Addressing the Challenge to the I ndustry
A few slides on: Why have a carbon management strategy The UK carbon challenge Latest policy drivers Consumer pressure on the supply chain Reducing carbon in the supply chain & carbon labelling
W hy Manage Carbon? Existing pressures lead to opportunities to.. Reduce Costs Policy & Regulation Reduce energy bill through energy management important as prices have risen significantly Improve operational effectiveness Com ply w ith Regulation Company Costs Ensure compliance for up - coming rounds of Climate Change legislation, EU ETS, Buildings Directive, and more Enhance or Maintain Reputation Reputation Maximise brand & reputational impact of & reducing carbon emissions Consumer pressure
The UK carbon challenge The UK s direct emissions of CO 2 are 560 million tonnes ( MtCO 2 ) a year 40% of UK CO 2 emissions are created by business The Government s target is to reduce the UK s emissions by 60% by 2050 The move to a low carbon economy presents significant challenges but huge opportunities
Meeting the UK carbon challenge Meeting the projected 60% emissions reduction requires technology innovation in addition to energy efficiency UK CO 2 Emissions Trajectories * Assumes full implementation of all CCPR measures and central i mpact of energy white paper measures. Sources: Climate Change Pr ogramme Review (CCPR), Energy White paper emissions projects, June 2007. Note t hat current BAU emissions projections post 2020 show rising emis sions which would tend to increase the size of the gap to the 2050 60% reduction target
Moving the debate forw ard Scientific Case In 2007, 600 scientists on the UN Intergovernmental Panel on Climate Change (IPCC) agreed that climate change is caused by human activity Economic Case In October 2006 the Stern Review on the Economics of Climate Change found that if climate change is left unchecked it could cost the equivalent of 5 - 20% of Global GDP to tackle Political Case Business and the public are increasingly calling on the Government and politicians for leadership
Policy Latest Budget 2 0 0 8 UK is taking a leadership role on EU and international action: Phase III of the EU ETS 20% target reductions by 2020 20% renewables by 2020 Regulatory framework for carbon capture & storage London promoted as centre for expertise in carbon trading
Other Highlights Carbon budgets to be set alongside financial budget for 2009 Incentives for increased use of bio-fuels All new commercial buildings zero carbon by 2019 Promotion of energy services Increased support for R&D Increased Climate change levy rates Proportion of electricity from renewables x3 by 2015 EMPHASIS IS ON A COMMERCIAL APPROACH
Energy Perform ance Certificates Required on construction, sale or let April 08 > 10,000m 2 July 08 > 2,500m November 08 the rest Last for 10 years
Stakeholder aw areness is grow ing UK Quarterly press coverage of climate change issues 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 94 95 96 97 98 99 00 01 02 03 04 05 06 Source: Factiva and Lexis Nexis: UK English language press menti ons including global warming, climate change, greenhouse effect or greenhouse gas
Responsibility People do not think business is doing enough to cut carbon emissions and tackle climate change Consumers remain sceptical of green claims currently being made by business 79% do not think businesses is doing enough to help consumers make informed choices about the carbon footprints of the products they sell 70% of respondents in the UK said that climate change claims should be proven by independent parties. Scientists, environmental groups are seen as credible.
Consum er behaviour 67% say they are more likely to buy a product with a low carbon footprint Consumers say they are willing to alter their purchasing decisions based on product/ service carbon footprint information
W hat is the footprint of a product? Supply chain / value chain of a can of cola Aluminium Cola Transportation Refrigeration Can collection Production production Chilled storage Recycling or Sugar farming Packaging disposal Total carbon footprint of the can of cola (illustrative) Disposal & Raw recycling material Product Consumer manufacturing use Distribution & retail
Hot topic: food m iles Cutting food miles is important to reduce transport impacts BUT Food miles is a poor indicator of the overall impact Local sourcing m ay increase the footprint of a product I nnocent W alkers 250ml Mango & Passion Fruit 34.5g Cheese & Onion Total = 75g CO2e Total = 294g CO2e Potato Disposal: 2% distribution: < 1% Distribution: 10% Smoothie - making: 21% Making nitrogen Making the packaging: 30% fertiliser: > 15% Raw materials transport: 14% Growing & Packing: 23% Source: Carbon Trust Low Carbon Supply Chain Pilot, March 2007
I n March 0 7 , launched the initiative w ith 2 com ponents 1. Standards Setting 2. Company Engagement Developing standards to: Measure ; Product footprinting & Reduce ; and reduction projects Communicate Testing the Carbon the GHG emissions from Reduction Label goods & services
About the Carbon Trust The Carbon Trust was set up by government as an independent company Our mission is to accelerate the move to a low carbon economy We work with organisations to reduce carbon emissions and develop commercially viable low carbon technologies To deliver our mission we bring together public and private funding and encourage cross sector partnerships As a Company Limited by Guarantee any profits we make are reinvested to help deliver our mission
Our activities cover 5 com plem entary business areas Insights Solutions Innovations Enterprises Investments Delivers carbon reduction Develops low Creates low Finances clean energy Explains the solutions carbon technologies carbon businesses businesses opportunities surrounding climate change
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