Friday, February 23, 2007

Christian Aid Report on Carbon Footprints Includes Indirect Business Impacts...discuss.

Christian Aid's recently released report has recieved some slack because it is seen as condoning--or leading to--double counting. I believe that these acusations are due to a misunderstanding of the report and unfortunately lead people to miss some interesting opportunities...

(Carbonara--And My Response)

As mentioned below by Jon yesterday, British charity, Christian Aid, has published a report saying that many British companies have not measured all their carbon emissions.

It's comments on consistancy where to my mind more important, talk of messy data and comparion between companies being impossible was most worrying. A standard carbon auditing procedure seems to be a good idea.

Christian Aid believe companies should measure, in addition to their direct emissions, also their indirect emissions, for example, those which arise from activities by companies upstream in their supply chain, or downstream, for example, by customer activities.

I think that there is some merrit to this. I find it disengenuos for the likes of Merril Lynch, to be talking about carbon neutrality in it's own running and then funding more than a dozen coal plants in Texas. I think that this information is vital, it could perhaps be seperate from there own corporate emissions when it is presented but reference to it should be made.

While this method would give a picture of the wide emissions impact of a single activity, such as operating a supermarket, this approach is not sensible from an economy-wide perspective.

I don't for a second think that they would disagree with you on this, certainly keeping data on direct and indirect emissions seperate for different purposes would make sense.

Counting indirect emissions would mean double- or multiple- counting lots of emissions, since the emissions of each company in a supply chain would be counted by every other company in that same chain. This makes no sense from public policy perspective.

Perhaps futher to my statement above; double counting occurs when you are calculating a national inventory by addition so in that case it makes no sense, but for a customer to have access to the total for a given company makes absoloute sense. Perhaps they would rather invest with a bank that isn't funding coal, they could be a powerful force if they had this information.

In addition, an organization can only reduce its own emissions, not those of their business partners. In particular, it makes no sense to blame a supermarket such as Tesco for the emissions generated by their customers driving to buy groceries, since Tesco has no control over their customers.

The first point here is plain wrong, suppliers react to...well demand, if there is demand from customers for a low contribution to supply chain carbon intensity then they will work to provide this sort of product! This is how wallmart plans to make it's greatest impact, through its many thousands of suppliers. The second part is also not true although working on customer carbon emissions is more radical it can be achieved by making stores closer to where people live or improving public transport...if they had a financial nmotive they might even put on transport to reduce emissions from cars!

Surely our common goal should be to reduce carbon emissions through a well-designed and well-operating cap-and-trade system.

Absoloutely, no one disagrees on this.

Accusing companies of not measuring emissions outside their own direct control may create a lot of publicity, but it does nothing to promote this goal.

I have tried to argue this is not the case, but if you still disagree i would be interested in hearing your argument.

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At 12:44 AM, Blogger Calvin Jones said...

Thanks for the response Peter, much appreciated.

We agree on some issues, and disagree on others.

Not unexpected, most people have some disagreements. Now, I won’t re-iterate some of my issues with your origianal article…perhaps we have resolved these? You do, however raise an interesting point of debate that is more than enough for futher comment.

We disagree profoundly on the issue of companies being responsible for the behaviour of their customers.

Well, i did state that I thought my ideas on this where radical so I would expect profound disagreement from someone working on carbon trading, but my language was perhaps loose. We may yet agree on more.

Of course a company like Tesco responds to perceptions of demand. That is one reason that Britain has so many out-of-town shopping centres, because customers find it more convenient to drive to a surburban shopping centre than to try to find parking in town centres.

I agree customers can create demand for out of town shopping (supermarkets) …or coal (power generation). There are alternatives to out of town shopping, and there are many ways such as walkways, cycle lanes, siting of supermarkets initially i.e out of town but near housing. There are alternatives to traditional coal; renewables, efficiency, dsm and ccs.

I understand that you believe that these are already factored in within the ETS (well personal transport isn’t, but could be in theory)…the price signals come from this system. However, the ETS is currently the EU ETS (not global) and therefore we could be said to be missing a trick in not holding companies fully to account.

Also, we don’t nessicarily need to concern ourselves with the EU ETS as individual consumers. The question that I would like to ask myslef is ‘Which companies can I invest in to contribute the least possible to climate change?’. I would rather bank with a company that is involved in developing solar cells and renewable energy rather than coal. So you accept that this informationshould be available? I can’t see why not. They would not have to pay for this but would have to declare it for investor discression. As part of a two tier system perhaps (like gross and net?).

But responding to customer demand is very different from being responsible for the behaviour of customers.

Yes, it is, entriely sperate.

The indirect counting of emissions proposed by the CA Report is putting the blame on supermarkets when it belongs on their customers.

I believe that responsibility goes hand in hand with the ability to make decisions, we agree on that atleast, perhaps I have persuaded you that in many cases there are options that businesses can take to affect customers. Perhaps not.

As I said, this creates publicity, but needlessly creating enemies by putting the blame where it does not belong will only increase hostility to climate change policies.

I see where you are coming from on this and certainly i can see that selling a straightforward but stringent ETS would be far easier than getting companies to take responsibility for investments, and the very real role that–I atleast–believe they have in shaping behaviour.

Finally, the most obvious example that i avoided mentionng initially for that reason, marketing. Currently advertising constitutes around 2% of global gdp, well in the range of what nicholas stern believes that solving this whole problem will cost! If advertising can influence attitudes and values then surely behaviour..?

Perhaps, again we disagree on this, but if you see my blog you might notice that i have ben reading about marketing, persuasion and behviour change recently (you may notice from my tone that i`m absoloutely avoiding rhetoric here as i`m intested in this argument). Anyway, after a few days of this, i`m quite convinced that marketing has an influence comensurate with it’s economic weight and that it can powerfully influence values: businesses advertise therefore they have some influence over what customers demand. I`d be interested in if you agree on this, and if not, where do you think my logic fails?

At 11:10 AM, Blogger Unknown said...

A more detailed financial argument for why Christian Aid should be taking on the City of London can be found in the podcast episode called 'Drenched in Carbon'.


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