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"Money": The Role of Finance Related to Climate Security and Energy Security
Michael P. Totten
Senior Advisor, CI – Singapore
November 3, 2011
Founded: 1987 Employees: 900+ Global Offices: 30+ Partners: 1,000+ around the world Funds: $338 million in grant funds Charity Navigator Rating: ★★★★
We imagine a healthy prosperous world in which societies are forever committed to caring for and valuing nature for the longterm benefit of people and all life on Earth.
Building upon a strong foundation of science, partnership and field demonstration, CI empowers societies to responsibly and sustainably care for nature for the well-being of humanity.
Leading the Responsible Corporate Movement
Business & Sustainability Council
Triple S Portfolio
Continuous Efficiency Gains Smart Green Power Protecting Ecosystem Services .Adopting Cost & Risk-Resilient Portfolio Using portfolios of multiple-benefit actions to become climate positive and revenue positive Pervasive Information & Communication Technologies Key to Success Ambitious.
& biodiversity-friendly. and promotion of community sustainable development) . biodiversity preservation.Promoting Triple S Portfolio through Innovative Policies 1)SHRINKING .CONTINUOUS EFFICIENCY Adopt decoupling+ and comprehensive IRP for delivering utility services to the point of use at least cost & risk.ECOSYSTEM OFFSETS Add standards-based (CCB) carbon mitigation options to portfolio that deliver triple benefits (climate protection. & avoid adverse impacts 3)SOURCING . fully including end-use efficiency improvements and onsite/distributed generation 2)SHIFTING – GREEN/SMART ENERGY Select only verifiable ‘green power/fuels’ that are climate. accelerate not slow poverty reduction.
STMicro.$1. 670% ROI So the financial incentive is there. 1987-2005. it won’t succeed.” Pasquale Pistorio. . “If the chief executive is not totally committed. CEO. but as CEO Pasquale Pistorio stressed. it’s not enough. water & chemical costs.14 billion savings over 5 years on energy.
000 ha total). www. to reach CO2 direct emissions neutrality by 2015. SOURCE: Compensate the remaining direct CO2 emissions through reforestation or other carbon sequestration methods. Sustainability Report 2010. Australia.com/internet/com/CORPORATE_RESOURCES/FINANCIAL/FINANCIAL_REPORT/ST_2010_sustainability_report. Our culture of Sustainable Excellence in Practice. geothermic. and thermal solar.STMicro Carbon Positive & Revenue Positive SHRINK: Reduce total emissions of CO2 due to our energy consumption (tons of CO2 per production unit) by 5% per year: SHIFT: Adopt whenever possible renewable energy sources of wind. photovoltaic. Between 1998-2010 STMicro planted 10 million trees in reforestation programs in Morocco.pdf . Source: STMicroelectronics. hydroelectric. France and Italy (9.000 tons of CO2 sequestered. USA.st. 179.
CO2 reductions at negative cost Dow slashed energy intensity by ~40% between 1990-2005.4 billion savings between 1994-2010 940% ROI . $9.
or about half the €215 . Not counting the efficiency savings the incremental cost of achieving a 450 ppm path is €55-80 billion per year between 2010–2020 for developing countries and €40–50 billion for developed countries.CO2 Abatement potential & cost for 2020 Breakdown by abatement type • 9 Gt terrestrial carbon (forestry/agriculture) • 6 Gt energy efficiency • 4 Gt low-carbon energy supply Zero net cost counting efficiency savings.
pollutants. energy. & capital) through aggressive. waste. land. water. ambitious and continuous efficiency gains .Portfolio Part 1 SHRINKING ecological footprints (emissions.
Walmart Mike Duke CEO. Walmart . Chairman.Rob Walton.
Our License to Grow is threatened 2004 in the Bull’s eye .
7 million associates 138 million customers every week 8.500-plus stores and clubs .000 suppliers in 70 countries 100.000 product lines Walmart’s World 1.60.
South Korea Guatemala Honduras Top 15 Countries Walmart Imports – 2008 China India Taiwan Hong Kong Pakistan Thailand Brazil Sri Lanka Bangladesh Malaysia Philippines Indonesia .
70% Walmart Imports from China – 2008 25% from 14 other nations ( ) .
Most of Walmart’s impact & cost is imbedded in products Water Packaging Indirect Impact = 92% Agriculture Marine Factories .
24. but hot ocean water makes them more powerful. but the science is in and it is overwhelming. CEO 21st Century Leadership Presentation Nov. save money for our customers. 2005 “We believe every company has a responsibility to reduce GHG as quickly as it can. Climate change doesn’t cause droughts. but it can increase the frequency and severity of heavy flooding. This used to be controversial. and reduce dependence on oil. Wal-Mart can help restore balance to climate systems. Climate change doesn’t cause hurricanes. “ Lee Scott. but it makes droughts longer.On Climate Change Action “We are looking at innovative ways to reduce our GHG emissions.” . reduce greenhouse gases. Climate change doesn’t cause rainfall.
Sharing all learning in technology with the world.On Climate Change Action We are committed to aggressively investing $500 million annually in technologies and innovation to do the following: Reducing GHG at our existing store. including our competitors (the more people who can utilize this type of technology the larger the market and more we can save our customers) . Designing and opening prototype stores 25-30 % more efficient and 30% fewer GHG emissions within the next 4 years. Increasing fleet efficiency 25% in 3 years. and doubling efficiency in the next 10 years. club and Distribution Center base around the world by 20 percent w/in 7 years.
100% RE Zero Waste LCA goods .
selling 137 million. By the end of 2010.New & Expanding Business in CO2Reducing Product lines In 2006. Walmart had sold nearly half a billion CFLs. Walmart set a goal of reducing energy consumption & CO2 emissions in the USA by selling 100 million CFLs in 1 year. Walmart exceeded that goal. .
net] 6-pak CFLs Dow -Jones Average Bank Account .$10 CFL 6-pak Purchase Value $ 300 250 200 150 100 50 0 -50 Investment lst year 2nd year 3rd year 4th year [source: SafeClimate.
CFL factories displace power plants The $3 million CFL factory (right) produces 5 million CFLs per year. 1991 . source: A. LBL. Gadgil et al. Over life of factory these CFLs will produce lighting services sufficient to displace several billion dollars of fossilfired power plant investments used to power less efficient incandescent lamps.
1/3rd Asian incandescents replaced by LEDs by 2020. founder lightemitting diodes LED LED light output (lumens) and luminous efficacy (lumens per watt of electricity) are doubling every 20 months. High-brightness LEDs compound annual growth rate of 24% worldwide. Everything around you is changing. To succeed. . US$ 15 billion market in 2013. stay out in front of change.New Goal to Supersede CFLs with LEDs “You can’t just keep doing what works one time.” Sam Walton.
October 2008 . thenpresident and CEO of Walmart . that shows preference to suppliers who set their own goals and aggressively reduce their own emissions.S. Lee Scott.On Climate Change Action We are committed to the following: Assisting in the design and support of a green company program in China. Initiating a program in the U. speaking to 1000 Suppliers in China. where Walmart would show preference to those suppliers and their factories involved in such a program.
certain businesses where the biggest opportunity exists. lower costs. with the rising cost of energy.Walmart to Reduce 20 million tons CO2 by 2015 “Reducing carbon in the lifecycle of out products will often mean reducing energy use. making our business stronger and more competitive.” . CEO. And. Walmart Matt Kistler. as we help our suppliers reduce their energy use. we’re looking at the category of products where there’s great opportunity. costs and carbon footprint. we’ll be helping our customers do that same thing. Whether it be in apparel. That will mean greater efficiency and. where it’s the most efficient and most cost-effective to remove that GHG from that supply chain. whether it be in food. Senior VP of Sustainability at Walmart Stores “Over the next five years we’re going to be focusing on certain categories.” Mike Duke. whether it be in home line products.
. and to reduce barriers to integrating these sources into the power grid.Walmart’s Biggest Competitor High Oil & Utility Prices Aggressively pursuing regulatory and policy changes that will create incentives for utilities to invest in energy efficiency and low or no GHG sources of electricity.
000 per family California 30 year proof of IRP value in promoting lower cost efficiency over new power plants or hydro dams. and lower GHG emissions.Integrated Resource Planning (IRP) & Decoupling sales from revenues are key to harnessing Efficiency Power Plants For delivering least-cost & risk electricity. natural gas & water services USA minus CA & NY 165 GW Coal Power Plants Per Capital Electricity Consumption New York [EPPs] California Californian’s have net savings of $1. . California signed MOUs with Provinces in China to share IRP expertise (now underway in Jiangsu).
3 trillion global cumulative electric utility infrastructure investment needed between 2007 and 2030.com/data/uploads/The%20Electricity%20Economy. 2008. 12. http://www. The Electricity Economy.globalenvironmentfund.US$26. in 2007 US$.pdf .7 trillion kWh Additional generation by 2030 Source: IEA. GEF & Global Smart Energy.
www.rmi.Cost of new delivered electricity (US¢/kWh) CCS US current average nuclear coal CC gas wind farm CC ind cogen end-use bldg scale recycled ind cogen efficiency cogen Amory Lovins & Imran Sheikh. May 2008.org . The Nuclear Illusion.
The Nuclear Illusion.org CC ind cogen end-use bldg scale recycled ind cogen efficiency cogen . May 2008.Coal-fired CO2 emissions displaced per dollar spent on electrical services 1¢: 93 kg CO2/$1 2¢ 47 32 23 nuclear coal CC gas wind farm Amory Lovins & Imran Sheikh. www.rmi.
ELECTRIC MOTOR SYSTEMS Now use 1/2 global power 30-50% efficiency savings achievable w/ high ROI .
$240 billion savings per decade. New savings of 50% -.@ 1 ¢/kWh. SO2 and NOx.Trillion Dollar Savings Demand Facts Industrial electric motor systems consume 40% of electricity worldwide. SEEEM (www. Efficiency Outcomes 2 trillion kWh per year savings – equal to 1/4th all coal plants to be built through 2030 worldwide. $200 to $400 billion benefits per decade in avoided emissions of GHGs.seeem.Motor Market Transformation Path to Multi. 50% in USA. Retrofit savings of 30%.org/) is a comprehensive market transformation strategy to promote efficient industrial electric motor systems worldwide Support SEEEM (Standards for Energy Efficiency of Electric Motor Systems) . 60% in China – over 7 trillion kWh per year.
More Retail “Efficiency Power Plants .EPPs” Less Need for Coal Mines & Power Plants Less Coal Power Plants Less Coal Rail Cars Less Coal Mines .
Portfolio Part 2 SHIFTING To green power and fuel options that are both climate & biodiversity positive. and have the smallest combined ecological impacts .
and standard practice since 1990 Reflects away 80% of solar heat .SOLAR REFLECTORS Over 4000 Walmart stores with white roofs.
2008. http://www. CA. 59 Gt CO2 Reduction 100 m2 Hashem Akbari Arthur Rosenfeld and Surabi Menon.html . Global Cooling: Increasing World-wide Urban Albedos to Offset CO2. Sacramento. 5th Annual California Climate Change Conference.ca. September 9.gov/events/2008_conference/presentations/index.World of Solar Reflecting Cities $2+ Trillion Global Savings Potential.climatechange.
7 km/l – 529 million liters [6.2.4 mpg – 140 million gal] 121.000 hectares Land required if Wal-Mart Class 8 large truck fleet Switched from Fossil Diesel to BioDiesel from Oil Palm Plantations .
5 km/l – 265 million liters 2004 2011 8 km/l – 176 million liters .40.7 km/l – 529 million liters 5.000 hectares When the truck fleet achieves triple fuel efficiency 2.
Multi-billion $ Savings & Cost-free CO2 Reductions Cost Comparison Biodiesel vs Truck Efficiency $70 $60 per barrel cost $50 $40 $65 $30 $20 $10 $- $15 biodiesel truck efficiency .
Building the Next Generation Walmart…Responsibility.equivalent to taking 7. Over the past 2 years Walmart replaced ~2/3rd of their fleet with more efficient tractors. Walmart delivered 57 million more cases.Walmart is on the path to tripling its truck fleet efficiency. Avoiding ~40.S. In 2010.000 t/CO2 -. Source. Achieved 65% reduction in fuel per ton km over past 5 years. cars off the road.600 U. 2011 Global Responsibility report . while driving 79 million fewer km.
and distribution centers • 100% dedicated to Walmart Mexico • Eximbank’s “Deal of the Year” awarded to turbine manufacturer by President Obama Now examining large-scale aggregation purchasing from independent suppliers at competitive price to utility rates 27 wind turbines in “La Ventosa”. clubs. Oaxaca .5 MW to power 348 stores.Walmart Mexico’s “Oaxaca I” Wind Farm • • 67. restaurants.
Portfolio Part 3 SOURCING OFFSETS remaining footprints by prevention of threatened tropical forests (REDD+) and other intact ecosystems (e.. grass lands) through standards-based conservation carbon offsets . mangroves.g. peat lands.
High Quality Multi-Benefit .
Using Climate. Community & Biodiversity Carbon Standards. . Will prevent more than 900.Largest Corporate REDD Carbon Project to date $4 million to protect the Tayna and Kisimba-Ikobo Community Reserves in eastern DRC and Alto Mayo conservation area in Peru.000 tons of CO2 from being released into the atmosphere.
Protecting Critical Wilderness to Offset Operation Footprints In 2005.000 hectares. . Wal-Mart adopted the goal to permanently offset the land footprint of all their USA stores and distribution centers by protecting critical wildlife habitat in the USA. as well as the company’s development throughout the 10-year period -roughly 60. Walmart’s $35 million donation over 10 years enables purchasing enough land to account for its stores current land-use.
planes.Need to Halt Deforestation & Ecosystem Destruction Gigatons global CO2 emissions per year Billion tons CO2 25 20 15 10 5 0 Fossil fuel emissions IPCC LULUCF Special Report 2000. trains. Tab 1-2. More emissions than world transport system of cars. 14 million hectares burned each year emitting 5 to 8 billion tons CO2 per year. ships GHG levels Tropical land use . trucks.
5 to 8 billion tons CO2 per year in mitigation services available in poor nations. Tab 1-2. and saving better-off nations billions of dollars. increasing their revenues by billions of dollars annually . GHG levels Tropical land use .Outsourcing CO2 reductions to become Climate Positive Gigatons global CO2 emissions per year Billion tons CO2 25 20 15 10 5 0 Fossil fuel emissions IPCC LULUCF Special Report 2000.
December 2008 .S.Geological storage (CCS) vs Ecological storage (REDD) Carbon Mitigation Cost $ per ton CO2 U. fossil Electricity CO2 mitigation cost annually (2. REDD is CCS NOW.4 GtCO2 in 2007) Carbon Capture & Storage (CCS) $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $.0 CCS REDD ~$100 billion ~3 ¢ per kWh Reduced Emissions Deforestation & Degradation (REDD) ~$18 billion ~0.5 ¢ per kWh Source: Michael Totten.
4 billion tons CO2 emissions $7.U.S.50 per ton CO2 1/2 cent per kWh $18 billion/yr REDD trade Poverty reduction Prevent Species loss A A win-win-win win-win-win outcome outcome Tropical Deforestation 2007 13 million hectares burned 7 billion tons CO2 emissions . fossil Electricity in 2007 2.
1824 Liters per year (10.6 km/l x 19.8 tons CO2 emissions per year ~$48 to Reduce Emissions from Deforestation at $10 per tCO2 Adds 7 cents per gallon .370 km per year) = 4.
Totten.org . mtotten@conservation.Stay Tuned for Part 2 Accelerating & Scaling Best Opportunities Green ATP Michael P.
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