NRG 173: Carbon Footprints for Climate Action in Complex Organizations Spring Term 2011 Class 18 of 20 May 31, 2011 Kelly Hoell Good Company Eugene, OR

overview McKinsey global GHG abatement cost curve introduction to climate policy physical climate risk for Oregon start reviewing for final exam

objectives continue to understand the risks and opportunities from climate change understand how climate policy has evolved to where it is today in the US Review course material for integration into the real world! (and to get ready for the final…)

McKinsey’s Pathways, 1 global abatement cost curve –also “GHG emissions reduction supply curve” (abatement = mitigation = emissions reduction) –aggregate opportunity for reductions, or “the business case for climate action” (missing from public discourse) –static assessment of twenty-year opportunities, now and coming to us in the short-term sensitivity analysis not apparent (just one graph) –cost is a life-cycle consideration, but tricky –example of this trickiness: price of oil (Fig ) –this example provides a general platform for imagining changes to other parameter values McKinsey: GHG abatement cost curve

McKinsey’s Pathway overall vibe?

McKinsey’s Pathway overall vibe?

McKinsey’s Pathways, 2 sensitivity analysis not apparent (just one graph) cost is a life-cycle consideration, but tricky example of this trickiness: price of oil (Fig ) this example provides a general platform for imagining changes to other parameter values McKinsey: GHG abatement cost curve

McKinsey’s Pathway 6.2.1

McKinsey’s Pathways, 3 positive NPV ≠ “easy investment to make” some “smaller” investments (still big, but smaller per MT CO 2 e) could have “high bang for buck” –but there’s still a net cost to reducing emissions –corollary: a cost of carbon really matters, and its precise trajectory really matters opportunities clumped at origin –changes in practice but not big capital outlays –small net cost but not necessarily easy “change” McKinsey: GHG abatement cost curve

McKinsey’s Pathway 9

carbon footprints: from mandatory to…useful? Comprehensive reporting for informed climate strategy: all of Scopes I and II risk assessment of and scenarios for Scope II quantify and/or estimate all Scope III sources Current proactive voluntary reporting beyond Scopes I and II: dabbling in Scope III The Climate Registry’s (TCR) General Reporting Protocol (GRP) Scopes I and II, except for de minimis emissions Mandatory reporting (e.g. WA, OR, CA): Scope I, maybe Scope II or worse, permit-based Climate Policy

Climate policy… at various levels Climate Policy

physical climate risk for Oregon, 1 Very likely to occur –increase in average annual air temperatures and likelihood of extreme heat events –changes in hydrology and water supply; reduced snowpack and water availability in some basins; changes in water quality and timing of water availability Likely to occur –Increase in wildfire frequency and intensity –Increase in ocean temperatures and ocean acidification –Increased incidence of drought –Increased coastal erosion and flooding –Changes in abundance and distributions of species –Increase in diseases, invasive species, and pests –Loss of wetland ecosystems and services Physical Climate Risk

physical climate risk for Oregon, 2 More likely than not to occur –Increased frequency of extreme precipitation events and incidence and magnitude of damaging floods –Increased incidence of landslides Physical Climate Risk

climate risk – who cares? Physical Climate Risk

Class 1: major concepts Definitions of sustainability –Limits, needs, fairness –What matters most, ability to make connections, common focus/action areas Introduction to climate –Climate change is an energy problem Review for final exam: class 1

environment society economy one view of sustainability… Review for final exam: class 1

WARNING: Beware of carbon goggles! course focus: GHG emissions however, GHG-generating activities often have other environmental, financial, health or other concerns: –air pollution –habitat degradation/destruction –fossil-fuel and other natural resource extraction –pollution and depletion of freshwater supplies –loss of topsoil –financial constraints –more Review for final exam: class 1

please memorize this for test at 2 PM Review for final exam: class 1

overview of US emissions nomenclature Review for final exam: class 1

major take-away(s)?

squeezing value from energy (and carbon) Emissions Carbon Intensity of Energy Energy Intensity of Economy The Economy Review for final exam: class 1

squeezing value from energy (and carbon) Review for final exam: class 1

squeezing value from energy (and carbon) Emissions Carbon Intensity of Energy Energy Intensity of Economy The Economy ~Stable Review for final exam: class 1

What do you measure? Kyoto gases and Global Warming Potential (GWP) carbon dioxide equivalent (MT CO 2 e) Review for final exam: class 2

global GHG emissions by gas type Source: Vattenfall Review for final exam: class 2

pop quiz! 1.____________SF 6 2. ___________ 3._____________HFCsPFCs SCOPE 1 4. Circle one: Direct/Indirect SCOPE 3 6. Circle one: Direct/Indirect SCOPE 2 5. Circle one: Direct/Indirect 7. _______________ 8. _______________ 9. _____________________ 10. ________________________ 11. ________________________ 12. ________________________ 13. ________________________ 14. ________________________ 15. ________________________ Review for final exam: class 2

two views of US emissions Source: EPA’s Opportunities to Reduce Greenhouse Gas Emissions through Materials and Land Management Practices Review for final exam: class 2

defining the business case Cost savings Efficiency in use of energy, water, materials and other inputs = reduced environmental impact, sometimes also improved working conditions Increased revenue or market share Appeal to new markets and/or charge a price premium by delivering new form of value Risk reduction Reduce exposure to legal and image risk associated with being barely compliant Internal stakeholders Opportunities for higher morale and loyalty, lower turnover, greater sense of purpose and direction, clearer focus on goals External stakeholders Goodwill in communities where facilities are located or from which inputs are sourced, reputation benefits with regulators and advocacy organizations There may also be alignment with mission. Review for final exam: class 2

conducting a GHG Inventory – an overview 1.identify relevant protocols and tools 2.set inventory boundaries 3.collect data 4.revisit inventory boundaries 5.finish data collection 6.calculate emissions 7.write report 8.share results with stakeholders 9.develop climate action plan (Plan as much as reasonable. Be ready for loops.) Review for final exam: class 2

business activity (driving owned fleet) GHG emissions (CO 2 e) unit (gallons of gas) understanding calculations: math is fun! other math emissions factor (CO 2 / gallon gas) Review for final exam: class 7

calculate emissions - it’s as easy as 1,2,3! 1.activity data (kWh, therms, gallons, etc.) 2.emissions factors for each activity 3.unit conversion factors Review for final exam: class 7

tricky emissions factors: electricity local (EWEB).18 lbs/kWh regional (NWPP).90 lbs/kWh national (US average)1.3 lbs/kWh Electricity Emissions Factors Matter! electricity consumption unit (kWh) GHG emissions (CO 2 e) other math emissions factor (CO 2 e / kWh) What emissions factor do you use? Review for final exam: class 8

electricity sensitivity analysis Review for final exam: class 8

10/29/ emissions scenarios, example 2 Review for final exam: class 8

Feel free to contact me: Kelly Hoell (541) 341-GOOD (4663), ext. 217 see you Thursday; bring your questions!