photo by Un Climate Change, www.flickr.com/people/45289935@N08/, used under the Creative Commons Attribution license
While the general sentiment towards the hazy outcome of the recently concluded United Nations COP15 Climate Change Conference has been one of disappointment –especially amongst the business community–the annual convention, held in Copenhagen last December, was far from a complete copout.
Most significantly, the event convened all major greenhouse gas (GHG) emitters such as the United States, China and Japan, notes Rebecca K. Green, Chair of the American Chamber of Commerce in Japan Environmental Committee, and senior consultant for green business consultancy Environmental Resources Management.
In particular, the U.S.’s role in steering negotiations is significant given the fact that America stayed out of the 1997 Kyoto Protocol, neither ratifying nor withdrawing from the treaty which sets binding targets on industrialized countries’ GHG emissions, due to China’s exclusion from the restrictions.
China surpassed the U.S. as the biggest GHG emitter in 2007, but on a per capita basis the U.S. still outstrips China by nearly four times.
“While COP15 did bring together the major emitters, limitations of the Copenhagen Accord will undoubtedly perpetuate climate change policy uncertainties, reinforcing the need for advocacy efforts in this area,” said Green.
In A Nutshell
COP15 stands for Conference of the Parties, and has nothing to do with the 2009 convention city of Copenhagen. The annual event, convened for the 15th time since it was first held in 1995, saw 20,000 official delegates from 192 countries gather to address environmental issues from December 7-18 last year.
President Barack Obama announced that the U.S. would agree to a 17 percent cut in carbon dioxide output by 2020 compared to 2005 levels, China offered to cut carbon levels per unit of Gross Domestic Product by up to 45 percent by 2020 versus 2005 levels, and Japan’s Prime Minister Yukio Hatoyama announced the ambitious target of reducing Japan’s GHG emissions by 25 percent from 1990 levels by 2020, and by over 60 percent from 1990 levels by 2050.
Green Light For Eco-Friendly Business Operations
Photography by Hiromi Iguchi
Amongst the complex issues the COP15 conference was tasked to resolve, perhaps the most perplexing–and pressing–one was to set mid-term targets for GHG emissions reduction when the Kyoto Protocol expires in 2012.
“Without knowing how much countries will have to commit to reduce their emissions, by when and how such reduction commitments will be made, it can be difficult for businesses to make decisions on carbon and energy efficiency investments and strategies,” said Green.
A clear agreement on climate change would allow companies to more confidently price and evaluate the adoption of low or lower carbon technologies, such as wind farms and biomass programs.
It is also crucial information for energy-intensive industries such as coal power plants. For example, before building a new coal power plant, an energy company might want to know whether it will have to buy costly carbon credits–financial instruments based on how much carbon individual power plants emit in excess of applicable limits–under a global climate change treaty.
Carbon credits, which allow companies to offset their total CO2 output, could potentially add millions to the cost of a single plant and make it uneconomic compared to plants using other fuel sources such as natural gas or nuclear energy.
“Due to the many remaining uncertainties following COP15, there is simply not enough detail to price the value of carbon post-2012, making it hard for businesses to confidently and decisively move ahead with low-carbon investments,” said Green. “Firms will need to develop their own scenarios.”
In effect, that means countries adopting a program of reductions that investors can have confidence in based on the firmness of commitments and their measurement.
Carbon Credits
The New Currency Explained
Carbon offset credits allow companies and governments to comply with emissions standards by buying carbon credits. Some individuals and organizations also buy credits to offset the environmental damage from their own carbon footprints –or the CO2 emissions created by a particular activity. Such emissions trading is also referred to as “cap and trade,” which is an administrative tool to control GHG emissions by providing economic incentives for companies that do reduce their emissions.
The goal is to steadily reduce carbon dioxide and other greenhouse gas emissions economy-wide in a cost-effective manner. Successful cap and trade programs reward innovation, efficiency, and early action and provide strict environmental accountability without inhibiting economic growth. The European Union Emission Trading System is the largest multi-national, emissions trading scheme in the world. The U.S. and Japan are currently looking into cap and trade options.
According to the calculator on www.safecom.org.au/carbon.htm, if the average motorist does 400km per week in a 2L petrol car then 19 trees should be planted to absorb all the CO2 created. Alternatively, he could buy carbon credits from his neighborhood carbon offset provider found on sites such as www.ecobusinesslinks.com or www.carboncatalog.org/providers/.
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