I listened to a sermon recently about signs and covenants. Don't tell the rector but my mind wasn't entirely on the message. As I listened, I couldn't resist associating signs and covenants to our industry's dilemma. All the signs point to a failure to respond to a growing problem of environmental irresponsibility, i.e., the generation of byproduct that is so huge it boggles the mind. And then covenant. What covenant? We haven't made any commitment to anyone – not to ourselves, our customers and vendors, or to the entire supply chain. Talk is cheap.
I thought "signs and covenants" was a good lead-in to "carbon footprint," which is complicated enough without adding a religious overtone. I really do believe that we've had plenty of signs that say our industry is at a crossroads. When you talk to end users, whatever the state of the economy, they are totally focused on sustainability and the reduction of carbon footprint. We are seeing this more and more. The disconnect is that the end user's vision isn't moving down the supply chain. Their suppliers, the OEMs and converters, don't realize that by meeting environmental best practices, by reducing carbon footprint, they will actually improve their bottom line. Reducing energy usage, better management of road vehicles, diverting byproduct from landfills or incineration, better environmental management in offices – these and other metric improvements translate not only to a better bottom line but to a smaller carbon footprint.
Let me tell you, baby, times are changing. Get ready to measure carbon footprint. If you won't make changes to improve your position with your customer, you will ultimately be forced by government to reduce your carbon footprint. As usual, California is leading the assault.
California passed Assembly Bill 32 (AB32) which imposes the nation's toughest restrictions on greenhouse gas (GHG) emissions. Admittedly, the law will at first apply only to those in the power sector and to emission sources that have large stationary combustion. It is likely, however, that it will be extended later to cover many other sources of GHG.
AB32 defines the parameters of the California Global Warming Solutions Act of 2006. The most significant part of the legislation is a mandate that GHG emissions be reduced to 1990 levels by the year 2020. The goal is a 25 percent reduction in emissions over that 30-year period. Measurement starts this year, in 2009.
So if you operate a coal fired boiler in California, you will be subject to the law. Most of us in our industry in the USA won't be affected unless, of course, you're using this kind of energy to make paper or chemicals or coatings. Mind you, this is phase one. And keep in mind that this legislation could very well be the template for future programs in other states and by the US Environmental Protection Agency. This is landmark legislation that ultimately may affect everyone in the United States.
What exactly is a carbon footprint? As coal, oil, and natural gas are burned, carbon is released back to the atmosphere, increasing concentrations of carbon dioxide. If we have natural balance – rain, photosynthesis, natural decay – the system works. We digest the CO2. But when we increase emissions of greenhouse gases to a point where we have more CO2 than we can consume, scientists believe, we get out of balance. We have extreme weather changes, for example, that cause rising ocean levels, earthquakes, tsunamis, hurricanes, torrential rains, droughts, and other global weather disasters.
Whatever in the world does this have to do with us?
Our byproducts, for the most part, are landfilled. Our byproduct – matrix, liner, inks and glue – combines with other waste and creates methane gas. Methane is released into the atmosphere and adds to the amount of GHG. Our collective carbon footprint adds to the imbalance. Oh, yes, we are part of the problem.
Keep in mind there are six "Kyoto" gases: CO2, CH4, N2O, HFC, PFC, and SF. All of these contribute to the problem. Yes, it is complicated. But, suffice it to say, we are part of the problem and, unless we make conscious choices to improve, change will be forced on us, as in the case of California, by legislation.
Governments across the world have introduced measures to limit GHG. In Europe these measures include an elaborate emission trading scheme, the EU-ETS. In the UK there are two carbon reduction schemes: the Climate Change Agreement and the Carbon Reduction Commitment. The CCA is a straight carbon tax while the CRC is a cap and trade option similar to what we're talking about here in America.
All of these actions are directed to the big emitters. But all business is not far behind. For example, experts believe that 60 percent of all GHG is generated by consumers. This could mean, ultimately, a federally mandated carbon labeling system that is applicable to consumer products. I know I'm not far off on this because it is already occurring in England. Tesco, the third largest retailer in the world, has calculated the carbon footprint on 20 of its most popular brands. They have labeled each product with "total carbon footprint," that is the total amount of carbon dioxide and other gases that are emitted during the product's life, including production, use, and disposal. Carbon footprint is for real.
Signs and covenants. The signs say improve. If we don't we will lose market position. The covenant we all need to make is a commitment to change so that from year to year we reduce our carbon footprint.
Another Letter from the Earth.