Taking Aim: Setting Emission Reduction Targets
Reduced to its essentials, carbon management is about setting a goal to reduce emissions and then working to attain it. Once an organization has completed a greenhouse gas (GHG) inventory, it can establish a carbon emissions reduction target. Setting a that target based on an accurate and thorough inventory of GHG emissions communicates a company’s commitment to managing its footprint. Establishing clear, attainable, but ambitious target can motivate staff, help drive long-term strategies, and save money for the company through energy efficiency projects.
Factors to Consider in Setting a Goal
To be actionable, a goal must quantify an emissions reduction target, specify a baseline or starting point, and include a timeframe. An example of a goal would be: “By 2012, our organization will reduce greenhouse gas emissions by 15% relative to a base year of 2008.”
Setting a goal might seem relatively straightforward the first time around. But conditions that influence the goal-setting process can change over time, and organizations should expect to periodically revisit and refine their goals. Both external and internal factors can influence goals or trigger a need to re-evaluate:
Potential regulations – in nearly every part of the globe, governments are considering or are currently regulating greenhouse gas emissions in some manner. Whether a cap-and-trade system, a carbon tax, or a simple restriction on emissions, emerging regulations have an impact on an organization, requiring a reassessment of its goals. For example, a new law might require a different base year to be used, or mandate a more aggressive target than originally planned.
Organizational changes – While the goal-setting process usually accounts for organic growth (e.g. expected expansion of operations, more employees, more facilities), other types of change are more difficult to plan for. Acquisition of another company, for example, requires a reassessment of both the baseline emissions and the emissions reduction target.
Absolute Versus Intensity Reductions
It is also important to understand just what you are trying to improve. There are two broad categories of carbon management goals. An absolute target requires a reduction in an organization’s overall emissions, measured in terms of total metric tonnes of carbon dioxide equivalent. In contrast, a normalized target tracks the carbon intensity of the organization by dividing the emissions by some normalizing factor, such as revenue or manufacturing output. Over the past decade, normalized (often referred to as intensity targets) goals have been a common approach because they hedge against rising emissions through business growth. This is because the metric is in greenhouse gas emissions per unit of product. However, reducing intensity does not guarantee the GHG reductions that are generally accepted as necessary to avoid the worst effects of global warming. For this reason, the recent trend in carbon management has been toward absolute emissions reduction targets.
Going “Carbon Neutral”
Taking absolute reduction to its limit, some organizations aspire to be “carbon neutral,” aiming to achieve and maintain net zero GHG emissions in a company’s operations. Going carbon neutral makes a dramatic statement about the organization’s commitment to a sustainable future. The EPA, through its Climate Leaders program, states that a carbon neutral goal should:1
Have a robust, transparent GHG inventory and inventory management plan in place, and include at least one significant optional emissions source (see discussion of Scope in Taking Stock: Using GHG Inventories to Bring Emissions into View) to capture the full climate change impact of the company’s operations.
Seek out opportunities to reduce the company’s internal emissions. For example, through energy efficiency, installing onsite renewable energy, or setting up employee commuting programs.
Include the purchase of Green Power, Renewable Energy Certificates (RECs), and/or offsets for emission areas uncovered by the inventory but not easily reduced through internal projects. The company may elect to purchase Green Power or RECs to reduce the emissions associated with its electricity use. It may purchase project-based reductions (“offsets”) to offset the remaining emissions from direct, other indirect and optional emissions sources. For more on purchasing credible RECs and offsets, see the EPA’s Guide to Purchasing Green Power.
Climate Leaders is an EPA industry-government partnership that works with companies to develop comprehensive climate change strategies. Participating companies commit to reduce their impact on the global environment by completing a corporate-wide inventory of their greenhouse gas emissions based on a quality management system, setting aggressive reduction goals, and annually reporting their progress to EPA. Through program participation, companies create a credible record of their accomplishments and receive EPA recognition as corporate environmental leaders.
1 Guide to GHG Management for Small Business & Low Emitters [https://www.epa.gov/sites/production/files/2015-07/documents/lowemitter_guidance.pdf].