Category: Green News

Global Investors Look to Spur Action on Climate Change

 
At the recent UN Climate Summit in New York, global investors frustrated by the lack of policy progress on climate, issued a call to action through two initiatives: (1) 2014 Global Investor Statement on Climate Change, and (2) Montreal Carbon Pledge.

2014 Global Investor Statement on Climate Change
The 2014 Global Investor Statement on Climate Change has been signed by 354 investors with more than $24 trillion in assets, which represents an important contribution by the global investment community to support the UN Climate Summit and encourage strong domestic and international climate and clean energy policies. The statement sets out the steps that institutional investors (both asset owners and asset managers) can take to address climate change, and calls on governments to support a new global agreement on climate change by 2015 in addition to national and regional policy measures. By articulating their concerns, the signatory investors highlight the climate risk within the context of global investment:
“We are particularly concerned that gaps, weaknesses and delays in climate change and clean energy policies will increase the risks to our investments as a result of the physical impacts of climate change, and will increase the likelihood that more radical policy measures will be required to reduce greenhouse gas emissions. In turn, this could jeopardise the investments and retirement savings of millions of citizens.
There is a significant gap between the amount of capital that will be required to finance the transition to a low carbon and climate resilient economy and the amount currently being invested. For example, while current investments in clean energy alone are approximately $250 billion per year, the International Energy Agency has estimated that limiting the increase in global temperature to two degrees Celsius above pre-industrial levels requires average additional investments in clean energy of at least $1 trillion per year between now and 2050.
This Statement sets out the contribution that we as investors can make to increasing low carbon and climate resilient investments. It offers practical proposals on how our contribution may be accelerated and increased through appropriate government action.”
Now that policy makers have been called on to consider the recommendations in the 2014 Global Investor Statement on Climate Change, the investors are looking forward to a dialogue about the policy frameworks needed to catalyze investment in the clean energy, low carbon future.

Montreal Carbon Pledge
In another initiative, a number of the world’s largest institutional investors (representing more than US$75 trillion in investable assets) launched the Montreal Carbon Pledge at the annual conference of the UN-supported Principles for Responsible Investment (PRI) in Montreal. By signing the Montreal Carbon Pledge, investors commit to measure and publicly disclose the carbon footprint of their investment portfolios on an annual basis. Signatories will be accepted until September 2015. Overseen by PRI, the Montreal Carbon Pledge aims to attract US $3 trillion of portfolio commitment in time for the United Nations Climate Change Conference in December 2015. It also allows investors to formalize their commitment to the goals of a recently introduced Portfolio Decarbonization Coalition, co-founded by the United Nations Environment Programme Finance Initiative.
The Montreal Carbon Pledge represents an important first step to measuring and managing the long-term investment risks associated with climate change and carbon regulation. By measuring their carbon footprints, investors will be able to quantify the carbon content of their portfolios. A growing number of investors, including Etablissement du Régime Additionnel de la Fonction Publique (ERAFP), AP4, London Pensions Fund Authority (LPFA) and VicSuper, have already taken steps to measure the carbon footprint of their investments. 78% of the largest 500 publicly listed companies now report their carbon emissions. PRI will manage the online portal where investors can endorse the Montreal Carbon Pledge. In particular, the portal will enable investors to report the size of their portfolio carbon footprint commitment and any associated carbon reduction targets. Business leaders highlighted the importance for investor to understand their carbon risk in order to reduce their risk exposure:
“There is a perfect storm of reported carbon data, reliable portfolio carbon measurement tools and low carbon investment solutions. This makes it possible for investors to understand and act to reduce their carbon exposure like never before.” (Toby Heaps, CEO of Corporate Knights)
“It is hard to dispute that carbon is a risk, so how can we fulfil our duty of trust if we don’t implement the systems necessary to assess this risk in order to reduce it and, worse still, having measured the risk, we don’t disclose it to stakeholders.” (Philippe Desfossés, CEO of ERAFP)
 

Food for Thought: Assessing the Impacts of Our Dietary Choices on the Climate

Changing food consumption patterns and associated greenhouse gas (GHG) emissions have been a matter of scientific debate for decades. In a study by the Potsdam Institute for Climate Impact Research and the University of Potsdam Department of Geo- and Environmental Sciences , researchers undertook to assess the potential for climate change mitigation through optimal management and dietary changes in light of the agricultural sector’s role as one of the world’s major GHG emitters. Current agricultural practices are resource intensive, requiring fuel and fertilizer as well as significant water use (agricultural accounts for approximately 70% of global water withdrawal). In terms of GHG emissions, the study indicates that agriculture contributes between 10% to 14% to the total anthropogenic GHG emissions. The study also projected emissions and examined dietary patterns and their changes globally on a per country basis between 1961 and 2007.
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Global population growth and poverty reduction are driving changes in food consumption both in terms of total amount and composition. Lifestyle-related changes in diet are also driving increases in food demand. A dietary shift towards a reduction in meat consumption has the potential to significantly decrease GHG emissions, but current trends are heading in the opposite direction. While an increase in the consumption of animal products, vegetable oils and sugar sweeteners has occurred primarily in developed countries over the past few decades, a westernization of diets has also been occurring in developing countries. However, animal protein, animal fat and vegetable oil intake remains significantly higher in developed countries as compared to developing countries.
In order to better understand diet related emissions, researchers identified typical dietary patterns of food consumption and composition per country for the period from 1961-2007. Detailed analyses show that food consumption patterns are moving from low to higher calorie diets, which is consistent with an overall trend of improvements to long-term nutrition. While low calorie diets are decreasing worldwide, there is a change in parallel diet composition as well. In particular, there is a discernible shift towards more balanced diets in developing countries and the move towards more meat-rich diets in developed countries is characteristic of this trend. As a result, environmental impacts in terms of fossil fuel requirements and total GHG emissions generally increased as diets become more calorie rich. Low calorie diets, which are mainly observable in developing countries, show a similar emissions burden as moderate and high calorie diets. This can be explained by a less efficient calorie production per unit of GHG emissions in developing countries. Very high calorie diets are common in the developed world and exhibit high total per capita emissions of 3.7–6.1 kg carbon dioxide equivalent (CO2e) per day due to high carbon intensity and high intake of animal products. In case of unconstrained demographic growth and changing dietary patterns, the projected emissions from agriculture will approach 20 Gt CO2e per year by 2050, which represents a 40% increase in agriculture-related GHG emissions compared to 2005 levels. This highlights the tremendous potential the food sector can play with respect to helping us achieve climate protection goals, particularly with the introduction of less energy intensive agricultural practices. The study suggests that optimized management of agriculture may contribute to emission reductions of up to 7 Gt CO2e per year in 2050. The authors also highlight the importance of the livestock sector for diet-related GHG emissions; emissions from this sector are increasing rapidly according to their estimates and approximately 14 Gt CO2e per year by 2050 will be related to the consumption of animal products. The authors conclude by saying that agricultural intensification should focus on an optimization of emission intensities, which keeping other environmental stresses and anthropogenic inputs as low as possible. Or as Michael Pollan, author of the Omnivore’s Dillema, says: “Eat food, not too much, mostly plants.”

Latest IPCC Report Concludes that the World is Not Well Prepared for Meeting the Climate Change Challenge

Working Group II of the Intergovernmental Panel on Climate Change (IPCC) issued its contribution to the Fifth Assessment Report on March 31, 2014.  The second of three “Summaries for Policymakers” (the first report from Working Group I on the physical science of climate change was issued in September 2013) addresses climate change impacts, adaptation and vulnerability, and says the effects of climate change are already occurring on all continents and across the oceans. The IPCC report explains that in many cases, the world is ill-prepared to deal with climate change risks and concludes that while there are opportunities to respond to such risks, these risks will be difficult to manage with high levels of warming.

The report, entitled Climate Change 2014: Impacts, Adaptation, and Vulnerability, is designed to guide global lawmakers as they devise policies to reduce emissions and make their infrastructure, agriculture and people more resilient to a changing climate.  The report details the impacts of climate change to date, the future risks from a changing climate, and the opportunities for effective action to reduce risks. A total of 309 coordinating lead authors, lead authors, and review editors, drawn from 70 countries, were selected to produce the report. They enlisted the help of 436 contributing authors, and a total of 1,729 expert and government reviewers.

Observed impacts of climate change have already affected agriculture, human health, water supplies, ecosystems on land and in the oceans. One of the striking things is that observed impacts are occurring from the tropics to the poles, from small islands to large continents, and from the wealthiest countries to the poorest. The researchers documented how climate change affects everything from retreating glaciers in East Africa, the Alps, the Rockies and the Andes to the bleaching of corals in the Caribbean Sea and Australia’s Great Barrier Reef. Mussel-beds and migratory patterns for salmon are changing off the west coast of North America, grapes are maturing faster in Australasia and birds are flying to Europe earlier in the year.  One of the IPCC’s starkest findings relates to water availability and food production. Where there was less certainty seven years ago about the potential damage to staple crops, the latest IPCC report found that global wheat and maize production are already being negatively impacted by warmer temperatures, with yields of wheat declining by about 2% per decade and those of maize by 1%.  While he report does mention some positive impacts of climate change such as improved crop yields in southeastern South America, it also refers to “future risks and more limited potential benefits”.

Chris Field,  co-chair of Working Group II, said the rising trajectory of greenhouse emissions is projected to lead to more than 3 degrees Celsius of additional warming this century. This is on top of the 0.85 degrees of warming already observed since 1880. UN treaty negotiators are aiming to limit the total rise to 2 degrees Celsius.  The researchers wrote that economic losses accelerate with greater levels of warming, noting that little analysis has been done for levels of warming of 3 degrees Celsius beyond present temperatures. The report warns that this amount of additional warming would lead to “extensive biodiversity loss”.

The report concludes that responding to climate change involves making choices about risks in a changing world. The nature of the risks of climate change is increasingly clear, though climate change will also continue to produce surprises. It finds that risk from a changing climate comes from vulnerability (lack of preparedness) and exposure (people or assets in harm’s way) overlapping with hazards (triggering climate events or trends). Each of these three components can be a target for smart actions to decrease risk. In particular, adaptation can play a key role in decreasing these risks.

Field also said that: “Understanding that climate change is a challenge in managing risk opens a wide range of opportunities for integrating adaptation with economic and social development and with initiatives to limit future warming. We definitely face challenges, but understanding those challenges and tackling them creatively can make climate-change adaptation an important way to help build a more vibrant world in the near-term and beyond.”

Now the ball is in the policymakers’ court as industry and the public look to their governments to take decisive action and facilitate the implementation of creative solutions to meet the climate change challenge.

The third report from Working Group III (WGIII) of the IPCC will address climate change mitigation and is expected to be released in April 2014.
 

Québec’s First Cap & Trade Permit Auction Results

 
In the first auction of permits under Québec’s cap-and-trade scheme on December 3, 2013, bidders purchased only about one-third of the emission allowances offered – or 1.03 million of the 2.97 million 2013 permits. As a result of the low demand, the permits cleared at the lowest possible price of $10.75 per metric tonne of carbon dioxide equivalent.

Québec said it sold a combined CAD $29 million in 2013 and 2016 allowances in the auction.  The province plans to sell the remaining 2013 carbon allowances in future auctions, which will be held every quarter starting March 4. Regulated entities will have until November 1, 2015 to acquire carbon allowances covering emissions generated in 2013 and 2014.

Yves-François Blanchet, Québec’s Minister of Sustainable Development, Environment, Wildlife and Parks said that the province is very satisfied with the results of the first auction and is confident that the remaining units will be sold at the upcoming auctions.  Bloomberg New Energy Finance market analyst William Nelson observed that it was a “surprisingly under-subscribed auction”, but went on to say that the province’s failure to sell all the allowances in the first auction was a “one-time freak result”. Nelson anticipates that future auctions will fare better as the entities that did not participate in the auction this week will eventually show up as they still need to cover their emissions for the next two years.

Quebec’s program will be integrated with the larger California cap-and-trade market in 2014, when entities from both jurisdictions will be able to buy and sell emission allowances and offsets in either jurisdiction. At California’s last auction on November 19, 2013, the state sold 16.6 million tons of carbon allowances at a price of $11.48 each, which was in line with market expectations.

The results of the Québec auction are available online (in French only)

The results of California’s November 2013 auction are also available from the state’s Air Resources Board.
 

Global Investors Call on Energy Companies to Disclose Financial Risks of GHG Emissions

 
A group of 70 global investors managing more than $3 trillion of collective assets has called on 45 of the world’s top energy companies (including Suncor Energy Inc., Canadian Natural Resources Ltd., Exxon Mobil Corp., Royal Dutch Shell PLC and Total S.A.) to assess the financial risks that climate change poses to their business plans. The investor effort, called the Carbon Asset Risk (CAR) initiative, is being coordinated by Ceres and the Carbon Tracker initiative, with support from the Global Investor Coalition on Climate Change.

In a letter sent to energy companies in September 2013, investors wrote: “We would like to understand [the company’s] reserve exposure to the risks associated with current and probable future policies for reducing greenhouse gas emissions by 80 percent by 2050…We would also like to understand what options there are for [the company] to manage these risks by, for example, reducing the carbon intensity of its assets, divesting its most carbon intensive assets, diversifying its business by investing in lower carbon energy sources or returning capital to shareholders.”  Investors signing the letters include California’s two largest public pension funds, the New York State and New York City Comptrollers, F&C Asset Management and the Scottish Widows Investment Partnership.  The investors have requested detailed responses before their annual shareholder meetings in early 2014.

Most energy companies produce sustainability reports and use a shadow carbon price to assess the viability of projects, but the financial risks of climate change driven policies are not usually disclosed.  According to the report Unburnable Carbon 2013: Wasted Capital and Stranded Assets  , the 200 largest publicly traded oil and gas companies collectively spent an estimated $674 billion on finding and developing new reserves in 2012 alone – some of which may never be utilized. The CAR initiative is part of a growing trend to assess the present value of fossil fuel companies and their long-term reserves, based on expectations that government policies will lower demand for the most carbon-intensive energy sources in the longer term.  Analysis from HSBC suggests that equity valuations of some oil and gas companies could be reduced by 40 – 60% in a low emissions scenario where a portion of their reserves would become stranded assets. This highlights an opportunity to redirect this capital, rather than investing it in high carbon assets that could become stranded.




	


	





	

		
		
BC signs Climate Action Plan with California, Oregon and Washington
	


	
	
	

		
 

On October 28, 2013 the leaders of British Columbia, California, Oregon and Washington signed the Pacific Coast Action Plan on Climate and Energy committing their governments to a comprehensive and strategic alignment to combat climate change and promote clean energy. The region covered by the Action Plan has a combined population of 53 million people and a GDP of $2.8 trillion, which represents the world’s fifth largest economy.


Through the Action Plan, all four jurisdictions will account for the costs of carbon pollution and where feasible, link programs to create consistency and predictability across the region.  In addition, the Action Plan provides for the following actions:


    

  • harmonizing 2050 targets for greenhouse gas (GHG) reductions and developing mid-term targets needed to support long-term reduction goals;
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  • cooperating with national and sub-national governments around the work to press for an international climate change agreement in 2015;
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  • enlisting support for research on ocean acidification and taking action to combat it;
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  • adopting and maintaining low carbon fuel standards in each jurisdiction;
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  • taking action to expand the use of zero-emission vehicles, aiming for 10% of new vehicle purchases by 2016;
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  • continue deployment of high-speed rail across the region;
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  • supporting emerging markets and innovation for alternative fuels in commercial trucks, buses, rail, ports and marine transportation;
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  • harmonizing standards to support energy efficiency on the way to “net zero” buildings;
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  • supporting federal policy on regulating GHG emissions from power plants;
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  • sponsoring pilot projects with local governments, state agencies and the West Coast Infrastructure Exchange to make infrastructure climate smart;
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  • streamlining approval of renewable energy projects; and
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  • supporting integration of the region’s electricity grids.
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The Action Plan provides a much needed boost to regional and national efforts climate change policy efforts.


The Pacific Coast Collaborative was established in 2008 to address the unique and shared circumstances of the Pacific coastal areas and jurisdictions in North America by providing a formal framework for co-operative action, a forum for leadership and the sharing of information on best practices, and a common voice on issues facing coastal and Pacific jurisdictions.

 



	


	





	

		
		
Release of Latest IPPC Report Spurs Calls for Action from Business Leaders
	


	
	
	

		
 


On September 25, 2013 the Intergovernmental Panel on Climate Change (IPCC) released Climate Change 2013: the Physical Science Basis, the first part of its Fifth Assessment Report (AR5). Six years in the making, the 2,200 page report was developed by 209 lead authors, citing more than 9,000 scientific publications in their analysis of key physical and scientific aspects of the climate system and climate change.


The report confirms that human influence is the dominant cause of observed warming. Scientists now state with more certainty than ever before, that it is extremely likely (95% probability) that human activities, particularly combustion of fossil fuels and changes in land use, are responsible for the 0.85ºC increase in average global temperatures that has occurred since 1880.


There has been a reduction in the rate of atmospheric temperature increases over the past fifteen years which the IPCC attributes to the absorption by the oceans of a large amount of heat, and sequestering a third of the greenhouse gas emissions. This is by no means good news, since warmer waters expands leading to rising sea levels, sea temperatures also significantly influence climate patterns and an increasing concentration of greenhouse gases in ocean waters contributes to acidification with negative impact on aquatic ecosystems. The report concludes that “human influence has been detected in changes in the global water cycle, in reductions in snow and ice, in global mean sea level rise, and in changes in some climate extremes.”


The report lays out four different potential scenarios for global temperature rise over the course of the century, ranging from 0.3 ºC to 4.8ºC. In the immediate decades, all four scenarios follow a similar trajectory, showing a low sensitivity to curbing emissions in the short-term. But if current trends continue, the effects of cumulative emissions will be difficult to mitigate due to the long half-life of greenhouse gases and their continued impact on the climate long after emissions subside.


The AR5 is the first IPCC report to define a “carbon budget” – an estimate of the maximum amount of human caused emissions that can be released in the atmosphere before we experience warming greater than 2ºC – the indicative threshold beyond which extensive global environmental and socio-economic damage is expected. That carbon budget is 1,000 trillion tonnes of carbon dioxide equivalent (CO2e), of which approximately half has already been emitted. Based on carbon-intensive trajectories, this means that the world has just 30 years until it has used up its carbon budget. If we exceed this budget, the chance of staying within 2ºC of warming looks far less promising.


What does this mean for business? In short, climate change brings with it greater risks and investment challenges:


• More frequent extreme weather events: Higher temperatures and more extreme weather are among the most apparent business risks. At the World Economic Forum in 2013, financial experts named climate change as one of the top three business risks. From raging wildfires to severe flooding, extreme weather events can imperil operations throughout a company’s supply chain. Rising sea levels will also threaten shorelines. According to the IPCC, sea levels have likely risen nearly twice as fast as previously reported. More than 1 billion people worldwide, along with many financial centers, are located in low-lying coastal communities. According to the OECD, average flood losses in major cities around the world could exceed $52 billion per year by 2050, and possibly go as high as $1 trillion without additional protection. At the other end of the spectrum, some regions will be faced with greater water scarcity rather than flooding. In the Carbon Disclosure Project’s 2012 Global Water Report, 53% of respondent companies reported that they have experienced water-related detrimental impacts in the past 5 years (up from 38% in 2011), with costs as high as $200 million for some companies.


• Risks to energy infrastructure: Extreme weather also poses a threat to energy and electricity infrastructure by potentially disrupting production, delivery, and storage of energy. Many power sources depend on water and decreased water availability due to changing precipitation trends may threaten operations.


• Investment risks: Climate-related economic disruption also compounds risks to global investments. A 2011 Mercer study warned that climate change could increase investment-portfolio risk by 10 percent over the next two decades. The IPCC’s carbon budget may have implications for fossil fuel companies, which are traditionally among the higher grossing investments. Since their value is based on proven reserves, there is a risk of devaluation if a significant portion of the reserves are left untapped in order to keep within the carbon budget.


• Insurance risks: Extreme weather events are already having an impact on the insurance industry. As damage from extreme weather events increases, insurers are faced with either hiking rates or refusing to provide coverage in disaster-prone areas. Ultimately, increased costs will be passed onto businesses and consumers.


While climate change presents clear risks to business, smart responses can deliver economic benefits as well. In a 2010 report by the UN Global Compact, more than 86 percent of businesses named responding to climate change as an opportunity. This is reflected in the actions of many multinational corporations, which are already taking steps to reduce risks and lower their greenhouse gas emissions. Whether it is driving emission reductions throughout the supply chain, investing in renewable energy or phasing out the use of carbon intensive materials, companies are choosing to act.


Industry comments in response to the IPCC report highlight the urgent need for action for more, see ‘Experts React’. Nick Robins, head of the Climate Partnership at HSBC, commented that: “The IPCC report provides firmer foundations for policy action. For the world’s capital markets, climate change is an issue of strategic risk management … Our research shows that India, China, Indonesia, South Africa and Brazil are the G-20 nations that are most vulnerable to climate risks. We expect the succession of IPCC reports into 2014 to provide a renewed impetus to policy and business action through to the finalization of negotiations in December 2015.” Head of Swiss Re’s sustainability program in the Americas, Mark Way, also said: “When a body like the IPCC concludes that with 95% certainty mankind is causing climate change we would be foolish not to listen. And yet we are still not listening closely enough. The transition to a low carbon economy and a more climate-resilient society cannot be thought of as options, they are necessities.” Mindy Lubber, president of Ceres (a US-based organisation which presses for greater sustainability and environmental awareness in the business sector) summed it up nicely: “The IPCC report’s conclusion is unequivocal – climate change is happening and it’s disrupting all aspects of the global economy, including supply chains, commodity markets and the entire insurance industry. Business momentum is growing to innovate new strategies and products to manage climate risks and opportunities. But scaling these efforts to levels that will slow warming trends will require stronger carbon-reducing policies globally.”


The IPCC will release three more parts to the AR5 report in 2014: Impacts, Adaptation and Vulnerability; Mitigation of Climate Change; and a Synthesis Report. For more information on the current report, see IPCC Fifth Assessment Report: Climate Change 2013: The Physical Science Basis.


 



	


	





	

		
		
California ARB Fines Nine Companies for Late or Inadequate GHG Reporting
	


	
	
	

		
 


Nine companies have been fined by the California Air Resources Board (ARB) for violations of the state’s Mandatory Greenhouse Gas Reporting Rule (the Reporting Rule) which requires facilities, including those covered by California’s cap-and-trade regulation, to report their greenhouse gas (GHG) emissions annually. Adopted by ARB in 2007, the Reporting Rule requires facilities that emit more than 10,000 metric tons of carbon dioxide annually to report their emissions. About 600 facilities have been reporting their greenhouse gas emissions to ARB since 2008.  


Industrial facilities are required to report each April and utilities are required to do so each June. These reports are then checked for accuracy and verified by independent third parties with oversight by ARB staff.  The reporting compliance rate for 2012 was 97%. Nine companies have been fined for failure to supply complete information by the appropriate deadlines for either the reporting or verification stages. In addition to paying these fines, the violators must provide ARB with plans for complete and accurate data collection and reporting in the future. The companies fined include:


·        ExxonMobil Oil Corporation: $120,000 


·        DG Fairhaven Power: $55,000 


·        Vintage Production California: $35,000 


·        Pacific Gas & Electric: $20,000 


·        Veneco: $20,000 


·        Cemex Construction Materials: $15,000 


·        Lehigh Southwest Cement: $10,000 


·        Lhoist North America of Arizona: $10,000 


·        Tidelands Production: $10,000 


With respect to GHG reporting, ARB Chairman Mary D. Nichols said that: “Accurate reporting of greenhouse gas emissions is the foundation of our efforts to reduce carbon pollution from the state’s energy and industrial sectors.  We will continue to vigorously enforce the mandatory reporting rule to ensure that every company follows all its requirements.”


Emissions reported by facility under the Reporting Rule can be viewed online




 



	


	





	

		
		
President Obama Announces Climate Action Plan
	


	
	
	

		


On June 25, 2013, President Obama made a long-awaited announcement for his administration’s Climate Action Plan.  The plan outlines a range of actions the Obama administration will take using existing authorities to reduce carbon pollution, increase energy efficiency, expand renewable and other low-carbon energy sources, and strengthen resilience to extreme weather and other climate impacts.  As part of the plan, the Environmental Protection Agency (EPA) has been directed to set standards by June 2015 to reduce carbon pollution from existing power plants.


 


President Obama’s Climate Action Plan focuses on the following key areas:


 


·        Regulating Greenhouse Gas Emissions – In lieu of any action by US Congress on setting an economy-wide price on carbon, President Obama is using his powers under the Clean Air Act to curb emissions from power plants, by far the largest unregulated source of US carbon emissions.  Companies are seeking regulatory certainty so many of them are prepared to work with the Obama administration on pragmatic approaches to cut GHG emissions and mitigate climate risks.  The Supreme Court ruled in 2007 that EPA has authority under the Clean Air Act to regulate greenhouse gases.  Carbon pollution standards for new power plants proposed by EPA in March 2012 have not yet been finalized. In his June 25 speech, President Obama announced a Presidential Memorandum directing the EPA “to work expeditiously to complete carbon pollution standards for both new and existing power plants.” 


 


·        Energy Efficiency – The Department of Energy has been directed to build on efficiency standards for dishwashers, refrigerators, and other products that were set during President Obama’s first term.  President Obama set a goal of cumulatively reducing carbon dioxide emissions by 3 billion metric tons by 2030 through efficiency measures adopted in his first and second terms. The president also committed to build on heavy-duty vehicle fuel efficiency standards set during his first term with new standards past the 2018 model year.


 


·        Renewable Energy – In 2012, renewable energy was responsible for 12.7% of net U.S. electricity generation with hydroelectric generation contributing 7.9% and wind generation 2.9%.  As the fastest growing energy source in the US, President Obama reiterated his support to make renewable energy production on federal lands a top priority.   In particular, the President announced a series of executive decisions (i) directing the Department of the Interior to permit enough renewable projects on public lands by 2020 to power more than 6 million homes; (ii) to designate the first-ever hydropower project for priority permitting; and (iii) to set a new goal to install 100 megawatts of renewables on federally assisted housing by 2020. The President will also maintain a commitment to deploy renewables on military installations and will make up to $8 billion in loan guarantees available for a wide array of advanced fossil energy and efficiency projects to support investments in innovative technologies.  


 


·        Natural Gas – New drilling technologies such as hydraulic fracturing have significantly increased the amount of recoverable natural gas in the US. These advances are expected to keep the price of natural gas near historically low levels, thus altering energy economics and trends, and opening new opportunities to reduce greenhouse gas (GHG) emissions. To better leverage natural gas to reduce GHG emissions, the administration will develop an inter-agency methane strategy to further reduce emissions of this potent GHG.


 


·        Leading by Example – In his first term, President Obama set a goal to reduce federal GHG emissions by 24% by 2020. He also required agencies to enter into at least US $2 billion in performance-based contracts by the end of 2013 to finance energy projects with no upfront costs. In his climate plan, the President established a new goal for the federal government to consume 20% of its electricity from renewable energy sources by 2020 which is more than double its current goal of 7.5%.


 


·        Climate Resilience – The President wants federal agencies to support local investments in climate resilience and convene a task force of state, local, and tribal officials to advise on key actions the federal government can take to help strengthen communities. President Obama also wants to use recovery strategies from Hurricane Sandy to strengthen communities against future extreme weather and other climate impacts and update flood-risk reduction standards for all federally funded projects.


 


·        International Climate Change Leadership – President Obama promised to expand new and existing international initiatives with China, India and other major emitting countries. He also called for an end to US government support for public financing of new coal-fired powers plants overseas, except for the most efficient coal technology available in the world’s poorest countries, or facilities deploying carbon capture and sequestration technologies. A noteworthy  initiative introduced by the President was a direction given to his administration to launch negotiations toward global free trade in environmental goods and services, including clean energy technology “to help more countries skip past the dirty phase of development and join a global low-carbon economy”.


 


Eileen Claussen, President of the Center for Climate and Energy Solutions, commented that President Obama is laying out a credible and comprehensive strategy to strengthen the US response to climate change. In particular, President Obama’s plan recognizes that the costs of climate change are real and rising; to minimize them, the US must both cut its carbon output and strengthen its climate resilience. These policy initiatives are an important first step, but it will require continued leadership to translate the plan’s good intentions into concrete policy.


 






 



	


	





	

		
		
Study shows that most Companies get GHG Reporting Wrong
	


	
	
	

		
 

A study released by the Environmental Investment Organisation (EIO) in April 2013 shows that most of the world’s largest companies do not report their greenhouse gas (GHG) emissions fully or correctly and do not have the data independently verified.  Based on the latest publicly available data, which for most companies was from 2011, the Environmental Tracking (ET) Global 800 Ranking Report found that only 37% of the world’s 800 largest companies disclosed complete data and correctly adopted the basic principles of emissions reporting.  Only 21% had their data externally verified and only one firm, German chemicals producer BASF, reported emissions across its entire value chain – from business travel and transportation to distribution and investments.  This transparency enabled BASF to achieve the number one ranking among all companies. In addition to BASF, the best companies at reporting emissions were telecoms firms such as Canada’s BCE, Swisscom, Singapore Telecom, Spain’s Telefonica, BT Group and Deutsche Telekom.  The bottom companies, with no publicly disclosed emissions data, consisted mainly of Russian and US utilities and oil and gas companies including Phillips 66, Lukoil, Edison International and First Energy.


The report’s key findings include the following:


BASF came out on top, disclosing 15 Scope 3 Categories, with a combined Scope 1, 2 & 3 emissions intensity of 932.74 tCO2e/$M turnover.


US based First Energy came last, with no public data and an inferred combined Scope 1, 2 & 3 emissions intensity of 10,342.03 tCO2e/$M turnover.


63% of companies report incomplete data or no data at all, indicating the scale of the GHG reporting challenge.


Europe leads the world on all disclosure metrics: 35% of companies report complete and independently verified data. This compares to 11% for the BRICS (Brazil, Russia, India, China and South Africa), the lowest of any region.


In total, only 21% of the ET Global 800 companies report public, complete and independently verified data, as defined by the ET Global Carbon Ranking Methodology.


Italy and Spain rank joint highest in terms of disclosure and verification with 62% of companies reporting complete data and a further 54% having their data verified.


33% of companies within the ET Global 800 report one or more Scope 3 categories. However, only 2%, report 5 or more Scope 3 categories.


Companies are under increasing pressure from the public and policymakers to report the environmental impacts of their daily business activities.  While some companies are starting to measure and disclose environmental performance in their annual reports, the lack of utilizing transparent and internationally accepted standards like ISO 14064-1 and ISO 14021 means that both reporting formats and content vary widely and remain toothless tigers.