This week we're looking at climate change and business. In this lecture I want to introduce you to carbon footprinting. A company's carbon footprint is its emissions of greenhouse gases over a year. Now if your company doesn't compute its carbon footprint, this would be a great project for you to propose and implement. The reason that having a carbon footprint for business is important, is that without this information, you can't identify places to make improvements. In almost all cases, reducing emissions means using fuels or energy more efficiently. There's a saying in management that you've probably heard. You cannot manage what you do not measure. Now, for a lot of what managers do, this may not be true. But to identify improving your energy use or carbon emissions, it's certainly true. Now, earlier we spoke about baselines and setting them if we were to measure change or improvement. You can think of the carbon footprint as a baseline. It's the starting point against which we're going to measure our efficiency proposals to see how effective they are. To get started, we need to understand that while we call it a carbon footprint, it's really a greenhouse gas footprint. Carbon dioxide is the primary greenhouse gas emitted globally. But the standard protocol for computing a carbon footprint includes six greenhouse gases or families of greenhouse gases. The table shows these greenhouse gases and their global warming potential, their GWP. Greenhouse gas emissions are measured in carbon dioxide equivalents according to the global warming potential of the particular gas being considered. Using carbon dioxide equivalence means that CO2 is given a global warming potential of 1.0. The global warming potential is based on how much infrared radiation the gas can absorb. That is how much energy it absorbs, heat it generates, and how quickly it decays once it's in the atmosphere. The global warming potential for a gas differs depending on the time span used in the measurement. The global warming potentials in this table are for a 100 year time horizon. Even though there are not a lot of fluorinated gases like CFC and HCFC emitted, they have such high global warming potentials, that they have a high impact. The convention is to state greenhouse gas emissions in terms of metric tons of CO2 equivalence, or mtCO2e. So the way greenhouse gases are measured is in metric tons of CO2 equivalence. 1 ton of CFC-12 is equivalent to 10,900 tons of carbon dioxide. The conversion to CO2 equivalence is the amount of the gas times its global warming potential. A company's carbon footprint is its greenhouse gas emissions over a recording period, usually a year. I'll show you the procedure that's become the standard worldwide. It's based on the Greenhouse Gas Protocol and was developed by World Resources Institute and the World Business Council on Sustainable Development. You can download the complete Greenhouse Gas Protocol Corporate Standard Guidance for free from their website. Emissions are broken into four categories called scopes. Scope one are direct emissions from fuel, or refrigerants or other chemicals that your company buys and uses. Here are some examples. The emissions from gasoline or diesel, purchased to operate company owned cars and trucks. Omissions from natural gas, or propane used in company owned boilers, furnaces, heaters, ovens, hot water heaters and so on. Emissions from recharging or the leakage of refrigerants from company owned coolers, freezers, and air conditioning equipment. So scope one tries to capture all of the emissions that occur directly from company owned equipment. This will make a little more sense when we talk about scope two emissions. So scope two emissions. Indirect emissions from the purchase of electricity and also heat and steam. When your company buys electricity, there are often emissions associated with the generation of that electricity, but they don't occur at your company's facilities. The emissions occur at the electrical generation plant or at the steam generation plant, but they're your company's responsibility because you're the end user of the electricity. In 2015, the Greenhouse Gas Protocol folks made a slight revision, actually it's a pretty big revision about how scope two emissions are reported. In essence, they're reported twice. Scope two emissions are reported once, as if all electricity that the company used was provided by its local utility companies. This is called location based. Then they're reported again based on the emissions from the actual mix of electricity that the company purchased. Sometimes these will be the same. But increasingly, companies are concerned about their carbon footprint, so they're signing contracts called power purchasing agreements. You'll see this abbreviated as PPA to buy green electricity from wind farms or solar farms. These are called market based scope two emissions. By showing both the local and the market based electricity used in the emissions, companies can better show what they're doing to reduce their carbon footprint. While still showing how much electricity they're using. I've been reading and re-reading the new policy and I think that if a company generates renewable electricity using on-site solar panels or wind turbans, that electricity is included in the amount used. Any electricity it sells back into the grid has to be subtracted from the amount generated. Here's an example from Apple. The default emissions of 39,507 metric tons carbon dioxide equivalents are the emissions if Apple had bought all of its 54 million kilowatt hours of electricity from local utilities. Its effective emissions, which is another name for market based, were zero because it bought wind power, some green energy from a utility. And then it generated electricity with a micro-hydro system that Apple installed near its data center. So scope two has two metrics, which help show how many tons of emission were avoided by the company's carbon strategy. The carbon emissions associated with producing a kilowatt or a megawatt of electricity varies depending on where the consuming facility is located. Utilities use different fuel mixes. Those using more coal have higher emissions per kilowatt hour than those in say the Northwest, that gets a lot of their power from hydroelectric damns. Now, you can find the regional default emissions on the EPA's eGRID, E-G-R-I-D, website. Search for EPA eGRID emission factors summary tables, and you'll find that. Scope three, these are all other indirect emissions. Companies vary on how many of these they report. These are sometimes divided into upstream and downstream emissions. These are emissions that occur for the most part outside of the company's boundaries. We see a number of these listed on Microsoft's greenhouse gas emissions report. Upstream emissions are emissions embedded in purchased goods and services and emissions from transportation. Downstream emissions are product use and disposal. Within the boundaries, some scope three emissions are from business travel and employee commuting. Notice that Microsoft shows that the emissions are in metric tons of CO2 equivalence. Now, we know about the scopes, in the next lecture, we'll build on this information and compute a carbon footprint, thanks.
