State and Business Action on Climate Change Judi Greenwald Director of Innovative Solutions Pew Center on Global Climate Change February 23, 2005 California Public Utilities Commission: En Banc Meeting on Climate Change

The Pew Center Founded in May 1998 Independent, non-profit, non- partisan Research (science and impacts, policy, economics, solutions). Education and outreach Business Environmental Leadership Council

The landscape of state policies Direct and indirect GHG emission reductions Almost every state is doing something: –Regional initiatives –Climate Action Plans –Electricity (Renewable energy mandates, carbon adders, Public Benefit Funds, Green pricing) –Transportation (CA GHG vehicle standards, smart growth, transportation management, cleaner fuels and vehicles) –Ag and Forestry (sequestration, renewable energy, biofuels) –Other (e.g., energy efficiency, waste management)

Renewable Energy Mandates HI: 20% by 2020 IA: 105 MW MN: Xcel 1125 MW by 2010 WI: 2.2% by 2011 AZ: 1.1% by 2020 CO: 10% by 2015 NM: 10% by 2011 TX: 2000 MW New by 2009 CA: 20% by 2017 MA: 4% New by 2009 NY: 25% by 2013 ME: 30% by 2000 DC: 11% by 2022 MD: 7% by 2008 NJ: 6.5.% by 2008 RI: 16% by 2009 CT: 10% by 2010 PA: 18% by 2020

Business Environment Leadership Council

BELC Principles Accept that the science compels action Businesses should take concrete steps to manage their own emissions Kyoto is a first step; more must be done to and involve the rest of the world Reasonable policies and strategies can address climate change and sustain economic growth in the U.S.

How companies act on climate change Reduce their own (direct) greenhouse emissions Reduce GHG emissions from their suppliers or use of their products Invest in the development of new technologies and industrial processes Invest and participate in emissions trading, and sequestration or other offsets projects Advocate for reasonable public policy

Why do companies decide to act? Regulatory and price risks – Potential facility regulation State, federal or international – Scenario planning Competitive positioning – Customer demand – Investor demand – Bottom line returns Corporate responsibility – Leadership – Employee recruitment and retention Shape emerging policies

Emissions Inventories and Verification Keys to success: –Simplicity –Credibility –Comparability –Materiality –Flexibility Types of Inventories –Facility-level –Entity-wide –Project-specific –Life-cycle of a product Need to measure before you can manage Assessment of the completeness and accuracy of reported GHG reductions Key questions: who should verify; what to verify against; what purpose; what level of detail

Choosing a corporate GHG target Target type: –Absolute/Relative –Direct/indirect/products –CO 2 /GHG/energy Parties to involve: –Those responsible for implementing the action plan. –Those who will be making core investment and operations decisions (especially if significant shifts in production technologies, products, or sources of energy supply are planned) Data from an environmental management system is valuable for setting a target

Achieving the target Action Plan –Top-down (set at corporate level) –Bottom-up Companies find that “What gets measured gets managed” Communication of target is key –employees –general public –government regulators –investors

Examples of Company Activities Process Improvements –Alcoa –Baxter Energy Demand and Supply Solutions –IBM –Green Power Market Development Group –AEP Waste Management –Air Products and Chemicals Transportation –Boeing –Best Workplaces for Commuters –California Fuel Cell Partnership –Toyota

Conclusions and Insights Corporate culture concerning environmental citizenship plays an essential role in action on GHG Targets (usually profitably) drive: –Innovation –Ideas –Technologies Frequent reaffirmation of commitment to reducing GHGs by senior management (what and why), especially the CEO, is important Many options for type and scope of GHG action available

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