Industries Can Lead in Carbon Reduction

Rather than merely adhering to national climate-change rules, industries, such as cement, can lead the way with their own global agreements

by Elaine Coles

The agreement by member countries at the recent G8 summit in Japan to "consider and adopt a goal of achieving at least a 50% reduction of global emissions by 2050" was widely hailed as a success. But in truth, the position of the world's richest nations has barely budged from last year, when they agreed to "consider seriously" halving global emissions. Furthermore, there are no details yet on how these cuts should be shared between rich and poor nations, nor on what the baseline for such cuts should be.

The world cannot afford to make progress on climate change one word at a time. According to the Intergovernmental Panel on Climate Change (IPCC), the room for maneuver in keeping global temperature increases to 2°C above preindustrial levels—the EU's target—is extremely limited, not least because global emissions continue to rise.

So action is needed, fast. Yet signs are few that global negotiations to devise a post-2012 climate agreement will reach a sufficiently robust agreement. True, the U.S. will likely become more engaged in the policy process on climate change following November's election. But big developing nations, such as China and India, remain resistant to carbon-reduction targets—and their resistance would dampen American commitment.

Industrial Initiatives

Another measure pushed by the G8's Japanese hosts, however—one endorsed at the U.N. Framework Convention on Climate Change (UNFCCC) talks in Bali last December—offers real prospects for rapid action to reduce emissions around the world. Rather than targeting whole nations and governments—or, at the other end of the scale, individual facilities—this approach focuses on key industrial sectors that get together and agree on global emissions targets.

The sectoral approach has several advantages. First, industry in many cases is able to respond faster than governments to the need to cut emissions, both in making decisions and in implementing them. Second, industry often is in a better position to judge what the most effective mitigation technologies and activities are. And third, the approach provides a number of ways to engage emerging markets. For instance, once a sector agrees on targets, companies can take on the job of facilitating internal technology transfer across national borders. As a result, developing countries can play a major role in cutting emissions without having to sign up to the national targets they so dislike.

Working sector by sector provides a framework for sharing best practices, expertise, and guidance without falling afoul of competition regulation. It also helps address the concern among European companies subject to the EU Emissions Trading Scheme that they face costs their competitors elsewhere do not. Combating emissions sector by sector creates a more level playing field within industries and across borders. And it discourages "carbon leakage," whereby businesses move to avoid the expense of complying with regulation—and effectively export their emissions to other countries.

For all these reasons, a sectoral approach to addressing sustainability issues is likely to work better than a system of many different externally imposed controls.

The Example of Cement

One industry well-suited to spearhead sectoral compliance is cement. The Cement Sustainability Initiative (CSI)—a project to help the industry consider and act on sustainability challenges, under the auspices of the World Business Council for Sustainable Development—has been addressing emission issues since 2002 and provides a model for how sectoral approaches might develop. The CSI's initial step was to develop the world's first sector-specific carbon dioxide protocol and a database of current, accurate data for CO2 and energy performance among cement companies worldwide.

CSI members then defined and made public their baseline emissions and now report their emission figures every year. The process is verified by independent, external auditors to ensure the data's accuracy. The CSI measurement protocol is now used by 80% of the world's cement industry, so most companies are talking the same language on emissions.

The development of this global database of CO2 emissions and information on energy performance has had a measurable impact, with the average net emissions of the CSI's 18 members falling from 760kg CO2 per metric ton in 1990 to 670kg per ton in 2007.

Sectoral approaches won't be suitable for all areas of the economy. But some of the biggest sources of carbon emissions, such as steel, aluminum, and electricity generation, could benefit greatly from such initiatives. Ideally, industry-specific efforts will co-exist alongside discussions at the national and international levels—and the result will be coordinated and realistic movement toward a global climate agreement.

Elaine Coles is a consultant and researcher based in Bristol, England. She has written extensively on climate change, energy use, water, and waste, and their impact on the manufacturing industry.