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Agrifood – Carbon inventory introduction
Presenter/s names here
The material provided in this presentation has been produced
in conjunction with our partner Energetics Pty Ltd.
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
This presentation has been produced with the assistance of funding provided by the Commonwealth
Government through the Department of Education, Employment and Workplace Relations.
What is the problem?
•
•
Climate change
Resource depletion
– Energy
– Water
– Materials
•
•
•
Increased emissions,
contamination & waste
Reduced air quality
Loss of biodiversity
© 2011 Energetics
2 Pty Ltd and AgriFood Skills Australia. All rights reserved.
How is economic activity affected
by climate change?
Agriculture,
tourism and
insurance
•Directly affected
- more droughts,
floods and bush
fires.
Carbon taxes,
energy tariffs
and emissions
trading.
•To address climate
change, emissions
must be reduced
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Impact upon
other sectors
•Energy sector costs
flow through to
energy intensive
sectors – mining,
manufacturing
Other indirect
impacts
include
Longer term
global impacts
potentially:
•Reduced demand
for products
•Disruption to
business activities
•Potential litigation
•Brand and
reputation risk
•Large scale refugee
movement
•Political instability
•Social unrest.
Risks specific to Australia
Energy pricing
Access to Water
• Low energy costs, greenhouse
intensive coal sources
• Australia is the driest
continent on earth
• Costs to increase – oil prices,
carbon, lack of investment,
drought conditions
• Many industry sectors are
dependent on access to
water for operation.
Regulatory uncertainty
• Carbon Pollution Reduction
Scheme – Emissions Trading.
• Uncertainty - difficulty in longterm infrastructure/ asset
planning.
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Market related risks
•Climate change risks in
other countries may differ
remarkably – regulations,
consumer behaviour
Things to consider when managing
carbon – organisational boundaries
Decisions must be made as to how emissions will be
aggregated. Three approaches include: GG protocol?
Operational control is default
•Equity share
boundary!
– required for reporting to
•Financial control
Australia’s National Energy and
•Operational control
Greenhouse Reporting System
(NGER)
What is operational control?
Defined in Australian law as
the right to introduce or
implement operating, health
and safety or environmental
policies
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Things to consider when managing
carbon – operational boundaries
GGprotocol ?
L
Nat
Pe
P
Electricity
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Reporting / reduction programs
• NGER (Australian) – Mandatory reporting of national
energy consumption and production and greenhouse gas
emissions above legislated thresholds.
• EEO (Australian) – Mandatory identification of energy
efficiency opportunities by energy users above thresholds.
• CPRS (Australia) – Mandatory purchase of permits to emit
all greenhouse gases for emitters above threshold (program
delayed to 2013)
• CDP (International) – Voluntary requests for greenhouse
and energy disclosure from over 2,500 organisations. CDP
acts on behalf of 534 global institutional investors
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NB: No longer considered “voluntary”
for Australia’s top 200 companies
The business case for carbon
management– emissions & profit
Figure 8: Carbon intensity by sector (VicSuper Carbon Count 2009)
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
The business case for carbon
management – carbon labeling
uk carbon trust
Aldi – first company in
Australia to introduce
Carbon Reduction Labels.
Suppliers now required to
• report GHG emissions
• commit to GHG reductions
Woolworths and the Australian Food and Grocery
.
Council conducting study on benefits of carbon
labeling
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
The business case for carbon
management – carbon trading
• Japan – currently designing ETS that is likely to be
implemented in 2011
• NZ – ETS started 1 July 2010
• China - likely to have an ETS
• EU – existing ETS may legislate a 30% reduction target
• UK Coalition - setting a floor price for carbon
• US – multiple regional ETS’
Emissions
trading or
some form
of a carbon
price is
inevitable
NB: Emissions trading works: EU verified
emissions showed a decrease of 11% in 2009
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
The business case for carbon
management – carbon price
Q: If a price on carbon
is introduced, who will
pay?
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Some will pay directly
eg. Large users of coal such as coal
fired power stations
Some will pay indirectly
eg. Consumers of electricity /
smaller users of fuels
Think petrol excise – you pay,
but payment collected upstream
The business case for carbon
management – what level of price?
What might a carbon price be?
NB: Very costly for some
Interim tax
$23
Introduced 1
July 2012
Transition to
Permit price
trading
scheme
5% reduction
target for 2020 (variable price)
= $25 in 2013 = $20 - $35 in
2015
Costs spread across the economy
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Regulation
eg. ban on all
coal - fired
generators
(incl. boilers)
Risk and opportunity identification
These include:
•
Physical – damage to functioning of assets / take advantage of shifting climatic
zones
•
Regulatory – exposure to / seize opportunities around:
- current and future requirements;
- administrative burden;
- direct and pass-through carbon price costs (CPRS)
•
Litigation – CEO liability or opportunity (NGER and EEO)
•
Competitive – business environment will change – advantage or risk?
•
Reputational – information is in public domain
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
The business case for carbon
management
Experience shows that sustainability makes good
business sense
•
•
•
Embedding sustainability within an organisation’s broader business strategies
frequently results in organisational and technical innovations that generate
both top- and bottom-line returns.
Reducing inputs to a business, due to a carbon-constrained economy, reduces
costs.
Reducing inputs requires new or improved products or even new business
lines.
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Additional slides for management
presentation
• Insert following slides as required
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Summary graph from baseline tool
Insert summary graph from baseline tool
Financial Year 2010 Energy Usage, Resources Cost and GHG
Emissions
399
5,771 GJ
$229,441
29,664 GJ
$186,875
7,334
$906,400
48,135 GJ
Energy
$300,844
2,465
Cost
Tonne CO2 -e
Natural Gas
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Electricity
The size of your footprint
Insert summary graph 1 from inventory
Total annual emissions
(kt CO2-e)
8
7
6
5
4
3
2
1
0
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Scope 1 v scope 2 emissions
Insert Summary graph 2 from inventory
Scope 2
emissions
76%
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Scope 1
emissions
24%
Energy use by emissions source
Insert summary graph 3 from inventory
Annual energy consumption
(TJ)
60
50
40
30
20
10
0
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.
Carbon price impact
• Insert summary slide 4 from inventory
Carbon liability under 3 pricing scenarios
$350
$300
$250
Unknown
financial
impact
without
$200
$150
$100
Indirect
liability
Direct liability
$50
$-
Scenario 1
Scenario 2
Scenario
Scenario
3 4 Regulation without price
Tax ($10/tCO2-e)Permits: 5% target
Permits: 25% target
($23/tCO2-e)
($32/tCO2-e)
© 2011 Energetics Pty Ltd and AgriFood Skills Australia. All rights reserved.