*EPF505 08/04/00
Excerpts: Report on Corporate Initiatives to Reduce Greenhouse Gases
(Companies take heed of global climate change) (1690)
Several U.S. companies are taking concerns about global climate change seriously and launching voluntary programs to measure and reduce their greenhouse gas emissions, according to a report released by the Pew Center on Global Climate Change.
The Pew Center, a large non-profit organization working to improve the quality of the environment, held an August 1 briefing on the report. Representatives from DuPont, United Technologies and Arthur D. Little, which were all featured in the report, discussed their corporate strategies to monitor greenhouse gases.
Under the 1997 Kyoto Protocol, industrialized countries pledged to collectively reduce their greenhouse gas emissions to roughly 5 percent below 1990 levels during the period 2008-2012. Although the United States has not yet ratified the protocol or enacted legislation to meet the Kyoto objectives, several companies are acting now in anticipation of such legislation.
"Why be proactive?" asked John Carberry of DuPont. "First, there is enough information about climate change for cause for concern. Secondly, at some point regulations are expected, and instead of reacting, we wanted to act on our own schedule so we can anticipate issues in the debate and plan ahead."
Beyond considerations of environmental concern and good corporate citizenship, companies conducting inventories can also identify ways to enhance their productivity and energy efficiency, the report says. Eileen Claussen, president of the Pew Center, explained the report offers important lessons and guidelines for other companies to adopt greenhouse gas reduction programs of their own.
"Ensuring that such efforts are recognized in the future requires that they be well thought out and documented today," Claussen said. "This report is a thorough guide to the choices involved in inventorying greenhouse gas emissions."
The Pew Center's full report is available at: www.pewclimate.org
Following are excerpts from the news release, as well as from the introduction and executive summary of the report overview:
(begin excerpts from news release)
Pew Center on Global Climate Change
Washington, D.C.
August 1, 2000
REPORT DESCRIBES COMPANIES' EFFORTS TO "INVENTORY" GREENHOUSE GAS EMISSIONS
Voluntary Initiatives Mark First Step Toward Emissions Reductions
A growing number of companies are launching voluntary efforts to measure and track their greenhouse gas emissions, coming up with solutions to practical issues and presenting opportunities for others to learn from their experiences.
A new report released by the Pew Center on Global Climate Change describes the pioneering work being done by some of the world's leading companies to inventory and report their greenhouse gas emissions. The report, authored by a team from Arthur D. Little, Inc., presents a set of principles for such efforts; describes credible approaches being tried by more than a dozen major companies; identifies key decision points in the process; and lists information resources that are available to companies contemplating such projects.
"In the absence of a comprehensive policy regime, we must encourage voluntary efforts to identify and reduce greenhouse gases," said Eileen Claussen, President of the Pew Center. "Ensuring that such efforts are recognized in the future requires that they be well thought out and documented today. This report is a thorough guide to the choices involved in inventorying greenhouse gas emissions."
Benefits of Emissions Inventories
The trend toward increased corporate reporting of greenhouse gas (GHG) emissions is driven in part by the companies' recognition that enough is known about climate change to warrant emissions reductions in the near term. An emissions inventory is the first step in that process.
Beyond considerations of environmental concern and good corporate citizenship, companies conducting inventories can also identify ways to enhance their productivity and energy efficiency; and support the development of flexible, market-oriented policies such as emissions trading. An accurate inventory will also put companies in a better position to count voluntary, near-term emissions reductions toward any future regulatory requirements.
The report also describes the efforts of many specific companies, including American Electric Power of Columbus, Ohio; Air Products of Allentown, Pennsylvania; Baxter International Inc. of Deerfield, Illinois; BP of London, England and New York, New York; DuPont of Wilmington, Delaware; Entergy of New Orleans, Louisiana; ICI of London, England and Bridgewater, New Jersey; Niagara Mohawk of Syracuse, New York; Shell International of London, England and Houston, Texas; Suncor of Calgary, Canada; Sunoco of Philadelphia, Pennsylvania; United Technologies Corp. of Hartford, Connecticut; and Whirlpool Corp. of Benton Harbor, Michigan.
First in "Solutions" Series
The inventory report is the first in a new series aimed at identifying practical solutions to the challenges presented by climate change. Other Pew Center series focus on domestic and international policy issues, environmental impacts, and the economics of climate change.
A complete copy of this report -- and information on previous reports -- is available on the Pew Center's web site, www.pewclimate.org.
(end excerpts from news release)
(begin excerpts from introduction to the report overview)
Pew Center on Global Climate Change
There is currently much interest among corporations in undertaking greenhouse gas (GHG) emissions inventories. This interest has been accelerated by the trend toward increasing voluntary reporting of corporate environmental performance, including the emissions of greenhouse gases. Increasingly, companies are concluding that enough is known to begin taking action now to understand, to manage, and to reduce their GHG emissions. Conducting an emissions inventory is a necessary first step in this process. By properly accounting for their GHG emissions and removals, corporations have an opportunity to establish a foundation for setting goals and targets; provide a baseline to measure progress; evaluate cost-effective greenhouse gas reduction opportunities; clearly communicate with their stakeholders; contribute to the development of accurate national inventories; and provide data that supports flexible, market-oriented policies.
The 1997 Kyoto Protocol, under which industrialized countries pledged to collectively reduce their greenhouse gas emissions to roughly 5 percent below 1990 levels during the period 2008-2012, is one impetus for conducting emissions inventories. Although the Protocol has not been ratified by any major industrialized nation, and it is unclear how corporations would be affected by any such plan to reduce emissions, knowledge of their current emissions (and means for their reductions) is essential for companies to understand how the policy options currently being debated might affect them and how they should participate in the debate.
Other reasons cited by companies for conducting GHG emissions inventories are primarily financial. Conducting inventories in conjunction with energy measurement and conservation programs enables companies to identify opportunities to reduce their energy usage, greenhouse gas emissions associated with this energy usage, and energy costs. Reducing emissions of the greenhouse gas methane by, for example, reducing losses during oil and gas production and transport or capturing landfill gases, saves a valuable commodity.
(end excerpts from introduction to the report overview)
(begin excerpts from the executive summary to the report overview)
There is great interest today in the inventorying of greenhouse gas (GHG) emissions by corporations - perhaps more than there has ever been for a voluntary environmental initiative. This interest is part of the general trend among corporations towards increased reporting of environmental performance. In addition, many organizations have concluded that enough is known to begin taking action now to understand, to manage, and to reduce their GHG emissions. The possibility of earning credit for taking voluntary actions to reduce emissions is also a motivating factor for many companies to conduct inventories. Conducting an inventory is a necessary first step in managing GHG emissions.
The intent of this paper is not to advocate any specific methodology or approach for conducting GHG emissions inventories, nor to promote any particular policy positions. The review of the experience to date and issues surrounding GHG emissions inventories, however, suggests several general principles for developing effective GHG emissions inventory programs:
Start by understanding your emissions. Knowing the relative magnitude of emissions coming from various sources is necessary to understand whether or not they are material contributors to a firm's total emissions. Understanding the nature and the number of the emissions sources will facilitate the use of the inventory development guidance that is becoming available.
Understand the likely uses of the emissions inventory. Companies conduct GHG emissions inventories for purposes that range from internal goal-setting to external reporting to obtaining financial benefits. These different uses of the inventory information imply different levels of completeness, accuracy, and documentation in the inventory. Each organization will need to reach its own conclusion as to the cost/benefit balance of developing its inventory, depending upon its set of likely uses.
Decide carefully which emissions to include by establishing meaningful boundaries. Questions of which emissions to include in a firm's inventory and which are best accounted for elsewhere are among the most difficult aspects of establishing GHG emissions inventories. Since the purpose of conducting an inventory is to track emissions and emissions reductions, companies are encouraged to include emissions they are in a position to significantly control and to clearly communicate how they have drawn their boundaries.
Maximize flexibility. Since requirements to report or reduce GHG emissions under a future climate policy regime are uncertain, companies should prepare for a range of possibilities. By maximizing the flexibility in their emissions inventories - for example, by being able to track emissions by organizational unit, location, and type of emission or by expressing emissions in absolute terms or normalized for production - organizations will be prepared for a wide range of possible future scenarios.
Ensure transparency. Transparency in reporting how emissions and emissions reductions are arrived at is critical to achieving credibility with stakeholders. Unless the emissions baseline, estimation methods, emissions boundaries, and means of reducing emissions are adequately documented and explained in the inventory, stakeholders will not know how to interpret the results.
Encourage innovation. Now is the time to try innovative inventory approaches tailored to a company's particular circumstances. The range of experience and lessons learned will be invaluable as voluntary reporting protocols are developed or as possible regulatory requirements are established. Learning what works best - and doing it before any requirements for reporting are in place - will be as important as learning what does not work.
(end excerpts from the executive summary to the report overview)
(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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