Blog Reducing Greenhouse Gas (GHG) and Carbon dioxide (CO2) Through Carbon Credits Will Increase A Company’s Bottom Line
March 21st, 2008Everyone knows that change can be difficult and costly. This is certainly true for energy use. But change brings the opportunity for increased efficiency. The process of achieving increased efficiency begins with an energy audit for your company. An audit provides an accounting of your company’s energy usage (electricity, natural gas, etc.) and energy consumption (lighting, computers, HVAC, etc.)
A similar accounting can be conducted for the raw materials of a manufacturing process. Then increased efficiencies are identified. The relative costs of these changes versus the energy and raw material savings are calculated. It is important to recognize that energy and raw material prices have increased dramatically in recent years. Global economic trends are driving these price increases and they are not likely to change in the coming years.
Another direct cost which needs to be considered is a “carbon tax”. It is now clear that emissions of carbon dioxide (CO2) will no longer be “free”. In the near future there will be significant economic costs associated with all green house gas (GHG) emissions. Along with direct costs there are the indirect costs to the planet of climate change. These effects have the potential to be even greater than direct costs and could even be disastrous. The motivation to make changes is clear: maximum efficiency leads to minimum consumption which in turn leads to minimum cost. In today’s rapidly changing global economy this is the only viable long term strategy.
Once maximum feasible efficiency gains have been achieved, some CO2 and GHG emissions will remain. The negative effects of these emissions can be counteracted by “carbon offsets”. There are two main categories of carbon offsets: carbon sequestration and carbon displacement. Carbon sequestration means removing CO2 from the atmosphere. This is achieved through reforestation projects since trees absorb CO2 as they grow. These reforestation projects are typically located in tropical areas where trees grow faster. Carbon displacement means preventing fossil fuel consumption by using renewable energy instead. Currently, many examples of renewable energy are being explored and developed. Biogas can be generated by anaerobic digestion of organic materials and can be used to generate electricity. Biodiesel can be produced from vegetable and animal oils and can be used as transportation fuel. Wind turbines can be used to generate electricity. Solar panels can be used to generate both heat and electricity. Carbon Credit Environmental Services (CCES) generates carbon offsets directly through reforestation and renewable energy projects. The direct involvement of CCES guarantees the legitimacy of these carbon offsets.
The economic reasons described above are amplified by political reasons as well. At the federal level there is considerable debate about the best approach to GHG regulation. One method is a flat rate carbon tax which charges a certain amount per metric ton of emissions. Another approach is a “cap and trade” system based on the existing system for sulfur emissions from power plants. The “cap and trade” system for sulfur emissions is widely considered to be a success and could be a model for a similar system for other green house gases. Presidential candidates Clinton, Obama and McCain are all on record supporting “cap and trade”. At the state level, California is leading the way with AB 32, the California Global Warming Solutions Act of 2006. This regulation makes the California Air Resources Board responsible for monitoring and reducing GHG emissions.
AB32 has led to a variety of different strategies for achieving GHG reduction. One example is labeling consumer products with the GHG emissions associated with their production and distribution. Many other states are promoting alternative energy with Renewable Portfolio Standards (RPS’s). These mandate that a percentage of total energy production must come from renewable energy sources. According to the Pew Center on Global Climate Change, Oregon, Illinois and New Hampshire all have RPS’s that require 25% renewable energy by 2025.
We are entering a new era in the American economy. Business decisions will not be made on monetary considerations alone. GHG emissions are now an essential factor in determining long term business viability and profitability. The result will be substantial, if not dramatic, changes in the structure and development of our economy.
If you would like to know how to increase your company’s bottom line by reducing GHG and CO2, contact Carbon Credit Environmental Services at: inquiry@getcarboncreditco2.com or visit our website: www.getcarboncreditco2.com.
Written by: Brad Clark, CCES