Environmental Engineering Reference
In-Depth Information
BACKGROUND
know when and how they will be required to reduce
their emissions. Repeatedly they have stated that in
an era of uncertainty with regards to regulation on
climate, it is impossible for them to properly plan
their energy investments. Companies need to know
what type of regulation they should anticipate so
they can plan their investments properly. Energy
infrastructure is not replaced very frequently and
energy upgrades often involve expensive capital
investments that do not pay back for many years. In
most of the U.S. climate change policy proposals,
businesses are given only a 3-5 year ramp up period
to prepare for regulation (Pew Center, 2010). In
addition, these climate policy proposals do not
define precise GHG measurement and reporting
methodology. A short ramp up period that lacks
proper greenhouse gas accounting guidelines will
not provide companies enough time to make the
energy investments needed to meet emissions
reduction goals.
“Unlike market-based approaches to environ-
mental management…voluntary programs have
emerged as a pragmatic response to the need for
more flexible ways to protect the environment”
(Morgenstern & Pizer, 2007, p. 23). It has been
almost three years since the launch of C4C, and
10 years since the CDP was launched. During
this time 2,500 organizations have measured
and disclosed their emissions via CDP (Carbon
Disclosure Project, 2010). Voluntary emissions
reduction platforms such as C4C and CDP help
businesses think about, frame and communicate
emissions data. However, it is unclear whether
companies that participate in these programs are
actually reducing their GHGs in absolute terms.
The absence of regulation means that reporting
on emissions reduction is not consistent between
companies and between reporting years. This
study examines disclosures by C4C participants
in attempt to answer the question:
Do voluntary
reporting schemes work to reduce corporate green-
house gas emissions in absolute terms and could
they possibly serve as a substitute for regulation?
“Despite almost a decade of public and private
efforts in voluntary reductions in the United
States, emissions of greenhouse gases rose 14.1%
from 1990 to 2000, an average annual increase
of 1.3% (Gardiner & Jacobson, 2002, p. 32).
Scientific consensus calls for dramatic reduction
in emissions in order to avoid the worst impacts
of climate change (Meinshausen, 2006). Starting
in January 2010, the United States Environmental
Protection Agency (EPA) has mandated that the
13,000 highest GHG polluters measure and report
their emissions (Plumer, 2009). Many companies
do not yet have the expertise to count their emis-
sions. However, others have been participating
in voluntary disclosure programs and are already
measuring and reporting their emissions, albeit
with varying degrees of coverage. These compa-
nies have spent years learning how to navigate the
complex world of carbon foot printing and may
have a competitive advantage as the EPA's new
program starts up. They have not only counted
their emissions, they may have also determined
how much energy they are using, and possibly
wasting. This simple action of reviewing energy
use has allowed many companies to identify where
and how to reduce energy use, and therefore save
money (Plumer, 2009).
Voluntary Reduction Programs
A wide range of emissions reduction programs
have evolved in response to different government
climate regulations. These programs tend to fit
into three categories described below in Table 1.
Voluntary Disclosure Programs
Voluntary reporting programs such as those de-
tailed below are essential in preparing companies
for carbon regulation and emissions trading. These
programs prompt companies to inventory and
