Sustainablog

This blog will cover some news items related to Sustainability: Corporate Social Responsibility, Stewardship, Environmental management, etc.

12.5.05

Greenhouse gas trade growing sharply-World Bank

Greenhouse gas trade growing sharply-World Bank
By Vera EckertWed May 11,10:40 AM ET
Trade in carbon dioxide (CO2) permits surged this year as the European
Union launched an emissions scheme and the Kyoto Protocol on climate
change came into force, a World Bank study showed on Wednesday.
Dealing volumes in the first three months of 2005 were 3.5 times higher
than in the whole of last year. This year's growth comes after a five-fold
increase in 2004, the study showed.
"The carbon market is responding to the ratification of the Kyoto Protocol
and to the beginning of operation of the European Union's emissions
trading scheme," World Bank economist Franck Lecocq said on presentation
of the study during a carbon trade fair in Cologne.
Further growth was extremely likely in the coming years, he said.
The EU's trading scheme, the mainstay of Europe's bid to meets its Kyoto
targets on curbing greenhouse gas emissions, was launched in January. The
Kyoto pact officially kicked in a month later.
The EU's "cap and trade" scheme imposes limits on CO2 emissions from about
12,000 factories and power stations. Firms exceeding their limits must buy
extra permits from companies which have undershot their CO2 ceilings -- or
face financial penalties.
Forward trading through brokers began ahead of the scheme's official
launch. This year several energy exchanges have started up emissions
trading platforms as they look to tap a potentially huge commodity market.
This year's increase in trade brings the total volume in the 18 months
between January 2004 and March 2005 to 56 million tonnes, the World Bank's
report showed.
Prices for European allowances have nearly tripled since January, trading
on Wednesday at around 16.70 euros a tonne.
TIP OF THE ICEBERG
Brokerage Evolution Markets, which helped the World Bank collate its
report, said current trading volumes were "just the tip of the iceberg."
Evolution's president Andrew Ertel said that of the 12,000 companies
covered by the mandatory EU scheme, only 50 to 70 had started actively
trading.
"We see new companies come in every single day...next year there may be
several hundred million tonnes traded within the year," said Ertel.
Trading in project-based CO2 permits -- credits generated by
emissions-reducing projects in developing countries -- so far in 2005
amounted to 43 million tonnes, the World Bank said.
Governments and companies buy the permits and use them toward meeting
their CO2 reduction goals.
Brokerage Natsource, which also had input to the World Bank report, said
project-based transactions grew by 38 percent in 2004 to 107 million
tonnes.
The biggest European buyer of project-based permits was the Dutch
government. The biggest private sector buyers were Japanese companies,
Natsource research showed.

10.5.05

General Electric Plans Broad Push On Green Issues

The Economy
General Electric Plans Broad Push On Green Issues
By Kathryn Kranhold and Jeffrey Ball
841 words
9 May 2005
The Wall Street Journal
A2
English
(Copyright (c) 2005, Dow Jones & Company, Inc.)
Seeking to make money on the global push toward tougher environmental
regulation, General Electric Co. plans to roll out today a comprehensive
investment, marketing and policy initiative that addresses environmental
issues such as global warming and water shortages.
The Fairfield, Conn., conglomerate plans to more than double its
investment, to $1.5 billion by 2010, in technologies that include cleaner
coal-fired power plants, a diesel-and-electric hybrid locomotive and
agricultural silicon that cuts the amount of water and pesticide used in
spraying fields.
GE aims to achieve $20 billion in sales of environmentally cleaner
products by 2010, or double the amount it currently has -- a target that
would comprise as much as 20% of the company's estimated industrial sales.
Already, GE, the biggest publicly traded company in the U.S., sees a
business case for its strategy as utilities such as Cinergy Corp. and
American Electric Power Co. line up to build plants using cleaner
coal-burning technology.
GE Chairman and Chief Executive Jeffrey Immelt plans to urge the U.S.
energy industry to take the lead in dealing with carbon-dioxide emissions
in a "carbon-constrained world." Carbon dioxide is produced when fossil
fuels are burned and is widely believed to be the main global-warming gas.

GE says it will reduce its global-warming emissions by 1% over the next
seven years. GE also says it will increase its energy efficiency by 30% by
2012.
GE's move comes as an increasing number of big U.S. companies are calling
for a federal global-warming emissions cap and announcing their own
emissions reductions. Multinationals based in the U.S., where the
government has rejected the Kyoto Protocol, the international
global-warming treaty, are preparing to comply with the treaty's mandates
in foreign countries where they do business. Executives at many big U.S.
companies say they have concluded that it is only a matter of time before
the U.S. also imposes some sort of global-warming emissions cap.
A number of big companies and public entities have pledged 4% reductions
in their global-warming emissions over several years ending in 2006 as
part of the Chicago Climate Exchange, a voluntary program to test ways to
address global warming economically. Among CCE members are Ford Motor Co.,
DuPont Co., Motorola Inc. and International Business Machines Corp.
In a recent interview, Mr. Immelt said he plans to encourage the federal
government to mandate that utilities produce a specific percentage of
electricity from "renewable" energy sources such as the sun and wind, like
many European countries and some U.S. states have done.
GE's promised 1% emissions cut would be less aggressive than the reduction
envisioned by the Kyoto Protocol. It also would be less significant than
the voluntary cuts pledged by several other U.S. companies. But the GE
pledge is more aggressive than the Bush administration's global-warming
policy, which envisions businesses continuing to increase their emissions,
along with economic growth, though emissions would increase at a slower
rate.
To be sure, a 1% cut over several years, even by a huge company like GE,
won't make an appreciable dent in global warming. Its importance is more
symbolic. GE's move is likely to intensify the political debate over
whether the U.S. should impose a federal global-warming emissions cap.
GE says its emissions-reduction pledge is significant, given that the
company's emissions were on track to grow by 2012 between 40% and 45% if
the company did nothing to curb them.
In the past, GE executives have stayed away from publicly addressing
issues like global warming or from marketing itself as a company producing
environmentally-friendly products. That's partly because the company is
facing a continuing controversy over dumping polychlorinated biphenyls in
the Hudson River in New York state. GE is negotiating with the
Environmental Protection Agency over the best way to dredge the Hudson and
remove the chemicals, which were banned by the federal government in 1977.

Given its past, GE risks environmentalists' wrath with what it calls its
new "Ecomagination" campaign. In one television ad, attractive male and
female models, their biceps exposed and flexed, pose as coal miners as a
voiceover says GE is making coal more beautiful.
Environmental activists called GE's move significant. "GE is a potent
symbol and sends a powerful message to the private sector and the
public-policy sector," said Jonathan Lash, president of World Resources
Institute, an organization in Washington that tries to persuade companies
that investing in environmentally friendly technologies can be good for
their bottom lines.
Mr. Immelt isn't shy to say that global warming is good for GE and its
shareholders, because the company sells technology such as wind turbines
and natural-gas-fueled turbines that produce fewer emissions than
traditional technology. "We're at a tipping point where energy efficiency
and emission reductions also equal profitability," he says.