IMPACT OF THE US WITHDRAWING OF THE PARIS AGREEMENT

IETA made the following statement about the fact that the US has announced to withdraw itself from the Paris Agreement. We at Climate Neutral Group support this statement.

STATEMENT IETA: 

Genève, 2017, June 1st

As was widely reported, President Donald Trump announced plans today for the United States to withdraw from the Paris Agreement. We issued a press statement, noting our disappointment and reiterating our intention to continue to work with US states, sub national authorities and nations interested in advancing market based solutions to climate change.

This decision was not a surprise. Trump made a pledge during the election campaign to withdraw from the Paris Agreement. Many Paris supporters urged him to reconsider – from US corporate CEOs to heads of state to the Pope and other religious leaders. Secretary of State Rex Tillerson and other cabinet colleagues urged him to remain in the agreement, but EPA Chief Scott Pruitt and Chief Strategist Steve Bannon reportedly pushed for exiting the agreement. Trump said that he decided to withdraw out of concern for the US economy.

We have seen strong reactions from many world leaders. It will take some time to understand all of the ramifications of the exit, both technical and political. We wanted to offer our initial thoughts about potential impacts, since you are probably gathering your own thoughts and reactions.

  1. Obviously, this is a big disappointment, because it weakens the strong show of unity around the Paris Agreement. But, as a consequence, we expect many other countries – and companies— to quickly rally around the Paris Agreement. The G7 statement last week was encouraging, as is the announcement expected tomorrow from the EU and China on enhanced cooperation on climate change.
  2. Given past experiences with the US withdrawal from the Kyoto Protocol, we expect California and the northeast RGGI states to enhance their own carbon market and climate policy agendas. Other states, from Virginia and Pennsylvania to Washington and Oregon, could become more ambitious on carbon pricing, given the void of federal leadership.
  3. Pressure from investor groups on US corporations will intensify. The climate risk shareholder resolutions at Exxon and Chevron this week are one example.
  4. We received several press inquiries (CNBC, CNN, Reuters, among others) about the possible trade sanctions that could be triggered by Trump’s decision. We emphasised that we believe in cooperation on climate change through markets, highlighting in particular Article 6 of the Paris Agreement. We also said that interest in border taxes or other trade restrictions could be reignited, but that it is a complicated subject – and could escalate in a harmful way. We urged calm and caution.

We will be tracking developments closely in the coming weeks, and we will do our best to keep you informed. We know this is a difficult development, but we encourage all IETA members to continue to speak out for market-based solutions for climate change and to encourage our colleagues in the US to forge ahead. A better day will come.

​Spekboom can fix ecosystems, create jobs and suck up CO2 – if SA gets a carbon tax

This article was published on the 24 May on mg.co.za

Written By Sipho Kings, the Mail & Guardian’s environment reporter, on 26 July, 2017

Spekboom was meant to be the ultimate symbol of sustainable development, a plant that could fix ecosystems and making farmers bucketloads of money. Then the world economy crashed and progress towards a local carbon tax stalled.

A few projects are chugging along, showing the potential of the indigenous plant to rehabilitate large parts of the country. But the shine has gone.

“This was going to be the big breakthrough for climate change. Instead of just being a victim, South Africa could plant spekboom, which would soak up carbon emissions and do so in a profitable manner,” says Professor Richard Cowling, who was there for the test project in 2004.

His name is on much of the research into how planting a 2.5m-tall evergreen succulent could transform the rural parts of the Eastern and Western Cape.

But that research now catalogues potential, not reality. “Maybe there was too much hype, so people expected too much of a miracle solution,” he says.

Cowling lives in Cape St Francis, with the restless blue Indian Ocean on one side and the rhythmic rotation of dozens of wind turbines on the other. This was an area that was almost impassable a century ago, given the dense thicket of spekboom that covered the coastal belt. The plant was a favourite of elephants. Thousands crashed through the thicket, eating the top leaves and spreading the seeds.

Then came the farmers who cut away the spekboom to introduce irrigated crops and livestock such as goats. The latter ate spekboom from the bottom up, ruining millennia of adaptation. With the food gone and land use changed, only a few hundred elephant remain in Addo Elephant Park.

All this broke the local ecosystem. Now, when the winter rain falls it washes away topsoil. This flows into dams, silting them up. Little water infiltrates deep into the ground to recharge aquifers. And none of this is good for farming, a bulwark of the local economy that formally employs 7% of the province’s workers.

Fixing ecosystems could turn this around. But planting spekboom is expensive and the plant grows slowly. It also means farmers have to take a leap of faith, converting land that makes money now into something that creates longer-term value. That’s where climate change and spekboom come in.

Because it is evolved to survive the arid conditions of the Karoo, spekboom has a few unique tricks. In winter, when it gets moisture from cold fronts, it photosynthesises like any other plant. In summer, it absorbs carbon dioxide (CO2) during the day but stores this away without photosynthesising. Instead, it does this at night so no water evaporates. That moisture is then stored as carbon compounds in the spekboom’s leaves, stems and roots.

In other words, the plant is really good at sucking carbon dioxide out of the air, something the world needs. Carbon dioxide levels are currently at 400 parts per million, their highest concentration in three million years.

Carbon trading schemes were introduced to lower CO2 concentration. Companies that emit carbon buy credits to offset against the carbon tax. Those credits pay for people to carry out activities to reduce the emissions, such as plant spekboom.

In the mid-2000s, this looked to be extremely profitable. Research by the Rhodes University-based Subtropical Thicket Restoration Programme found that a farmer could earn R440 000 a hectare each year by planting spekboom.

Speaking to the Mail & Guardian in 2008, Anthony Mills, then of Stellenbosch University’s department of soil science, said: “The bottom line is that the carbon market is booming and creating carbon credits is likely to be profitable.” At that time, companies were buying carbon credits for between €10 (about R130 then) and €20 a tonne of carbon emitted. Mills said the price was expected to reach €60 by 2030. That would mean R2.6-million a year per hectare for farmers.

Startups seized on this. Airlines advertised the fact that paying a bit extra on a fare would plant spekboom in rural South Africa. The money started to flow. Farmers in the southern part of the Eastern Cape started converting hundreds of hectares of land to spekboom. This was especially useful in an area where farmers were turning to wildlife as a source of income — spekboom is a good source of food.

Then came the 2008 financial crash. The bottom fell out of the carbon market. Carbon credits are now €5 (about R75) a tonne. That has all but destroyed the dream of spekboom. Without lucrative profits, farmers cannot afford the tens of thousands needed to convert their land.

But part of the spekboom project is surviving. Through the environment department’s Working for Land programme, R45-million has been invested in more than 7 000 hectares, creating jobs in areas where there is no industry.

Ecosystems become valuable to politicians when they create jobs. This guarantees a budget. Research by the Development Bank of South Africa, titled Natural Resource Management: An Employment Catalyst, shows that fixing ecosystems is a big job creator. It calculates that 500 000 jobs could be created “if the prevailing environmental challenges are to be addressed more actively”. Spekboom is a small but integral part of that future.

Overseeing this future is the environment department’s Dr Christo Marais, head of its chief directorate for environmental protection and infrastructure programmes.

Forever visiting projects, he is a difficult man to contact. An initial email gets the response: “The thicket project is still very much alive.” A call follows. “We have problems with the deadly sins that bring fatalities [to spekboom]: frost, drought and grazing. But things are looking good.”

Without the backing of lucrative carbon credits, Marais spends his time convincing farmers that fixing ecosystems makes sense — in this instance, more water, particularly underground. But that’s water that you cannot see, he says. “A farmer wants to see his dam and see that there is water in that dam.”

The current drought has helped his argument, as have the valleys where rehabilitation has meant once-dry rivers now flow again. “Farmers talk. It’s a slow process because we are working with a small budget, but each example means more people get interested in fixing their local ecosystem.”

That could be given a huge boost should the South African carbon market take off. Taxed at R120 a tonne on carbon emissions, companies could invest in projects such as spekboom. With 500-million tonnes of carbon emitted each year in South Africa, the treasury has said the potential for stimulating local projects is big.

But the tax is being blocked by companies and government departments that say it would lead to factories closing and job loss.

Because of this, spekboom’s potential to improve local ecosystems dramatically, provide jobs and slow global warming will remain just that — a potential.

South African business and industry is taking  steps towards mitigating the impacts of the proposed carbon tax legislation on their operations and investments.

Rather than viewing the carbon tax as potentially increasing costs, Climate Neutral Group will help you find opportunities to drive innovation and to develop creative ways to implement efficiencies.

One of our services is Carbon TaxCoach which helps companies to decrease their future carbon tax as well as developing a robust carbon tax offset purchase strategy.

Would you like to know more about our carbon tax solutions, click here  and for more information contact Franz Rentel on franz.rentel@climateneutralgroup.com

The Peninsula Offsets Conferencing Carbon Footprint

Posted by: TourismTattler, 24 April 2017

With a drive and passion for saving the planet, The Peninsula All-Suite Hotel is dedicated to improving the health conditions and quality of life of families less privileged throughout South Africa by providing them with a simple cooking device – The Wonderbag. Header image credit: Climate Neutral Group.

The Wonderbag is a revolutionary non-electric heat-retention slow cooker that continues to cook food that has been brought to the boil for up to 12 hours without the use of additional fuel or electricity.  It provides communities with greener, safer and more reliable energy to cook their everyday meals.

As a solution to offset the carbon emissions generated through the Peninsula’s meeting rooms and conference facilities, caused by the need for lighting, cleaning, catering, heating, cooling and travelling, for every conference booked the Peninsula will donate Wonderbags to families in need through the Climate Neutral Groups Green Dreams project.

In doing so they are not only neutralising and reducing their carbon footprint but significantly contributing towards the life conditions of vulnerable communities across Africa, empowering them to progress by creating a safer and healthier environment.

Carbon Credits

The Wonderbag project is registered under the Verified Carbon Standard (VCS), thereby allowing companies to credibly offset their carbon emissions whilst making a sustainable social impact in South Africa. The Wonderbag’s environmental impact is measured and monitored by internal and external researchers and audited by independent auditors as required by the VCS guidelines.

The Peninsula All-suite Hotel is managed as a professional and environmentally conscious business and will continue to identify areas of opportunity to decrease their carbon footprint and bring forward change. They will stock the Wonderbag at the hotel to guests or conferencing delegates who wish to make a difference.

Would you also like to offer climate neutral conference facilities at your hotel? Click here for more information or contact Nishanthi Lambrichs at nishanthi.lambrichs@climateneutralgroup.com

Implications of new Greenhouse Gas Reporting Regulations for business

This article was published on the 13 of April on www.bizcommunity.com

By: Simon Clarke, director, IBIS Consulting, 13 April 2017

After being in draft format for nearly two years, the National Greenhouse Gas Reporting Regulations were published by the minister of Environmental Affairs on 3 April 2017. This briefing document provides a short summary of part of the regulations and highlights what we believe to be some of the key issues for business.

Download the full regulations here.

South Africa is undoubtedly moving to some form of carbon pricing regime. The timing and format (carbon tax, carbon budget or combination thereof) is still unknown, but the greenhouse gas (GHG) data reported to government as part of these regulations will form the basis for this carbon pricing regime. Companies impacted by the legislation therefore need to make sure their data is accurate and complete as it will have financial implications.

Few changes have been made to the final regulations so there should be no major surprises. But for companies that have not been following the draft regulations, there are some important considerations that are outlined below.

Reporting boundaries. Companies must define their reporting boundaries based on operational control, defined by the regulations as “the full authority to introduce and implement its operating policies at the company”. For companies that have been using the GHG Protocol Corporate Accounting and Reporting Standard for reporting of their GHG emissions historically and have adopted a slightly different approach, either financial control or equity share, this will need to be addressed.

Inclusion / exclusion of certain emissions. The regulations require companies to exclude emissions from mobile combustion (essentially emissions from vehicles) as well as emissions from purchased electricity and refrigerants. Emissions from waste and waste-water treatment are included (provided you exceed the threshold – see the point below on thresholds). If your current GHG emissions inventory is not set up to include or exclude these sources, you may well end up over or under-reporting your emissions.

Emission factors and methodology. The regulations refer to the “Intergovernmental Panel on Climate Change (IPCC) Guidelines for National Greenhouse Gas Inventories (2006)” as the basis for calculating emissions. These guidelines have been translated for South African companies into a slightly easier format by the Technical Guidelines for Monitoring, Reporting, Verification and Validation of Greenhouse Gas Emissions by Industry (hereafter referred to as the Technical Guidelines). To understand the reporting requirements properly, the regulations and the Technical Guidelines must be read together. The most important methodological considerations are:

  • The emission factors to be used must be in line with the IPPC requirements and are mostly provided in the Technical Guidelines. For companies that previously relied on the UK government’s DEFRA as a source of emission factors, this will need to change. There are also South African specific emission factors for certain fuels, such as diesel and petrol, which companies must be aware of.
  • Companies must report their GHG emissions for carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O) separately. Global warming potentials (GWP), which are a measure of how much a GHG contributes to global warming relative to CO2 for these gases, are also specified in the regulations and must be sourced from the IPCC Third Assessment Report.
  • The IPCC Guidelines divide emissions into four main categories, termed sectors (which are Energy, Industrial Processes and Product Use (IPPU), Waste and Agriculture, Forestry and Land-use (AFOLU)), which are further divided into several sub-sectors. Companies will need to determine which sector and sub-sector their emissions fall into.
  • The IPCC Guidelines provide several options for calculating the emissions, described as tiers. There are three levels of tiers: one, two and three. Each tier has an associated increasing level of detail and accuracy, with the tier three method requiring the most accurate approach. The regulations specify which tier to use, usually either tier two or three.

Thresholds per source category. The regulations provide thresholds per emission source, above which companies are required to report. In the energy sector this is typically 10MW for the energy sources, and varies for other categories (e.g. five tonnes of waste per day for waste disposal sites and 4-million bricks per month in the brick manufacturing sector). For most companies, the most important part of this is that the 10MW refers to the design capacity and not how much fuel you consumed. In addition, it is not linked to one piece of equipment larger than 10MW. The regulations provide an example of six 2MW boilers, equating to 12MW, that would then exceed the threshold. Interestingly, this approach may require a company with a number of sites with back-up generators to trigger the 10MW threshold, even if no diesel was consumed for that year in those generators.

Calendar year. Reporting needs to be done on a calendar year basis. For companies whose financial year does not end in December, this will require a good system to cater for this requirement.

Timing. The regulations don’t explicitly state this but it is expected that companies will need to report their 2017 data by March 2018. As an aside, the Department of Environmental Affairs is asking companies, through their industry associations, to provide historical data so that the National GHG Inventory is more complete.

Registration. Companies will need to register their company and the facilities that exceed the threshold on the South African National Atmospheric Emission Inventory System (NAEIS) which will serve as the reporting portal for GHG data. Note that the GHG module on the NAEIS is not functioning yet but it is understood that this will be ready by March 2018. The regulations require facilities to register within 30 days of publication of the regulations. Although companies are required to register the facilities that exceed the threshold, it is our understanding that because reporting is done per IPCC category, facility level reporting is not mandatory. This allows for companies with multiple sites to consolidate their data. For example, the six sites with 2MW boilers could then report emissions from coal (assuming they are all coal-fired boilers) collectively under a single line item in the NAEIS.

Validation and verification. The regulations don’t require verified data, but if the competent authority deems the data to not be transparent, complete or correct, they may undertake on-site verification and validation which the company will be responsible for paying for.

What actions should you take?

Companies must register and familiarise themselves with the NAEIS and ensure they are ready to report by March 2018. Many companies have been reporting their GHG emissions data for a number of years so the transition to mandatory reporting should be relatively straightforward. However, it is important that your GHG inventory is set up to allow for:

  1. Clarity on your boundary approach, focused on operational control for mandatory reporting.
  2. Disaggregation of emission sources (e.g. mobile and stationary combustion) per facility.
  3. Transparency on emission factors and GWPs and the ability to easily change these. The IPCC Guidelines and the Technical Guidelines must be consulted in this regard.
  4. Ability to easily include or exclude emission sources (e.g. exclusion of emission from electricity for mandatory reporting but inclusion for voluntary reporting).
  5. Clarity around design capacities of fuel combustion equipment.
  6. Monthly data capture and reporting, particularly for companies with financial year-ends that are not in December.
  7. Verification of your GHG data. It is recommended that this is conducted by an organisation that understands the requirements of the IPCC Guideline.

Would you like to asses your carbon footprint, click here for more information or contact Franz Rentel on franz.rentel@climateneutralgroup.com

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Emissions offsetting: closing the main carbon tap of your business

By Danielle de Bruin, Programme Manager Mobility / Climate Neutral Group in The Netherlands

A car leasing company called us recently with a query around sustainability and transport. “We are not offsetting emissions because we think prevention is better” was one of the statements. Upon concluding our telephone conversation, during which we agreed on many points, one issue lingered on.

Prevention is better than offsetting: is that true? To find an answer, we will need to look at two things:

1. Can companies prevent climate change just by reducing their carbon emissions?

The answer is no. Reducing emissions is not enough. Of course, every little bit helps and lowering your overall emissions from your fuel consumption and energy use is something you should definitely do. This is however not where it ends.

After all, if your kitchen is flooding because you have left the tap open, you must close the tap and mop the floor. By reducing your company’s fuel and energy consumption, thus carbon footprint, you are closing your carbon emission tap only a little, say by up to 20%, if you are doing everything right.

The problem is that you can’t ignore the remaining 80%. A transition to electric transport could be a structural solution, but it could take many years before we reach that point. Do we have time to wait for this? I don’t think so. You can’t say: “I am sorry your kitchen is flooded. I will return next month to close the tap.”

2. Is there a difference between reducing emissions and offsetting?

The answer is no. Please allow me to explain why.

In the Netherlands, our infrastructure is largely based on fossil fuels. We fill up our cars with petrol and diesel and the bulk of our electricity is generated from coal. We all know how much effort it takes to change this: coal plants aren’t after all easily closed. In essence, we are all on the fossil fuel highway together, whilst making hairpin bends towards a more sustainable economy. Meanwhile, dozens of emerging markets around the world are developing rapidly, and are embarking on a similar path as the developed world a good few years ago. These countries will have to make the same hairpin bends in 20 years’ time to get rid their fossil fuels.

What is offsetting all about?

Offsetting means investing in sustainable energy projects in countries which are developing at a fast pace to prevent reliance on fossil fuels. One can, for instance, invest in wind turbines in India. With this, you are investing in clean, sustainable electricity grids from the word go – preventing emerging economies from becoming dependent on fossil fuels.

In other words, does offsetting equal reduction?

The answer is: yes. Offsetting is much more than closing the tap or mopping the floor. Offsetting your emissions means you are aware of the fact that greenhouse gases originate from several taps and that you have to close the largest, not just the most obvious. We essentially all benefit from offsetting.

The following day, I called the lease company and explained the above. The result? The firm in question is now one of our clean transport ambassadors in The Netherlands, and it is persuading their clients to offset their emissions. What about you?

The above is applicable to South Africa. Please contact us to see how your company can start reducing and offsetting its carbon emissions.