BSR Insight Articles About Energy
Can Carbon Capture Solve Climate Change? A Conversation with Journalist Marc Gunther
Melanie Janin, Managing Director, Communications
GreenBiz senior writer and Fortune magazine contributing editor Marc Gunther's new ebook, Suck It Up, explores carbon capture and storage (CCS), technology that attempts to suck carbon dioxide out of the air in order to reverse the atmospheric buildup that causes climate change. "It would take a lot of time and cost a lot of money but, in theory, could eventually get CO2 concentrations back to where we want them," he says. He spoke with us about the market opportunity in CCS—which, he writes, is equivalent to US$10 trillion of oil—and about his views on the technological, political, and behavioral barriers to solving climate change. What's your message for business leaders on the subject of carbon capture? What should they take away from your book? I'd like to see business, as well as government, take a closer look at capturing CO2 from the air. I think it's a tool we will want to have at our disposal, particularly if there is not a radical downturn in greenhouse gas emissions in the next decade or two. Unfortunately, I don't see that happening, You write about the enormous market opportunity in capturing CO2—100 billion barrels of U.S. oil, or US$10 trillion of oil, which equals 14 years of U.S. oil independence. With this much potential gain at stake, why aren't more companies investing carbon capture? Direct air capture of CO2 is a new idea. And it appears to be very costly at this point. But there are at least four startup companies that think they can bring the costs down to the point where they have a real business. Their plan is to suck CO2 out of the air, turn it into a liquid, and then inject it into the ground to extract stranded oil. This would finance the scaling up of the technology—after which it could be used to focus directly on the climate problem. Eventually—and this is admittedly a long-term vision—these companies would like to recycle CO2 to make renewable, low-carbon transportation fuels. The goal would be to capture CO2 from the air, extract hydrogen from water, and combine them to make fuels, in a process powered by solar energy. Every country in the world could produce its own oil and burn it. The CO2 would be recycled, like a newspaper or an aluminum can. You note a number of promising technologies and techniques for carbon capture in the book. Which one do you think holds the most promise overall and gives you a real sense of optimism? I'm not in a position to judge which of the three startups—Carbon Engineering, Global Thermostat, and Kilimanjaro Energy—has the best technology. But each one was started by scientists with great credentials and impressive track records. Bill Gates has invested in Carbon Engineering, which tells you something. At BSR, we've been having an internal conversation about climate issues, and we'd like to pose the same question to you that we've been discussing: What do you see as the key barriers or enablers to progress on climate change? Are they primarily technological, political, or behavioral? I think all three are barriers. Technology: Clean energy is still too expensive, relative to cheap natural gas. So investments are needed there. Political: Definitely. The most important things business leaders can do is talk loudly and forcefully and repeatedly about the need to address the climate crisis. Behavioral: Yes, because all of us (meaning well-to-do people in the Western world) should try to consume less, or at least consume in more sustainable ways. In your book, you describe the United States' refusal to address the climate problem as a case study in the "tragedy of the commons," and our continued dependence on fossil fuels as an "epidemic failure by many Americans to delay gratification." When do you think we will start paying attention to the risks of climate change? It will take a climate disaster to wake people up, although the extreme weather we've seen in recent years hasn't done so. I can also envision a scenario in which political leaders do what leaders are supposed to do—explain to people why this matters and what needs to be done about it, even if that requires short-term sacrifices. It's also possible that a breakthrough technology—say, very cheap solar panels—could come to the rescue. At the end of the book, you describe a clear path forward for addressing climate change on a global scale: Reduce subsidies for fossil-fuel production, put a price on carbon, government investment in research around cleaner energy (not just solar and wind), and government investment in geoengineering research. If you could make one of these happen in the next five years, which would you choose? Put a price on carbon. That would get us on the right path. This is BSR's 20-year anniversary, and we're exploring how far we have come, and how far we still need to go, to create a sustainable world. What's your take on this: Has everything changed in 20 years, or has nothing changed? Nothing has changed on a scale that matters. Attitudes have certainly changed. Behavior, not so much—not corporate behavior and certainly not individual behavior. We've seen incremental change. What's needed is transformational change. If you could get corporate behavior to change, what would you have business do? Speak about the urgency of the climate crisis, in an effort to change the political dialogue, and refuse to support candidates who deny the reality of climate change. Read more
Local Social Performance Management in Energy and Extractives
Michael Oxman, Director, Advisory Services Joyce Sood, Former Digital Communications Manager
Local social and sustainable performance is critical to energy and mining companies' ability to secure and maintain a social license to operate at various sites around the world. BSR's Director of Energy and Extractives Michael Oxman highlights a few areas that form the foundation for planning and implementation of social performance management, including human rights, community engagement, community development and social investment, and local content, and offers solutions for effective management of local social performance plans. Read more
BSR at Rio+20
Julia Robinson, Communications Associate
Rio+20, an important milestone that marks two decades since the first Earth Summit, kicks off this week in Brazil. BSR--which is also celebrating its 20th anniversary in 2012--is excited to join companies, NGOs, and governments to develop new strategies and innovative partnerships for sustainability. BSR Senior Vice President Eric Olson, South America Director Joe Sellwood, and Advisory Services Manager Alison Colwell will attend the UN Global Compact Rio+20 Corporate Sustainability Forum from June 15 through 18: Read more
Burning at Both Ends: Understanding Energy’s Two Major—and Opposite—Climate Trends
Ryan Schuchard, Manager, Climate and Energy
Recently, Bank of America and Citigroup were both labeled the "greenest" banks while another group called them the "filthiest." The first name was for investing in clean energy and reducing emissions from operations, while the latter was for providing financial support to carbon-intensive energy such as coal. In a similar vein, a survey of boom industries shows that one of the top areas for growth in the economy is renewables. And oil and gas. And unconventional energy production, such as shale drilling. What can we take away from this jumble of signals? The energy sector is growing on all sides, with nearly US$40 trillion in infrastructure being developed to meet global energy demand, which is on track to rise 40 percent by 2030. As a result, energy--which is already directly responsible for more than 60 percent of carbon emissions--is getting more and less carbon-intense. On the one hand, renewable and hyper-efficient energy production is rising fast, with wind, solar, and biofuels growing from nascent technologies just a few years ago to mature and commercially viable ones today. On the other hand, the rise of developing economies and increasingly power-hungry industries is driving a quest to uncover the cheapest energy wherever it is found. This is leading us into an era of "extreme energy," defined by the widening pursuit of unconventional fossil fuels--those resources that are more difficult to extract and that come with greater environmental consequences. Over the past year, BSR has been exploring what these trends mean for companies that are trying to address their greenhouse gas (GHG) emissions and become leaders in sustainable energy solutions with our Future of Fuels initiative. It is clear that if current trends hold, the beneficial climate impacts of renewables, which are growing rapidly on a very small base, will be more than offset by the much larger, faster growth in conventional and unconventional fossil fuels. This has important implications for companies that are trying to manage and communicate their climate impacts, as this article will highlight. Before we turn to these implications, however, it is important to point out another lesson in our Future of Fuels work that will be the subject of articles later this year: There is much more to the energy story than carbon, including a complex set of additional sustainability issues such as human rights, ecosystems health, economic development, and national security impacts. This complexity is unfolding dramatically with shale gas development, which is unlocking a huge amount of natural gas supplies in the United States that may replace more carbon-intense coal. At the same time, however, there is concern that the high-volume, hydraulic fracturing techniques used to produce the gas may threaten water supplies with chemical pollution and even lead to earthquakes. Our Future of Fuels work will create a comprehensive framework to help companies manage the total sustainability impacts of fuels, but for today, our focus is on carbon. ##The Rise of Lower-Carbon Energy You probably know about the first story: Renewable energy is scaling up in a big way. In percentage terms, it is the fastest-growing energy sector. Generating capacity for solar and wind has been expanding in the double and even triple digits annually, and today, both technologies are commercially viable in Germany, Spain, and the U.S. states of North and South Dakota and California. Solar prices also have dropped dramatically; at a solar power auction in California just last month, developers sold projects to utilities at lower rates than were available from the existing power grid. As for wind, it is reasonable to expect that it could power 20 percent or more of the entire U.S. electricity grid by 2030. Lower-carbon transportation fuels are also being deployed rapidly. In Brazil, the most advanced biofuels market in the world, virtually all new cars can run on any mix of gasoline and ethanol. In the United States, which produces enough ethanol for 10 percent of its fuel, the electric vehicle industry is tripling in size annually. Finally, we are in the midst of a natural gas boom, with shale-led gas production in the United States displacing gasoline and coal. New markets for natural gas are also developing around the world. In terms of climate impacts, this is positive, since natural gas is about a quarter to half as carbon-intense as traditional gasoline and coal. ##The Rise of Higher-Carbon Energy What seems to be less widely known, however, is that for all the growth in low-carbon energy production, energy is, in many cases, becoming more carbon-intense. Coal remains the fastest-growing global energy source. Coal has met around 50 percent of new electricity demand over the last decade (solar and wind, by contrast, have made up only around 1 to 2 percent of the growth) and is on track to rise another 65 percent by 2035. This demand is driving new investments in coal mining in Australia, Indonesia, Russia, and Mongolia. And though coal is being displaced by fuels like natural gas in some regions, it is nonetheless likely to be developed for use elsewhere. When Jim Rogers, CEO of Duke Energy, the largest U.S. utility, was asked what he would do with all his company's extra coal, his answer was simple: "I guess we'll be exporting it to China." Meanwhile, future oil production is likely to come increasingly from unconventional sources that require more energy and resources to produce. These sources, previously considered too costly to pursue, include bitumen from U.S. and Canadian oil sands, extra heavy oil from Venezuela, and oil shale. From an energy user's standpoint, emissions from direct electricity generation and transportation are virtually the same as conventional varieties, but the processing upstream is between 10 and 70 percent more carbon-intensive. Finally, just as radical breakthroughs are being made in clean energy, there are also new experiments with even more carbon-intensive configurations. To wit, the process of deriving synthetic liquid transportation fuels from coal, or "coal-to-liquids" (CTL), which uses chemical and thermal processes to create drop-in fuels such as gasoline, has twice the carbon footprint of conventional varieties. Though CTL fuels are banned for government use in the United States, there are economic incentives for the expansion of commercial-scale production facilities such as those in Sasolburg, South Africa, and Shenhua, China. ##The Bottom Line In the end, while low-carbon energy technologies are making progress, fossil fuels continue to outpace them. The renewable energy technologies of solar, wind, ocean, and geothermal comprise a minor part of the overall mix--just around three percent of total for electricity generation, and 0.05 percent of total energy sources. In fact, renewables are projected to rise to only around 15 percent of the total energy picture by 2030, even assuming good progress. It is therefore critical that companies and policymakers interested in the climate impacts of energy develop a comprehensive energy strategy that includes three things: radically improved efficiency/demand reduction, accelerated development and deployment of alternatives, and strong measures to reduce the climate impacts of all fossil fuel types that will be a major part of the mix for at least the next few decades. As they do, and while our energy mix becomes more varied, companies should consider the following tactics to help achieve their aims: * Understand the total lifecycle impacts of your energy sources. Understand the sources of energy throughout your business networks, where future regulation is most likely to affect the company, and which investments will accelerate low-carbon energy. This means making sure your view of energy supplies is up to date because energy grids evolve rapidly, as they have done recently in Germany and Japan, where the sudden replacement of nuclear power with natural gas, coal, and fuel oil increased the country's carbon intensity by about five percent. * Understand how siting choices affect the GHG profile of your energy mix. Where your company sites (or purchases from) data centers, manufacturing operations, and other energy-intensive facilities will influence the total carbon impacts and, therefore, whether you're meeting your sustainability objectives. * Measure the carbon impacts of energy throughout your value chains. Evaluating the energy impacts of your company's value chain means looking beyond its four walls. Companies should do this using the GHG Protocol's Scope 3 framework. (See the sidebar for a summary of common energy-related business activities and their corresponding Scope 3 categories.) * Involve stakeholders. As the bank examples noted earlier in this article show, it is not enough in the era of extreme energy for a company to stake out bold positions without involving diverse stakeholders in planning. The opinions of civil society groups play a major part in the company's perceived sustainability impacts, even for solutions that may seem to be cut-and-dried engineering projects. Companies should tap and build common ground with potential thought leaders and influencers before making major commitments. * Communicate your underlying story. The new frontier of climate reporting is to go beyond data disclosure to focus on the process of continuous improvement, and to share key insights and context behind the numbers. It is important to know the trends related to the fuel represented in the "conversion factors"--those numbers that describe the carbon content of different energy sources. Also, understand and communicate about your company's role in all aspects of energy, from enabling cleaner energy to minimizing emissions for carbon-intensive energy. Don't give critics an opportunity to accuse you of cherry-picking the most favorable results. * Advance sound public policies. While companies can drive innovation on their own, some of the most powerful work they can to is to influence political leaders to develop public policies that guide energy markets toward lower climate impacts This is just good business: Carbon-reducing policies are increasingly on the way. Since companies need long-term predictability and appropriate economic incentives to make rational long-term investments in better energy, it is up to them to advocate for it. * Think beyond climate impacts. Finally, companies need to start developing strategies that account for the fact that there are additional considerations beyond climate change, which range from biodiversity to human rights impacts to economic development. These issues must be included in an overall assessment of the sustainability impacts of energy. This is no small task, but it is essential given that we are going to be wrestling with energy sustainability for many decades to come. In the coming months, watch for more on this from BSR as part of our Future of Fuels initiative. For more information, please contact Ryan Schuchard, Manager, Climate and Energy, BSR. Read more
Energy Savings Through BSR’s Energy Efficiency Partnership
Ryan Schuchard, Manager, Climate and Energy
Since the launch of BSR's Energy Efficiency Partnership (EEP) in 2010, member companies and their suppliers have developed a range of carbon-reducing, energy-efficiency projects--including in lighting, electrical motors and drives, and heating and cooling--that have achieved significant savings in energy (enough to power 1,000 flat screen televisions for more than 11 years*). Additionally, they have implemented systems to track savings made through existing programs. All told, 100 suppliers have counted savings of 100 million kilowatt hours since 2007. Building this knowledge of energy saved and effective practices helps EEP members and their suppliers manage energy usage in order to reduce carbon emissions, establish tools to measure and verify climate performance, and credibly communicate progress to investors. EEP is currently recruiting new members and has a member meeting scheduled for July 2012 in China. For more information, contact Ryan Schuchard. *Source: U.S. Department of Energy. An average flat screen TV has a wattage of 120w, (W x h)/1,000 = kWh consumption. Read more
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