Carbon Redux

With the release of our CSR report two weeks ago, we've had some renewed attention on our overall carbon strategy.

As we have been, we're currently focused on lowering our actual carbon footprint as low as possible. We have been making good headway, and have a long list of projects still to go which we know will have a good return. And with this long list, our investments in carbon reduction will continue to focus on these projects as opposed to investing in offsets.

At some point the list of projects with clear ROI will start to shorten, and at that point we'll take a look at offsets as a way to continue to allow us to make headway. Is that point in time three years from now? Two? Five? Not sure yet, but we'll be open about our approach.

There is a cost to this strategy, and that cost is that we can't claim that we're "carbon neutral". Right now that's a cost we're willing to live with.

Because we've been willing to talk about not being carbon neutral, I find myself in interesting discussions. Here's some thought-provoking questions that have come up. They aren't meant to prove any specific point, but I think they're useful in helping understand the nature of carbon offsets.

What about the other GHGs? If carbon neutrality is a good idea, what about nitrous oxide neutrality? Methane neutrality? Water vapor neutrality? And beyond the GHG's, what about fresh water neutrality? Is this a mechanism that we want to scale, or is carbon unique in some way?

Can you be "double carbon neutral"? If it is good to offset your emissions, is it even better to offset your emissions twice? Is there a name for this? Anyone want to give it a try?

What happens if the externality cost of carbon gets priced into the market by some mechanism? If a CO2 tax comes into being that represents the impact of emissions, am I automatically carbon neutral, assuming I pay my taxes? If a CO2 cap and trade system is instituted do companies stop offseting?

Let me know how you'd answer these questions!

Comments:

Check out this US Carbon Footprint Map, an interactive United States Carbon Footprint Map, illustrating Greenest States to Cities. This site has all sorts of stats on individual State & City energy consumptions, demographics and much more down to your local US City level...

http://www.eredux.com/states/

Posted by ed on October 16, 2007 at 01:11 PM EDT #

Dear Mr. Douglas,

I found your questions not so provoking, but very interresting.

There is no official definition of carbon neutrality, but it should in fact imply neutrality in all GHG. Carbon is generaly used for "carbon equivalent", a practical unit which allow to group several GHG : 1 CO2 counts for 1 unit, 1 methane counts for 21 units, etc...

Fresh water neutrality is not such a strange idea : I read that Coca Cola had thought to become water neutral, at least for some sites or some countries.

Double carbon neutral is effectively possible (even triple !!): it would maybe be called "climate positive" or "carbon negative". The English company Innocent Drinks already offset 120% of its emissions (http://www.innocentdrinks.co.uk/us/?Page=what_are_we_doing)

A tax system would not make you carbon neutral, since the product of the tax would not necessarily be used to fund additional projects reducing carbon emissions.

A cap and trade system does not make you either necessarily carbon neutral, since all emissions below the cap are not offset.

Speaking of the cost of becoming carbon neutral, if we consider the data provided by Sun on its Internet Website, the 133.000 tCO2e emitted because of energy consumption (11.128 x 12), valued at USD 15/tCO2eq are worth around USD 2 million. This represents 0,4% of the USD 473 million of net income for full FY 2007. I understand that USD 2 million is a sum, but 0,4% of net income for contributing to the biggest challenge humanity has ever faced does not seem to me such unafordable.
It represents USD 0.00054 /share.

I might be a great idealist, but I do really think it affordable. Do you really think its provoking ?

Wth my best regards

Eric Parent
Founder of Climat Mundi, carbon offsetting company

Posted by Eric Parent on October 18, 2007 at 09:49 AM EDT #

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