Conversations with Corporate Decision Makers #4 Voluntary Programs

So, you've defined your carbon footprint and purhcased green power; what next? This conversation will discuss a few different options for reporting your entity's actions.

Him/Her: Hey, thanks for sitting down with us today.
Me: My pleasure.

Him/Her: We've defined our carbon footprint for our 25 US facilities and have made 20% of our energy consumption green by purchasing RECs. You've also helped us qualify for the EPA Green Power Partnership; so what's next.
Me: The next step is reporting your emissions. You have a few choices:

1. US DOE Voluntary Reporting Program 1605(b)
2. California Climate Registry
3. EPA Climate Leaders
4. WWF Climate Savers

Him/Her: Ok, could you quickly discuss each one?
Me: Sure.

1. US DOE 1605(b) - This program is probably the most underutilized of the four choices. It gives industrial companies a means for differentiating themselves, as it actually rates your overall carbon emissions measurement and quantification methodologies. The more direct your company is (by using CEMS - Continuous Emissions Monitoring Systems) the more robust your results will be. In my opinion this options is more attractive for industrial polluters who may have invested more capital in their monitoring technology and want to receive credit for their efforts.

2. California Climate Registry - This program is the most appropriate for large office based organizations and entities with offices located in California. It is important to understand that you need not have any facilities in the state of California to register your emissions. It is also important to understand that California will likely merge with RGGI (and possibly preempt the federal government and join Kyoto). This means that early voluntary actions now will likely have a real financial benefit once allowances are doled out beginning Jan. 1 2012. Also, California Climate Registry requires 3rd party verification - which is integral to the process of carbon trading.

3. EPA Climate Leaders - This program is very similar to the California Climate Registry, but will not result in trading benefits. This has been the standard for US corporations for the last few years, but CCR is likely to replace it.

4. WWF Climate Savers - This program focuses more on helping its participants become more active in reducing emissions, but the formal reporting program will not likely be as robust as the CCR. The first six participants in the WWF Climate Savers were International Business Machines (IBM), Johnson & Johnson, Polaroid Corporation, Nike, Lafarge, The Collins Companies, and Sagawa Express.

Him/Her: Which program would you suggest for us?
Me: Well, since over 90% of businesses carbon emissions are from office/facility occupation and not direct combustion or industrial process emission - I would suggest California Climate Registry. The program is robust, user friendly, and will likely become a part of the national reporting system in the US.

Him/Her: Ok, thank you. Next time could we talk about the steps and time horizons involved with reporting emissions to California Climate Registry.
Me: Absolutely.

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.