It is becoming clearer by the day that the future of world economic and political activities would rest on our ability to realign our behaviour to the sustainability of the global environment. Of these two horns of global interactions, the economy appears to be the most susceptible to the carbon age.
Industry analyst today estimate carbon management business presently at about 2 trillion dollars and this amount is expected to rise to an astounding figure of about 20 trillion dollars in the next 10 years. The future of industry rest squarely on how we are able to arrest the emission of carbon and its related compounds into the environment. The implication of inaction is the continued depletion of the ozone layer with its inherent raising of global temperatures, melting of polar ice in the northern hemisphere, drought and desertification in Africa, disastrous economic damages due to hurricanes in the Americas, loss of bio-diversity in warming ocean beds and terrestrial habitats and countless other collateral damages.
With the Montréal protocol of 1987 which banned the production and use of chlorofluorocarbons (CFC’s)-substances which deplete the ozone layer, the Basel Agreement on movement of trans-boundary hazardous wastes (1987) which set mitigation’s on dumping of hazardous wastes in developing nations, and more appropriately the Kyoto framework on climate change of 1982, it seems as if the sound of environmental sustainability and the carbon future has been long in coming. Ours is to make the best of it because with it also comes lots of opportunities.
Businesses could save a lot on cost by good energy conservation and carbon reduction management, and also earn incomes that far out stripe their present earnings by getting involved in the trade in carbon, and also earn good social credit for community relationship -a major corporate income mostly unquantifiable in real terms. This becomes a veritable enterprise in converting waste to wealth. Developing nations with low carbon emission accrue income, clean technology and energy production infrastructure from carbon trading by selling pollution permits (CDM) to the developed world.
The concern of major financial and green analysts is that with the fast pace of market growth, companies in developing economies may be left behind if they do not tune in at this early stage of the carbon economic development programs.
The direction of the new US government is a useful indicator to where global policy direction is driving with respect to a green economy. The US stimulus package allocated about $90 billion dollars for development of a new energy future of low carbon emission and sustainable businesses/manufacturing operations. President Obama has further promised to pass laws on carbon cap and trade that would reduce carbon emission.
What this means is that energy companies and other carbon emitting entities that exceed their legal limits can purchase credits from a company that is not using all its available credits, or from companies whose business is to store and sell credits because they create activities or products that reduce carbon emission such as forest plantations which sequester carbon. The carbon issue is an international feature because national boundaries are immaterial to where a carbon laden plume of waste emissions flows. Recently the provincial government in Ontario Canada enacted a green energy act meant to boost incentives for energy conservation and encourage sustainable energy use. This measure practically implies that the government intends to reduce the amount of carbon emission in Ontario. This empowers government agencies to audit consumer energy use.
To sell a house in Ontario with this new regime you may likely pay a green tax of about $300 dollars. Experts are tinkering with policy considerations of carbon taxing fossil fuel from the point of exploration. This means that each unit or litre of fuel will be taxed, and this would definitely be passed on every stage from the point of production to the consumer. All over the globe there is increased capacity and incentives for businesses to develop around environmental sustainability.
For companies, understanding the implications of the series of regulations emanating globally on indigenous, regional and international activities could be quite challenging, more especially as many of these rules are still evolving. Understanding how to manage carbon accounts without increasing overheads and alienating themselves from mainstream global and regional economies and relationships should be a prime goal.
In most developed nations today, companies are required to reduce their green house emission. Inability of a company to do this will increasingly earn dire reprobation’s and/ incur cost from monitoring authorities and could even lead to closures. Though the type and number of companies to be regulated may depend primarily on national interests and exigencies; international businesses and relationship of major global entities is progressively based on how well you impact the environment. Companies and government are increasingly wary of the carbon content of their imports. This boils down to the carbon or ecological housekeeping of the businesses they deal with. This scenario will trickle down to regional and intra national concerns with time.
Aside from a company’s financial status, one question companies, banks, governments, institutions, communities, including international agencies, the United nations , International Monetary Fund and the World Bank, now ask each other before establishing a business’s relationship is – are you in ecological deficit or credit? These questions are more explicit today than implied. In other words they also require knowing of your environmental balance sheet. But they are all the more relevant and important if we are to sustain our activities and productive enterprises with the earth’s diminishing resource base. You are in credit if your carbon foot print is low and in debit if it is beyond your global capacity. This generic measurement index is referred to commonly as global hectares. Quite tasking new business terms for many no doubt. That is why these processes also need to be fine tuned to meet the unique requirements of the developing economies.
This is where the twin financial and environmental consultancy companies like Hayman Corp with global linkages and in house experts on carbon trade, eco-foot printing and benchmarking becomes most essential; to assist companies maintain competitiveness, profitability, social responsibility, track their carbon footprint, produce and communicate conformance report for carbon management which are all imperatives to properly align businesses and governments to still flourish today without losing their foothold in the emergent carbon future.
Kingsley Ejiogu. read more