Greenhouse Business Challenge and Carbon Footprint - Australia - Assignment Example

Greenhouse Business Challenge and Carbon Footprint – Australia Executive Summary Greenhouse gases such as carbon dioxide, methane and other equivalent gases are very harmful to the environment. The combined effect of such gases is called carbon footprints. This is a very important area of concern for the world. In countries like Australia where the majority of national income is generated from oil, petroleum and mining industry, carbon footprint is a serious matter of discussion. One of the largest oil and petroleum gas producing company of Australia called Woodside has also taken several voluntary as well as cost-effective measures to reduce emission rate of their business. Woodside considers customised emission reduction plans for each of their project plans. They have emission reduction strategies and models for their different projects. Companies such as BP have also taken measures like implanting solar plants for installing solar panels. It has decided to supply electricity to its retail stores through these solar energy generated electricity. The government of Australia has also taken strict measures imposing carbon tax on companies to limit their carbon emission. Companies are disappointed through such policy because the carbon tax is not fixed and this would affect the revenue of the company. So it would be recommended that the government of Australia can revise the rate of carbon tax for the country. Tax issues could be also settled down through such discussion. But imposing tax is important because it would create a pressure on the companies to reduce emission. After all the earth is a place for us to live and it is our duty to protect it. Table of Contents Executive Summary 2 Background of Greenhouse Business Challenge including Carbon Footprint in Australia 5 Organisation Background 9 Carbon Footprint responses 10 Organisation response 10 Comparisons with other organisations 11 Identified problems 12 Recommendation 13 Overall Recommendations 13 Conclusion 14 Appendices 18 Introduction The word Carbon used in the phrase "Carbon Footprint" defines the core greenhouse gases such as carbon dioxide, nitrous oxide or methane. Carbon footprint signifies the emission of greenhouse gases by the individuals, companies or products. The Carbon footprints of companies, organisations or individuals are measured by assessing their greenhouse gas emission rate. So when the rate of emission is known, a company can take measures to reduce it. Carbon foot prints can be reduced by developing alternative methods of generating business such as utilizing the solar energy, wind energy, planting trees and protecting the forests. The effect of such carbon equivalents in the environment causes global warming. Methane has about 23 times and Nitrous Oxide has about 300 times more potential to cause global warming than carbon dioxide. It is an established fact that the greenhouse gases produced by human beings through various means are a significant reason for the spread of global warming (Sarkar, 2010, p. 468-469). Many non-government organisations have come up to conserve the environment and take actions to protect it. The consumption of energy and change in climate are closely related. Multinationals understand the relation between the greenhouse gases and the energy consumption. In short if the usage of energy consumption is reduced then the emission of green house gases can also be reduced. Companies need to find short-term solutions to reduce their greenhouse gas emission. In Australia, the Intergovernmental Agreement on the Environment, a mutually agreed norm on the control and reduction of greenhouse emission was passed in the year 1998. The government subsequently set up the Australian Greenhouse Office (AGO) to monitor the climate changes and establish policies relating to greenhouse emission (Bonyhady, and Christofl, 2007, p. 113). Background of Greenhouse Business Challenge including Carbon Footprint in Australia Australia is a coastal country. About 85 percent of the population in Australia lives in the coastal region. Over the last 6000 to 7000 years the coastal regions of Australia had remain unchanged but now it is changing due to the affect of climate changes driven by global warming. The rising sea level and greenhouse gases are the indicators of such a change. So the Australian Government has come forward and adopted strict measures to curb the effects of global warming (Australian Government, 2010). There are basically no such internationally accepted standards for reducing carbon footprint. The base standards in Australia are Greenhouse Friendly and NSW Greenhouse Gas Abatement Scheme. Even schemes like the greenpower guarantees that the source of power is eco friendly. This also allows the customers to compare the products. The companies certified with greepower must generate or purchase the electricity produced from the green sources such as from wind, geothermal or hydro power. The greenhouse Friendly certification is given to those companies’ product or services which are carbon neutral and energy efficient. The Renewable Energy certificates are like the energy currency issued to increase the acceptance of renewable energy in Australia. The owners of the registered energy stations apply for such energy credits. These credits are then traded with other companies who aim to utilize renewable energy source for their company (Rossiter, and Wassl, 2007, p. 2). If businesses want to stop their contribution in global warming and increasing emission of green house gases, then they have to become carbon neutral. This can be done by balancing the businesses carbon emission. Current Global Practices – How countries are responding to the Greenhouse Business Challenge including Carbon Footprint. The organisations for global business and industries round the world have taken various steps to understand and fight against the risk of climate changes and greenhouse gas emission. All the countries round the world are concerned about the carbon footprints and its effects. . The developed countries have already taken various measure and adopted policies under the Kyoto Protocol. The other developing countries are taking steps towards reduction of greenhouse effect but none of them have accepted the international legal bindings to do so (UNEP, 2011). European Union The European Union agreed to reduce the Greenhouse gases emission of its 15 member states by 8 percent within the time period of 2008-2012. The EU was successful in reducing its emission level by 7 percent. So for the next step they have projected that they would try to reduce green house gases emission level by 13 percent in the time frame of 2008-2015. After the Kyoto Protocol period the EU has taken a 20-20-20 policy. It signifies 20 percent reduction of greenhouse gases, 20 percent share of renewable energy in the total energy consumption of EU and 20 percent reduction of energy consumption (Saundry, 2010). United Kingdom United Kingdom also followed the Kyoto Protocol and the share of European Unions target for UK was 12.5 percent below 1990 for the time span of 2008-2012. The Climate Change Act of 2008 was introduced to present a long-term target of cutting down the emission by 80 percent till 2050 and at least 34 percent by 2020. This Act also includes other commitments such as carbon budgeting system, creating climate change committee, etc. It also includes the government to amend the emission acts relating to the shipping and aviation industry by December 2012. It also focuses on the fact of reducing 40 percent emission in the power sector by 2012. Apart from this they have set the goal of reducing the emission from new house to zero by 2016 (Cunningham, and Cunningham, 2007, p. 215). Australia Australia has agreed under the Kyoto protocol to maintain a limit of 8 percent above 1990 level. It has also projected, under the new agreement, to target on reducing its greenhouse gas emission by 25 percent below the 2000 levels till 2020. The Australian government has also put forward a carbon Pollution Reduction Scheme (CPRS) to sell the Carbon Emission permits in Australia at a price of Aus$ 10 per ton of carbon (US$ 9.20) (Smith, Vromen, and Cook, 2012, p. 358-359). China In China each province has been allotted individual target of action. The central government wanted to meet its target of reducing emission from 2006-2010. The keys used by the government to meet its targets were: Removing inefficient and polluting plants. Setting the targets of energy consumption for the top 1000 companies. Providing financial help to set up low GHG emitting technologies. Setting vehicle efficiency standards and setting rules to destroy or eliminate the old vehicles. Strong policies were made for municipalities. Russian Federation Russia has also estimated that by 2010 its green house gas emission will be 28 percent below 1990. The government’s policies would mainly depend on the oil and gas sector because 50 percent of the revenue is generated from this sector. In the year 2009, the president had declared that Russia would take measures under the Kyoto Protocol to reduce emission. They were: To install energy meters for individual households Increasing efficiency in the public sector. Production of energy-saving light bulbs. Introduction of paid energy service contracts. Sales of natural gases instead of flaring gases. United States The US government has not set any legal bindings or targets for reduction of GHG emission in the past but President Barack Obama has introduced the policy of US to reduce the emission by 14 percent below 2005 levels by 2020. The US government is mainly focusing on the reduction of fuel emission by regularly reviewing the number of vehicle and the emission of GHG gases. Organisation Background Woodside Petroleum is an oil and gas company in Australia. It came into existence in the year 1954. It is one of the largest producers of liquefied natural gas in the world. The countries to which it is doing business are Japan, China, and other Asia-Pacific countries. Woodstock has a large base of natural gases, so it is planning to provide cleaner energy to the society. The company seeks to provide environmental friendly gas to the countries (Source Watch, 2009). Capabilities The oil producing capabilities of the company provides stable flow of cash into the company. The company owns oil fields in Exmouth Basin, Timor Sea and North West Shelf, which produces about 16 million barrels of oil. The company maintains a safety track record in terms of efficient infill and development areas. It is one of the largest producers of LNG and has more than 20 years of experience in this sector. In the year 2012 the company has floated the project of Pluto LNG, which would add 100,000 barrels of oil. The company also operates networks of pipelines infrastructure. Woodside is also into exploration of wells in Australia. It has undertaken many such projects to add new volumes of oil and gas to their portfolio. The company undertakes various environmental studies for minimising carbon footprints and improving energy efficiency (Woodside, 2012a). Carbon Footprint responses Since Woodside is an oil and gas company, so the main area of concern for the company is the environmental issues. According to the corporate governance report of 2011, the company has performed significantly. As seen in Appendix 1, the flared gas emission was reduced by 14 percent. The new FPSO was about 30 percent less emission intensive then the previous one. The future objectives of Woodside are to maintain low level of environmental incidents. Woodside recorded six environmental incidents in the year 2011 as it can be seen in Appendix 2, so the company has decided to manage the impacts of operating activities in relation to environmental incidents. Woodside has adopted the following system as a part of their environmental strategy: To maximise the efficiency of the resources. Create designs to minimise the life cycle costs. Work and formulate plans for effective emission control. Formulate framework to stop water pollution through oil spilling or any other form of accidents. Organisation response Woodstock participates in various voluntary services to reduce carbon footprints and emission of greenhouse gases. Greenhouse gas management plans- All the developments operated and proposed by Wood side have their own greenhouse management plan. This plan includes the projection of emissions and opportunities to reduce such emission. It also includes benchmarks according to the facilities of Woodstock. Carbon Disclosure projects- This is an organisation which has the largest database of the climatic change information round the world. Greenhouse Challenge program- Woodside was the 100th member in the greenhouse challenge program in 2007, conducted by the Government of Australia. The company regularly reports to government office stating their green house performance. The statutory activities undertaken by the company: Energy Efficiency Opportunity Act- This act came into existence in the year 2006. Woodside had participated in the program conducted by the Australian Government. This type of programs runs for a span of five-years and they require companies to assess their energy usage and identify opportunities to reduce he emission. National greenhouse and Energy Reporting Act- Under this act Woodstock had to report its level of emission to the government. It came into effect from 2007 and introduced a single way to calculate and regulate emission. Comparisons with other organisations We can do a comparative analysis to check the activities going on in different companies in relation to reduction of carbon footprints and emission of greenhouse gases. Woodside took steps according to their favourable situation. We cannot say that the methodology followed by one company is better than the other. The efforts taken by companies for bringing about positive changes in the environment is appreciable and effective. These oil and petroleum companies rarely deal with such substances which if not controlled can cause great harm to mankind and the atmosphere. So special laws act and serious steps should be taken by the companies themselves to reduce emission on their front. BP is another leading company in the international oil and gas industry. It is into providing fuel and petrochemical products. The company took significant steps in reducing the global greenhouse effects. It has taken up the challenge to reduce the emission by 10 percent below 1990 standards before 2010. It was an ambitious challenge taken by the company following the Kyoto protocol. BP has also introduced the usage of solar power in their retail stores. New solar stations with solar panels would be set to generate electricity through solar power (BP Refinery, 2012, p. 3). Identified problems Woodside and Rio Tinto are the two Australias biggest companies in oil and petroleum. They produce emission of about 16 million tons. So these two countries are not pleased with the rate of compensation that the companies need to pay as carbon tax. Rio is just in favour of a generous compensation but Woodside want the companies to be exempted from such taxation because they are due to the exports which are generating revenue for the country. The companies want a fixed price of tax for any amount of emission produced (Taylor, 2011). The companies are also accusing the government of not protecting the rights of the export industry. This is due to the plans of the Australian Government to introduce the Carbon trading schemes and carbon tax system for the companies emitting greenhouse gases. This issue has also raised political questions because the companies concerned generating good revenue for the country. Recommendation Oil and Petroleum companies generate more than half of the revenue of the Australian government. So it can be understood very well that the government has to keep in mind the profitability of these companies because exporting is also a main source of business for the petroleum companies. But the environmental issues have come to a serious stage. The world is concerned about the threats arising from carbon footprints. So the government can sit with the owners of such companies and come to a mutual understanding for imposing carbon tax because imposing carbon tax is necessary otherwise companies would not have any obligation for emission reduction. Overall Recommendations Reduce emission Cut down the usage of toxic substances Utilize the solar energy for electricity Proper disposal of harmful waste should be done Laws and Act relating to environmental issues should be strictly followed Reforestation Creating eco-friendly working environment for the employees Usage of energy efficiency machinery should be done (Generation Green, 2010). Conclusion In this study we have understood the importance of eliminating carbon footprints and reducing the usage of greenhouse gases. Major companies like Woodside, BP and Rio Tinto are taking effective part in regular evaluation of their emission levels and planning out effective environmental strategies for eliminating such drawbacks. These companies take part in several voluntary initiatives of the Australian government for spreading information on how to reduce emission and also to control their rate of emission and carbon footprints. References Australian Government, 2010. Australias Coasts and Climate Change. [Online]. Available at: [Accessed on May 23, 2012]. Bonyhady, T. and Christofl, P., 2007. Climate Law in Australia. Sydney: Federation Press. BP Refinery, 2012. BP Climate Change. [Pdf]. Available at: [Accessed on May 23, 2012]. Cunningham, W. P., and Cunningham, M. A. 2007. Principles of Environmental Science. New Delhi: Tata McGraw Hill. Generation Green, 2010. Make Your Business Carbon Friendly. [Online]. Available at: [Accessed on May 23, 2012]. Rossiter, D., and Wassl, K., 2007. Australia’s Renewable Energy Certificate System. [Pdf]. Available at: [Accessed on May 23, 2012]. Sarkar, A. N., 2010. Emissions Trading and Carbon Management. New Delhi: Pentagon Press. Saundry, P., 2010. Overview of Greenhouse Gas Control Policies in Various Countries. [Online]. Available at: [Accessed on May 23, 2012]. Smith, R., Vromen, A., and Cook, I., 2012. Contemporary Politics in Australia: Theories, Practices and Issues. Cambridge: Cambridge University Press. Source Watch, 2009. Woodside Petroleum. [Online]. Available at: [Accessed on May 23, 2012]. Taylor, R., 2011. Rio, Woodside Urge Australia Govt to Modify Carbon Tax. [Online]. Available at: [Accessed on May 23, 2012]. UNEP, 2011. GREEN Economy: Pathways to Sustainable Development and Poverty Eradication. [Pdf]. Available at: [Accessed on May 23, 2012]. Woodside, 2012a. Our Capabilities. [Online]. Available at: [Accessed on May 23, 2012]. Woodside, 2012b. Annual Report 2011. [Pdf]. Available at: [Accessed on May 23, 2012]. Bibliography Hoovers, 2012. Woodside Petroleum Ltd. [Online]. Available at: [Accessed on May 23, 2012]. World Socialist Website, 2012. Australia: Labour Government Moves to Ratify Kyoto Protocol Ahead of Bali Climate Change Conference. [Online]. Available at: [Accessed on May 23, 2012]. Appendices Appendix 1 Source: (Woodside, 2012b, p. 23) Appendix 2 Source: (Woodside, 2012b, p. 23) Read More