.

Transaction

Offsetting 

Emissions reductions credits are traded between two entities. Quantities and prices are specified in the contract and normal trading conditions are applied on issues such as timing of delivery.

Insetting 

Agreement between stakeholders on how emission reductions will be achieved through collaborative action and how the resulting benefits will be shared and communicated. Total amount of emission reductions may be uncertain at point of agreement of inputs.

Monitoring/ Follow-up

Offsetting 

Monitoring and follow-up is normally specified in contract. 

Insetting 

Emissions reductions occur within the boundaries of one or several of the participants and will be captured within the scopes of corporate or individual GHG accounting. 

Relationships

Offsetting 

Purchaser and offset provider are normally discrete/ non-related entities (essentially a trading relationship).

Insetting 

Project is a collaborative activity between stakeholders in one or more businesses.

Written by Jimmy Olet

[1] Econometrica.com

Carbon Management Strategies: Insetting Part 1

What is Carbon Insetting?

It is certainly clear that the environment is of significance being thrust to the forefront of public perception in recent years. As a response, countries and corporations are increasingly seeking to demonstrate their environmental leadership either through policy (such as introducing Emissions Trading Schemes or planning them), or by announcing and acting on carbon reductions strategies.

On the side of companies, whilst it is clear for a company to seek to reduce their energy usage and conserve resources, they ultimately will have limited effects if carbon neutrality is desired. For as start, continually cutting targets for energy usage become more challenging over time in a manner akin to the shape of an exponential decay curve – the magnitude with which cuts are feasible (without hurting the bottom line) decreases.

The company can then invest in renewable energy for the remaining energy requirements. Even at the end of all of this, there will always be a residual footprint because of operating from a host of sources such as corporate travel, refrigeration leaks, outsourced goods etc. For a company where these emissions sources are significant, it is more than possible that they may undermine emissions reduction efforts.

There are a number of means in which these can be neutralised such as carbon offsetting, which if unfamiliar, is the process of neutralising emissions within an organisational boundary, by avoiding the release of emissions in another location – preferably, where the required technology will have social benefits such as generate jobs, or provide stable electricity for example.

Given the nature of the instruments, there are often fierce debates associated with carbon offsetting which are understandable. The source, as with any purchase is key, where depending on said source, it can determine the effectiveness of the carbon offsets and whether they can meet the intended aims.

At their best, the offsets are real, manageable, and verified emissions reductions that adhere to additionality achieving far greater reduction in tonnes on CO2e per unit currency than an investment in internal carbon reductions. The reductions are transparent, adhere to additionality, offer no leakage, are not double counted, and raise awareness [1]. There are a host of strict verification-bodies (or third parties) such as Gold Standard, or VCS to help ensure these benefits are realised.

The Implementation of Carbon Insetting

In addition to offsetting, a solution known as “carbon insetting” can be employed. This can be defined according to Tipper, Coad, and Burnett (2009) as:

“A partnership / investment in an emission reducing activity within the sphere of influence or interest of a company (outside WBCSD [World Business Council for Sustainable Development] Scopes 1 and 2), whereby the GHG reductions are acknowledged to be created through partnership and where mutual benefit is derived” [2].

In other words, emissions reductions are realised through partnership with an entity in the company’s supply chain, or stakeholders. The result is mutual benefit where the company reduces the environmental impact, and the partner realises social or financial benefits. It is thus considered the most innovative carbon-offsetting product in the world. 

What is also key is the fact that at a time where company's are becoming aware of the climate risks associated with climate change, this can offer a useful means for the corporate entity to reduce it emissions, reducing and promoting the reduction of emissions amongst those it does business with (suppliers), and also aids the vitality of the company and the environment as a whole. See here for another piece on Climate Change Incurred Business Risks.

Differences between Carbon Offsetting and Carbon Insetting

The main difference between offsetting and insetting is that in offsetting, emissions and reductions are considered discrete activities with no interaction between parties except a financial transaction. On the other hand, insetting involves the exploration and partnership with various stakeholders to identify emissions reduction opportunities.

The compensation actions of the "offsetting" are held in a separate locations and use uncorrelated technical activities and entities; "insetting" integrates socio-environmental commitments at the heart of the companies’ sectors and occupations where benefits include:

• The integration of mechanisms, and offset impacts within your sector and occupations; 

• Securing your development by actively conserving resources upon which your activities depend upon (such as plants, climate, water, raw materials, etc.); 

• Working in partnership with other parties to enhance your impact and added value; and 

• Acting in accordance with your business aims [3].

To be continued...

Written by Jimmy Olet

Consultant at CNI (UK)

[1] http://secondnaturebos.wordpress.com/2010/03/25/carbon-insetting/

[2] http://www.ecometrica.com/assets//insetting_offsetting_technical.pdf

[3] http://www.purprojet.com/en/insetting-definition

Risk & Resilience

It is quite clear that climate change is a real and present concern; one that is affecting our climate is clearly adverse ways. Looking back on the past 5 years, there have been a myriad of natural disasters in the form of hurricanes, droughts, and floods. In addition to the regrettable widespread impact on human life, the untold damage climate change is having on organisations is extremely detrimental to the way businesses operate. 

Damage and Insurance

The National Oceanic and Atmospheric Administration reportedly calculated 11 extreme weather events that wrought more than 1 billion dollars in losses [1] in 2012.

Insurance companies for example are already feeling the effects of climate change. The billions wrought in damage is costly and may make some areas uninsurable [2] where the unpredictability of the environment is adversely altering the risk assessments insurance companies undertake [3].

“In some high-risk areas, ocean warming and climate change threaten the insurability of catastrophe risk more generally… To avoid market failure, the coupling of risk transfer and risk mitigation becomes essential.” – Warming Of the Oceans and Implications for the (Re) Insurance Industry: Geneva Association [4].

Wildfires, last year laid waste to 10 million acres across the US mainland; Typhoon Bopha struck the Philippines destroying more than 300,000 homes, and extreme drought left over 1,000 towns in Brazil short of water leading to food shortages – due to livestock perishing – and growing tensions due to scarcity of water. Situation such as the latter in Brazil are a stark pointer to a world in which climate risks issue restriction on the resources which we take for granted.

Business Implications

In a business context, climate change has the potential to disrupt operations, devastating sections of the supply chain, or at least reducing access. These impacts have costs; costs which businesses cannot afford to ignore. It has been reported that climate change costs organisations between 1% and 5% depending on whether quick and decisive action is taken by policymakers, or not. Further, the impact of climate change has been suggested to double every 14 years according to a sectoral analysis covering 11 sectors such as oil & gas, food producers, and airlines, performed by TruCost [5].

In light of these alarming revelations, climate change – relative to a few years ago – is becoming a key risk issue. Investor communities for example, are increasingly concerned about the [financial] constraints of a world in which water becomes a scarce commodity; energy becomes so expensive, it diminishes organisational value; among others. Further, a survey completed by Ernst&Young in collaboration with GreenBiz Group titled, Six Growing Trends in Corporate Sustainability showed that shareholders are increasingly enquiring about the efforts a company is taking to reduce it energy consumption, its greenhouse gas reduction efforts, and how the company is responding to Corporate Reporting.

“Climate change should be amongst the top considerations companies will need to take into account when making long-term capital investment decisions.” – David Batchelor, CEO of risk management firm, Marsh.

Sustainability is an issue which organisations will have to keep in mind in future, if they are not doing so already as in future, it likely will become a potent threat to the health and vitality of business. On key way to do this is to access the business areas of an organisation, analyse all the products and services provided, and determine their exposure to climate change. Ask yourself what the worst case scenario is, and whether the organisation is prepared for it. It also makes sense to analyse products and services which are considered low net worth relative to high earning services and products as even they can be profoundly sensitive to supply chain shocks – a prime example is that of palm oil, and sustainability issues surrounding the widely used oil.

This is more commonly known as a Scenario Analysis and is a means of risk management. In this context, each product or service is analysed on its susceptibility to water scarcity, pressure on agriculture and potential risk, and excess deforestation to name a few. Assess where there are key vulnerabilities in the supply chain, and work within the organisation to address how these issues can be alleviated.

Conclusion

Climate change is a serious issue of our time. Whilst it presents risks, it also presents opportunities for business, organisations etc. to capitalise upon. By managing these risks, the resilience of the business entity can be fortified through securing (or at least exercising damage limitation on) supply chains, and as such enhance organisational value. Managing these risks will almost certainly positively impact on business value and share prices, and additionally create value for stakeholders as a whole. (For example, using more renewable energy reduces the associated externalities associated with oil and gas such as air pollution and local pollution which preserves natural capital – something good for the planet as a whole.) Further in managing these organisational risks, it can present opportunities – business and otherwise – and lead to innovation. The benefits that result in managing climate risks are yours for the taking.

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[1] State of Green Business 2013 – Joel Makower and Associates (2013)

[2] http://au.ibtimes.com/articles/484241/20130628/parts-world-increasingly-uninsurable-due-climate-change.htm#.UdGiGz7h5oY

[3] http://blueandgreentomorrow.com/2013/06/25/climate-change-is-making-parts-of-the-world-uninsurable/

[4] https://www.genevaassociation.org/media/616661/GA2013-Warming_of_the_Oceans.pdf

[5] KPMG (2012). Expect the Unexpected: Building business value in a changing world

Corporate Reporting and Its Integration into Businesses

What is Corporate Reporting?

Corporate reporting – also known as GHG Reporting, Carbon Footprinting, or creating a GHG Inventory for example – is the act of reporting a company’s (or organisation’s) emissions in a manner that preferably adheres to the following principles as defined in the WRI GHG Protocol[1]:

• Relevance – ensuring the reported emissions reflect the reporting company within a determined “inventory boundary” 

• Accuracy – ensuring the reported data is no an under- or overestimate as far as possible 

• Completeness – the faithful accounting of a company’s GHG emissions within the boundary justifying exclusions 

• Transparency – refers to the manner in which the data and reporting process is undertaken; there should be an audit trail to aid internal (and external) verification 

• Consistency – consistent, credible methodologies should be used to accurately measure emissions clearly documenting this

In a world, where the effects of climate change are being felt with a 0.8oC global temperature rise[2] – considering the fact that we as a planet need to limit temperature rise to no greater than 2oC above pre-industrial levels (1861-1890)[3], which involves cutting anthropogenic (man-made) emissions by 80%, and the fact that in May 2013, we passed the 400 ppm (part-per-million) milestone[4] – the need to manage our emissions has never been higher.

It is no secret that a majority of these emissions are from corporate activities, such as mining and aviation, and thus, as an aid to managing these emissions, corporate reporting is a means to find out just how much CO2e organisations emit. Not only can this information give an absolute figure of emissions, the value can highlight risks the organisation may be exposed to, such as regulatory risks, and opportunities to cut emissions, and thus fortify organisational resilience.

How Wide Spread Is Corporate Reporting?

Within the past few years, the concept of sustainability reporting is starting to take root. A reported 5,000 companies worldwide are reported to be issuing corporate reports according to CorporateRegister.com. Of the many reasons a company may choose to produce a corporate report, it can be agreed that there is certainly an increase in pressure from stakeholders to be more transparent about how an organisation conducts operations; about the steps a company is taking to manage its energy use; about the steps the company is taking to become more sustainable in its business practices.

For example, Harvard Business School Professor Robert G. Eccles, one of the leaders of the Integrated Reporting movement[5], said:

“Even so-called mainstream investors are increasingly recognising that a company’s ESG performance increasingly affects its ability to create value for shareholders over the long term, and can even put its license to operate at risk.”

Further, François Passant, Executive Director of the European Sustainable Investment Forum, said:

"Looking at non-financial aspects of an investee company is becoming the new norm for investors, and one has just to look at the spreading of ESG integration practices to realise this[6]."

Why Report in the First Place?

It is also very clear that companies produce these reports for a manner of different reasons. A study by Ernst & Young: “2013 Six Growing Trends in Corporate Sustainability”, highlighted the top four key reasons (among many others) of producing these detailed reports amongst the companies they surveyed were: increasing sustainability awareness (63%), for transparency with stakeholders (56%), enhancement of corporate reputation and brand (54%), and the creation of a competitive advantage (37%).

Being completely impartial, it is unwise to state that in completing a corporate report, there is a level of short-term risk involved; particularly reputation-wise. (What if the report is not completed to the required standards? What if the required information is found to be unavailable? What if the information found is not particularly positive?) But the risk is far outweighed in the long-term due to:

• Better measurement of the company’s triple bottom line – environmental, social, and economic performance - Reporting annually improves the methods and quality of reporting, which can be a distinct advantage when regulations become tighter, or reporting becomes mandatory; 

• Increased risk management - Corporate reporting can highlight the areas of the business that are exposed to risks linked to climate change (such as in the supply chain) and sustainability; 

• Increased operational efficiency - Highlighting the above mentioned risks can lead to innovations in product offerings and the way the company does business leading to increased productivity and efficiency; and

• Enhanced decision-making ability.

On the other hand, failure to report can lead to:

• Increased (and perhaps avoidable) business risk;

• Appearing less transparent with stakeholders – especially if competitors already do so.

The communication value of these reports is immense allowing the companies to reach customers, investors, business partners, media and a range of other stakeholders. They also have value within the organisation where they can be used as a tool to raise awareness of the non-financial aspects of the organisation, for example, having them become mandatory reading for employees. This can perpetuate the company’s aims if it is pursing sustainability initiatives, and wishes to cut out undermining activities in addition to aiding internal communication.

A document published in July 2013 by the United Nations Environment Programme Finance Initiative (UNEP FI) outlines that carbon footprinting will ultimately reduce policy, regulatory, and financial risks associated with GHG emissions[7], which will almost inevitably increase as the effects of climate change get worse[8].

GHG reporting additionally aids in the battle against climate change by indirectly supporting sustainable development. This is because as reporting highlights where emissions are coming from, where there are risks, and where they can be reduced, it is within the power of the reporting company to make the steps to reduce the emissions. As such companies will be better placed to drive investment toward low carbon projects – either internally such as renewable energy integration, or externally supporting international projects, i.e. carbon offsetting or carbon insetting.

Suggestions

As reporting is a means of documenting performance, it can be an aid to target setting and meeting goals. It may even aid in meeting goals the company has set; reporting helps the company identify business areas where costs can be cut, and resources can be conserved. Some targets imposed may take the form of KPI’s, or Key Performance Indicators, which can be used to measure performance internally and even externally with competitors assuming the KPI’s are comparable. These KPI’s are then often reported.

It highly instrumental to choose the issues and indicators (KPIs) your organisation will place focus upon determining the overall quality of the report, and will aid in its preparation. The organisation is encouraged to determine the extents of its operational and organisational boundaries to establish the scope of the reporting to again aid in the report preparation process[9].

To help decide what to report upon, the organisation could engage with stakeholders to determine what is important to them, so that when the stakeholder reads the finished report, they will have access to the information they have requested. Further, in engaging stakeholders, the organisation can better formulate strategies that align with the interests of the stakeholders.

Conclusion

Despite the challenges presented in producing these reports, it is hard to argue against the merits. It aids corporate compliance, better prepares the company to future regulations, identifies risks and resilience issues. It is useful as a means of determining whether the company is meeting emissions targets, and strengthens the organisations longevity by identifying where costs can be minimised and drives sustainable development.

The act of reporting will not simply vanish. New legislations such as the UK’s Mandatory Reporting comes into effect this year (2013), which will make it compulsory for FTSE companies to do corporate reporting with the long-term goal of extending it to all companies. Further, in producing these reports, it is hoped that in time, the tools required to produce high quality reports will improve[10] – having being termed “rudimentary” – compared to the tools used in financial reporting for example.

Written by: Jimmy P. Olet

[1] http://www.ghgprotocol.org/standards/corporate-standard

[2] http://revcom.us/a/305/urgent-climate-change-wake-up-call-en.html

[3] den Elzen M.; Meinshausen M. (2005). Netherlands Env. Assessment Agency. Meeting the EU 2°C climate target: global and regional emission implications.

[4] http://www.theguardian.com/environment/2013/may/14/record-400ppm-co2-carbon-emissions

[5] State of Green Business 2013 – Joel Makower and Associates (2013)

[6] http://www.businessgreen.com/bg/news/2283988/investors-demand-clearer-sustainability-reporting

[7] http://www.businessgreen.com/bg/news/2283988/investors-demand-clearer-sustainability-reporting

[8] http://www.unepfi.org/fileadmin/climatechange/UNEP_FI_Investor_Briefing_Portfolio_Carbon.pdf

[9] Ernst&Young – Seven Things CEOs Boards Should Ask About Climate Reporting (2013)

[10] State of Green Business 2013 – Joel Makower and Associates (2013)

The Importance of Natural Capital

Natural Capital

What is Natural Capital?

The concept of Natural Capital encompasses Earth’s limited resources, that is, clean water, breathable air, and the liveable climate to name a few. Given the dependency of numerous organisations on natural capital, the concept is poised to become much more significant on the agenda of internal discussions within companies.

Whilst it is highly difficult to measure the value of all the natural capital on the planet, that has not hindered attempts to do so. Valued at 47 trillion USD (for 17 of the world’s ecosystems)[1], the value of the ecosystems are insurmountable given the scope of resources the term “natural capital” encompasses.

Why Will There Be Constraints on Natural Capital?

Items key to the advancement of the planet such as globalisation, wealth, urbanisation, material use, population and climate change are all interconnected affecting each other in varying ways forming what has been described as a “nexus” by organisations such as KPMG[2]. Analysing all listed items in turn, it is evident to see how they are interconnected.

Using a similar example in KPMG’s 2012 report, “Expect the Unexpected: Building business value in a changing world”, an increase in wealth (and thus a growth in the middle class) w4ill very likely increase the demand for goods and services, in turn, placing more stress on producers and supply chains. The added pressure will result in added pressure on natural and resource capital to deliver these goods and services. In order to feed the growing population, agriculture will be pressure to provide more food, putting increased strain on the planets waters supply. A growing middle class will likely lead to more individuals migrating to cities (i.e. urbanisation) again putting strain on natural and resource capital to feed, clothe, and meet demand for items and services which are essential such as power.

However, to the astute mind, it is clear that for these projections, there is a key point missing. How are these resources being maintained? It is both unsustainable, and irresponsible to continue consuming these resources assuming their supply is infinite. The supply of fresh water on the planet for example is extremely limited relative to (undrinkable) saltwater, and the means to create more fresh water from seawater, is an extremely energy intensive process, for the time being. Increased agriculture does not account for erosion of the topsoil, and depletion of key nutrients required to produce basic crops. Urbanisation also fails to account for the impact of migrations from areas where climate change has had a particularly damaging effect.

The Growing Importance of Natural Capital

For an organisation, financial reporting is highly developed having been utilised for decades to determine a myriad of metrics and values that determine the success (and sometimes failures) of the organisation and usually where they have occurred. However, the standard and more common means of reporting (financial reporting) fails to account how sustainably the organisation is operating. It is to the detriment of the organisations long-term success if no consideration is made regarding how that performance was obtained – more so to the planets detriment. How can than the organisation continue to operate if value is being destroyed as time advances?

Whilst natural capital has seldom been included in internal corporate dialogue or business strategies, the Rio+20 United Nations Conference on Sustainability showed a change having what was considered a surprising outcome: the signing of the Natural Capital Declaration[3] by 39 global financial institutions, primarily from Europe and Latin America.

Further, items such as water security served as key items on the agenda highlighting how organisations are now beginning to consider the risk associated with a natural capital constrained world. This act represented the positive change of mentality by corporation to act responsibly; to operate in a manner that will not endanger the wellbeing of our planet in years to come.

Whilst it is not currently included in reporting, it appears to certainly be on the horizon representing that crucial first step. A joint KPMG-ACCA report (2012) concluded that over 50% of CEOs and CFO’s include natural capital in their business-risk evaluation, and 49% highlighting that natural capital was linked “operational, regulatory, reputational, and financial risks”[4]. It is clear that companies will be under greater scrutiny to at least measure their natural capital impacts.

There is also a growing sense of urgency amongst large organisations to show leadership with regards to the preservation of natural capital. Coca-Cola for example has reportedly assigned a monetary value to the natural resources it utilises such as fresh water in collaboration with The Nature Conservancy (TNC) and World Wildlife Fund[5].

Further, as of July of this year (2013), major retailers in the building sector have agreed on new water efficiency labelling[6] marking a key first step to making the initiative widespread in many other sectors.

What are international organisations doing to facilitate understanding?

To better facilitate the understanding of “natural capital”, organisations such as TEEB (the Economics of Ecosystems and Biodiversity) convened by the UN, the EU, and International Union, aim to demystify the concept and have companies  develop a “universal understanding” of what the true value of natural capital is and why it must be preserved.

Scenario Analysis

A key point to note is that from a company’s viewpoint, it is necessary to understand that the insecurity of natural capital will result in supply chain constraints; particularly for sectors which are more dependent on natural capital, such as water, or forestry reserves.

Whilst climate change is recognised as a key risk, for risk assessment, it is not enough to just recognise it as a risk. Analysis must be completed to determine where there is risk bourne from natural capital limitations. An organisation and its departments, or business areas, will have varying exposures to the dangers of climate change and the concept of sustainability. It is up to the organisation as a whole to gather and hold a meaningful dialogue – free of technical vocabulary, to allow all members to engage – and determine which products, services, departments, etc. are exposed, and to what degree. Then and only then, can action be taken that will serve its intended purpose: to make the organisation more sustainable.

Conclusion

Natural Capital has traditionally not been a key item on the agenda of an organisation’s internal dialogues with regards to conservation, but as time has passed, the issue of climate change, has pushed sustainability and by extension natural to the forefront of internal communications. Tools are being developed, and work is being undertaken to more accurately measure the value of natural capital in order to implement more effective means of preserving the resource. However, this action needs to be implemented at an enhanced speed to prevent unfavourable circumstances such as conflict or utter destruction, which is detrimental not only for business, but to everyone on the planet.

Written by Jimmy Olet

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[1] State of Green Business 2013 – Joel Makower and Associates (2013)

[2] KPMG (2012). Expect the Unexpected: Building business value in a changing world

[3] http://www.naturalcapitaldeclaration.org/

[4] www.kpmg.com/UK/en/IssuesAndInsights/ArticlesPublications/Documents/PDF/Tax/natural-capital.pdf

[5] http://www.2degreesnetwork.com/groups/managing-sustainability/resources/natural-capital-accounting-essential-tool-sustainable-future/

[6] http://www.edie.net/news/4/Major-retailers-agree-on-new-water-efficiency-labelling/

Could leadership change save the Australian Carbon Market?

26^th June saw the latest chapter in the see-sawing power struggle within the Australian Labor Party (ALP).

After a land-slide victory in 2008, spearheaded by Kevin Rudd, the party’s popularity began to slide year on year, resulting in Julia Gillard staging a successful ‘coup’ in 2010 and ending in Kevin Rudd’s reinstatement as leader of the party and ultimately Prime Minister in 2013.

Often referred to as unpopular within the party, but a hit with the electorate, Rudd has a strong history on environmental issues, having described global warming as "the greatest moral challenge of our time". Mr Rudd's popularity nose-dived when he decided to shelve his original emissions trading scheme, a decision he later described as a “mistake”.

It is hoped Rudd’s reinstatement will stem the consistent loss of voters, and if not secure another term, at least minimise the impact of what polls suggested would be a resounding defeat.

Environmentalists the world over will be hoping this is so, as running throughout all of this is the issue of Carbon Pricing, enshrined in the Clean Energy Future Act (CEFA).

Although seen as unpopular by many at the time, and despite the criticisms aimed at the scheme, Carbon Pricing has brought about significant change.

In fact through a fixed price of around $25 AUS per tonne of carbon, Australian carbon emissions are at a 10 year low. Coal generation is down, and cleaner alternatives are up; wind generation is at 3.8 per cent, hydro 8.7 per cent and gas at 12.7 per cent of the National Electricity Market. [1]

Public opinion is also supportive of the scheme. Fewer voters want to see the carbon tax removed now than before it took effect on July 1 last year. Nearly half, or 48%, wanted the tax scrapped a year ago, compared to only 37% of respondents in a recent Climate Institute poll.[2]

In spite of all this, waiting in the wings to become the next PM of Australia is Tony Abbott, leader of the Liberal Party who recently swore:

"I am giving you the most definite commitment any politician can give that this tax will go. This is a pledge in blood."[3]

If things remained as indicated by polls at the beginning of the month, Tony Abbott would face little resistance in his bid to claim head office in September, insisting that this election is a ''referendum on the carbon tax'[4]'. So once there, even though he would be unlikely to control the Senate outright, it is thought repealing the carbon price will be enthusiastically supported by conservative’s allies.

Any repeal of the pricing system will facilitate a rapid reversal in electricity through coal’s fall from prominence and severely undermine investment in the renewables industry.

Already its long-term validity is in question as beyond 2015, as carbon moves from a fixed to a floating price mechanism, the price per tonne could be as low as $8 AUS.

The long-term aspiration of the CEFA has been to link up with the EU ETS.

The hope is a multi-national cap-and-trade platform will encourage other nations to implement schemes and resultantly reduce the anti-competitive nature of unilateral implementation of domestic schemes.

Additionally, closer to home, it has often been suggested that combining the EU ETS with similar global schemes will provide a solution to the issue of carbon price volatility, which has hindered the success of its first two phases.

Encouraging signs for the Rudd government have begun to appear in recent weeks. The Newspoll survey of 9th July showed Labor are now tied with the Liberal Nationals; today’s Fairfax/Nielsen poll echoing this saying the two major parties each have 50 per cent of the two-party preferred vote - a seven-point gain for Labor on last month's result; and even the Roy Morgan Research of Monday 8th put Labor in front with 55% of the two-party preferred vote, compared with 45% support for the coalition.

Such a considerable swing in momentum, over such a short period of time, shows Rudd’s popularity with the electorate – an electorate who increasingly support the carbon tax. Should Rudd maintain this momentum to the polls a secure a miraculous new term for Labor, let’s hope he has learned from 2010 when his change of heart on the extent of the carbon pricing scheme spelled the end of his first term in office.  

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[1] http://www.reputex.com/media-centre/q2-fy13-energy-outlook-reputex-webinar/

[2] http://www.climateinstitute.org.au/articles/media-releases/no-mandate-for-carbon-laws-repeal,-national-poll-finds.html

[3] http://www.abc.net.au/am/content/2011/s3337450.htm

[4] http://www.news.com.au/national-news/carbon-tax/railway-association-says-train-costs-to-rise-by-110m/story-fn99kjia-1226413167093

Written by David Lennox (Consultant at CNI UK)

The Pressures of Success

The publishing of the 2013/2014 Barclays Premier League fixtures sees the race to win the biggest football league in the world begin all over again. And when operating a football club – with all the pressures of success - it can be easy to forget about the clubs impact on the environment.

Unfortunately however, due to the quantities of energy used keeping your pies hot and your beers cold, keeping the lights on through those dark winter evening matches, and the fuel used to transport players and staff, your club can be responsible for the release of significant quantities of greenhouse gases (GHGs) into the atmosphere. 

And the global nature of the modern game has seen emissions rise steadily over recent years. Take travel emissions for a start. Premier League matches are broadcast in over 200 international territories to over 600 million homes, and this global appeal has seen clubs trotting the globe to entertain their ever increasing fan base. In 2012, it was reported that pre-season travel by Premier League clubs totalled a whopping 186,000, encompassing countries from the US to Australia, the Far East to South Africa and everywhere in between.

While the scheme has been shelved for now, the prospect of the 39^th Game adding an international fixture to the Premier League season, is still a distinct possibility. The Champions League and Europa League have grown significantly in the last decade and it has recently been announced that the 2020 UEFA Euro Championships will be held at venues across the continent. Football is truly a global game, and while this adds to the spectacle, it also adds millions of tonnes of GHGs annually into the atmosphere.

In recent years, as the political processes attempting to find a solution to climate change have stalled, the call for action has been answered increasingly by the private sector. Football's world governing body FIFA has decided to include environmental protection in future bidding agreements, starting with the FIFA World Cups in 2018 and 2022; with Qatar 2022 aiming to become the first Carbon Neutral World Cup. In recent years FIFA also invested €400,000 in a carbon offsetting project in South Africa and offset the 92,000 tonnes of unavoidable CO₂ emissions from the 2006 World Cup in Germany.

This rise in awareness, and the desire to drive change, requires innovative new ways to promote sustainability worldwide. CNI works with a number of high profile clients, such as Formula 1 teams, English Premier League clubs and the land speed record attempt among many others; all of whom are keen to develop their business with resource, and therefore financial, efficiency at the heart, while addressing the stigma attached to their perceived carbon intensive nature, through our complete end-to-end energy and carbon management service.

CNIs' involvement with football clubs comes from a range of methods; from energy auditing and efficiency consultation through to full carbon neutrality. Most importantly, CNIs’ consultancy service can provide financial savings to clubs from day 1; through unique energy management and funding platforms, as they did with Newcastle United in 2012.

Following NUFCs lead would see the direct reduction and abatement of 100,000s of tonnes of GHGs, which would have been emitted by football clubs in the UK. Plus, due to the focus on English football internationally, would uphold the image of the English Premier League as the best in the world, and will encourage stakeholders and supporters the world over to follow suit. 

Sustainability is proving a powerful tool for building brand and reputation, while providing benefits to the wider world, opening up a whole new base of supporters, ready to push your club to the next level.

And offsetting the residual emissions would relieve the environmental strain the next time Emmanuel Adebayor takes a private jet from Togo, Peter Odemwingie makes a late night dash down the M40, or when Arsenal decide to fly to Norwich.

Let’s hope sustainability can be the real winner this season. 


Written by David Lennox, Consultant at CNI (UK)