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March 1, 2009

It’s Not That Easy Being Green

Robert Oden
Senior Commercialization Manager
EcoSecurities

I don’t know much about YouTube but I have enjoyed a short called “Hip or Dangerous?” In that clip, a couple of New Yorkers stand on the sidewalk and analyze passersby, guessing which of the scruffy Brooklynites are truly shady characters and which are merely playing the part. It reminds me (as do many things) of carbon neutrality. Every company claiming carbon neutrality exposes itself to this same kind of authenticity analysis from anyone who cares to post a casual comment.

Of course, scrutiny is healthy. But increasingly, companies need to be prepared for examination by critics of the concept of carbon neutrality who see each new claim as an opportunity to exaggerate the shortcomings of the theory. As a case in point, I will address a recent analysis of Dell Inc.’s declared carbon neutrality.

After Dell publicized its accomplishment, a leading financial paper dismissed Dell’s claim on three fronts: suggesting that the “boundaries” of Dell’s carbon footprint were inappropriate, that Dell had employed too great a quantity of offsets, and that Dell had purchased offsets of poor quality. Some of the analysis was appropriate, but Dell took some cheap shots because it happened to be standing between the newspaper and the concept of carbon neutrality (which the newspaper in fact admitted was its actual target).

First, the question of boundary. While Dell claimed neutrality for its business operations, the critique pointed out that there is a much larger universe of emissions “associated with” Dell, from upstream material supplier to downstream end-user. It is perhaps appropriate to pressure Dell to increase its boundary upstream – Clean Air Cool Planet has actually singled out Dell as an example of a manufacturing company that should probably consider some supply chain emissions within the boundary of its footprint.

Pushing Dell to incorporate downstream emissions, though, is inappropriate and counterproductive. Not only would it require hugely imprecise estimates about the time and location of product use, but more importantly, it would suggest that customers could use the product as much as they wanted with no consequence. About half of life cycle assessment emissions of a typical computer are attributable to its end-use, and suggesting that users may operate with abandon would encourage behavior precisely the opposite of the kind of responsible behavior we all need to begin to embrace.

The second criticism involved Dell’s use of RECs and offsets. Dell is chided for addressing only 4 percent of its footprint with direct reductions. Should companies strive to make direct reductions? Sure – direct reductions are the best long term solution and they often save money in addition to reducing emissions. But direct reductions are typically impossible in the short term, given current technology and the makeup of our electric grid. Unless you are singing for tips in a public park, the only way to eliminate the carbon footprint of your business is probably … to go out of business.

Dell should be encouraged to focus on employing carbon offsets instead of RECs, but it is not fair to lay general blame for employing environmental commodities. A robust claim of carbon neutrality requires some degree of internal action, and Dell did take internal steps, increasing the efficiency of its power usage and cutting down on employee air travel.

The final criticism addressed the quality of the environmental commodities that Dell employed. Generally, this is an appropriate inquiry. But this particular inquiry rejected several REC projects as non-additional. If you know one thing about the difference between RECs and offsets, it is that offsets typically require an additionality analysis while RECs do not. Buried in this article was a brief acknowledgment that one sponsored offset project did appear to be additional based on a brief phone interview (roughly equivalent, by the way, to an analysis of hip or dangerous at ten yards).

As an aside on offset quality, after years of emphasizing the importance of additionality, it has been wonderful to witness the voluntary market develop an understanding of, and demand for, additionality. These days we find ourselves more often emphasizing the need for “real” offsets. Buyers need to understand that ‘sponsoring’ future activities of an additional project carries risk. For example, it appears that Dell is counting today the reductions that a sponsored project is expected to make over the next five years. Dell should be prepared to disclose in five years just how many of those reductions were achieved, and to make good on the shortfall if necessary.

In the big picture, every critique adds to the health of the industry. Each discussion improves public understanding of the nature of the problem in the U.S. and increases our odds of addressing the issue quickly, thoughtfully and effectively.

And most importantly, action can lead to action: hopefully Dell’s claim will give Dell customers an increased awareness that leads some to turn off their computers when they’re not in use – exactly the kind of change in behavior that will lead to the direct reductions that are essential in the long term.

EcoSecurities is a leader in the international carbon market, working with companies around the globe to help reduce the impact their businesses have on the environment. EcoSecurities sources, develops and supplies emission reduction credits generated from projects to reduce the amount of greenhouse gas (GHG) emissions released into the atmosphere.

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