Footprint and why it matters
From Seedawiki
Contents |
Introduction
Carbon footprint measures the carbon dioxide an activity (or household, organisation, sector or area) releases – a rough measure of its contribution to climate change.
Ecological footprint measures the total burden an activity places on the planet’s environment, including energy but also use of land, physical resources, pollution and waste.
For more detailed definitions and explanations, see What is a footprint?
The South East Diamonds (along with the rest of the ‘developed’ world) have far bigger footprints than the planet can support: current lifestyles are literally unsustainable. See Baseline footprints, assessment and interpretation
Ambitious footprint reduction targets have been set nationally, regionally, in the Diamonds, and by some individual authorities.
Achieving these will require a step change in action.
This publication and website are designed to help achieve these.
What is a footprint?
The South East Regional Spatial and Economic Strategies each set targets for both the ecological footprint and carbon dioxide emission reductions. The latter is often referred to as a ‘carbon footprint’ although the way each of these ‘footprints’ is defined and measured is different.
Baseline footprints, assessment and interpretation
The calculation of each Diamond’s ecological and carbon footprint is derived from local authority calculations using Resource & Energy Analysis Programme (REAP) data.
Several reports are available covering local authority, South East region and national footprints.
Footprint reduction targets
To illustrate the extent of the challenge facing the Diamonds, of the top 20 highest footprint local authorities (LA's) in the UK for total ecological footprint (EF), 5 are from within the SE Diamonds. Of the top 20 for housing EF, 3 are from the Diamonds; of the top 20 for transport EF, 4 are from Diamonds; for Food, 1 out of 20. See the Diamonds Footprint Report for more details.
No Diamond LAs feature in the bottom 20 for housing, food or transport.
Footprint targets have been set for the UK, the South East and the Diamonds as well as some individual authorities within the South East. However, these use different methodologies and are therefore not always directly comparable.
Does footprint reduction pay?
Even with energy prices back down after the 2008 ‘spike’, a huge range of footprint reducing investments pay back quickly.
Business gains in the South East
Some recent examples of SE businesses profiting from footprint reduction:
ADM Computing, based in Canterbury, has reduced vehicle fuel costs by 20% - 30%; saving £200 - £300 per month out of their previous £1000, by giving customers as much support as possible remotely, and carefully planning work routes for engineers. More details.
Bio Health have saved £25,000 since 2004 through a methodical approach to avoiding, reclaiming and reusing wastes. Details: Bio Health
Bio Health
Rochester based herbal medicine company Bio Health adopted a positive sustainability policy in 2004, with an eco manager each for the factory and the office, monitor utility use, encouraging everything from switching lights off to saving water. This has achieved:
- Water saving equipment in the men’s toilet cut water use by 80%, saving 70 cubic metres a year, or nearly £500 over five years.
- Re-using all paper, then shredding it for packaging, replacing costly and less sustainable plastics.
- All waste product ingredients and ‘household’ waste went to a composter;
- plastic waste was given to a local school for art lessons; waste sacking and plastic sheeting went to local allotments holders.
- Waste to landfill plummeted from 1 large skip a fortnight to 1/2 skip a month, with savings in 2004 of £150 per month
They estimate direct bottom line savings at £25,000 over four years. However they estimate publicity and reputation benefits, including winning awards and high profile conferences, as worth well over £200,000 in advertising equivalent. More details.
Energy price futures
Up to 2008 a long period of low energy prices made energy saving investments look a poor deal. Then oil prices rose rapidly to an unprecedented $147 a barrel in July 2008. Prices of gas and electricity went up too. Environmentalists said ‘we told you so’, and argued that energy conservation was now a no-brainer: essential for cost control as well as for climate security.
Then prices tumbled to below $50 a barrel for the first quarter of 2009, making the conservation case much weaker. However predictions that the price might dip to $25 a barrel in 2009 or even lower were not borne out: by November the price was nudging $80 again. (Money Week offers a neat graph of oil prices).
The International Energy Agency predicts [2008 World Energy Outlook] that ‘the long-term path for the oil price is still up’: likely to top $200 per barrel by 2030 on the back of booming demand in emerging economies like China and India. "While market imbalances will feed volatility, the era of cheap oil is over," warned Nobuo Tanaka, executive director of the IEA [1].
Indeed it warns that low prices now may cause higher prices later. Former environment minister Michael Meacher warns that low prices now will make oil and gas companies all over the world scale back their investments in developing new supplies, so that when the world economy comes out of recession, and demand grows again, supply will be short: ‘A prolonged slump in the oil price at below $50 a barrel will thus inevitably lead to another cycle of shortages and soaring prices. This intense price volatility is the first stage of the devil's see-saw that is likely to accompany the coming of Peak Oil [see 1.3.2.1 Peak Oil], which is widely expected within the next five years.’
In a straw poll of 18 experts (mainly operating out of businesses with a base in the South East) at a Best Foot Forward event in October 2008, all predicted over $100 a barrel in 2020, with a mean and median of around $200. [2]
What does this mean for the Diamonds? The only certainty is uncertainty. But the likelihood is continued price rises, with turbulence along the way.
Message: Reducing footprint is not only good for sustainability and costs, it is also an important way to hedge against future risks and uncertainties.
This is particularly significant because energy price rises can be bigger – and harder to cope with – than price drops, a point that thinking only of the payback of investments can disguise: see 1.3.2.2 payback the wrong end of the telescope?
The Carbon Reduction Commitment
The Carbon Reduction Commitment (now renamed CRC Energy Efficiency Scheme) applies to the 5,000 – odd biggest energy using organisations which are not already covered by the European Union Emissions Trading Scheme (EUETS). This will include many larger local authorities. Every organisation using more than 6000 MWh a year through half-hourly meters for purposes other than transport will be required to measure and report its energy use from 1 April 2010, and buy allowances from the Government to cover it from 1 April 2011. The Government will give all the money paid for permits back to the participating organisations - but reallocated: those who have done best at improving their emissions will get more money back, those who have done worst will get less. League tables will be published. Performance will be assessed partly on absolute energy consumption, partly on consumption per unit of activity, to make some allowance for organisations growing or shrinking. In the early years the performance assessment will also take into account how hard organisations have worked to reduce emissions before the scheme came into effect: this is intended to avoid potential unfairness to those who have already done lot and therefore have fewer easy opportunities.
The scheme is complicated. Many details are still not settled at the time of writing (November 2009). The latest information is available on the Department of Energy and Climate Change's web page for the scheme. However the overall intention is clear: to give big energy users an increasingly strong incentive to cut their energy use by rewarding those who do best and penalising those who fall behind.
Peak oil
‘Peak oil’ is the proposition that oil production will peak at a certain date, after which it will inexorably get harder, slower and more expensive to extract. (The Association for the Study of Peak Oil argues this in detail). Mature oilfields such as the ‘lower 48’ US States and the North Sea have already peaked. There is considerable argument and uncertainty about when the global peak will occur, but a lot of evidence suggests it is imminent. There is also contention about how far its effects can be put off by, for example, opening up previously prohibited areas for exploration, developing dirtier alternatives (for example, oil shales and sands), or deriving petroleum substitute from coal. But uncertainty about the details does not detract from the overall message that fossil hydrocarbons are going to get scarcer, costlier and less secure, very probably within the lifetime of investments and strategic decisions made now.
Payback: the wrong end of the telescope?
The simple payback period is how long it takes for energy (or waste or water) savings to pay back the costs of efficiency investments. This is a handy, and widely used, way to compare the cost effectiveness of footprint reduction measures with each other, and with alternative uses of the money. Many footprint reduction investments pay back within 2-4 years, a return of 25% to 50% on capital – outstandingly good by most standards. (All these figures ignore interest and inflation, which become significant over longer periods.)
Obviously if energy prices double, payback times will halve. And vice versa. However thinking solely in terms of payback can give a misleading impression of the relative importance of different cost changes. The following example demonstrates this.
Suppose that you are trying to decide whether to invest £600 in an energy efficiency improvement that would save you £200 worth of energy a year at current prices – ie a 3 year payback. How would this change if energy prices changed? If energy went up 50%, the investment would save you £300 a year instead of £200 and the payback period would shorten from 3 years to 2 years. If instead energy went down 50%, the investment would only save you £100 a year, and the payback would lengthen from 3 years to 6 years. A 3 year increase feels bigger than a 1 year decrease, so it would be easy to assume that the potential downside risk of a fuel price cut reducing the savings from the efficiency investment was bigger than the potential upside benefit of bigger savings if energy prices went up.
But this looks very different if, instead of payback, you consider your actual energy costs. If your energy costs go down, that’s good news, and if they don’t go down as much as they might because you have already invested in reducing them, that might be annoying but probably not disastrous. In contrast, a big increase in energy costs can be hard to cope with, so reducing their scale will be very welcome. For most organisations in times of uncertainty and turbulence in energy and other resources, the benefit of hedging against increased costs if prices rise will (within reason) outweigh the disbenefit of taking longer to pay back the investment if prices fall – the opposite of the message that payback periods might seem to give.
Message: when assessing energy and other footprint reduction investments, consider how they would affect your future energy / resource costs – and especially your vulnerability to future price rises – and not only payback periods.
