June 27, 2005
COMMENTARY: The neutral zone | An emerging sustainable business strategy seeks to offset a company's carbon dioxide emissions
By John Deans
Third-year student, College of the Atlantic, Bar Harbor
In the past 20 years, Maine businesses have adopted sustainable business practices that once seemed exotic, including recycling and the purchase of energy-efficient equipment. But even as those practices become commonplace, new tools are emerging to help businesses deal with their own environmental impact. One tool that has been gaining momentum in recent years is carbon neutrality. The odd coupling of words is confusing at first, but it presents a great opportunity for businesses to get further down the road to sustainability.
The concept starts with a fact: All businesses contribute to the production of the greenhouse gas carbon dioxide, or CO2, in some way or another. For most businesses, this is through the electricity they buy, the heating fuel they burn and the vehicles they operate. Because these practices involve the combustion of fossil fuels, businesses can be seen as "carbon positive," or contributing to an increase in CO2 emissions. Carbon neutrality simply means adopting new practices so that your business operations do not contribute to a net increase in CO2.
Of course, curbing CO2 emissions isn't entirely simple: How can you be carbon neutral and still power your facilities and drive a car? The first step is to reduce the amount of energy you consume, either through carpooling, conservation or the use of alternative fuels like biodiesel. After reducing your energy consumption, you have to figure out how to handle the remaining impact of your everyday operations.
To really go for it, a business could buy energy generated only from renewable sources such as hydro-electric or biomass power. For some business that is not an option, since renewable energy providers often limit their programs to homeowners or very small businesses, so another approach is to offset your company's CO2 production by helping pay for projects that are generating renewable energy elsewhere.
Last year, College of the Atlantic and the Bangor Theological Seminary announced carbon neutral programs to mitigate their energy usage. More recently, organizers of the upcoming ecotourism conference scheduled for September in Bar Harbor said the gathering would be the first carbon-neutral event of its kind. For these organizations, and for any business considering such a move, the appeal of being carbon neutral may start with an interest in improving air quality. But as with other sustainable business practices, carbon neutrality is emerging as a potential market force that some businesses won't want to ignore.
COA's efforts are an example of the technique. COA receives its electricity at the standard offer rate, supplied by Bangor Hydro-Electric through the grid. This electricity is generated by several sources, but combustion of fossil fuels is the biggest contributor. To offset the CO2 emissions from these fuels, COA purchases renewable energy credits, or green tags, from Vermont-based NativeEnergy. The proceeds from the sale of these credits pay for the generation of wind power in South Dakota.
Because the Maine grid is not connected to the South Dakota grid, COA is not actually receiving that wind energy. However, a given grid only holds a limited amount of energy, so when energy enters a grid from those South Dakota wind turbines it displaces energy generated from non-renewable sources. COA pays for the displacement of however much non-renewable energy it uses in a given year, making COA's electricity use carbon neutral and reducing the emissions floating into our state.
Not every business may feel an altruistic pull toward going carbon neutral, but businesses also can find branding and marketing benefits in being carbon neutral. Certain customers like shopping at a business that cares about the environment, because they feel that their money is also supporting good practices. Some customers may even alter their shopping choices specifically to support a company that resonates with their ethics.
A more complicated marketing niche is selling carbon neutral products. If you can prove that all of the carbon emissions related to a product's manufacturing and shipping have been offset, it can be marketed as such. This strategy is similar to the rise of organic food or sustainably harvested lumber, which have become undeniably strong markets. Admittedly, consumers are less knowledgeable about carbon neutrality, but businesses can do the educating.
The biggest drawback to being carbon neutral is the added expense. Green power can cost about 10 cents per kilowatthour, compared to about seven cents for standard offer electricity, and a green tags program that offsets 12 tons of CO2 emissions annually costs about $145, or 40 cents a day.
With rising fossil fuel prices these options may be affordable sooner than expected, but for now businesses will have to bear the extra cost. Painful though that may seem at first, think of the added expense as the cost of a marketing edge, or an initial payment toward a business practice that may someday be as common as recycling.
In the past 20 years, Maine businesses have adopted sustainable business practices that once seemed exotic, including recycling and the purchase of energy-efficient equipment. But even as those practices become commonplace, new tools are emerging to help businesses deal with their own environmental impact. One tool that has been gaining momentum in recent years is carbon neutrality. The odd coupling of words is confusing at first, but it presents a great opportunity for businesses to get further down the road to sustainability.
The concept starts with a fact: All businesses contribute to the production of the greenhouse gas carbon dioxide, or CO2, in some way or another. For most businesses, this is through the electricity they buy, the heating fuel they burn and the vehicles they operate. Because these practices involve the combustion of fossil fuels, businesses can be seen as "carbon positive," or contributing to an increase in CO2 emissions. Carbon neutrality simply means adopting new practices so that your business operations do not contribute to a net increase in CO2.
Of course, curbing CO2 emissions isn't entirely simple: How can you be carbon neutral and still power your facilities and drive a car? The first step is to reduce the amount of energy you consume, either through carpooling, conservation or the use of alternative fuels like biodiesel. After reducing your energy consumption, you have to figure out how to handle the remaining impact of your everyday operations.
To really go for it, a business could buy energy generated only from renewable sources such as hydro-electric or biomass power. For some business that is not an option, since renewable energy providers often limit their programs to homeowners or very small businesses, so another approach is to offset your company's CO2 production by helping pay for projects that are generating renewable energy elsewhere.
Last year, College of the Atlantic and the Bangor Theological Seminary announced carbon neutral programs to mitigate their energy usage. More recently, organizers of the upcoming ecotourism conference scheduled for September in Bar Harbor said the gathering would be the first carbon-neutral event of its kind. For these organizations, and for any business considering such a move, the appeal of being carbon neutral may start with an interest in improving air quality. But as with other sustainable business practices, carbon neutrality is emerging as a potential market force that some businesses won't want to ignore.
COA's efforts are an example of the technique. COA receives its electricity at the standard offer rate, supplied by Bangor Hydro-Electric through the grid. This electricity is generated by several sources, but combustion of fossil fuels is the biggest contributor. To offset the CO2 emissions from these fuels, COA purchases renewable energy credits, or green tags, from Vermont-based NativeEnergy. The proceeds from the sale of these credits pay for the generation of wind power in South Dakota.
Because the Maine grid is not connected to the South Dakota grid, COA is not actually receiving that wind energy. However, a given grid only holds a limited amount of energy, so when energy enters a grid from those South Dakota wind turbines it displaces energy generated from non-renewable sources. COA pays for the displacement of however much non-renewable energy it uses in a given year, making COA's electricity use carbon neutral and reducing the emissions floating into our state.
Not every business may feel an altruistic pull toward going carbon neutral, but businesses also can find branding and marketing benefits in being carbon neutral. Certain customers like shopping at a business that cares about the environment, because they feel that their money is also supporting good practices. Some customers may even alter their shopping choices specifically to support a company that resonates with their ethics.
A more complicated marketing niche is selling carbon neutral products. If you can prove that all of the carbon emissions related to a product's manufacturing and shipping have been offset, it can be marketed as such. This strategy is similar to the rise of organic food or sustainably harvested lumber, which have become undeniably strong markets. Admittedly, consumers are less knowledgeable about carbon neutrality, but businesses can do the educating.
The biggest drawback to being carbon neutral is the added expense. Green power can cost about 10 cents per kilowatthour, compared to about seven cents for standard offer electricity, and a green tags program that offsets 12 tons of CO2 emissions annually costs about $145, or 40 cents a day.
With rising fossil fuel prices these options may be affordable sooner than expected, but for now businesses will have to bear the extra cost. Painful though that may seem at first, think of the added expense as the cost of a marketing edge, or an initial payment toward a business practice that may someday be as common as recycling.
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