Carbon market-related business opportunities and developing the strategic framework for realizing them

The Roadmap Is a Guide, Not a Recipe
This Roadmap is intended to guide companies from PSOJ in Jamaica and from CAIC in Trinidad & Tobago in identifying carbon market-related business opportunities and developing the strategic framework for realizing them; it is not intended be a“cookbook” approach for implementation.
• There is no single “strategy” for going to the Carbon Market. Each company will develop a unique approach based on its perception of risks and opportunities, specific targets, available resources, schedule, etc.
• Each company has a unique culture and will develop its own management approach to realize carbon market opportunities.
• Extensive information on managing carbon market strategically is available. Not only in the presentations provided in this workshop but also in the expense information references provided in the Toolkits. PSOJ and CAIC have developed and posted other guidance and tools for your own needs.
• It is comprehensive, intended to help companies avoid missing potential benefits by addressing opportunities for enhancing:
    • Energy savings,
    • Energy efficiency, and
    • Reducing greenhouse gases emissions and carbon footprint
  • It is scalable and can be applied at the level of an individual process or facility, or enterprise-wide.

It should be noted too that while the roadmap is unique in its focus on carbon market planning and management, the overall logic and approach is consistent with established approaches to strategic planning and management across a variety of disciplines.

The uniqueness—and value—of this project is its focus on Carbon Markets and the fact that it represents the collective wisdom of many PSOJ and CAIC companies consolidated in a format that will be useful for many others.

The Roadmap: A Summary

There are four steps in the overall process:

  • Step 1: Initial Assessment
  • Step 2: Design the Process
  • Step 3: Evaluate Opportunities
  • Step 4: Implementation

Step 1: Initial Assessment

This first step involves a thorough, organization-wide assessment of its carbon footprint, the main emissions sources and the importance of reducing emission to the company in relation to its overall needs, risks, goals, image and reputation, and of potential business opportunities through carbon markets. Properly implemented, the assessment can provide clear direction as to the potential inherent in a strategic approach to carbon planning and management.

The key question posed by the assessment process is “what are the business opportunities related to carbon markets?”

This framework provides the context for evaluating carbon market opportunities as more than simply a cost of operation.

Companies that have embarked on such an evaluation have asked themselves very fundamental questions about how carbon markets relate to:

  • Potential business opportunities;
  • Potential business risks; and
  • The overall “positioning” of the company

The bottom line is that while cost is an increasingly important factor, companies evaluate the importance of decreasing greenhouse gas emissions from multiple perspectives. Other factors such as risk management, reputation, and even product-line issues may carry weight as well.

The outcome of this step is a decision: to go forward with a more strategic approach to carbon management, or not.

Step 2: Design the Process

The design and planning process begins with an assessment of a company’s actual carbon footprint or greenhouse gases emissions versus “business as usual” practices and an investigation into the most promising solutions for deploying emission reduction projects. Taking this approach—asking the fundamental question of “how much greenhouse gases emissions do we produce and how much of them would be reduced?”—encourages thinking beyond the familiar and the comfortable and exploring possibilities for innovation. It is important that process design and planning consider all factors that could inhibit success, from corporate culture to appropriate scale to resources, funding and organization.

Key questions to consider:

  • At what scale should we initially approach carbon management: a single facility or division, or enterprise wide? This decision is driven by the potential for success in the early stages and consequent sustainability of the overall management process.
  • What technical and financial resources are available (this is closely related to the scale question): are they internal, external using carbon markets, or both? What are the competing priorities for these resources?
  • Are there programs or processes already in place with which carbon management could be integrated?

These and other questions frame the overall approach that a company will choose and can greatly influence the chances for early success, which is critical to establishing a sustainable management process that will maximize potential benefits.

Beside this to deliver further carbon emissions reductions the following actions should be considered:

  • To enhance existing policies to continue to drive down emissions.
  • Carbon leakage and unnecessary bureaucracy must be guarded against.
  • Renewable Energy Sources and CHP (Central Heating and Power/Cogeneration) incentives should be provided.
  • More support should be given to help small and medium emitters to reduce their carbon footprint.

Step 3: Evaluate Opportunities

This step is the “nuts and bolts” of the carbon strategy and management planning process because it is where real opportunities can be realized. It is where the “real work gets done,” but because of its potential size and complexity, especially in larger, diversified and carbon intensive businesses, if not well mapped out and systematically approached, significant opportunities may be missed, or momentum may be lost that will be difficult to regain.

Essential to this third and crucial step in the process is a greenhouse gases emissions baseline calculation that reflects the types, quantities, and costs and/or revenues of potential emission reduction activities in each significant component of the business. Ideally this will include facilities, operations, and transportation and distribution, and in some cases even the energy consumed by the product itself, especially if that issue i s increasing in importance in a business sector. Also, for certain companies, this will include an assessment of new or expanded energy-related products and services that may benefit the company.

Emission reductions or Carbon assets opportunities fall into three categories, althoughnot all will be relevant for all companies:

  • Improving efficiency in your whole process such as reducing energy use, reducing both cost and greenhouse gases generation.
  • Energy supply management can help to control costs, emissions and assure reliability.
  • Carbon management techniques can help existing products to be more competitive in the marketplace or create new markets.

At any point in time, in addition to the carbon market opportunity, the cost of energy, a range of factors influence the opportunities that are available.

Because these influencing factors, including energy cost, are dynamic, a strategic approach to carbon planning and management must be dynamic and iterative rather than static. Only in this way will opportunities be continuously identified and realized.

Step 4: Implementation

This fourth and final process step follows a classic management system model and involves determining and setting in place an organizational structure that will ensure that the program is integrated into the overall company management culture and that the new energy management goals are achieved. Regardless of the framework decided upon, certain management principles and tools must be in place to achieve significant results.

These include:

  • Leadership at the very top of the company with a clear commitment to results.
  • Clearly stated goals and measurable objectives at appropriate levels.
  • Clear accountability for results, whether in a single or multiple executives.
  • Sufficient resources to enable achievement of the objectives and goals.
  • Periodic review and updating of goals, objectives and resource commitments. and
  • Recognition of progress and reward for achievements.

If you have any question please contact us:

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