What do Arnold Schwarzenegger, Barclays Bank, ONGC and students of Oberlin College (Ohio) have in common? They are all working towards a greener tomorrow by reducing the emission of greenhouse gases in their own way.
With people now realising that global warming is a reality and climate change is happening, it was time someone decided to do something about it. So, out came the Kyoto Protocol by UNFCC to tackle climate change by reducing man-made green house gases or emissions. Each of these gases causes global warming, but not all are equally sinful. If CO2 (carbon dioxide) has been given a score of one on the global warming-potential scale, then sulphur hexafluoride with a score of 23,900 makes it the most lethal of all.
So, if you develop a mechanism to reduce the emission of these gases, you gain points accordingly. As an example, stopping emissions of a tonne of CO2 gives you one point, while reducing emissions of one tonne of sulphur hexafluoride will get you 23,900 points, and similarly so on so forth. These points [or CERs: Certified Emission Reductions] could be sold to countries, which under the Kyoto Protocol, need to reduce their green-house-
The heat is on
Yes, literally! With climate change comes a whole lot of other changes too. Bankers, insurers and institutional investors have begun to realise that climate changes leading to storms and destruction of property are causing them big financial losses. They are now demanding that companies, in which they hold stakes, sit up and take notice and alter their business plans accordingly.
Businesses too are realising how soaring energy costs are increasingly eating into their profitability and it’s time they did something about it. Citigroup is encouraging the sale of energy efficient homes, IBM has reduced its energy bill, Unilever has reduced its greenhouse outputs by 10% in one year. DuPont, way back in 1980, had introduced substitutes for Chlorofluorocarbons (CFCs) in refrigerants as they were destroying the Ozone layer.
Siemens has developed more energy-efficient motors plus has stared using renewable energy systems like wind-energy. The firm conserved some 1.2 billion tonnes of carbon dioxide since 1995! Intel has chipped in too by developing a technology where a PC on standby mode would consume just 5 watts of electricity, resulting in a saving of 71% of power consumption.
Toyota, always a pioneer and leader, beat everyone in energy conservation by launching the Toyota Prius. This hybrid averages 55 miles to the gallon and emits 55% less carbon dioxide than other midsize cars. Not just are these companies helping the environment, but tomorrow when regulations on carbon emission get stricter (which they will, if we need to save our planet), these companies, who have already got a ‘heat-start’
DuPont in 1994 set a target of cutting emissions by 40% by the year 2000. It achieved that. Then it targeted 65% reduction by 2010 and achieved that by 2005. It found that despite producing 30% more goods, it was using 7% less energy, which helped it save $2 billion. It surely makes business sense today to think green.
Green bucks, green planet
There are some companies who are unable to reduce their carbon emissions for various reasons. Sometimes, it’s just not practically possible and sometimes, it’s too expensive for them to replace their existing equipment with the modern energy saving ones. They needn’t lose hope. All they need to do is pay companies in developing countries to cut emissions and earn CER credits.
A business opportunity
As the West realises it’s cheaper and easier to buy carbon credits than earn them on their own, it has now developed a huge new business opportunity for many. One company that’s made a very big fortune for itself is the European Climate Exchange (ECX). In its first month of operations, it traded a million tonne of CO2 credits. Today, it handles 85% of the 1.2 billion carbon emission trade made in Europe.
