The challenge facing carbon markets
16th May 2007 by Anne-Marie Warris6 Comments
We are at the beginning of a new era, of a new exciting place to be. But we’re also facing a huge level of challenge. A challenge not just for industry, or for assurance providers or for government, but also for us as consumers. We as individuals have to start making carbon choices that we’re not prepared to make yet, but that we’re beginning to think about.
Industry can help with these carbon choices by helping to guide us, by helping to make the right decisions for them in terms of their carbon history. And government can help us in terms of making the rules simple and easy to work with and transparent and manageable.
Clearly on top of all that, which is also part of the work we’ve done with What Assures Consumers?, is an issue that says that verification is crucial. 70% of people said that for them it was very important that climate change claims were verified.
It’s clearly important for LRQA as an assurance provider to provide the right sort of service to deliver something that says ‘here is a tonne is a tonne’, but we need to do that in the least bureaucratic fashion and the most flexible fashion without losing trust in the market.
Dr Anne-Marie Warris is Technical Director: Climate Change for 
17th May 2007 at 4:22 pm
To quote Rajendra Pachauri, IPCC:
And that’s the rub, verification is essential if we are to have any faith in corporate reporting. Unfortunately, as you point out, government is two steps behind business on this issue.
It is apparent that business is quite able to self-regulate when it comes to declaring its carbon risk - see the CDP for example - and so long as there is sufficient weight of peer approval by shareholders, customers and partners, companies will formulate their own reporting standards - the WEF is working with business to set new accounting standards that can be recognised for corporate accounts purposes - but these things do not get the official stamp of approval from a third party verifier, just a nod of approval, meaning that if there’s to be any litigation, you won’t see the nodders for dust, and quite understandably.
Perhaps with the right forum for debate, we can get business and the professions to present a fait accompli, which seems to be the direction we’re heading in. The only missing stakeholder here is government and if the success of the US VER market is anything to go by, perhaps we don’t need a Kyoto dictum to decide what is a tonne of carbon or not - I say this for debate.
18th May 2007 at 11:04 am
Climate change used to be an environmental issue but now it’s something companies can no longer afford to ignore. Defra is now proposing a couple of measures to reduce carbon emissions in non-energy intensive organizations that could force some UK issuers to seriously curb their emissions.
Its Energy Performance Commitment sets out a mandatory carbon cap and trade system for non-energy intensive businesses and public sector organizations in an effort to deliver 1.2MtC/year (4.4MtCO2/year) carbon savings by 2020. If passed, this will be the first time many organizations will be obliged to measure and reduce their emissions.
I think it’s interesting that consumers are demanding climate change action verification. Particularly with carbon labelling, this would seem crucial since it’s a very complex process to capture the ‘embodied energy’ of a product. I would also think that it would be imperative to place climate change claims in context. For instance, demonstrate the relative worth of a carbon measure otherwise it these labels may lose their effectiveness.
It seems as though consumers want to be ‘carbon responsible’ but do you think we have reached a point where they are ready to make choices based on the amount of emissions emitted in the production of products?
21st May 2007 at 4:59 pm
Adrienne… yes I do think individuals are now at that point.
But only if they can trust the basis of calculation, and if they can contextualise the meaning of that footprint in their lives.
This is the challenge - giving consumers the contextual tookit to make better decisions…
22nd May 2007 at 2:00 pm
In response to Adrienne - I think consumers are ready. The time for ‘carbon-labelling’ is here, but only if its straight-forward, consistently applied, cost-effective, trusted and easily explained to consumers. Not an easy task.
The Government is currently examining the possibility of personal carbon allowances. If these go ahead, it will be even more important for producers to explain the ‘embodied energy’ of a product, so consumers can put their purchases into context with their other activities (as the previous blogger suggests) and reduce their carbon ‘footprint’ if they choose to.
So the challenge is for business and Government to come up with consistent evaluation and labelling that can be trusted. But the question remains - can business self-regulate and agree to schemes and standards amongst themselves, or should the Government pursue mandatory methods and labelling?
31st May 2007 at 11:14 pm
So is the issue of reducing carbon footprint and issue for organisations or individuals and how do we support and encourage the two to make a difference.? can we do this/ How are we fair to all involve and manage the trade off between social equity and environment?
Carbon labelling is not just about simple products like electrical goods where it relates to end use and not so much to manufacturing and its is farely easy to measure but alos more complex products from your Ipod or MP3 players to the food you had for dinner, was it good? Food is more about the productsion process all down the supply chain and your MP3 player is both about is manufacturing footprint as well as its use footprint.
3rd July 2007 at 10:02 pm
The last month has yet again reminded us about the challenges possed related to climate change. Very wet weather in England as well as Pakistan and elsewhere and heatwaves in southern and Eastern Europe.
However listing to senior speakers yesterday about climate change there are in my mind some serious questions. Do we as corporations incluing CEO believe that climate change is real or is something that will disappear. Look at some recent research by KPMG which seems to suggest that for many corporations climate chahnge has yet to climb up the corporate consience.
Added to my concern is the confusing message from consumers on one hand you the producer look after climate change but not at our cost and anyway we are mot too sure about is all and on the other hand the findings from the research in ‘what assures consurmers’ that consumers want carbon claims to be third party verified.
What do we need to do to help us all to reduce our carbon foot print - better information, encouragements (or will that as health warnings become counter productive)? Any good ideas for what we should do as individuals and corporations to help support the change we all have to face?