EPA Stuns Industry with Plans to Kill Climate Leaders Program

OAKLAND, CA — The U.S. Environmental Protection Agency (EPA) left some in the business community scratching their heads Wednesday at the news it would phase out its popular Climate Leaders program over the next year.

In a letter (PDF) sent to Climate Leaders partners yesterday, the EPA said it would wind down the program because a raft of credible state and regional programs is now available to help organizations develop greenhouse gas inventories and set emissions reduction goals. Regulatory developments, such as the EPA's new mandatory GHG reporting program, also factored into the agency's decision.

The reporting program, however, only captures a small part of corporate carbon footprints, and won't cover all Climate Leaders partners, many of whom were surprised by the news.

"There were a lot of conversations between EPA and partners as recently as last week on goal setting and other issues," said Kyle Tanger, CEO and president of consulting firm ClearCarbon. "There were a lot of investments made on the part of companies and consultants to comply with the requirements, and it turned out that was not necessary."

Since 2002, the Climate Leaders program has helped some of the nation's largest companies create comprehensive greenhouse gas management strategies. Partners received assistance with sizing up their carbon footprints and setting goals to reduce emissions, shared best practices with one another, and received recognition for their efforts.

"Johnson Controls would just like to emphasize how important Climate Leaders was in supporting companies as they began establishing baselines, goals and engaging in public reporting," Jennifer Layke, the company's director of building efficiency, said in a statement given to GreenBiz.com Wednesday. "The EPA has been an excellent partner for Johnson Controls, and this program is an example of the important role voluntary partnerships play in establishing and building corporate capacity for environmental improvement."

Taking Away an EPA Carrot, Leaving Only a Stick

Being part of a program that included high quality partner companies and the EPA stamp carried a lot of weight, said Bruce Klafter, managing director of corporate responsibility and sustainability at Applied Materials. Another benefit was access to consulting services that ensured the company's carbon accounting aligned with the agency's standards. Many regulated companies also appreciated the opportunity to interact with EPA outside the compliance context.

Klafter views the move as a mistake, and says it puts the EPA in a position of carrying a "big stick" -- its regulatory authority -- while reducing leadership opportunities at the national level.

"It may cause some people to question what their attitude is in terms of working with industry," Klafter said, noting the demise of Performance Track, another voluntary program eliminated last year. "As they shut down more and more voluntary programs, it suggests they really just want to play cop."

In an email sent to GreenBiz.com Wednesday, the EPA pointed out that it would still support GHG reduction efforts through its other voluntary programs, such as Energy Star and the Green Power Partnership. It said phasing out Climate Leaders "was not an easy decision."

"We want to reiterate our thanks and appreciation for our partners' efforts under this program, and we look forward to working with our partners during this transition period," the agency wrote. "EPA is inviting partners to assist with the transition to a new phase by giving feedback on what tools and resources would be beneficial to the continuation of their work to keep inventory of their GHG emissions and make reductions."

Companies to Shift to Other Information-Sharing Networks

The EPA anticipates the Climate Leaders program will continue through the end of fiscal year 2011, which ends Sept. 30, 2011. Over that period, it will help partners transition to other state and regional programs.

Potential alternatives include The Climate Registry (TCR), which is supported by 41 states, while the Carbon Disclosure Project collects emissions data from hundreds of global companies every year.

The news is prompting TCR to ramp up its outreach efforts, said Denise Sheehan, vice president of government affairs.

"We're going to be reaching out to partners and give them an overview of our program," she said.

TCR offers technical assistant from staff GHG experts with experience in emissions reporting, Sheehan said.

"We're here to help them to continue their terrific work in terms of GHG management," she said. "We would certainly welcome them with open arms."

The EPA said it is interested in partnering with one or more NGOs to sponsor a recognition program that would honor achievements in corporate emissions reduction efforts. Sheehan, who views the development as a way for the EPA to move from GHG inventorying to mitigation, hopes to pursue a joint awards program with the agency, noting that TCR launched a leadership recognition program last year.

The question for Climate Leaders partners, Tanger said, is whether the alternate registries provide a match, since there are differences between the programs, such as the third party validation requirements.

Overall, he said, the announcement should not have a major impact on the efforts of the dozens of Climate Leader partners that have put in place carbon management programs that are improving efficiencies and bottom lines.

"Maybe for a lot of companies that have started their carbon management strategies, this will have no bearing," Tanger said. "Some might come to realize the catalyst that was Climate Leaders has served them well and they are really now self-sustaining."

Image licensed by Alfred Palmer .