BUSINESSES MEASURING EMISSIONS

Carbon Disclosure Project (CDP) data is forming a comprehensive picture of corporate greenhouse gas emissions. More than 20% of the world's 500 largest companies keep their emissions information private. But many of the biggest corporations are waking up to the age of climate change. They are recording, disclosing, reducing and offsetting their greenhouse gas (GHG) emissions.

Why? Many are based in Europe, where it is necessary in order to do business. Others have a social conscience and understand the necessity. And still others simply see the handwriting on the wall. The U.S. Senate is taking up the matter of a market-based emissions reduction program this spring. It probably won’t happen until after the November election, but cap-and-trade is coming to the U.S. Then everybody will have to account for emissions. Get used to it.

Participation is growing every year as a national cap-and-trade system grows more inevitable. (click to enlarge)

Carbon Disclosure Project to assess world business CO2 footprint
January 20, 2008 (AFP via Yahoo News)
and
Global carbon trade rose 80 pct last year
Timothy Gardner (w/ Matthew Lewis), January 18, 2008 (Reuters)

WHO
The Carbon Disclosure Project (CDP) (Paul Dickinson, CEO); Point Carbon

Participation comes from across the spectrum of business. (click to enlarge)

WHAT
Worldwide trading in greenhouse gas (GHG) emissions credits grew 80% in 2007 to 2.7 billion tonnes. CDP, a consortium of 315 top institutional investors (ex: Goldman Sachs, Merrill Lynch, Allianz, HSBC) in the GHG emissions market and thereforeanxious to assimilate more information on institutional emissions, announced plans to bring in companies and suppliers as a Supply Chain Leadership Collaboration (SCLC) (ex: Dell, Hewlett Packard, L'Oreal, PepsiCo, and Reckitt Benckiser prospective; Cadbury Schweppes, Nestle, Procter & Gamble, Tesco, Imperial Tobacco, Unilever signed) to collect and report GHG emissions patterns.

WHEN
- World emissions trade, 2006: $33 billion
- World emissions trade, 2007: $60 billion.
- CDP’s information request will go out to SCLC applicants in the first quarter of 2008. The information will be rolled out in May 2008.

Data cmes from all industrial sectors. (click to enlarge)

WHERE
- Point Carbon is based in Oslo, Norway.
- Almost 2/3 of emissions trading took place through the EU ETS, 1.6 billion tonnes of GHGs worth $41 billion..
- The other major emissions trading arena was the UN Clean Development Mechanism (CDM), 947 million tonnes of GHGs worth $17.5 billion.

WHY
- The EU ETS trades in credits allocated according to the EU Kyoto Protocol-based cap-and-trade system. The UN CDM allows industrial countries to fund developing nation projects to earn Certified Emissions Reductions (CERs).
- There is also a growing voluntary marketplace. 10 U.S. East Coast states will start trading power plant emissions credits in 2009 and both West and Midwest states have similar plans for regional markets.
- Banks, hedge funds and exchanges are developing in the U.S., including the New York Mercantile Exchange (NYMEX) and the Chicago Climate Exchange (CCX).
- Secondary markets in CDM credits rose from $836.2 million (40 million tonnes) in 2006 to $8.3 billion (350 million tonnes ) in 2007
- CDP members manage $41+ trillion. It is requesting detailed GHG emissions information from participants. The SCLC members are each expected to expand CDP’s information base by 50 supply chain participants.

Power companies with foresight are participating. (click to enlarge)

QUOTES
- Point Carbon: "This indicates a growing confidence that GHG emission trading will soon take off in the U.S., whether it is at the state or federal level…"
- Dickinson, CDP: "The Supply Chain Leadership Collaboration (SCLC) is a key step towards a unified business approach to climate change…By bringing together the purchasing authority of some of the largest companies in the world, CDP will encourage suppliers to measure and manage their greenhouse gas emissions…This will enable large companies to work towards managing their total carbon footprint, as the first step to reducing the total carbon footprint is to measure its size."