March 17th, 2010 by Michel Gelobter

The last few weeks, I’ve covered a range of federal actions that are driving energy and carbon onto the business agenda. For all that action though, the real action is in the states, starting with California.

I had the privilege in 2002, of helping California legislators craft what has become the world’s most aggressive climate change law, the California Global Warming Solutions Act. The law is aggressive because it essentially mandates compliance, by all of California, with the Kyoto Protocol. This means reducing emissions back to 1990 levels by 2020 (a more than 15% decrease from emissions levels today and a 30% decrease from what emissions were expected to be absent the law). Although the law gives the state significant time, it also mandates reductions of up to 80% of 1990 emissions by 2050.

Reporting under the law has already started for sources larger than 25,000 tons and anyone in the state generating more than 1 MW of electricity. The regs here, like EPA’s, embody a whole host of calculation methodologies for power generation, refineries, cement plants, biomass conversion, and fuel use. If you have to report, you usually know who you are, but watch that pretty low power threshold. A lot of co-generation facilities are being subsumed under this rule.

The law’s major provisions kick in in just 2 years (2012). They are sweeping and involve:

· Substantially stepping up building and appliance efficiency standards;

· Getting the overall mix of energy up to 33 percent renewables;

· Developing a state-level cap-and-trade system;

· Controlling transportation related emissions, including a Low Carbon Fuel Standard; and

· Creating lasting revenue streams from fees for water use and other systemically large sources of greenhouse gas (pumping water accounts for 20% of California’s electricity use!)

All told, these measures represent a set of near-term changes and opportunities for business-as-usual in almost every sector. And the nature of the California law means that the changes will keep rolling out for the foreseeable future.

And did I mention that over a dozen Northeastern states are trying to opt-in to essentially just follow suit and adopt California’s program?

March 5th, 2010 by Michel Gelobter

Climate regulations have been cropping up and even implemented for quite a while in Europe, California, and some Northeastern states.  But the US federal government has been catching up fast and with it comes the kind of detailed attention to regulation the world’s leading environmental agency is famous for.

Check out the EPA’s “Mandatory Reporting of Greenhouse Gas Rule” often referred to as MRR. 300 pages long, and almost half of that are detailed specifications for how to calculate emissions from ammonia manufacturing to aluminum smelting.  And those details aren’t just about compliance…they can be a roadmap to efficiency because, unlike toxic pollutants, when you figure out how to optimally reduce climate pollution you’re usually also saving a lot of energy, materials, and money.

These rules were effective January 1, 2010, but we’ll be learning a lot more about how companies use them, which of many alternative approaches to reporting allowed are most efficient, and how many of the specific rules apply to any one given company or facility.

One thing that’s clear now is that software is going to play a big role in keeping track of the diverse types of emissions sources out there and all the ways you can calculate an industrial carbon, and for that matter energy footprint, under the regulations.  As supply chain tracking deepens, we’ll need to know how to account for those emissions not just at the source, but down the chain in finished products.  Comprehensive, real-time analysis will make it possible to grow production while driving down emissions and energy costs.  The big wins will accrue to those who’ve learned how to find patterns in the details.

Climate change is a big picture business.  But as regulation becomes real, the details come fast and furious.  That’s why an enterprise solution that provides companies with a comprehensive environmental and energy system of record, like Hara, is so necessary – enabling visibility and control of the details across stakeholders so you can focus on the big picture.