The market is looking for companies that create new value. Products, services, ways of doing business that fall outside the mainstream and provide a fresh, innovative approach. Time after time we hear of significant revenue gains or cost savings when companies leverage a sustainability program as a way to reassess how they are doing business.
We’ve included a few abstracts in this newsletter we think relevant and worth bringing to your attention.
·There are new innovations in energy production that mean we will have options to purchase clean energy for our businesses. Being aware of the availability of these programs and ready to take advantage of those options is good strategic planning.
· Programs are being implemented here and in other countries that signal energy initiatives we may be legislated to address. Again, knowledge enables risk avoidance.
Now is the time for innovation, resilience and being lean and green as a strategy for financial sustainability.
CLEAN ENERGY INNOVATION – SOLAR THERMAL
The largest sustainability item for media companies – both digital and print – is clean power. So the opening of the AUSRA-built, Kimberlina solar thermal power plant in California is a landmark event to say the least. The Palo Alto, California company cut the ribbon on a 5 megawatt facility located in Bakersfield, where it will generate enough electricity at peak hours to power 3,500 homes.
Though not as publicly as well known as solar photovoltaics, according to AUSA, solar thermal has the potential to meet more than 90% of the US demand for electricity.
AUSRA will now turn to building a larger version of the Kimberlina plant: the 177 MW Carrizo Plains plant in San Luis Obispo, California. The plant is scheduled to come on-line in 2011 and be supplying electricity to Pacific Gas and Electric. Ausra’s founding investors are Khosla Ventures and Kleiner Perkins Caufield & Byers. They’ve since been joined by additional investors.
Ausra’s zero-carbon power plants generate electricity at current market prices for fossil-fired power without the emissions caused by burning fuels. Solar concentrators boil water with focused sunlight, generating high-pressure steam that drives conventional turbine generators. Low-cost thermal energy storage systems now under development by Ausra will allow solar electric power to be generated on demand, day and night.
Who says sustainable energy isn’t here yet?
YOU SHOULD KNOW ABOUT: U.K.CARBON REDUCTION COMMITMENT (CRC)
CRC is the UK’s first mandatory carbon trading program targeting emissions from around 5,000 large business and public sector organizations. It kicks off in April 2010. This is the first time organizations will be legally required to calculate, report on and trade carbon in Britain. The British are committed to cutting U.K. carbon emissions by 60% by 2050, compared to 1990 levels.
Because CRC inclusion is based on electricity consumption with the aim of carbon mitigation, its implementation will include a variety of job functions. Those functions include energy, facilities, environmental, operations, EHS, logistics, sustainability, regulatory affairs, CSR and finance managers. Proper data management systems and accurate carbon assessments will be critical to CRC compliance as there will be penalties for under-reporting emissions.
CAP AND TRADE AND MORE
We anticipate significant focus on climate change activity from governmental authorities. Medium to large businesses should be familiarizing themselves with Greenhouse Gas (GHG) reduction programs. This will be a significant business expenses. As Tom Friedman says in his new book Hot, Flat and Crowded, “Why am I so sure that we will have to pay? Two reasons. The first is that we have already passed the tipping points regarding energy supply and demand, petro-dictatorship, climate change, energy poverty, and biodiversity loss.
The second reason I am sure we will have to pay is that the true costs of all these things are becoming visible, measurable, assessable, and inescapable.”
Cap and Trade
Among the tools governments have at their disposal to achieve GHG reductions are the authorized activity of regulatory authorities and market-based approaches that rely on supply and demand along with financial incentives to change behavior. Cap and trade is the latter, and has proven successful in the U.S. in programs to reduce acid rain.
In a cap and trade program, the government determines what the program covers and sets an overall emission target, or “cap,” for covered entities. This cap is the total of all allowed emissions from all included facilities. When the cap has been set and the specifics determined, tradable emissions allowances are available to the market to be sold, traded, auctioned or gifted. Each allowance authorizes the release of a specified amount of GHG emissions, generally one ton of carbon dioxide equivalent. The total number of allowances is equivalent to the overall emissions cap.
Carbon Tax
In addition to cap and trade, another type of market mechanism sometimes discussed as a means of reducing GHG emissions is a carbon tax, which would require emitters to pay a tax for every ton of GHGs they emit. The key difference between the two approaches is that cap and trade provides environmental certainty, since the quantity of total allowable emissions is set, while a tax provides price certainty, since the cost of emitting a given amount of GHG is set. In response to a tax, many emitters will reduce their emissions, but others might simply accept the additional cost and continue to emit.
Regional Greenhouse Gas Initiative.
The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory U.S. cap and trade program for carbon dioxide and is happening now. Currently, ten northeastern and mid-Atlantic states are participating: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont.
RGGI sets a cap on emissions of carbon dioxide from power plants in the region, and allows sources to trade emission allowances. The program will begin by capping emissions at current levels in 2009, and then reducing emissions 10 percent by 2019. Sources will continuously monitor and report their emissions, and penalties for non-compliance will be enforced according to each state’s rules.