The New Way to Reduce Carbon Emissions

The New Way to Reduce Carbon Emissions

Op-Ed: Here’s how companies can strong-arm their suppliers into cutting carbon emissions

by Dan Graziano

Last week the world’s largest coal-fired power plant in America, First Energy’s Hazelco in Tennessee, went offline for one week because it couldn’t run itself due to a blackout. If all goes according to plan the power company expects to complete closing the coal-fired plant and replace it with a natural gas-fired power plant by May.

Coal production is a big factor in global carbon emissions. And the coal industry is a prime target for environmentalists and policymakers. On April 9, 2017, Greenpeace launched a massive protest at the White House against the U.S. government’s proposed net-zero emissions electricity sector by 2050. It’s an ambitious goal as it involves slashing the U.S. electricity sector’s greenhouse gas emissions 40% by the year 2050.

Now a new report has revealed a new way of reducing carbon emissions from companies that could not resist cutting prices on their raw materials: force suppliers to cut emissions.

The report, titled “Supply Sustainability,” cites a recent study by the Institute for Supply Management, or ISM, which reported that while energy efficiency was the top sustainability agenda for manufacturers in 2016, carbon pricing (in the form of a tax) was the top agenda for suppliers.

Among the findings the report found:

Suppliers are not only finding it cost prohibitive to implement energy efficiency projects, but are also finding it more profitable to implement them. They are now being forced to engage in energy efficiency initiatives even if they don’t need to — by being forced to pay for the investment costs, resulting from these increased expenses, in order to lower costs for their customers.

Energy efficiency is making good on promises made in the past.

A recent ISM report found that the United States ranks highest in the industrialized world for energy efficiency, with the highest rate of energy efficient lighting, HVAC equipment, and appliances at 59% of total U.S. industrial energy use. Compared to the U.S., countries like Korea, the Netherlands, and the United Kingdom have much higher energy efficiency at 20%, 30%, and 11%, respectively. By comparison, the U.S.

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