He is quick to point out the CCX is a voluntary trading system, in which companies agree to reduce their carbon emissions over a set period of time or buy carbon allowances to make up the difference, but he has a larger message: It won't be voluntary forever.
"Carbon emission regulations are going to be here soon and the companies that understand how to reduce emissions and trade carbon will be quantitatively ahead of the competition," he said last week in Chicago at the 2009 Environmental Summit sponsored by Boise Inc. "The E.U. already has restrictions in place for the highest emitting industries. The only questions left are what forms those requirements are going to take in the U.S., and how soon."
Cushing, like the rest of the event's speakers, offered two important conclusions for the more than 100 attendees: carbon management will likely be a mandatory requirement for doing business in the U.S. by 2010, at least for heavy emitting industries like paper and pulp; and if done correctly, the reduction effort can be a cost-saving endeavor that adds social, environmental and financial value to the company.
Many companies have already seen impressive environmental and financial results from cutting greenhouse gas emissions and waste, according to Rachel Bechardt, project manager for the Environmental Defense Fund.
She laid out a bevy of examples of companies that have partnered with EDF to achieve remarkable bottom-line results, including McDonalds, which has saved $3 billion since the '90s by eliminating polystyrene clamshell boxes and bleached virgin paper for bags; and United Parcel Service, which now saves $1 million a year since eliminating bleached paper and increasing recycled content and reusable containers.
The companies she mentioned also saw impressive environmental results, with packaging waste reduction numbers hitting 70 to 90 percent at McDonalds, and water use reduced by 17 percent at UPS. But the point that hit home: Sustainability efforts drive business incentives.
"Environmental gains are only replicable to the end that they can enhance the bottom-line," she pointed out. "The business benefits of going green are what get industries and companies on board for change."
Carbon tax with 100% refund
I am a bit skeptical of carbon trading. Do we really need to turn this soon to be trillion dollar market over to Wall Street speculators?
I think an easier and more effective system would be a carbon tax with 100% refund. All carbon would be taxed at the source and 100% of the money would be refunded on a per capita basis.
This approach would increase the cost of carbon leading to decreased use. The tax would effectively be paid by people whose lifestyle emits more than an average amount of carbon.
At last, the costs start to align with the benefits
For the last 50 years, people been paying artificially low prices for products and businesses have been reaping the profits.
Because we as a society did not clean up or take responsibility for the environment as we went along,(whether its climate or pollution or water supply or fisheries), we will now have to pay for all that retroactive stuff- as well as bake new processes into our business cases going forward. We can't make the profit from using cheap fuel and not cleaning up our mess, and then complain when we are asked to make it right- we should have thought of that sooner.
Making environmental issues an externality to business decision making was short-sighted and selfish decision- both by poorly informed free marketers and business leaders.
Luckily, there are a lot of businesses now leading the charge, instead of being in denial- Ceres BICEP group, for example- eBay, Nike, gap, etc.
The latest scientific information is worse than anticipated, at the same time Americans are in denial about climate change more than 2 years ago. And what's the break down? According to Gallup, 66% of Republicans and 22% of Democrats believe that climate change risk is exaggerated.
The leading scientists from 189 nations have weighed in. It's the time for all of to take action, to change our purchasing and energy consumption and waste habits- and move beyond short term, individualistic thinking. We are stewards here, and need to start acting that way.
Paperwork or not.
Why introduce another tax and overburden right now?
We're obviously in a recession/depression right now. Is this the right time to be introducing yet another tax and government overburden?
As an owner of a small business with a myriad of employment and tax forms to complete, I think I'm going to completely flip if the Federal or State Government sends me another mandatory form to fill out to talk about my carbon footprint.
Given that the Federal and State government have given me zero help in my business (and I'm not asking for any), the last thing I need is more government meddling in my affairs.
The most important thing government could be doing for businesses (and small businesses) would be to remove the 7.5 percent employer's FICA match. For every dollar we pay ourselves or our employers, we have to fork over a 7.5 percent tax to the government.
If the government were willing to eliminate this tax, I'd gladly fill out a one page form regarding my carbon footprint.
Then I'd have more money to pay myself, pay employees, and fund capital purchases to get this country going.
Isn't it nice that large companies can afford a carbon tax? Hmmm.