How to apply a carbon management strategy
ROBIN ARCHIBALD of UGL Services Beyond Green shares a simple, yet comprehensive carbon management framework that can be adopted to assist with managing carbon emissions.
The plan for a clean energy future signifies the start of a significant period of structural change for Australian business and the economy. Understanding the reality of carbon management in today’s built environment is now critical. The July 2012 introduction of the carbon price means now more than ever businesses need to accommodate a carbon management strategy into their overall business strategy.
Although the concept of carbon management has been around for some time, the field continues to evolve rapidly. This is often driven by new compliance requirements, such as mandatory disclosure and the price on carbon. While many of Australia’s largest companies have tackled climate change impacts with a comprehensive carbon management strategy, the majority of small- to medium-sized businesses are just starting their carbon management journey.
ESTABLISHING A CARBON MANAGEMENT FRAMEWORK
Most people have heard the phrase ‘carbon management’, but it is worth defining to ensure a common understanding. The following definition is more concise than most: carbon management is the monitoring of carbon emissions and implementing measures to cut the level of atmospheric carbon dioxide (in order to reduce global warming).
While this definition provides some context, almost any activity we undertake can have an impact on carbon dioxide levels. In order to focus effort, it is necessary to establish a carbon management framework. There are a variety of carbon management frameworks that can be adopted. The following is a simple, yet comprehensive framework.
1. Measure carbon footprint
A carbon footprint is the place to start the development of a carbon management strategy. The core carbon footprint calculations are very simple, yet the complexities have created an entire industry. This has, in part, been driven by government legislation, such as the National Greenhouse and Energy Reporting (NGER) Act, but also by industry itself, due to the need to have a transparent, credible carbon-reporting regime. The space has evolved quickly. The difference in the systems, standards and procedures that apply to carbon reporting now versus five years ago is remarkable.
Many organisations now participate in voluntary public reporting schemes such as the Carbon Disclosure Project. Stringent auditing processes can be applied to ensure that public statements are verified. Due to the risks and complexities, outsourcing carbon footprint reporting is an option that can save an organisation significant time and money.
2. Set objectives
In an ideal world, an organisation would implement a carbon management strategy purely to reduce the impacts of climate change. The reality is executives and boards usually focus on more tangible benefits. Fortunately, there are many benefits that can be realised by a carbon management strategy.
Benefits include cost savings, environmental performance, brand building, employee satisfaction and shareholder value. Cost savings are always a key benefit for business. With electricity prices increasing and the introduction of schemes such as the price on carbon, New South Wales Energy Savings Certificates (ESCs) and Victorian Energy Efficiency Certificates (VEECs), the financial rewards continue to grow. The best way to manage increasing energy prices and the impact of a price on carbon is to use less energy and emit less carbon.
A key part of setting objectives is the introduction of at least one measurable, high-level key performance indicator (KPI). Experience highlights that the development of highly visible, easy to understand and measurable KPIs are critical to obtaining buy-in from across an organisation. It is also critical to have the carbon management strategy and KPIs endorsed by the highest level of management in an organisation and to ensure the KPIs are a public commitment.
Setting targets for an organisation does require some analysis. It is important to consider what can realistically be achieved in the time-frame and the basis of the targets. Less aggressive targets in smaller time-frames are recommended, as this allows progress to be easily demonstrated and new processes to be adopted for the next target.
Budget processes must be considered. When starting out, a three-year time-frame between base year and target year is ideal. This ensures you can set up the framework, scope up the required works, submit budget bids, implement and still have time to evaluate the outcomes in terms of reduced emissions.
A preferred approach is to set the targets in terms of a key measure of production for an organisation. A common metric is square metres of office space. Specialist measures may be appropriate for different business units; for example, power usage effectiveness (PUE) is often used for data centres.
3. Avoid and reduce
Once the objectives are set, it is time to reduce carbon emissions. There are many parts of a business that can contribute to carbon emissions. It is important to consider both integration with existing processes and access to a specialist team of carbon management professionals.
As almost any part of a business can impact carbon emissions, a comprehensive framework to drive change throughout the whole organisation is required. Considerable effort is required to develop measures and programs to deliver these outcomes.
As well as reducing emissions, it is worthwhile considering a switch to less emission intensive fuel sources. Renewable energy, such as wind, solar and green power, is an obvious option, but use of geothermal power or natural gas to generate electricity and heat (co-generation) can provide an attractive return on investment.
Sequestering carbon is the process of capturing the carbon before it is emitted to the atmosphere for indefinite storage. Considerable research into this technology is driven by the coal industry for use at coal-fired power stations. While a number of pilot plants are in existence, for most organisations it will be many years before this is a viable option.
For those organisations seeking to become carbon neutral, it is necessary to purchase carbon offsets for the remaining emissions. A carbon offset is created by another entity when they have reduced their emissions. They can sell this reduction as an offset to any organisation. The revenue generated from the sale of offsets is often invested in projects in developing countries that would otherwise have no funds to invest in reducing emissions.
Robin Archibald is national operations manager for UGL Services Beyond Green Team. A carbon management specialist, Archibald’s technical skills cover all facets of carbon and water management, including corporate policy development, advisory services, sustainability program development, compliance reporting, metering and monitoring, ESD (environmentally sustainable design), energy efficiency, innovation and project management.