GLOBE 2010: A Recap of Sessions

April 2010 | Charles W. Bois, Bryan J. Buttigieg, Tamara Farber, Sarah D. Hansen, John R. Tidball

The GLOBE Foundation is a Vancouver-based, not-for-profit organization dedicated to finding practical business-oriented solutions to environmental problems.  GLOBE 2010 brought about 10,000 people to post-Olympic Vancouver to talk about the business of the environment.

A number of Miller Thomson’s environmental lawyers attended GLOBE 2010.  Below are our reflections on some of the sessions we attended:

1. Corporate Sustainability

Tamara Farber
Miller Thomson Toronto
tfarber@millerthomson.com
416.595.8520

Charles Bois
Miller Thomson Vancouver
cbois@millerthomson.com
604.643.1224

Bryan Buttigieg
Miller Thomson Toronto
bbuttigieg@millerthomson.com
416.595.8172

John Tidball
Miller Thomson Markham
jtidball@millerthomson.com
905.415.6710

Sustainability and Supply Chains

Tamara Farber
A panel discussion involving various large corporations including Dell, HP and others drove home the notion that there is no room for tunnel vision competition when it comes to greening supply chains. Collaborative action between traditional competitors can make the difference between suppliers in the chain not only getting on board, but being part of the solutions.  This can incorporate changes in energy efficiency, environmental materials, codes of conduct for manufacturers, packaging changes, transport changes and controls relating to the end of life for products.  The general consensus among the executives was that it was critical to have accountability at the executive level for performance in the supply chain. If the governance is not in place to do what you’re asking your own suppliers to do, the changes in the chain will not likely get implemented.

Transparency in the supply chain is something that is atypical for most corporations but is critical for supply chain buy-in and progress.  It fosters innovation and collaboration in the “pre-competitive” aspects of any given industry – meaning that companies still compete but are collaborative when it comes to what goes into getting to the competitive state.  Education of suppliers was also viewed as a key element of success in getting buy-in throughout the supply chain.  Education on the consumer side was also critical. The representative from Fed Ex provided a great example of how dialogue in the customer’s supply chain was critical in reducing their carbon footprint.  If customers were given choices about timing and other delivery options, they might not choose the most expensive, most carbon intensive option.

Sustainability and the Natural Resource Sector: How to Acquire and Maintain your Social License to Operate

Charles Bois
A key theme in this session was that natural resource companies (i.e. oil, gas, mining, forestry) are experiencing increasing expectations and demands from the public that such companies must become more sustainable and transparent if they hope to retain their social license.   The social license can best be described as the civil acceptance of what the company is doing in the area.

For resource companies, it is imperative that they develop policies and practices in all phases of exploration, development, production and sales of the resources.  Many resource companies operate in wilderness areas and sustainability has been redefined for such companies.  It is not enough for a company to develop and operate the project with the least adverse impact possible on the environment and surrounding areas.  Today, a key element to a resource company’s sustainability plan must include early and continuous community engagement and consultation with local governments and communities, and the company must increase its scope beyond the communities directly impacted by the project, to those that might be indirectly impacted.

Sustainability requires governments, regulators, and companies to go beyond minimizing the impacts of the project.  Resource companies must engage the community when it comes to reclamation plans and practices.  As a result, many companies are establishing codes of conduct for their employees to ensure communities and local populations are respected and engaged.  Some companies are imposing these codes of conduct and other requirements on their suppliers, contractors, and service providers to ensure that their actions do not adversely impact the company and jeopardize the company’s social license to operate.

Access to Water: Challenges and Opportunities

Bryan Buttigieg
Water supply can be a socially disruptive issue. Experiences in Australia and Israel show how a series of different solutions, from increasing supply (desalination plants), decreasing consumption, creative use of market forces (allocation of tradable water rights in Australia) and price signals can lead to workable solutions. In an interesting contrast, Arizona has also “allocated” its water resources. But unlike Australia, no allocation is given to the natural environment. Instead water resources are fully allocated for human consumption and because the allocations are based on outdated historical levels, the water supply is significantly over allocated. Out of necessity, solutions in Arizona now focus on conservation.

Both Australia and Arizona found it very effective to provide users with comparative usage data. When homeowners compared their usage to that of their neighbours, the “competitive spirit” kicked in resulting in dramatic decreases in consumption. Some utilities in Arizona now take several hundred (automated) meter readings a year which allows for much better provision of usage data to the utility and consumers.

The Sustainability Payoff

John Tidball
Corporate executives from Suncor Energy, Cenovus Energy, Novo Nordisk, Herman Miller and HSBC described how environmental sustainability has become a fully integrated concept in their organizations and how it has benefited their bottom lines.

2. Climate Change and Carbon Management

Sarah Hansen
Miller Thomson Vancouver
shansen@millerthomson.com
604.643.1273

Charles Bois
Miller Thomson Vancouver
cbois@millerthomson.com
604.643.1224

John Tidball
Miller Thomson Markham
jtidball@millerthomson.com
905.415.6710

Voluntary Carbon Markets: Opportunities and Risks

Sarah Hansen
Several emerging issues in the voluntary carbon markets were raised at this session.  Quebec’s approach to carbon pricing was discussed with a focus on the transportation sector, a key target in making Quebec carbon-neutral.  A number of transportation reduction strategies were raised including tree planting in urban areas, reforestation, and carbon capture.  A representative from the Pacific Carbon Trust (PCT) explained its role as a government procurement agency, the concept of additionality, and the eligibility of various projects in BC.  The CEO of ERA Ecosystem Restoration Associates spoke about the biological effects of climate change on BC’s forests, the benefits beyond carbon, key markets for trading offsets, wood plantations, and supporting biodiversity.  Finally, the Co-Founder and President of Offsetters spoke about the importance of early stage technology transfer, building the price of carbon into goods, “pressure release schemes” like tax incentives, the impact of America and the tonnes per capita of carbon emissions, and the problem with the high overhead cost of validation.

The group discussion that followed saw some panelists question the role of PCT competing with private entities in purchasing offsets, and generally, on the proper role of government.  The group also discussed whether those in the business have “over-engineered” validation and that perhaps a new approach for smaller projects is more appropriate where the validator underestimates and undertakes a more conservative assessment.  Finally, there was a general discussion on cost avoidance and price signals.

Carbon Capture and Storage

Charles Bois
CCS is considered to be a technology essential to developing long term solutions to climate change and global warming.  A key theme of all of the presenters was that action was needed now to achieve the targets set by different governments around the world.  Currently, it is thought that the costs of CCS could range between $40 per tonne to more than $120 per tonne by 2015.  All of the CCS projects being developed have relied on government investment and incentives to move forward.  Governments of all levels in Australia, Canada and Great Britain have invested over $12 billion in 8-12 demonstration projects based on different technologies, including re-injection of carbon dioxide into depleted oil or natural gas reservoirs, enhanced oil recovery and injection of carbon dioxide into deep saline aquifers.

A second and underlying key theme throughout the speakers’ presentations was the need to exchange information about CCS.  Historically, there has been little in the way of information exchange.  Some argued this was because of the need to protect intellectual property rights or patentable processes.  However, the general suggestion was that there is too little time and that the need to develop commercially viable CCS and obtain social acceptance is too important a task to be approaching these issues independently.

Innovative Policies for Effective Carbon Capture and Storage (CCS)

John Tidball
This informative session, chaired by the British High Commissioner, dealt with the urgent need to proceed with development of a large number of CCS facilities in order to have any chance of meeting a target of no more than a 2 degree global temperature rise by 2050.  The Canadian Government has already invested $2 billion into CCS.

Special Workshop

John Tidball
A special workshop was presented by ADEME, the French Environment and Energy Management Agency, which has developed a sophisticated tool, Bilan Carbone (carbon balance), to assist communities to develop climate change action plans.  The tool is now being used throughout France and around the world.  The workshop included a presentation by Toronto’s Harbourfront Corporation, which has used Bilan Carbone to develop an action plan to green public spaces.

3. The Future of Energy

Bryan Buttigieg
Miller Thomson Toronto
bbuttigieg@millerthomson.com
416.595.8172

The Next Spike: Building the Smart Grid

A “smart grid” is defined as a complex system of interventions to make grids more efficient.   The technology exists in many parts of the system but efficiency requires sending price signals to consumers. This isn’t occurring in North America because electricity pricing is seen as a political issue (unlike pricing for airline tickets, parking spaces, etc.).  The price of electricity is seen as a measure of political performance making it impossible for politicians to allow prices to rise.

Since politicians are reluctant to see electricity pricing rise, there is a huge impediment to implementing a smart grid.  The problem is compounded by 280 utilities in North America and different regulatory structures for all of them.  The rate based model is a problem in that the goal of the smart grid is to ultimately decrease consumption and therefore decrease utility revenue. But if revenue decreases, it may jeopardize the ability of the utility to be profitable or to service existing debt.

4. The Urban Infrastructure Revolution

Tony Crossman
Miller Thomson Vancouver
tcrossman@millerthomson.com
604.643.1244

Future of Cities Dialogue

With the Mayor of Vancouver committing Vancouver to become the greenest city in the world, the release of some key reports also highlighted the importance of clean technologies to achieving this, the importance to Canada’s economy generally, and some of the hurdles faced by these emerging companies.

Ernst and Young’s review of BC’s CleanTech sector concluded that although BC has the potential to be a world leader, it has yet to achieve this.  Key factors in realizing on this potential include BC’s abundance of natural resources, its regulatory regime which includes a comprehensive GHG emissions scheme (with cap and trade and carbon tax) and its geographical position. The report notes a number of ideas for immediate attention including a more effective procurement process and less government “red tape”.

Interestingly, in the recent 2010 BC budget, the BC government announced $100 million over three years for research and development to support transportation infrastructure, development of biofuels and renewable power, which will go some way to achieving these BC green goals.

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