Dr Verelle Roocke
IN 2006 there was a great leap forward in awareness of climate change and most people have now made the link between it and events that are occurring in their local communities such as water shortages. Many consumers and businesses now have an understanding of the importance of reducing greenhouse gas emissions. There is an awareness of the urgency of tackling the problem. Governments, businesses and individuals alike are demanding and creating a market for carbon. This is happening globally and is evolving in Australia at a rapid rate.
Most of what we do or consume, contributes to producing greenhouse gas emissions (GGE) in some way. In Australia in 2005, sources of GGE were as follows: (information from the Australian Greenhouse Office National Greenhouse Gas Inventory 2005)
Stationary energy (electricity etc) 50%
Land use, land use change and forestry 6%
Fugitive emissions 5.6%
Industrial processes 5.3%
Reducing emissions through improved energy efficiency, greater use of renewable energy, changes in agricultural practices and less deforestation, just to name a few, are vital. But there will always be some level of greenhouse gas emissions and this is where the ‘carbon market’ comes in.
The ‘voluntary carbon market’ in Australia, generates and sells ‘carbon offset credits’. Businesses and individuals, who have undertaken first to reduce emissions to as low a level as possible, are able to pay another organisation to reduce remaining greenhouse gas emissions on their behalf – to zero if they wish. This is called ‘offsetting’ emissions and if 100% of emissions are offset, then ‘carbon neutral’ status is achieved.
AUSTRALIA’S VOLUNTARY CARBON MARKET
Jessica Lerch from the ‘Greenhouse Friendly’ program run by the Australian Greenhouse Office discussed the process of becoming carbon neutral. The ‘Greenhouse Friendly’ program is the ‘carbon offset’ arm and is only undertaken once steps 1 and 2, under the ‘Greenhouse Challenge Plus’ program are completed.
1. Measure emissions – ie. our ‘carbon footprint’ but also referred to as a ‘life cycle assessment’ in industry and business. All emissions and their volume are measured using internationally accepted calculation methods and tools. The scope of this assessment is important too. Eg. Emissions for a business should include the emissions produced by staff members as they travel to work everyday by car etc.
2. Reduce emissions as much as possible – For individuals this may mean using the car less, reducing electricity use in the home and sourcing the remaining essential electricity from renewable source via ‘green power’ schemes, and purchasing locally grown food that hasn’t had to travel far. For businesses this may also mean changing a car fleet to hybrids, using recycled paper, changing to electronic filing or record systems, ‘greening’ the supply chain (expecting suppliers to do the same has a flow on effect). Consultants and advisers can create plans for emissions reduction and provide ongoing emission monitoring plans.
3. Offset the remaining emissions – by purchasing ‘carbon offset credits’ under the Greenhouse Friendly program, which is currently the only government run scheme in the world. Businesses that offset all of their emissions in this way are able to claim that their products and services are ‘carbon neutral’ and can use the Greenhouse Friendly logo. Abatement projects wishing to sell carbon offset credits within the Greenhouse Friendly program undergo a rigorous assessment process. So far only 24 projects have been approved in Australia to sell carbon offset credits but there are approximately another 50, according to Jessica, undergoing the accreditation process. To date the Greenhouse Friendly program has achieved a 4 million tonne reduction in greenhouse gas emissions in Australia.
Jessica further discussed the ‘voluntary carbon market’ that currently exists in Australia, where there is no mandatory emissions monitoring and no national carbon trading scheme, as exists in the EU. The voluntary market exists for several reasons. Many businesses feel that Australia is lagging behind in creating a carbon trading scheme. With increased consumer awareness of climate change there has been an increased demand globally for ‘carbon neutral’ products and a demand for leadership in this area. Becoming carbon neutral demonstrates a business’s commitment to corporate sustainability and is thought to provide a competitive edge as well as being shown to assist with staff attraction and retention. In addition, with the likelihood that Australia will develop and implement a National Emissions Trading Scheme (NETS) in 2011, it is thought that engaging in early action is cost effective. Many believe that climate change is a major business risk requiring action now.
As well as the government regulated market under the Greenhouse Challenge Plus and Greenhouse Friendly banners discussed above, there is a private voluntary carbon market. This market is unregulated and is a ‘buyers beware’ market. Projects such as tree planting are promoted as a way to offset carbon for businesses and individuals alike, much of it web based. It is not known how large this sector of the market is in real terms as it is unregulated. Many projects currently offered in the private market are in the process of undergoing accreditation with Greenhouse Friendly, to access corporate customers such as those undergoing the Greenhouse Challenge Plus program. Many companies purchasing carbon offset credits will only consider accredited projects, in order to provide long term certainty and to avoid accusations of ‘greenwash’..
The following basic criteria must be met for an abatement project to be eligible to provide carbon offset credits under the Greenhouse Friendly program:
1.Additionality. The emission reduction activity must be over and above any ‘business as usual’ activity.
2.Calculation. International methods of accounting are used to determine, for example, the amount of sequestered carbon in a tree, so that accurate carbon prices can be set.
3.Independent verification via a (third party) panel of independent verifiers. Ensures transparency.
4.Permanence. This is especially important for forestry and involves the use of legal arrangements and covenants on the land title to ensure that the trees stay in the ground for at least 70 years.
Further information about Greenhouse Challenge Plus is available on the AGO website at www.greenhouse.gov.au/challenge and further information about Greenhouse Friendly is available at www.greenhouse.gov.au/greenhousefriendly
GREENHOUSE GAS ABATEMENT PROJECTS
1. BIO SEQUESTRATION PROJECTS (GROWING TREES)
There were 3 speakers from tree growing projects.
1. Leo Kerr, CEO of Carbon Neutral WA since March 2007 and life member of Men of the Trees WA discussed how trees are a very effective way of sequestering CO2 if they are cared for properly after planting. Trees capture carbon, mostly within their root biomass, and restore oxygen to the environment, but they have many other benefits as well, such as controlling salinity, moderating climate, reducing erosion, regulating and cleaning water, providing food and timber and most importantly they are available now. Carbon Neutral WA are currently undergoing the accreditation process with the AGO’s Greenhouse Friendly program and hope to have achieved that certification by March 2008. All current plantings are conducted and monitored in accordance with AGO guidelines and 70 year covenants are placed on all projects. Salinity in agricultural land in WA consumes an amazing 5 hectares of arable land every hour and so far has affected 1.8 million hectares or 9% of the WA wheat belt.
Carbon Neutral WA plant mixed biodiversity species for multiple environmental benefits and oil mallees in belts around and through large areas of degraded agricultural land. Oil mallees have a large root biomass, quickly regenerate after fire or harvesting, once established, and are relatively drought resistant. Farmers in these areas, in days gone by, spent many years digging them out of the soil! As well as sequestering carbon these ‘mallee alleys’ provide shelter belts for wildlife and combat salinity. Bridgetown in WA’s South West is proposed to be home to an Integrated Wood Processing (IWP) plant, burning biomass from the blue gum and pine plantations, to create ‘green, clean, renewable energy’ to power the town. Other products produced by such a plant are activated carbon (ie. used in water filtration), eucalyptus oil, fuel pellets for household use, and charcoal (which can be used to enrich and improve soils for agriculture). The plant is proposed to produce 5 megawatts (MW). Currently in Sweden, 20% of the country’s energy is obtained from such IWP plants, some of which are as large as 550MW! Leo Kerr believes that bio-sequestration projects in the form of ‘mallee alleys’ and also forest sinks, with associated IWP plants are the way of the future in the rural environment in WA, especially in marginal agricultural areas where drought and salinity are taking their toll and growing crops is no longer viable.
Purchasers of carbon offset through Carbon Neutral WA can take advantage of their other services which involve an energy audit for businesses and strategies to reduce emissions first. Until trees have grown and are independently verified as such and able to sequester the agreed amount of carbon (this can take 5 years, sometimes more if in dry areas), purchasers are not able to call themselves ‘carbon neutral’ but can state that they are ‘offsetting carbon emissions’. All costs are tax deductible as they are a not for profit organisation. Further information at www.carbonneutral.com.au
2. James Bulinski, a director of CO2 Australia (a ‘for profit’ business) discussed his view that aggressive replanting of forests in Australia is the only cost effective way to reduce the level of CO2 that is already in the atmosphere. Trees are available here and now, and at low cost. He believes that the trend is for reforestation thanks to some changes in government policy, expansion of plantation forestry and a reduction in native logging, with also a wider recognition of the importance of forest ‘sinks’ leading to increased commercial opportunities in this area. CO2 Australia has been in existence for 3 years, was the first tree planting abatement provider to be accredited under the AGO’s Greenhouse Friendly program and currently operates in WA, Victoria and NSW. They establish tree plantings solely for the carbon value they hold, planting mallee eucalypts in belts on agricultural land, paying the farmer to use the land and establishing a ‘forestry right’ on it for 100 years.
James outlined some of the processes involved in becoming accredited with the AGO, including undergoing independent auditing for verification of CO2 claims, and compliance with record keeping and carbon accounting methods. He highlighted the importance of having people in the business with adequate skill sets to manage the projects and undertake risk management. They undertook research on a plot of mallees where all above ground material was removed and processed and the carbon content was estimated, and then all the root biomass was excavated and further estimations made. Frequent audits are conducted. Accreditation is believed to be important as biosequestration projects come under greater scrutiny and there is an increased trend towards greater regulation. Forest sinks will be recognised in any proposed Australian National Emissions Trading Scheme. Further information at www.co2australia.com.au
3. Brian Scarsbrick, CEO of Landcare Australia discussed their CarbonSMART offset project. Landcare is a not for profit organisation, that has grown to 4500 groups Australia-wide since 1990, with the main focus on revegetation of degraded land. They are currently also undergoing accreditation with the Greenhouse Friendly program. Brian discussed many issues already discussed by the other two biosequestration project speakers. He was enthusiastic that the corporate sector can now help to drive revegetation across the landscape, improve agricultural production and gain carbon offset credits at the same time. He briefly discussed that ‘soil carbon’ which is being studied around the world and has been shown to increase with changes in agricultural land management practices and in areas of revegetation, will probably have a role to play in Australia in the near future. Further information at www.carbonsmart.com.au
2. WASTE DIVERSION PROJECT.
The other abatement project presented at the conference was the Regional Resource Recovery Centre based in Perth’s southern suburbs. Tim Youe, the Manager of Business Development for the Southern Metropolitan Regional Council outlined the project where 7 council area’s waste (30% of the Perth metro area) is processed, making it the largest waste processing plant in Australia. Currently Australians have the highest annual landfill rate per capita (next to the USA) as well as the highest greenhouse gas emissions per capita. Through a combination of recycling, green waste mulching and diverting household organic waste to produce compost, the project prevents 180000 tonnes of CO2 from entering the atmosphere every year. The compost-producing arm is accredited to provide carbon offset credits under the AGO’s Greenhouse Friendly program and is the only accredited local government entity in Australia.
General household waste, collected weekly is sorted in a large shed and large items, most plastic, nappies etc are removed. This makes up approximately 30% of the collected waste and is placed in landfill. The remaining mostly organic material is placed in enormous composting ‘digesters’ (70m x 7m) which rotate for 3 days at 60 degrees Celsius to start the composting process. The material is then filtered to remove remaining inorganic material and piled into sheds where it is held for 42 days. The compost is then transported to agricultural areas (but is restricted for use and not available for home gardens or market gardens) where it is sprayed onto fields to enrich sandy soils and improve yield. Tim produced some horrendous statistics about the amount of food Australians throw away each year, including approximately $2.9 million of fresh food thrown out before even reaching the supermarket shelves!! The energy used to produce and transport this food is enormous and is no doubt contributing to our high rate of GGE.
The recycling facility uses infrared sorting technology. About 50% of material in recycling bins is paper and cardboard, the rest are plastic and glass containers mainly. They have just constructed a new recycling facility at the cost of $10million. Recycled aluminium cans are worth about $1500 a tonne or $5million a year. 80% of PET goes to China to return to Australia as polyester clothing. All mulched green waste is sold to be used in garden products ie. to Bunnings. An education centre is also on site and the facility runs education programs in schools, has online information and produces pamphlets, gives community talks and so on. Regular monitoring of garbage bags and bins as part of their accreditation and auditing process under the AGO reveals that about 75% of households are compliant with and aware of the RRRC’s aims and view waste as a resource.
CORPORATE CASE STUDIES.
There were 3 speakers from corporations who have undertaken an audit of emissions and implemented reduction strategies, followed by carbon offset purchasing.
1. Dr Tony Wilkin, Manager, Environment and Climate, News Ltd, discussed News Corporation chairman Rupert Murdoch’s dramatic shake up to make all the company’s businesses carbon neutral in the next 4 years, to combat the ‘clear and catastrophic threats’ posed by climate change. An emissions audit revealed that 92% were due to stationary energy (electricity), 3% due to airfares and 5% due to other vehicles.
The initiative, announced in May 2007, encompasses all of News Corp operations in 52 countries and involves 47, 000 employees.
Some changes implemented so far have been:
• Energy reduction strategies including lighting replacement and purchasing of renewable energy where economically viable. All new and refurbished buildings to be of a ‘green’, energy efficient design, with water capture, and with a reduced footprint. Generation of renewable energy to be considered.
• IT – undergoing a process of server consolidation; developing ‘wake up’ software that enables computers to be turned on by remote after hours when needed and then turned off again; recycling of IT equipment.
• Media – commitment to inform Australians about Climate Change issues (currently reach 15 million Australians); commitment to developing quality electronic media (The Australian won ‘Best Electronic Paper of the Year in 2006’)
• HR – induction package on the company’s plans and goals for all new employees; engage and excite employees, generate ideas and keep people informed; carbon councils of volunteers from each department report to a Climate Change Management Team which then reports to the Environment and Climate Change Department in each country where News Corp has operations.
• Purchasing and supply chain – encourage, suppport, inform and recognise business partners who improve their energy efficiency
• Travel – cut travel related carbon emissions from the vehicle fleet (purchasing hybrids), business travel and travel to work.
• Remaining emissions are all to be offset by 2010 and currently only projects accredited by The Gold Standard, a not for profit organisation based in Switzerland, are considered. The Gold Standard is an independently audited, globally applicable best practice methodology for project development that delivers high quality carbon credits of premium value.
Dr Wilkin stressed that this is a long term commitment and that they are serious about it. He reports that staff are keen and enthusastic and glad to be doing something about climate change.
2. Miles Dracup, Manager of Environmental Strategy and Policy, Water Corporation WA, reported that they plan to offset all emissions by 2030. The Water Corp is the largest electricity user from the WA grid, 90% of which is used for water pumping, and water and wastewater treatment plants. The water industry is particularly at risk from climate change, but other reasons for having an emissions reduction and offset strategy included reduced energy bills, reduced environmental impact, community reputation and expectations, cost effectiveness of early action in emissions trading and staff attraction and retention. Commitment has been made to power Perth’s second planned desalination plant entirely from renewable sources. The first desalination plant in Kwinana, now operational, is powered by a windfarm situated north of Perth. Increased energy efficiency measures in the areas of water pumping, waste water treatment, building design and staff behaviour, will be implemented. Planting trees on Water Corporation land is planned and as well, offsets will be purchased from abatement projects. Real commitment to change was questioned by some of the conference attendees in view of the 2030 target with a linear annual transition.
3 Marc Van Beek, National Manager, New Business Unit, Origin Energy revealed that as the second largest energy provider in Australia, they emit 10% of the total of Australia’s greenhouse gas emissions, in the order of 60 million tonnes of CO2 per year. Origin has 3.6 million customers and provide electricity, natural gas and LPG to consumers. They are also the Australian retail market leader in the installation of grid connected solar power systems and sell ‘green power’ to approximately 250000 customers. Origin believes that climate change is a major business risk and everyone needs to act now. Marc stated that Australia is lagging behind and we need to look to California and Europe to see what can be achieved. Origin has created their own carbon offset scheme available to anybody online, even if not an Origin customer. Their scheme is based on several frameworks including Greenhouse Friendly Program and the Gold Standard VERs amongst others. He stressed that Origin’s Carbon Reduction Scheme required offset projects which featured transparency, additionality (see Offset Criteria), credible standards and methodologies and which were independently verified. The idea was to use a mix of sources for carbon offset credits. Eligible projects include renewable energy projects, biosequestration, and reductions in emissions from industrial processes and others. The reason Origin created their own scheme was that they felt there was a vacuum in the market and because a mandatory National Emissions Trading Scheme was some time off. Customers in their scheme include the AFL (first sporting code in the world to be involved in such a program), Intrepid Travel, NAB, STA Travel and Transurban.
1. NATURAL GAS: Richard Harris, WA Director and Corporate Affairs Manager, NewGen Power, discussed the importance of gas fired power generation in reducing reliance on coal fired power in Australia. He felt that gas fired power generation was often overlooked in the debate, but was available now and provided real environmental benefits. There are several such power plants under construction in WA and the Eastern states. The benefits of combined cycle gas fired technology vs coal, are improved thermal efficiency (as well as a gas turbine producing electricity, waste heat drives a steam turbine that produces extra power), 50% less greenhouse gas emissions, 90% less water use, zero coal ash or dust emissions, 50% smaller industrial footprint and a smaller visual impact.
The Kwinana project in WA which is expected to be operational by 2008, will enable an older coal fired plant to be taken off the SouthWest Interconnected System (SWIS) and will be the largest (at 320MW) and most efficient plant on that system. A further plant planned for Neerabup, approximately 36km north of Perth, will be a peaking plant with 12 hours gas storage in a pipeline. Placing new plants close to population centres improves their efficiency with less ‘line loss’. Projects in NSW are being placed on currently existing gas pipelines and one in QLD will have its own 150km storage pipe so there is no need for diesel back up at peak times. Impacts on future development of gas fired power generation particularly in WA were cited, such as concerns about the security of long term supply – with most of WA production going offshore, and the price of gas for sale to energy companies, which has recently tripled.
2. CARBON NEUTRAL NATION: Professor Peter Newman, Director of Sustainability, Murdoch University, (and member of DEA’s Scientific Advisory Committee) proposed a transition strategy that Australia could adopt before a carbon trading scheme is functioning, where mass tree plantings in the order of 2 billion trees a year for 20 years or so, would offset all emissions, recreate landscapes for biodiversity, control salinity and demonstrate global leadership. He proposed that a government regulatory authority would oversee the projects that would report yearly, and if all costs were passed onto the consumer, would cost each person in Australia somewhere from $230-470/year, depending on the price that is set for carbon.
3. URBAN DESIGN.
Dr Newman also discussed increasing urban density in Australian cities, improving public transport with electric trains and gas buses to reduce dependence on the car and fossil fuels. Urban design is important in achieving ‘carbon neutral land development’. Firstly, Transit Oriented Development , where dense business and shopping nodes are developed along train lines in outer urban areas- these are walking centres and can provide most services people need without having to go further afield. Pedestrian Oriented Development, including high rise residential estates with surrounding and shared facilities so cars are not required. He cited Vancouver as an example where this type of development, has led to less cars in that city now than there were 10 years ago, and Copenhagen where only 20% of people drive to work. Finally, Green Oriented Development or ‘green urbanism’ which includes energy production such as grid connected solar power, ‘green roofs’ which are living and provide a cooling effect as well as places to enjoy, light rail systems and bicycle friendly development, public play spaces, car free spaces and so on. An ecovillage in Freiberg, Germany is an example of where all three designs are combined.
4. SUSTAINABILITY: Dr Ray Wills, Chair, WA Sustainable Energy Association, offered his thought that time has run out for solutions to climate change that are simply convenient. Regarding the carbon market, he feels that it is important not to over-regulate it and to treat carbon as any other commodities for which systems and rules are already in place. Changes are needed and need to be planned but WITH ALL URGENCY. Sustainable lifestyles equal a sustainable planet and he also supported the urban design concepts outlined above. He felt that the issue of negligence and the potential cost of ignoring a risk such as climate change is in the minds of corporations and this is forcing them to act, driving the carbon market in Australia. Global pressure for exports from Australia to be carbon neutral, will further stimulate the market here, such as is happening in the wine industry. He stressed that education is the key, especially of high school students, in mobilising individuals to reduce their energy consumption to the levels required for real slowing of the rate of climate change to occur.
This was an excellent conference. Thanks go to Carbon Neutral and IIR for the opportunity to attend.