A recent study by IBM published in Forbes magazine says that whilst many companies want to reduce their carbon footprint, many do not have the measurement systems in place.

The study says that “Companies aren’t collecting and analyzing the information they really need or aggregating it often enough. Because of that, they can’t implement real changes to fundamentally increase efficiency, lower costs, reduce environmental impact and improve their reputations with key stakeholders.”

“In our survey, only 19% of respondents said they are collecting data on carbon dioxide emissions weekly or more often. Most are collecting it only quarterly. That may be enough to meet government or stakeholder demands for information, but it’s not nearly enough to produce systemic change that can reduce environmental impact.”

The old adage “you can’t manage what you don’t measure” is no less true when it comes to cutting your carbon emissions.

Measuring and tracking your emissions on an ongoing basis:

• Helps you know where to focus your efforts. Its been our experience that the 80/20 rule certainly applies to greenhouse gas emissions. 20% of an organisation’s sites will be responsible for 80% of its emissions. We have worked with many local governments and the 80/20 rule always stands up. Organisations which don’t know where their emissions are coming can easily fall into the trap of not focussing their effort where it will have the greatest impact. On the other hand by applying the 80/20 rule its easy to get some quick wins that build credibility and win valuable support for ongoing carbon reduction. An example of this comes from Darebin City Council in Melbourne. We started off with an 80/20 analysis, then undertook energy audits of their top 13 sites. We were then contracted to project manage energy efficiency works. We did some data logging and identified that the heating was starting up at 1am. So the first thing we did was to get a programmer in for an hour or so to change settings in the Building Management System controlling the heating. By reading the gas meter regularly, and tracking the gas bills, an immediate saving was identified, equating to roughly $10,000 a year and 100 tonnes of greenhouse gas. This quick win, and a dedicated energy efficiency officer (Stuart Nesbitt) employed by the council at the time we started project managing, provided a “kick start” to a program that two years later is still going strong, with net savings to date across the top buildings of 22%. And measurement was a key part of this – the 80/20 analysis followed by targetted data logging to measure in detail major items of plant.
• Alerts you to problems. For example water consumption jumps 100% – usually when this happens there is a leak, often underground where it can’t be seen. If you aren’t measuring and monitoring, or you don’t have a system that raises an alert, you may end up wasting water for many months. Users of our CarbonmetriX system often find problems they would have otherwised missed because of the automatic alerts it raises.
• Engages with stakeholders. When you know where and how your energy is being used, and the trends, its much easier to engage with facility managers and other stakeholders when developing a plan to reduce your emissions.
• Enables comparison. You can pick out those facilities with the highest and lowest carbon emissions per square meter, per widget, or per staff member. Then see what the best facilities are doing and transfer that to your worst facilities.
• Assist you present genuine green credentials, and not just greenwash, when you go to the marketplace and can demonstrate what you have measurably saved.

The Forbes article finishes with the following comment: “The bright spot in these findings comes from companies that outperform their competitors in bottom-line results. Outperformers rank consistently higher in collecting every type of CSR information frequently or in real-time across all major green and sustainability categories, from carbon dioxide emissions and water conservation to ethical labor standards and sustainable procurement. They also rank higher in information collection from suppliers.”

Click here to see the IBM study presented in Forbes.

Yesterday I attended the public consultation in Melbourne about accounting for and measuring voluntary greenhouse gas savings. The consultation was run by the Offsets Policy Team from the Department of Climate Change.  

It was good to be consulted and heard, and made me feel a little less disenfranchised by the CPRS.

Four or five years ago I attended a number of state government consultations on climate change. There was always strong disagreement and a lack of consensus. Yesterdays workshop was doubly satisfying for not only feeling that my opinions were being heard, but to also see that pretty well everyone else who attended was expressing the same view point. Many individuals and small businesses want to make a contribution to reducing greenhouse gas emissions. And we want our contribution to be a real, recognizable contribution that actually reduces carbon emissions and is additional to that which would be achieved by the CPRS.

It was reassuring to be able to ask questions like “what is the definition of a small business under the CPRS” and learn that this same question had been asked in similar workshops around the country.

Hopefully the workshops will help the government make changes such that voluntary carbon ababement by businesses and organisations not liable under the CPRS is recognised. In a way that the business doesn’t have to “pay twice” to get their carbon abatement recognised. And that withdraws the carbon voluntarily saved from the CPRS.

Direct quote from the government’s 2009 budget web site:

“Households and small businesses will be able to calculate the potential dollar savings from their energy efficiency actions and make tax deductible donations to the Energy Efficiency Savings Pledge Fund. The Australian Carbon Trust will use these donations to purchase and retire Australian emissions units or purchase carbon offsets.”

What this means:

• If you voluntarily cut your household energy consumption to save greenhouse gas – sorry the greenhouse savings don’t count! If you want to reduce greenhouse gas emissions, you have to actually now go and pay to “retire” the carbon you’ve saved – and pay the government to do so. See my earlier blog posting rantings about the disincentives in the CPRS (Carbon Pollution Reduction Scheme) for more detail. Basically if you don’t pay to retire the greenhouse gas you’ve saved, the entity generating the energy (say an electricity generator) can claim it. And trade it. And you have contributed no additional greenhouse savings beyond that which the emissions trading scheme would achieve anyway.
• If you are a small business…. hang on… what is a “small business”? As only Australia’s top emitters get to participate in the CPRS doesn’t the definition of a “small business” in this context mean anyone who can’t participate in the CPRS? To participate in the CPRS you either have to directly generate over 25,000 tonnes of carbon a year, or consume more than 100 Terajoules of energy. In other words you are a small business if your annual energy consumption is less than 100 TeraJoules of energy or you directly produce less than 25,000 tonnes of carbon. What is a tera joule? You are probably familiar with kilojoules (1,000 joules), a tera joule is actually 1,000,0000,000,000 Joules. 100 TJ equates to an annual energy expense of about $2 million (as does the production of 25,000 tonnes). So, if you spend less than around $2 million a year on energy you are a “small business”!

So let me rewrite what budget actually means in plain English. “If you spend less than around $2,000,000 a year on energy, and you cut your energy use, in order to be able to also say that you’ve cut Australia’s greenhouse gas emissions you need to pay the government for it to recognise that what you’ve saved is an actual saving.”

Or, lets do a hypothetical here. Lets assume that you are a “small business” – ie your energy expense is less than $2 million a year. (What a tiny, wee business you’ve got if you’re not spending $2 million a year on energy!) You invest $10,000 in upgrading your lighting (using Mirrorlux Reflectors say). This saves you  $5000 a year on your electricity bills and about 25 tonnes of carbon annually. But if you want to say that your investment has reduced Australia’s emissions you actually have to pay. Lets say the carbon price settles at $50 a tonne. You’ll have to spend $1,250 a year to be able to genuinely say that your investment in your lighting upgrade is saving greenhouse gas. Because if you don’t, under the CPRS, the electricity generator supplying you the power that energises your lights has the right to the carbon you’ve saved.

Another hypothetical. This time you invest in a new gas heating system in your school. You spend $300,000 to put in gas space heaters and eliminate the old central heating system. It saves you approximately $20,000 a year in gas costs, and about 160 tonnes of greenhouse gas emissions a year. At $50 a tonne you have to pay the government $8,000 to “retire” the carbon you’ve saved. 40% of the financial savings you’ve realised goes to the government if you want to be able to say that your investment is actually reducing greenhouse gas emissions.

Are, you, like me, someone who believes that personal or “small business” action can do something to avert dangerous climate change? Do you, like me, spend less than TWO MILLION DOLLARS a year on energy? Well the government is clearly telling you and me that if we want to make a difference we have to pay twice. Pay for the investment to cut your emissions. And then pay the government to retire those emissions.

Isn’t there something really really wrong if we have to spend twice to cut our greenhouse gas emissions?

Its been a while since our last blog post. Which of course means we have been busy helping our customers save lots of carbon!

Its always tremendously satisfying to see customers act on our advice and thus cut their energy costs and carbon emissions. We recently helped one of our oldest customers identify savings in a building they have recently occupied, before I knew it our advice had been acted on and the next bill that comes in will be lower. As a consultant its pretty hard to beat the sense of fulfilment that comes from results such as this.

Over the last couple of years its been interesting to observe that the propensity for action is increasing. More of our customers are more willing to invest to achieve carbon savings. I think that there are a couple of  reasons for this.

Firstly, the obvious reason is that there is now much more popular support for efforts to reduce carbon emissions than there were three years ago. This has also transformed the mandate of many of the managers we deal with, to move from planning to action. Which is fantastic.

However another reason is also the experience of many of our customers. They have become “true believers” in energy efficiency because they have seen the results for themselves in the past. Two or three years ago they might have felt they were going out on a bit of a limb to put money into energy efficiency. Could our advice be trusted? But they did. And, surprise surprise, their energy consumption dropped. They saved money and carbon. Now they are much more willing to invest.

If you still haven’t seen the results of investing in energy efficiency yourself, do a small trial. Firstly, establish your baseline energy consumption. Pick a small building – for example your home – and go through the bills to establish your annual cost and carbon emissions (www.fossilfueldiet.com.au has a calculator which will help you do this). Then do some things to reduce your electricity use. Change any incandescent bulbs to compact fluorescent. If you have a beer fridge, used only occassionally, turn it off, and only turn on when needed. Rearrange your power boards so its easy to turn off stand by loads. Actively start thinking about light switches and turning off lights in empty rooms. If you can see that bad switch off habits in the household aren’t changing as quickly as you would like, try to do some things that “lock in” energy savings. For example, if your electric hot water unit is set to 70 degrees, lower this to 60 degrees, and start using timers to turn things off automatically.

You’ll learn a lot, and will see savings in your bills (remember to compare with the same time last year, as usage is seasonal). You can then apply these lessons at work to get much larger savings.

Become a “true believer” in energy efficiency and be a person of action. Simple, but something that can have a big impact when it comes to reducing carbon emissions.

As I’ve observed organisations that are successful in reducing their carbon emissions in an on-going way I’ve noticed that they all have three things in place before they begin to significantly cut their carbon:

1. Leadership commitment. More often that not the most senior level managers will be on the environmental steering committee.
2. A system in place for accurately measuring and tracking their emissions. They measure what they treasure – in this case their carbon savings.
3. Wider commitment in their workplace to emissions reduction.

With these three pre-requisites in place these organisations are more likely to move forward to actually cut their carbon pollution.