Newsletter // ClimateBiz News: September 3, 2009 -- Supply Chain Environmentalism, Nissan and Toyota Drive Emissions Cuts, and More ...

A Clean Development Mechanism for the Private Sector?
 
This week's feature story on "Supply Chain Environmentalism" usefully highlights one of the roles that the private sector can play in bridging the divide between developed and developing countries in the upcoming post-Kyoto negotiations in Copenhagen.
 
While government negotiators stake out positions regarding their 'fair share' of emissions reductions at a national level, multinational companies with significant sourcing in countries such as China are beginning to identify and address the total "lifecycle" emissions of their products, thereby creating incentives for their supply chain partners in those countries to support their efforts to reduce their impacts. Wal-mart, for example, has set hard targets for supply chain emissions reductions in China and is investing in local capacity to help suppliers understand and capture energy efficiency opportunities.
 
As the author, Larry Goldenhersh of Enviance points out, all of this is being done so far on a voluntary basis. What would happen if retailers and other corporate buyers in the OECD had explicit incentives to do more of this? Instead of taking the next $10 million to achieve a further 0.5 percent reduction in energy reduction at corporate headquarters in the U.S., a company might be given credit for investing that money with suppliers in a country such as China on projects that could yield easily ten times the impact. This is similar in spirit to the function of the so-called Clean Development Mechanism under Kyoto which allowed countries to earn reduction credit for qualified projects in developing countries where the cost/benefit of emissions reduction is far greater. Only in this case we would have powerful alignment of public policy and private sector incentives and objectives.
 
Problems of measurement, verification and accounting abound, but these are solvable problems and surely worth the effort. Is it time yet?

Eric Olson is senior vice president of advisory services at BSR.

This report utilizes the Carbon Disclosure Project (CDP) dataset to analyze how the world’s largest companies currently set emissions reduction targets and whether planned reductions are sufficient to combat long term climate change.

This report from the Sustainable Enterprise Institute finds that of the companies in the Russell 1000 index that have anything approaching an EHS policy, less than 10 percent include policies to make them effective. 

In these tough economic times, sustainability leaders and CIOs are looking for projects that deliver a fast payback and lower their environmental impact. In this session, IT executives and a PC power management expert will discuss their approach to greening IT operations and delivering rapid paybacks for the investment.