Financial Times today

There were a couple of interesting articles relating to the export of CO2 in the Financial Times today.

The first article reports: "Nicolas Sarkozy, the French president, warned China on Tuesday that the European Union could penalise cheap imports from high carbon-emitting countries in order to defend European companies that are obliged to meet strict environmental standards." Details on the penalties were not provided, but one can certainly imagine a CO2 tariff as discussed on this web site.

The second article reports on comments made by EU Industry Commissioner Günter Verheugen to give concessions to Europe's heavy industries: "Manufacturers of items such as aluminium, steel, base chemicals and semi-conductors should be granted free permits to emit greenhouse gases under the bloc’s emissions trading scheme (ETS), Günter Verheugen, Commission vice-president with responsibility for industry and enterprise, told the Financial Times." The reasoning behind this proposal is that companies in these sectors may leave Europe otherwise.

I think what Günter Verheugen jumps to conclusions here. While I certainly agree with the problem statement. I disagree with the solution. I would rather see a solutions which creates an level playing field, for example through CO2 tariffs on imports from countries without CO2 cutting commitments.

The long carbon tail

Over the last few years there has been quite of discussion of the long tail of retail (a model on low volume sales of highly diversified products by Chris Anderson) and how the Internet helped to make this a viable business.

Now in the carbon world, there is (and rightly so) the focus on the heavy emitters and the products, which have the largest energy consumption. When I was visiting Cambridge University's Julian Woodall this morning, we re-confirmed this approach.

But there is certainly a long tail of companies with products and services which have a low to medium carbon footprint and by smaller companies which are still heavy emitters. These companies are the long tail of the carbon world and they are not subject to reductions schemes like the EU ETS.

Nevertheless these companies represent in sum a large chunk of the total global footprint. The question is if the Internet (and software solutions) can help these long tail companies to manage and reduce the carbon footprint of the goods and services they offer.

So a better approach (which we also discussed) this morning, maybe to not distinguish the world into big companies which are heavy emitters and the rest of the world. Instead it maybe more useful to look for the low hanging fruits, i.e. to look for greatest inefficiencies, across all industries and companies.

CMU Green Design Institute's economic input-output models

I was visiting Carnegie Mellon University (CMU) on November 16^th and met with a a variety of people from different departments. Among them was Scott Matthews from CMU’s Green Design Institute who presented some of the work which was quoted in a recent Wall Street Journal article. Essentially he uses input-output tables which describe the economic activities between different (about 500) industry sectors: Economic Input-Output Life Cycle Assessment (EIO-LCA) model, http://www.eiolca.net

For example you can look at the automotive industry and analyze how much the automotive industry is buying from other industry sector, let’s say paint, rubber, steel, aluminum, plastics, electronics, etc. The data does not only contain the dollar volume the trade activities but also the associated amount of environmental parameters and CO2. You can then apply this mechanism recursively and trace the complete supply chain. This gives you the CO2 and environmental footprint of the average American car.

Scott also mentioned that further studies have shown that typically the variation of a specific product from the average is not more than 5%.

Another interesting research result is that the CO2 footprint is created on average 80% down in the supply chain.

I see two interesting applications of this work to Green2.0: around the CO2 import/export topic and the total environmental footprint of goods and services.

Import/export of CO2

As this data is also available for China, it will be great basis for simulation the impacts of the policies on the CO2 imports. The data will allow identifying the average CO2 footprint of imports from China (in the 500 industry sectors), according to the different policies the CO2 adjusted cost of the imported goods can be determined and compared with locally available products. The question is: Which policies will alter the purchase behavior of importing companies and how?

Total environmental footprint

The Economic Input-Output Life Cycle Assessment will provide a great baseline for the investigation of the total environmental footprint of the selected products (rice products and beer). It will allow to show the impact of the green policies the companies have defined and implemented and how much they have move away from the average as a consequence.

Welcome to the Green 2.0 blog

Thanks for stopping by the Green 2.0 web site and the Green 2.0 blog. While the web site provides an update of the Research project, I plan to use the blog for discussion of related topics which we pick up along the way of our research.

As a side project, we also want to explore the use of Web2.0 technology for research collaboration and communication. Besides the web site and the blog which are pretty standard, I'm also looking into using Facebook, specifically for interacting with academic partners.

Turned out that most of the academic partners didn't have Facebook accounts and aren't actively using them - plenty of growth potential for Facebook. Let's see how it works out.

I will also make blog entries when I update the web site, so please feel free to subscribe to the feed. Let me know if you prefer email notification, I could also add this feature.