Conversations With Corporate Decision Makers #3 Stewardship Claims

A common question that I hear is: "Besides slowing climate change in general; what are the benefits of buying green power or defining my carbon footprint?"

Him/Her: So, now that we understand our options for making an intial foray into the realm of corporate sustainability- can you explain how we can best leverage our actions?
Me: Sure, there are really three levels of involvement/sophistication to consider when you're making environmental stewardship claims.

1. EPA Program Membership
2. Voluntary Reporting Standards
3. Voluntary Emission Trading

Him/Her: #1 we know about. EPA Green Power Partnership and EPA Climate Leaders seem very straightforward. Green Power Partnership simply requires that we purchase Green Power or RECs and report those purchases. Whereas, EPA Climate Leaders simply involves doing a carbon footprint, setting a base year and objective and tracking emissions over time. What is the next level?
Me: Well, the next level is reporting your emissions (and emission reductions) under a voluntary framework such as US DOE Voluntary 1605(b) or California Climate Registry. The main difference is usually the inclusion of outside verification/certification of annual emission reports and public reporting on the registry.

Him/Her: What is the advantage of public reporting?
Me: Early voluntary actions may have real financial benefits under a future Cap & Trade emission trading program. California Climate Registry (CCAR) and the Regional Greenhouse Gas Initiative (RGGI) both allude to the potential for early actors to receive early reduction credits that could be traded with regular allowances when the two programs begin trading in 2012 and 2009, respectively.

Him/Her: How much could these early action be worth?
Me: That's actually level 3, which is trading the assets that you create by voluntarily reporting and reducing your emissions. The answer to that is somewhere between $1.50 - $15.00 per ton. The dollar value depends on how robust your emission reduction units are. These are things a carbon risk management firm should help you define. Things like measurement, verification, and motives help determine how valuable your early actions are. The highest level would be an emission reduction project that could qualify as a CDM/JI (Clean Development Mechanism/Joint Implementation). These would be assets certified under the Kyoto Protocol to be traded under that mechanism. The average Verified Emission Reductions (VER) project is current going for around $3.75/ton. (metric ton that is)

Him/Her: Ok, thanks for the info. Maybe next time we can talk more specifically about the voluntary reporting programs you'd mention.
Me: Absolutely, I look forward to it.