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European businesses are finding it pays to tackle climate change now, reports Sarah Morris
George W. Bush was criticised for abandoning the Kyoto Protocol – the international climate change treaty – in 2001. Yet some European countries have more in common with the ‘Toxic Texan’ than they care to admit.
From 1990 to 2004 both Spain and Portugal, for instance, have allowed their greenhouse gas emissions to climb above their Kyoto commitments, even beyond the 15% US increase. According to Reuters, Spain promised to keep carbon dioxide emissions to a 15% rise on levels recorded in 1990 – the base year for Kyoto – but is pumping out 49% more. Portugal pledged 27% and is emitting 41% more.
Embracing the challenge of climate change
Politicians are often reluctant to introduce tough curbs on greenhouse gases for fear of damaging their industries. Many European businesses, however, are choosing to embrace the challenge of climate change. “The circle we need to square is this: how do we achieve a low-carbon economy without destroying economic growth?” asked Terry Leahy, the chief executive of UK supermarket chain Tesco.
Tesco is squaring that circle by wooing customers to green consumption through its own carbon dioxide reduction efforts. It is introducing a system of labelling to show customers a product’s ‘carbon footprint’ – the amount of emissions created in producing and getting a good to the store. Other efforts include energy-efficient stores and a sustainable technology fund to support low-carbon technologies.
Rival supermarkets Waitrose, Asda, Sainsbury and WM Morrison, as well as clothes retailer Marks & Spencer, have all started to make cutting CO2 emissions a driving force in their business plans.
In Spain, energy giant Iberdrola spotted the trend towards renewable energy sooner than competitors and secured its lead by buying Scottish Power this year, bringing its total wind power capacity to 6,562MW. Favourable tariffs for wind generation have boosted Iberdrola, as well as wind turbine manufacturer Gamesa. When Gamesa listed on the stock exchange in 2001 some investors were sceptical, but shares have climbed almost seven-fold. French cement group Lafarge is working alongside the WWF to cut its emissions by 10%.
The consequences of climate change
A report by analysts at Lehman Brothers concludes that it pays businesses to take account of climate change now, considering all the opportunities and risks. Risks come from the effects of climate change itself – such as the damage unpredictable weather may do the insurance sector in the form of huge new claims – and from increased regulation to limit the earth’s warming.
“The pace of a firm’s adaptation is likely to influence whether, over the next several years, any given firm survives and prospers; or withers and dies,” writes analyst Dr John Llewellyn.
“We are moving towards a low-carbon economy and businesses that are late will be at a disadvantage,” agrees David McNeill, a spokesman for the UK Carbon Trust, which the British government set up to drive down CO2 emissions. The UK has currently set itself a target of a 60% reduction by 2050.
This spring EU leaders agreed ambitious new goals – a 20% reduction in greenhouse gases by 2020 in Europe, which they will increase to 30% if international agreement is reached, and a 20% target for the use of renewable energy.
Taking environmental action
The vehicle for successfully implementing EU targets on climate change is the European Emissions Trading System (ETS), the largest multi-country, multi-sector carbon trading market, started in January 2005.
EU countries allocate a number of emissions permits to installations in industries which generate around 45% of EU CO2: power generators, ferrous metals producers, chemicals plants, producers of minerals, pulp, paper and board.
Companies should get too few allowances so they are forced to become more energy-efficient or use cleaner energy forms. If they run out of allowances they can buy extra credits by funding carbon-cutting projects in other countries, including in developing countries.
The first phase of the scheme, which finishes this year, has largely failed because many countries gave a surplus of permits so the market was ineffective.
“Carbon has been selling for less than €1 a tonne – nowhere near enough to be effective,” says Mark Johnston of Greenpeace Europe, adding that the organisation favours the auctioning of all allocations.
Reversing the trend of rising greenhouse gases
The European Commission has closely vetted countries’ proposals for the next phase, from 2008-12, demanding many countries cut their CO2 quotas and reduce the amount of credits they buy in. “Carbon prices will be much higher. There is rationing and so there will be a much greater incentive for companies to take [environmental] action,” says Johnston.
The cost of action varies considerably across sectors. Dr Llewellyn says the cement industry, responsible for around 5% of world emissions, faces higher costs from buying carbon permits as well as from higher electricity costs as regulation increases the cost of energy.
Not everybody is on board, however. In the car industry, German manufacturers say they will be penalised by European regulations, particularly by an EU proposal to oblige manufacturers to cut car CO2 emissions to 120g/km by 2012. The German government is lobbying Brussels on the issue, arguing that the measure will punish Germany’s premium car sector but won’t promote further emissions cuts at smaller carmakers such as those in Italy and France.
“We all know we have to bring down CO2 emissions and we have been pursuing that for years,” says Manuela Hoehne, spokeswoman for the German Association of the Automotive Industry. She states that German companies have cut traffic emissions by 25% since 1990, compared to around 16% for imported cars.
“The target of 120g is ambitious and we only have five years. Product cycles in the car industry are six to seven years,” she said.
But time is not on the side of any industry. The UN’s Intergovernmental Panel on Climate Change says the world has until 2020 to reverse the trend of rising greenhouse gases, and must spend 3% of GDP on carbon-cutting measures.
What will that mean for consumers? “Every gram of CO2 reduction will cost money because of huge investment by manufacturers and suppliers,” says Hoehne. “It will probably involve higher prices in some respects.” Higher prices perhaps, but the cost of failing to curb climate change is far greater indeed.
FR » Le Changement climatique
On peut traiter George W. Bush de ‘Terreur Toxique’, mais en réalité de nombreux pays européens partagent de nombreux points communs avec lui. Ainsi, l’Espagne et le Portugal, ont laissé leurs gaz à effet de serre dépasser le taux autorisé dans le cadre du Protocole de Kyoto.
Les politiciens rechignent à introduire des mesures de réduction des gaz à effet de serre par peur de l’impact dévastateur sur leurs industries. Toutefois, de nombreuses entreprises européennes sont prêtes à relever le défi.
La chaîne de supermarchés au Royaume-Uni, Tesco, a lancé un label ‘empreinte de carbone’ c’est-à-dire qui calcule le taux des émissions émises dans le processus de production et d’acheminement d’un produit dans le magasin. En même temps, un fonds pour le développement de la technologie durable soutient les technologies à faible teneur en CO2.
En Espagne, le géant énergétique Iberdrola a racheté Scottish Power, portant sa capacité totale énergétique produite par éolienne à 6,562MW. Le groupe cimentier français Lafarge collabore avec le WWF pour réduire ses émissions de 10%.
En agissant maintenant, les firmes ont tout à gagner. “Nous nous acheminons vers une économie à faible teneur en CO2 et les entreprises qui auront pris du retard seront désavantagées”, explique David McNeill du UK Carbon Trust.
Le Système européen d’échange de quotas d’émissions permet aux entreprises incapables d’atteindre les objectifs de Kyoto d’acheter des allocations à des entreprises plus performantes. Vu qu’il n’y a pas suffisamment de permis, les compagnies doivent soit réduire leurs émissions soit acheter de nouveaux crédits en investissant dans des projets de diminution des émissions de carbone. Cette initiative n’a malheureusement pas abouti, car la surallocation de crédits de pollution dans certains pays a nui à la crédibilité du système.
Une opposition se manifeste aussi, en Allemagne notamment. Les constructeurs automobiles allemands affirment qu’ils seront pénalisés par les réglementations européennes, et le gouvernement fait du lobby auprès de Bruxelles.
Le temps n’est pas de notre côté. Le Groupe d’experts intergouvernemental sur l’évolution du climat des NU affirme nous avons jusqu’à 2020 pour renverser la tendance à l’échelle du globe. Les consommateurs doivent s’attendre à des coûts plus élevés, mais c’est un petit prix à payer.
NL » Klimaatverandering
George W. Bush mag dan een ‘toxische terrorist’ zijn, sommige Europese landen doen niet onder voor hem. Zo is in Spanje en Portugal de uitstoot van broeikasgassen groter dan het respect voor het Verdrag van Kyoto.
Politici leggen immers schoorvoetend uitstootbeperkingen op, bang voor de reacties van de industriesector. Gelukkig gaan heel wat Europese bedrijven de uitdaging wel aan.
Zo vermeldt de Britse warenhuisketen Tesco op zijn producten de ‘koolstofvoetafdruk’, de totale uitstoot als gevolg van productie en transport. Via een fonds voor duurzame ontwikkeling investeren ze ook in lage-emissietechnologie.
In Spanje bracht energiereus Iberdrola met de overname van Scottish Power zijn windkrachtcapaciteit op 6,562 MW. De Franse cementproducent Lafarge werkt samen met WWF om zijn uitstoot met 10% te verminderen.
Het loont voor bedrijven om nu actie te ondernemen. “We gaan naar een lageemissie-economie en bedrijven doen er goed aan de boot niet te missen”, verklaart David McNeill van de UK Carbon Trust.
Het European Emissions Trading System is een CO2-beurs die emissierechten toekent aan industrieën met een hoge uitstoot. Omdat de rechten beperkt zijn, staan bedrijven voor de keuze: hun uitstoot terugschroeven of nieuwe rechten kopen door te investeren in projecten voor CO2-reductie. Het systeem faalt echter omdat landen te veel emissierechten toekennen.
Er is ook heel wat verzet. Duitse autofabrikanten klagen dat de Europese voorschriften hen benadelen, en hun regering onderhandelt in Brussel.
Maar de tijd dringt! Het VN Intergouvernementele Panel voor Klimaatverandering geeft de wereld tot 2020 om de broeikasgassen te beperken. Consumenten mogen hogere rekeningen verwachten. Een kleine prijs om te betalen…
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