Commercial enterprises, which proactively assess & quality the environmental impact of business operations & resource consumption through the measurement of carbon dioxide and other greenhouse gas emissions as well as implement strategies to reduce carbon footprints, are expected to attract investments and build a competitive advantage & a sustainable business.
According to Chris Goodall, Author, Environmentalist, “Food production is now so energy-intensive that more carbon is emitted, providing a person with enough calories to walk to the shops, than a car would emit over the same distance.”
Virtually every human activity adds certain amount of carbon emissions into the earth's atmosphere. Technically, carbon footprint stands for a certain amount of greenhouse gas (GHG) emissions - associated with human production or consumption activities - that have an impact on climate and environment. For example, watching a plasma television for three hours on a daily basis contributes to 250 kg of carbon each year. Studies at the Stockholm Environment Institute (SEI) reported that carbon footprints during the Christmas season, including food, travel, lighting and gifts, amounted to 650 kg per person - an amount equivalent to the weight of 'one thousand Christmas puddings' per individual!
In recent times, there has been much public debate and concerns raised over the subject of global warming and carbon emissions. Being fully aware that allowing emissions to continue at the current rate could induce dramatic changes in the global climate system, carbon footprint calculations are in strong demand. Individuals and businesses, the world over, are adopting policies to reduce their own carbon footprint as well as those of the products they represent. Innumerable approaches to measure a carbon footprint have been proposed, ranging from basic online calculators to sophisticated lifecycle analysis or input-output-based methods. But some researchers point out that there is no c1earrcut analysis on how to quantify it.
Measurement methodologies
Globally, a carbon footprint is classified as a sub-set of all data covered under Life Cycle Assessment (LCA) - an internationally standardised method used for evaluation of environmental burdens and resources consumed along the lifecycle of products.
Since a carbon footprint reflects all lifecycle impacts of goods and services used, it is said to ,be composed of direct (or primary) and indirect (or secondary) emissions. The carbon footprint of an organisation can be measured by going through the entire upstream product manufacturing cycle, right from the sourcing of raw materials down to the finished product. In the process, non-manufacturing tasks such as management, administration, sales and several others that contribute to the footprint must also be taken into account so as to include the emissions from transportation, distribution and final disposal to the ultimate consumer. The total carbon thus emitted into the environment will be computed as the footprint of the product, process or person under consideration.
The task of calculating carbon footprints can be approached methodologically from two different directions, both of which strive to capture a full Life Cycle Analysis/ Assessment (LCA):
- Bottom-up, based on Process Analysis (PA)
- Top-down, based on Environmental Input-Output (EIO) Analysis
Process analysis: PA is a bottom-up method, which has been developed to understand the environmental impacts of individual products from cradle to grave.
This methodology suffers from a system boundary problem and if appropriate system boundaries are not properly identified, it could lead to truncation errors. PA-based LCAs run into further difficulties when carbon footprints need to be measured for larger entities such as government, households or particular industrial sectors. Often the results are patchy since this procedure requires the use of information from different databases that are usually not consistent.
Environmental input-output analysis:
EIO analysis provides an alternative top-down approach to measuring carbon footprints. Here, economic accounts that provide a picture of all economic activities at the meso level (sector) can be combined with consistent environmental account data to establish carbon footprint estimates in a comprehensive and robust way. In this method, all higher order impacts are taken into account and the whole economic system is set as the boundary. The environmental input-output analysis is not entirely suitable for assessing micros systems such as products or processes because it assumes homogeneity of prices, outputs and their carbon emissions at the sector level. The biggest advantage of the input-output- based approach is that it requires much lesser time and manpower. It is ideal for establishing carbon footprints in macro and meso systems, especially for industrial sectors, individual businesses, larger product groups, households, government, the average citizen or an average member of a particular socio-economic group.
Nevertheless, the best option for a detailed, yet comprehensive and robust analysis is combining the strengths of both the aforementioned methods through a hybrid approach that integrates the PA and input-output methodologies. Such an approach allows the preservation of detail and accuracy in lower order stages, while higher-order requirements are covered by the input-output part of the model. Of course, much improved models can be expected over the next few years.
Planning for low-carbon economy
Measuring carbon footprints is vital for organisations as well as individuals. Companies can use an understanding of their environmental performance to identify opportunities in managing carbon and other environmental impacts. In the long run, only those organisations and nations that are more environmentally efficient than their sector peers will be well positioned to attract investment and market share, given the emphasis and importance of shifting to a low carbon economy. Companies that can demonstrate energy and carbon efficiency in their sectors, with limited exposure to carbon costs, stand to gain competitive advantage as carbon prices rise.
Tata Chemicals: Setting up a new benchmark
India's largest player in the chemical industry, Tata Chemicals Ltd (TCL), worked on multiple fronts to help maintain the earth's fragile ecological balance and is still remembered for its major role in fighting the war against global warming. The process for mapping the company's carbon footprint across all its units began in 2007. The first step was to quantify C02 equivalent emissions across manufacturing locations and measure the size & scope of its carbon footprint. With the help of Ernst & Young, this exercise was done by tracking emissions from manufacturing units including captive power plants, logistics operations and staff travel.
As a result, the Babrala plant in Uttar Pradesh managed to improve energy efficiency by 10 per cent and C02 emissions came down by 5 per cent. At Mithapur in Gujarat, the company switched to masonry cement for its buildings, bringing down carbon emissions significantly. Several new products, including the low-cost household water purifier, Tata Swach, and , biofuel feedstock developed as part of its overall strategy for LIFE (Living, Industry and Farm Essentials), are helping the company extend its policy of , enduring care for the environment. At the end of the entire exercise, it has been found that TCL's overall carbon footprint per metric tonne of product matched that of leading chemical corporations and the total emissions fell below that of large-scale chemical producers. The Babrala urea manufacturing unit is now considered as a benchmark in energy efficiency and carbon footprint across the world.
CREDITS: Suresh Lulla, Founder & Mentor, Qimpro Consultants Pvt. Ltd.