Pricey carbon stirs passions
As the EU’s drive to bring the price of carbon to the forefront of its policies advances, plans to gradually reduce the allocation of “free” emissions to industrial sectors under the bloc’s emission trading scheme (EU ETS) have raised concerns that Europe’s energy-intensive industries may decide to relocate elsewhere.
Christian Balme, a director of Royal Dutch Shell, the world’s second-largest oil company, told the European parliament in April that full auctioning of emission quotas in Europe would destroy his company’s profitability.
At present heavy industry is allocated emission quotas for free under the EU ETS. The European commission has proposed that heavy industry should pay for 20 per cent of its emission permits in 2013, rising to 100 per cent by 2020.
According to Mr Balme, the payment Shell would have to make in respect of emission quotas would equal its current profit levels. This he called “unacceptable”, claiming his company would stop investing in Europe if the proposals became law.
The commission has already said it will ensure that the competitiveness of European industry is not affected. It has resisted pressure to rush into compensation measures, though, arguing it will be better placed to make the right decisions after further progress is made in international climate negotiations.
Once the picture becomes clearer, it will be interesting to see how the EU manages to square the circle and stick to its climate pledges while protecting its industry from cheap competition from abroad.
In the meantime, organisations have been busy tackling their carbon footprint – or helping others deal with it, as the case may be.
Among the latest initiatives, the Legal Sector Alliance has set up a movement to “encourage the legal profession to commit to environmental sustainability”. It plans to develop a carbon-footprint measuring tool for firms across the sector. The alliance is now working on a protocol that will help law firms and the like measure their carbon footprint. As the chief executive of the UK’s Law Society put it: “You can’t manage what you haven’t measured, so calculation of your carbon footprint is absolutely crucial before you take action to reduce it.”
This statement, obvious as it may sound, will strike a chord with the many small-and medium-sized companies that would like to do something concrete and measurable to cut their carbon footprint but don’t quite know where to start.
For larger firms with deeper pockets, investment bank Merrill Lynch has launched a
“full-service carbon offset service… to help companies develop and manage climate-related strategies”. Adding its name to the 170-plus offset providers worldwide, the bank says carbon offsetting is the way forward for most companies. But it adds a note of caution: stakeholders must receive “an independent guarantee of environmental sustainability and credibility”.
Which is exactly why ENDS recently published its own Guide to Carbon Offsets providing guidance, advice and a top-30 list (www.endscarbonoffsets.com). Unsurprisingly, the guide reveals that many schemes are quite simply not worth the effort.
But the ENDS guide also reminds readers that, while carbon offsetting can be a valuable initiative that helps stabilise emissions, it is not the panacea for all carbon evils that some would like it to be. “Organisations and individuals must cut their own emissions before offsetting, and continue cutting them afterwards.”
The full text of this article is only available to subscribers and free trialists. To login,please enter your email address and subscriber access code below.