Sustainability consultant discusses greenhouse issues

I was at home watching this while surfing. This clears up some misconceptions about "Sustainability" and "carbon neutral".

Australian Broadcasting Corporation

Broadcast: 03/10/2007

Reporter: Andrew Robertson

Jonathan Justen from sustainability consultancy firm Energetics discusses carbon neutral businesses.

Transcript

ANDREW ROBERTSON: 'Carbon neutral' has become a catch phrase if the business world as companies scramble to adjust to the demands of global warming. But what does 'carbon neutral' really mean, and how can business meaningfully contribute to lowering the output of greenhouse gases? Jonathan Jutsen is a founder of Energetics, which for 23 years has been one of Australia's leading consultants on sustainability and greenhouse issues, and he joined me in the studio earlier this evening.

Jonathan Jutsen, welcome to Lateline Business.

JONATHAN JUTSEN: Thank you.

ANDREW ROBERTSON: Does being carbon neutral actually lead to less carbon being pumped into the air or just to offsets like planting trees?

JONATHAN JUTSEN: Well, ideally it does lead to reduction in production emissions. and what we are recommending very firmly to companies and I think this is starting to become accepted, is that the right way to go carbon neutral is to in fact reduce your own carbon footprint first, which means improving energy efficiency and doing other measures internally within your organisation which will reduce carbon emissions before you start looking outside the organisation. And even when you look outside the organisation - to start with green power, which comes from new renewable sources, before you go to buying other types of offsets.

ANDREW ROBERTSON: What are some of the simple things that companies can do to reduce their carbon output?

JONATHAN JUTSEN: Well, most of the carbon output from most companies is related to their own energy consumption. And so improving energy efficiency in their operations is the primary thing that most companies can do in the short-term. And it has another benefit of course, they actually save money as well. So we're recommending and most reputable people in this field do recommend that companies focus on improving energy efficiency as the first step.

ANDREW ROBERTSON: Every company in the world at the moment seems to be saying that they're green. Just how green is business?

JONATHAN JUTSEN: You know, they say green is the new black, but I think people are fair to be slightly cynical because I think there is a variability. I mean, some companies are taking this very seriously. They see it as a core part of their business and want to do the right thing by the community and by their own organisation. Other companies I think see it as a good opportunity to raise their profile, or maybe change their public positioning, and really don't understand the full nature of the obligations and the cost involved to become carbon neutral in a responsible way.

ANDREW ROBERTSON: But how do you get business to do even basic things like turn the lights off at night? I mean, anyone that drives past an office block or a big company headquarters at night sees all the lights on.

ANDREW ROBERTSON: Look, I think that is the way that most companies have been up until now. I don't think many companies in Australia have, until the last few years, taken improving energy efficiency and reducing carbon emissions as a serious part of their business. It's been a relatively low cost for a lot of companies. Energy costs are relatively low in Australia. And there are very few companies that have seen that sort of resource efficiency and carbon management as a core part of their businesses, but it is starting to change quite rapidly.

ANDREW ROBERTSON: You say on your website that the challenge for all Australian companies, analysts and shareholders is to ensure that there's a common understanding of what it means to be carbon neutral as well as agreed standards for each of the settlements in achieving that. How do we get to that point?

JONATHAN JUTSEN: There are some real issues with carbon neutrality. And those are not just around what sort of offsets and how reliable they are and do they come from the right sorts of sources. It's also how you calculate your carbon footprint - the amount of carbon that you emit not only for your own organisation but through third party activities. So there is a need for common standards and they are starting to develop in Europe, and global standards are starting to come about.

But we have still got a problem that in Australia we have standards through the Australian Greenhouse Office, the greenhouse friendly program sets a local standard, but unfortunately not all carbon neutrality is done to any of those standards and there is no obligation in the way that companies report to ensure that they are reporting to those standards. So there is a need for a lot more rigour and I think probably some regulation around how companies can report this sort of information. I understand that the ACCC is starting to move in this direction at the moment.

ANDREW ROBERTSON: Just on the issue of regulation and the role of government - we don't have a carbon trading system in Australia and at the moment it's been foreshadowed that it won't start until 2012. How big an issue is that?

JONATHAN JUTSEN: I think it's a very big issue. For two reasons. Firstly, I don't believe carbon trading in itself is going to be enough to make the sort of carbon reductions that most scientists believe are necessary to stabilise the world's climate at some sort of reasonable level. And not only that, it will require, even when the carbon trading program is in place, will require other measure, including regulation, including regulation of energy efficiency performance metrics. There will be a whole range - education, public education, there will be a whole range of policy implements that are required other than just the carbon pricing. But as well as that, we can't wait three or four years with inefficient buildings going in, with inefficient factories going in, with people buying inefficient cars and houses, we can't wait three or four more years before we start to take action. We have to take action now, so there is a need for interim steps regardless how effective the carbon trading mechanism is.

ANDREW ROBERTSON: And what should those interim steps be?

JONATHAN JUTSEN: I think they should be very targeted regulations in terms of performance of appliances, efficiency of buildings, both commercial and residential buildings. I think there is a need for a regulatory approach. I think there should be financial incentives, substantial incentives for both businesses and householders to accelerate the implementation of energy efficiency measures in their facilities. I think these measures are absolutely essential.

ANDREW ROBERTSON: Carbon trading will lead to alternative, hopefully investment in alternative energy. But alternative energy will be much more expensive.

JONATHAN JUTSEN: Yes, and I think one of the things that I find rather frustrating being in the energy efficiency area - at least half the solution's going to come from energy efficiency to global warming, and yet our government, certainly at a federal level, hasn't put very much effort or investment into the energy efficiency area. There is a lot of focus on green supply, but energy efficiency actually reduces costs and will improve the economy and reduce costs not only for businesses but for householders. So there should be incentives and research and development and regulation going into that area and not just the into green energy.

We've seen new regulation just come out about green power requirements, but there's no increased regulation coming through on the energy efficiency side. And because it's the most cost effective way of getting to where we want to get to, it's amazing to me that there hasn't been a lot more focus in this area.

ANDREW ROBERTSON: What are the opportunities for being at the forefront in managing carbon output, and what are the costs for business in being left behind?

JONATHAN JUTSEN: Well, it's like any major change that impacts on business. There are the people who are going to be at the forefront of the activity and are going to be influencing and developing and creating markets and are going to be managing the risks very effectively in their business. And these people are going to be at the forefront of a business opportunity which is going to be huge globally.

To improve energy efficiency and to invest in green alternatives to reduce carbon emissions, the expectation is there's going to be $5 to $10 trillion invested globally in the next 40 years. So, I mean, this is a major opportunity, it's not just - we're not just talking about risks, and those companies who are at the forefront of that area will have the opportunity to take advantage of those new business changes. Whereas other companies are going to be just buffeted by changes. And we talk to executives quite often at senior levels of many companies, and I think many of them believe that the future is just going to be an extension of the past with a little carbon price tacked on the top. They don't recognise that this is potentially going to change not only pricing of products quite substantially, particularly energy intensive products, it's going to change the way we have to handle materials, it's going to change the way consumers look at their purchases, they're going to be much more sensitive about the perception of carbon-friendliness about products. It could have very substantial changes in the business environment and companies that don't take this into account now and just think the future is going to be pretty much the same as it was for the last 40 years are going to get caught out.

ANDREW ROBERTSON: So there's a revolution on the way?

JONATHAN JUTSEN: Absolutely.

ANDREW ROBERTSON: Jonathan Jutsen, thank you very much for your time.

JONATHAN JUTSEN: Thanks for having me.