NOx GHG. SOx. RECs. clean development mechanism. compliance. carbon credits

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2 A vertically integrated provider of high quality carbon offsets and renewable energy certificates A full service partner to measure, audit, reduce, manage and offset greenhouse gas emissions or carbon footprint who is Experienced management team Backed by RNK Capital

3 GHG NOx clean development mechanism RECs SOx carbon credits compliance $1.2 billion under management Involved in over 1,000 environmental-related transactions worldwide One of the largest and most diverse environmental credit portfolios in the world Eight figure investment in GreenLife

4 Established by the World Meteorological Organization (WMO) and United Nations Assesses scientific, technical and socioeconomic information to understand climate change and its impacts

5 The IPCC has very high confidence that the globally averaged net effect of human activities since 1750 has been one of warming Its rate of increase during the industrial era is very likely to have been unprecedented in more than 10,000 years. NOTE: very high / very likely implies greater than 90% confidence Climate Change 2007, 4th Assessment Report

6 Pop Quiz: Name the top five emitting countries! 1. USA 2. EU 3. China 4. Indonesia 5. Brazil 20%!!

7 12 10 The Scale of the Problem Reduction Required Historical US Projected US by 2030 to Avoid GHG Emissions GHG Emissions for 2030 Catastrophic Climate Change US GHG Emissions (Gigaton CO2e) emissions 2005 emissions Growth at historical rates of carbon intensity Projected improvements in carbon efficiency 2030 projected emissions 1990 level -27% Sources: U.S. EIA Annual Energy Outlook (2007) Reference case, U.S. EPA; USDA; McKinsey Analysis

8 Will legislation be enough?

9 carbon productivity The amount of GDP produced per unit of carbon equivalents (CO2e) Must increase from $740 GDP per ton of CO 2 e today to $7,300 GDP per ton of CO 2 e by a tenfold increase! U.S. labor productivity during the Industrial Revolution increased tenfold between 1830 and years. The carbon revolution needs to be achieved in 42years! By 2030 this would cost.2-3% of productivity GDP.today we spend about 3.3 % of GDP on insurance McKinsey Global Institute The Carbon Productivity Challenge

10 what is a carbon offset? An offset represents the reduction, removal, or avoidance of GHG emissions from a specific project that is used to compensate for GHG emissions occurring elsewhere Ensuring Offset Quality: Offset Quality Initiative, July 2008

11 what is a carbon offset?

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13 From this.. To this..

14 From this.. To this..

15 Carbon Finance

16 A financial instrument representing a reduction in emissions Includes six primary categories of greenhouse gases what is a carbon offset? Carbon offsets are measured in metric tons of carbon dioxide-equivalent (CO2e) One carbon offset represents the reduction of one metric ton of carbon dioxide equivalent

17 NGOs support offsetting

18 We re in a lifeboat with a hole.. Passenger who made the biggest hole is arguing with the others about who s responsibility it is to fix the hole Those who made the smallest holes think they don t need to do anything We ll sink if we don t fix the holes! We need to bail out the boat! Offsets are the equivalent of bailing Its not about fixing OR bailing Its about fixing AND bailing

19 12 10 The Scale of the Problem Reduction Required Historical US Projected US by 2030 to Avoid GHG Emissions GHG Emissions for 2030 Catastrophic Climate Change US GHG Emissions 8 (Gigaton CO2e) emissions 2005 emissions Growth at historical rates of carbon intensity Projected improvements in carbon efficiency 2030 projected emissions 1990 level -27% Sources: U.S. EIA Annual Energy Outlook (2007) Reference case, U.S. EPA; USDA; McKinsey Analysis

20 US GHG Emissions (Gigaton CO2e) The Scale of the Problem Reduction Required Historical US Projected US by 2030 to Avoid GHG Emissions GHG Emissions for 2030 Catastrophic Climate Change Internal Reductions (Price < $0/ton) Internal Reductions ($0/ton < Price < Cost of Carbon) Opportunity for Offsets emissions 2005 emissions Growth at historical rates of carbon intensity Projected improvements in carbon efficiency 2030 projected emissions 1990 level -27% Sources: U.S. EIA Annual Energy Outlook (2007) Reference case, U.S. EPA; USDA; McKinsey Analysis

21 portfolio tailor a specific portfolio to address your needs and preferences

22 Quality offsets address: Additionality Leakage Permanence Double Counting Independent verification is critical! quality

23 Voluntary Carbon Standard (VCS 2007) California Climate Action Registry (CCAR) Clean Development Mechanism (UNFCC) standards & certifications Gold Standard (GS)

24 Carbon Offset Project based Validated Independent third party Created Unique serial numbers life cycle of a carbon offset Tracked Traded Retired Corporate accounts Full security and audit trail Permanently

25 what is a registry?

26 two types of registries Emissions Report and track actual GHG emissions for companies Carbon Credit Track and manage the creation, verification, serialization, tracking, trading and retirement of allowances and offsets

27 what is a REC? A renewable energy certificate (REC) is and environmental commodity that represents unique and exclusive proof that one megawatt hour of electricity has been generated and contributed to the grid from a renewable resource

28 Carbon offsets are measured in CO 2 e RECs are measured in KWh Carbon offsets come from a wide variety of project types..including renewable energy RECs come from renewable energy projects only Comparing offsets and RECS Carbon offsets are primarily concerned with preventing emissions that enter the atmosphere and result in measurable, incremental reductions in GHG emissions RECs are primarily concerned with promoting the generation of clean energy by providing more attractive returns on renewable energy projects

29 Carbon offsets are about exact quantification of CO2 e prevented or captured RECs are measured in KWh and the carbon content of the saved KWh differs widely based on quality of the local electricity. Dirty electricity = potentially more carbon saved Carbon offsets are an international instrument backed by increasingly rigorous standard and certification regimes RECs are primarily a U.S. based instrument with limited standards and certification regimes. Comparing offsets and RECS Carbon offsets are likely to be approved for use in future U.S. cap and trade system RECs could be undermined by a cap and trade system in the U.S. Offsets from renewable energy projects offer the best of both worlds REC carbon saved calculations will always be and estimate

30 RECs do Convey the right to claim that power is provided from a renewable resource Help stimulate creation of renewable energy projects RECs do not Represent carbon offsets Guarantee greenhouse gas emission reductions Generally represent incremental environmental benefits (i.e. not additional) Protect against double counting the benefits

31 know your shoe size You cannot manage what you don t measure

32 setting a boundary Scope 1, 2 and 3 emissions parameters

33 boundaries Getting to Zero: Defining Corporate Climate Neutrality Clean Air Cool Planet, Forum for the Future

34 $ Lbs. CO2e Lbs. CO2e Lbs. CO2e $ $ Cost to offset footprint Cost to offset footprint Cost to offset footprint Lbs. CO2e Lbs. CO2e Lbs. CO2e $ $ $ Cost to offset footprint Cost to offset footprint Cost to offset footprint

35 a credible and effective carbon management strategy Avoid carbon-intensive activities Reduce waste, increase efficiency Replace high-carbon energy sources with low carbon ones Offset all emissions that can t be eliminated by the above

36 Avoid avoid carbon-intensive activities a credible and effective carbon management strategy Offset offset those emissions that cannot be eliminated directly concurrent approach Reduce do whatever you do more efficiently Replace replace high-carbon energy sources with low-carbon energy ones

37 Offsetting enables companies to act quickly. Whereas internal reductions typically require the development and roll-out of new technology or management practices, offsetting can provide a big, quick win for a company setting out on a carbon neutrality journey. Getting to Zero: Defining Corporate Climate Neutrality Clean Air Cool Planet, Forum for the Future

38 lowest cost carbon reductions The economic case for offsetting. $100 internal reduction versus $15 offset? Placing a financial cost on emissions through offsetting will drive future internal reductions In many cases, a small investment in offsets will easily pay for itself by driving greater efficiencies and revenue

39 The Role of Offsets cost of emission reductions ($ / tco2e saved) cumulative avoided emissions (tco2e / year)

40 The Role of Offsets cost of emission reductions ($ / tco2e saved) Laptop for desktop replacement On-site generation cumulative avoided emissions (tco2e / year)

41 The Role of Offsets cost of emission reductions ($ / tco2e saved) Video conferencing -200 Efficient lighting cumulative avoided emissions (tco2e / year)

42 The Role of Offsets cost of emission reductions ($ / tco2e saved) Business as Usual cumulative avoided emissions (tco2e / year)

43 The Role of Offsets cost of emission reductions ($ / tco2e saved) Required Corporate Carbon Reduction Target cumulative avoided emissions (tco2e / year)

44 The Role of Offsets cost of emission reductions ($ / tco2e saved) Cost of Carbon Required Corporate Carbon Reduction Target cumulative avoided emissions (tco2e / year)

45 The Role of Offsets cost of emission reductions ($ / tco2e saved) Cost of Carbon Internal Reductions Offsets cumulative avoided emissions (tco2e / year)

46 The Role of Offsets cost of emission reductions ($ / tco2e saved) Cost savings Cost of Carbon Internal Reductions Offsets cumulative avoided emissions (tco2e / year)

47 a credible strategy Should include ongoing commitment to reduce baseline emissions Absolute reductions Carbon intensity Claims from inefficient companies will generate skepticism

48 Getting to Zero AVOID REDUCE REPLACE CARBON FOOTPRINT TIME

49 Getting to Zero Carbon Neutrality AVOID REPLACE CARBON FOOTPRINT OFFSET TIME CARBON NEGATIVE

50 can offsets pay for themselves? Yes! Putting a price on carbon can: Provide a real incentive to conserve energy and an become more energy efficient Help drive top line growth through improved corporate social responsibility and/or product differentiation. Cost savings from lower utility bills, fewer flights, etc Increased sales

51 climate change is driving market transformation Climate change creates real risk! Systemic risks cross entire economy Sector, industry and company risks Financial Legal Regulatory Physical Reputational

52 BASELINE EMISSIONS/CARBON INTENSITY Avoid avoid carbon-intensive activities a credible and effective carbon management strategy Offset offset those emissions that cannot be eliminated directly concurrent approach Reduce do whatever you do more efficiently Replace replace high-carbon energy sources with low-carbon energy ones CARBON NEUTRALITY

53 motives

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55 do more with less reduce, reuse, recycle, replenish environmental responsibility carbon footprint sustainability design for the environment carbon neutral the triple bottom line climate change make it last

56 Climate and global warming are the most pressing and most public issues discussed regarding the environment All constituencies are focusing on it: investors, customers, consumers, employees, government Credible and comprehensive sustainability strategies must address climate

57 How much is enough? Annual Carbon Footprint Cumulative Carbon Footprint Emissions (tco2e) Business as Usual Cumulative Emissions (tco2e) Business as Usual Year Year

58 How much is enough? Corporate Carbon Footprint Reduction Target = 50% Annual Carbon Footprint Cumulative Carbon Footprint Emissions (tco2e) Business as Usual Cumulative Emissions (tco2e) % Business as Usual Year Year

59 How much is enough? Annual Carbon Footprint Cumulative Carbon Footprint Emissions (tco2e) Cumulative Emissions (tco2e) Year Year

60 How much is enough? Annual Carbon Footprint Cumulative Carbon Footprint Emissions (tco2e) Cumulative Emissions (tco2e) Year Year

61 How much is enough? Annual Carbon Footprint Cumulative Carbon Footprint Emissions (tco2e) Cumulative Emissions (tco2e) Year Year

62 How much is enough? Annual Carbon Footprint Cumulative Carbon Footprint Emissions (tco2e) Cumulative Emissions (tco2e) Year Year

63 How much is enough? Annual Carbon Footprint Cumulative Carbon Footprint Emissions (tco2e) % -25% Cumulative Emissions (tco2e) % -25% 75% Year Year

64 In late 2007 RNK Capital, one of the preeminent investors in global environmental markets, created

65 The GreenLife Story Quality Credibility Reliability

66 Veteran emission traders credibility experience and expertise Power and environmental engineers Project development and finance experts Financial and credit risk analysts Experienced legal professionals International energy and environmental policy experts

67 reliability uniquely qualified Guaranteed delivery and pricing of carbon offsets and RECs Balance sheet and credit worthiness to back guarantee Access to projects around the world Ensures quality and transparency

68 Diversity of project types Diversity of project locations diversified Ability to customize portfolios Expertise in all verification standards and quality benchmarks Guaranteed delivery and price with strong balance sheet support Full carbon management partner OR work with your team to assemble and deliver the Offset/REC portfolio

69 Measure your footprint getting started Develop a carbon management strategy Conduct an energy audit Develop goals and plans to reduce carbon footprint through operations, behavior and capital expenditures Offset a percentage of your footprint that cannot be reduced by other means

70 Full coordination of carbon management program Footprint measurement working together Energy audit and efficiency recommendations Analyze opportunities for on-site generation Offset and REC programs Marketing your purchase Offset/REC partner working within the scope of existing plan or experts Design, deliver, manage the offset/rec portfolio

71 66 Lbs. CO2e 31 Lbs. CO2e 121 Lbs. CO2e $.45 to offset footprint $.21 to offset footprint $.82 to offset footprint 97,000 Lbs. CO2e (44 metric tons) 7.2 Lbs. CO2e $ 659 to offset footprint $.05 to offset footprint 7 Lbs. CO2e $.05 to offset footprint

72 All truth passes through three stages: First, it is ridiculed; Second it is violently opposed; and Third, it is accepted as self evident Arthur Schopenhauer ( )

73 thank you