Carbon footprint & Carbon credit
POOJA | RAKHI | SANCHITA | SHAILJA | TANMAYEE | TRIPTI
Introduction to Carbon Footprint carbon footprint
total GHG emissions
individual, organisation, event or product
directly & indirectly
expressed as a carbon dioxide equivalent
CO2e unit of measurement which allows comparison between different greenhouse gases
A carbon footprint accounts for six Kyoto GHG emissions: Carbon dioxide (CO2) Methane (CH4) Nitrous oxide (N2O) Hydrofluorocarbons (HFCs) Perfluorocarbons (PFCs) Sulphur hexafluoride (SF6)
Different types of carbon footprints
Organisational carbon footprint
Product carbon footprint
Measures the GHG emissions from all the activities across the organisation.
Measures the GHG emissions over the whole life of a product - from the extraction of raw material, manufacturing, recycling or disposal.
Energy used in buildings, industrial processes and company vehicles.
Different boundaries of organisational and product footprints There is some crossover between the two types. Production is often a key focus when companies are looking at carbon management, and calculating one or both carbon footprints.
Organisational Carbon Footprints An organisational carbon footprint measures the direct and indirect GHG emissions arising from all the activities across an organisation. What is it used for? ●
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Quantifying GHG emissions helps in understanding what the key emission sources are, how an organisation contributes to global emissions, and what opportunities are there to reduce carbon emissions. After that, a carbon reduction plan is developed, identifying ways to reduce the carbon footprint and limit emissions from future activities and measure progress.
The Greenhouse Gas Protocol It categorises emissions into three groups or ‘scopes’: ●
DIRECT EMISSIONS: Results from activities within the organisation’s control. This includes on-site fuel combustion, manufacturing and process emissions and company vehicles.
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INDIRECT EMISSIONS: Results
from any electricity, heat or steam that the organisation purchases and uses. ●
OTHER: These include any other indirect emissions from sources outside the direct control. For Exampleemployee commuting and business travel, outsourced transportation, waste disposal and water consumption.
Under the GHG Protocol, all organisational footprints must include scope 1 and 2 emissions. There is more flexibility when choosing which scope 3 emissions to measure and report, and can be tailored to reflect the environmental and commercial goals.
Three ‘scopes’ of carbon emissions
Why calculate organisational carbon footprint? Calculating organisational carbon footprint is the first step towards reducing it. It also means the organisation can report the figure or gain independent certification for marketing or corporate responsibility purposes. There are two primary reasons to calculate organisational carbon footprint: â—?
Manage the GHG emissions and make reductions over time
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Report the footprint accurately to a third party.
Quantifying the GHG emissions sources helps in understanding what impact the organisation is having on climate change. This helps to identify and prioritise areas for reducing emissions.
Report the carbon footprint accurately to a third party Increasingly, companies are calculating their carbon footprint in order to share the information with other organisations for public disclosure.
How to calculate an organisational carbon footprint? Accounting for all the carbon emissions can be a complex task, but calculating a basic carbon footprint that includes the main emissions sources is straightforward.
The GHG Protocol is one of the most commonly used standards. Another recognised standard is ISO 14064, which builds on many of the concepts introduced by the GHG Protocol.
Set clear, explicit boundaries on which parts of the organisation are included in the footprint.
For gas and electricity, collect data in kilowatt hours (kWh) from meter readings or bills. For transport emissions, collect fuel consumption by fuel type wherever possible.
The carbon footprint is measured in tonnes of CO2 equivalent and is calculated using the activity data collated multiplied by standard emissions factors.
The organisation may choose to have a third party verify the carbon footprint, to add credibility and confidence to the carbon reporting for public disclosure.
Many companies have not only measured their carbon footprint but have taken action to reduce it progressively over time.
Communicating the organisational carbon footprint Once the footprint is calculated, it is ready to be published. Reporting the carbon footprint - and having it independently certified - can help in employee, customers and other stakeholders engagement, and enhance the company’s reputation. If the company decides to report the carbon footprint internally or externally, make sure the data is presented transparently.
Why communicate the footprint internally? Communicating the carbon footprint to employees can help engage them in the
process of carbon reduction and energy management. Gaining certification can also give employees something to aim for, once achieved, can help to retain and attract an increasingly environmentally-awake workforce.
Why communicate the footprint externally? Communicating the organisational footprint- in the corporate social responsibility (CSR) reportdemonstrates that the company is concerned with the impact it’s business is having on the environment which enhances the company’s reputation and attracts customers with similar concerns.
Product Carbon Footprint
A product carbon footprint is a measure of the greenhouse gas emissions across the life of a particular product throughout its life cycle. This includes emissions of the suppliers, customers and distributors related to the manufacture and use of the product. It also covers emissions created by disposing of any waste, and the impact of recycling.
What is it used for? A product’s carbon footprint is a useful tool to engage with employees, suppliers, investors and customers. It can motivate employees to take action to reduce emissions, build brand awareness and value, and support the actions of suppliers and customers in reducing emissions. It may also identify inefficiencies and cost savings in their own processes, and in the supply chain.
Measuring emissions from all stages of the product life cycle • Extraction and production of raw materials • Transportation of raw materials • Production (or service provision) • Distribution • Product use • Disposal/recycling.
Why calculate your product carbon footprint? A product’s carbon footprint offers a number of benefits in helping you better understand and manage your supply chains.
The three main reasons to calculate the carbon footprint of your product or service are to:
Reduce costs and emissions Identifying areas where you can reduce GHG emissions will often result in cost savings, in terms of transport energy, waste and packaging. Tell people Customers, employees and shareholders are becoming increasingly aware of the environmental impact of the goods and services they use. A product carbon footprint can help to differentiate your product or service and enhance your brand image. Drive wider change in the supply chain It’s important to look at the whole product supply chain, rather than just one part, as this will let us see all the opportunities to reduce emissions.
How to assess your product carbon footprint Use a standard method - Current guidance for calculating a product carbon footprint includes the PAS 2050, which was published in October 2008 following extensive development and international consultation.
The PAS 2050 sets out five basic steps to determine a product carbon footprint: Step 1 Build a process map
Step 2 Check boundaries and determine priorities
List all of the materials, activities and processes that contribute to each stage of the chosen product’s life cycle.
Calculating a high-level footprint first will help focus data collection on the main GHG emission sources and eliminate others.
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Step 3 Collect data
Collect activity data (e.g. litres of fuel consumed per product unit) and select appropriate emissions factors (e.g. kgCO2 per litre of fuel).
Step 4 Calculate the footprint
Calculate the GHG emissions (kgCO2e per product unit) from each source by multiplying the activity data by the emissions factors.
Step 5 Verify your footprint
• Self-verification • Verification by another party, such as another company • Accredited independent third-party verification.
Communicating your product carbon footprint A product carbon footprint can help to differentiate your product or service and enhance your brand image
You can communicate your carbon footprint in a number of ways, such as labelling your products, or providing information on your company’s website or marketing campaigns.
Communicating the carbon footprint of your product or service to your company as a whole can have several benefits. • Lower energy costs.- Using less energy to enable a reduction in your product footprint can help improve your bottom line. • Engaging with employees Communicating a product’s footprint to your employees shows them your commitment to reducing climate change.
44% of
consumers would switch to a lower carbon product even if the brand was not their first choice.
Business-to-business
• Engaging up the supply chain. The information you’ve gathered during the process can also help your suppliers reduce their emissions, thereby reducing the footprint of your product. • Engaging down the supply chain. You can provide your customers with valuable information about the carbon footprint of goods or services they purchase. This allows your customers to make an informed decision about what they buy and makes it easier for them to calculate their own carbon footprint.
Business-to-consumer
B2C organisations can distinguish themselves from other companies by communicating their product or service carbon footprints and reduction commitments. This can be done through: • Reporting • Advertising • Labelling
https://www.carbonfootprint.com/calculator.aspx
https://www.carbonfootprint.com/calculator.aspx
https://www.carbonfootprint.com/calculator.aspx
Carbon Credit A Carbon Credit is a financial instrument that allows the holder, usually an energy company, to emit one ton of carbon dioxide. Credits are awarded to countries or groups that have reduced their greenhouse gases below their emission quota. Carbon credits can be legally traded in the international market at their current market price.
The carbon credit system was a solution that came about near the end of the 20th century, as people became more aware that human industrial activity is potentially responsible for global warming and environmental degradation. The premise of the system is that a government or another body can regulate the total tons of carbon dioxide emitted but is given some flexibility as to how exactly the regulation is accomplished.
1 CARBON CREDIT ≈
1 ton of CO2 or its equivalent greenhouse gas (GHG) which is an entitled certificate by UNFCCC.
KYOTO PROTOCOL
The goal of the Kyoto Protocol was to reduce worldwide greenhouse gas emissions to 5.2 percent below 1990 levels between 2008 and 2012
What is it? The Kyoto Protocol was initiated by the United Nations Framework Convention on Climate Change and ratified by 181 countries and the European Union as a whole, individual entity in 1997, and was put into effect in 2005.
How does it work? The Kyoto Protocol divides countries between industrialized and developing economies. Industrialized, or "Annex I countries," operate in an emissions trading market that gives each country its own emissions standards to meet. If a country beats its target, it can sell its surplus to countries that haven't met their goals. The separate Clean Development Mechanism for developing countries issues carbon credits called Certified Emission Reductions (CER). These credits are issued for supporting sustainable development initiatives in developing countries and can be traded on a separate market.
UNFCCC
United Nations Framework Climate Change Conference It is an international environmental treaty adopted on May 9, 1992. It then entered into force on 21 March 1994, after a sufficient number of countries had ratified it. The UNFCCC objective is to "stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous interference with the climate system. The framework sets no binding limits on greenhouse gas emissions for individual countries and contains no enforcement mechanisms. Instead, the framework outlines how specific international treaties (called "protocols" or "Agreements") may be negotiated to specify further action towards the objective of the UNFCCC.
EU ETS
European Union Emission Trading Scheme The European Union Emission Trading Scheme (EU ETS) is the largest multinational, greenhouse emissions scheme in the world and is committed to reduce 8% 1990 levels of emission in 2008-2012. As of 2013, the EU ETS covers more than 11,000 factories, power stations, and other installations with a net heat excess of 20 MW in 31 countries. Under the 'cap and trade' principle, a maximum (cap) is set on the total amount of greenhouse gases that can be emitted by all participating installations. If emission exceeds what is permitted by its allowances, an installation must purchase allowances from others. Conversely, if an installation has performed well at reducing its emissions, it can sell its leftover credits.
INDIAN SCENARIO India signed and ratified the Protocol in August, 2002 and has emerged as a world leader in reduction of greenhouse gases by adopting Clean Development Mechanisms (CDMs) in the past few years. According to Report on National Action Plan for operationalising Clean Development Mechanism (CDM) by Planning Commission, Govt. of India, the total CO2-equivalent emissions in 1990 were 10,01,352 Gg (Gigagrams), which was approximately 3% of global emissions. If India can capture a 10% share of the global CDM market, annual CER revenues to the country could range from US$ 10 million to 300 million. In the year 2011, global carbon credit trading was estimated at $5 billion, with India's contribution at around $1 billion. Carbon, like any other commodity, has begun to be traded on India's Multi Commodity Exchange and MCX has become first exchange in Asia to trade carbon credits.
BENEFITS OF CARBON CREDITS
a permit that allows a country or organization to produce a certain amount of carbon emission which can be traded if the full allowance is not used ●
Individual benefits – Domestic users can also gain by trading in carbon credits while helping them adopt a more concerted and disciplined approach to reducing their carbon footprint.
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Buying greenhouse gasses – The purchase of carbon credits remains a lucrative enterprise. Each carbon credit that is purchased is channeled to a company which is specifically tasked to bring down emissions or provide more sustainable and environmentally-friendly alternatives to these emitters.
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Business and job opportunities – Trading in carbon credits allows private investors to generate profits from their purchases and diversify them towards the creation of environmentally-sustainable businesses which either emit very low or no carbons also leading to new businesses opportunities and more employment.
Advantages
Disadvantages
•. Help in reducing the global warming because this is being implemented across the world. • It helps the companies of developing world in generating extra. • Energy saving initiatives becomes more popular because of the awareness generated by carbon credits. .• It is also an alternative investment for people who are looking for some innovative investments.
• Emissions traders are vulnerable to significant risk and volatility. • Lack of centralized system has made marketing problematic. • No effect of carbon reduction in the atmosphere • Slow process
Carbon credits tradings.
Buying of carbon credits is a retail action.Trade in carbon credits has the potential to make forestry more profitable and to sustain the environment at the same time
A CARBON CREDIT TRADING ALLOWS THE DEVELOPMENT OF A MARKET THROUGH WHICH GREENHOUSE GASES (GHGs) CAN BE TRADED BETWEEN PARTICIPANTS IN THE FORM OF CERTIFIED EMISSION REDUCTION (CERs) The carbon credit market Creates a monetary value for carbon credits and allows the credits to be traded,for each tonne of carbon dioxide that is saved or sequestered carbon credit producers may sell one carbon credit Role of carbon credit trading The carbon credit system looks to reduce emissions by having countries honor their emission quotas and offer incentives to go below them.
Key Players Bank of America is a leader in carbon-reduction strategies. The bank recently launched a $20 billion, 10-year initiative to finance emission-reduction projects, invest in green technology, and facilitate carbon-credit trading. BP is among the most well-known companies to implement an internal cap-and-trade system. The company assigned its 150 units an emissions quota and allowed them to buy and sell carbon credits among themselves The European Union Emission Trading Scheme (EUETS) is the mandatory cap-and-trade program for the EU. The Chicago Climate Exchange (CCX)is a U.S. carbon-trading scheme in which companies make a voluntary but legally binding commitment to meet emissions targets. Karnataka power transmission corporation ltd. (KPTCL)
Conclusion
A product’s carbon footprint offers a number of benefits in helping you better understand and manage your supply chains.
Both carbon footprints as well as carbon credits Carry an importance in our daily life. The increased demand Flowing to carbon credits and the introduction of newer financial instruments for emission trading are all signs of heightened activity. It can also be concluded that India is an emerging leader for the developing countries in designing i Increase awareness Everyone should realise the effect and should try to protect the nature from the adverse effect