Values, the Triple Bottom Line in the SME’s and Corporate sector

In the next post I will do a reflection that is related to our classes of CSR in the SME’s, specifically on the importance of values in business, in companies and SME’s, and how they can be decisive in the development of this important sector and the importance of business include the concept of the triple bottom line (People, Planet and Profit) in its internal policies and business differentiator.

Facts

When we observe the behavior of companies in the last 30 years, we can see how each of them has made significant effort to generate economic wealth through their operations. Also, through the development of a corporate culture, this is done through a series of internal principles that define who we are and how we behave every day. These principles are called values, which are increasingly more important and can be a powerful differentiator that can positively affect or negative development of a business to a critical point in society.

In addition to the idea mentioned above, we should add that companies internally and externally looks to show each of these values, as elements eligible for members of the company to generate more value as well as enhance their brand within their consumer markets.  Also,  convert these efforts in trust and credibility for the company. Two intangibles those are significantly important to ensure business sustainability.

As an example of this idea you can see my previous post related to Enron and Arthur Andersen, companies who disappear of the face of the earth because the consequences of their internal practices.

At the end of the day the reason for these events has a strong connection with a massive loss of trust and credibility, if a company betrays their corporate values.

First conclusion: Winning levels of trust and credibility have a huge cost and they have an ephemeral character.

The Breaking Point

However, things are changing and changing for the better, some years ago, companies were focus on the concept of value generation considering one perspective, the economic, the results and the profit at the end of the period.

This is scheme is completely outdated, no longer fits the realities of the new world order, this is why companies have realized that they must addressed two sectors that had been neglected and now have incalculable importance, these are the environmental (planet) and social (people), and this is where the concept of the triple bottom line fits in companies, and gives the opportunity to prove that the concept of sustainability is not a utopia or an impossible. At the beginning was a market trend but not anymore. Now is a reality impossible to put aside.

Second Conclusion: the model is here to stay, is a global change

The Challenge

The importance of values lies in the ability of the individual to engage to them, live them, and believe in them, as a transformer of societies. When we extrapolate this to the company has a potentially bulking effect because it can raise awareness of the importance of these entities for integral development, or the famous “triple bottom line” that to this day is essential in order to face what is to come.

That is why we need more companies to adapt their current models to these needs; we need more examples like The Body Shop, in seventies and eighties, Interface in the nineties or Vancity in the last decade, as well as all that recent years have joined this intelligent and sustainable way of doing business, these companies started as SME’s and the become a success because their innovative models, so we have to ensure that this model can be adapted to all types of companies.

Third conclusion: I believe in this model, You believe? If you believe it, now it is the time to start making the difference.

Thanks for reading, see you soon.

 

Comments Off on Values, the Triple Bottom Line in the SME’s and Corporate sector / 15 Apr 2013 por Carlos Omar Garcia Pascual
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Who do you love? Integrating sustainability into brands

Some years ago I read a book by Kevin Roberts that explained the path of a product or company, through a brand and into a Lovemark.

Lovemarks: the Future Beyond Brands establishes that currently millions of products and services from all types of companies, in any region of the world grant already a great performance as expected from them. It also describes what are the features that a product or service should have to go beyond that and become an inspirational brand.

So, what is a Lovemark? They are those brands that transcend themselves to create a promise, fulfill it and go further consumer’s expectations. Are those that create intimate and emotional ties beyond reason and it is even possible to perceive them as relationships rather than transactions.

Which are their characteristics? The central element of a Lovemark is respect, because it is critical to generate rapprochement. Then comes the love element that is essential for building relationships. Integrated into this concept, there are three intangible assets.

• Mystery: is the story telling. The sum of the stories, symbols, the past, present and future.

• Sensuality: is the alert to the five senses through innovative and new flavors, textures, smells, colors and sound environments.

• Intimacy: is the element of empathy and closeness that manages to create loyalty. It’s the details that endure over time.

In this sense, and according to the experience of each person, thousands of brands could now be called Lovemarks. However, the current context of a globalized world full of dysfunctionalities and externalities with tremendous impacts on the environment and the development of societies, leads me to think that it is not possible to “love” a brand based solely on these items.

Is not only necessary, but ethically imperative to begin to include sustainability in its economic, social and environmental dimensions as one of the intangible assets that build a Lovemark out of a brand.

Why? Because it is only when this element is part of the essence of the brands, that companies will have made ​​that necessary and requested leap into a way of making really responsible and sustainable business, leaving aside the business as usual.

Thinking about this from a positive perspective, never before ethics, values​​, transparency and respect for human rights, workforce development, efficiency, innovation, environmental care, inclusion and development of communities among other fundamentals, had represented such a huge opportunity to ensure sustainability in essence but also to generate these intimate and emotional ties and relationships.

Relationships that expand beyond consumers achieving to reach a large variety of stakeholders such as employees, investors, media, civil society organizations, community and others.

Thus, today, companies face a huge challenge but also a huge opportunity to become Lovemarks.

Which companies are already on this path? What has been their strategy? How have they managed to differentiate from others?

 

Comments Off on Who do you love? Integrating sustainability into brands / 13 Apr 2013 por Monica Ducoing
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Purpose, Values, and Action: Corporate Responsibility in SMEs

Multinational Corporations have been at the center of the discussion surrounding corporate responsibility.  This has occurred for two main reasons:

1. Multinationals have received a significant amount of “bad press” in recent years – from oil spills, to child labor scandals, to world financial meltdowns – pressuring them to “shape up”

2. Multinationals maintain significant power and influence over the global economy, providing “quick, meaningful wins” for environmental and social activists when they decide to “do better”.

Large multinational companies have the power to make a significant, individual impact in improving the conditions of communities and promoting environmental preservation. Although Large Enterprises (with 500 employees or more) totaled only 2% of companies that exported products in 2010 in the US, they accounted for 68% of the total value of exports – making them very powerful in terms of the amount of resources and products they manage.

 

However, we must not ignore the achievements of America’s Small and Medium Enterprises.

Small and Medium Enterprises (SMEs for short) have a much larger impact on society and the environment than most realize.

According to the US Census Bureau, in 2009, 99.6% of all firms in the US were SMEs.

75.7% of US firms were Micro Enterprises (with 1 to 9 employees)

22.2% were Small Enterprises (with 10 to 99 employees)

1.7% were Medium Enterprises (with 100 to 499 employees)

Only 0.4% of all firms in the US were considered Large Enterprises (with over 500 employees).

That same year, these more than 5 million SMEs in the US employed slightly over half of the employees working in private sector firms. They contributed to about 44% of the total private sector payroll and created about 65% of the new private sector jobs. In terms of US GDP, SMEs accounted for “more than half of the nonfarm private Gross Domestic Product”.

Needless to say, SMEs in America have a large collective influence on our environmental impact and what values we promote within society.

SMEs and Corporate Responsibility

So, how can SMEs act responsibly?

SMEs have several advantages over large corporations when it comes to acting as a responsible member of society. Given their small size, relationships between the owners and the employees are often closer and more personal than those in Large Enterprises, which facilitates the filtration of the company’s values throughout the company.  Also, SMEs tend to be less-bureaucratic, allowing them to more easily adapt to social and environmental demands from civil society.

What SMEs need in order to be able to act responsibly is a core set of values, and a clear purpose that focuses on responsible practices (not just sales and profit). A clear purpose can motivate the entire team to work toward the company’s common goals. Clearly defined values allow employees to understand the company’s principles and strategy in order to obtain these goals.

This Ted Talk given by Simon Sinek explains the power of having a clear purpose:

 

But actions speak louder than words.

Once the company’s purpose and values have been laid out, management will need to be the first to turn these values into behavior.

Providing employees with space to voice their opinions, ideas, and concerns regarding business activity shows them that they are vital to the company’s success. Offering employees work flexibility, when possible, and understanding their family and health responsibilities keeps employees happy and productive.  When they feel that they are appreciated and that their personal lives are being respected, they will be more committed to the company’s purpose.

Environmental concerns should also be part of an SMEs’ values – and can save the company significant expenses.  SMEs can take small steps toward creating awareness around environmental concerns related to business activities. They can also work with employees to discuss ways in which waste, electricity, water, etc. can be minimized. Employees know the daily activities of the business better than anyone. They are a business owner’s best source of ideas and innovation.  There are thousands of examples in which employees have been the source of new ideas for product changes, streamlining processes, or even successful marketing strategies. They can be your best asset in order to promote a company’s “green” transformation.

Sounds Great! Easy! Right?

It is, as long as you remember: Purpose, Values, and then Actions.

Remember to clearly define the why.

(And it is not profit…)

Comments Off on Purpose, Values, and Action: Corporate Responsibility in SMEs / 13 Apr 2013 por Amy Blyth
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A social entrepreneurship week in Barcelona

 

 

Comments Off on A social entrepreneurship week in Barcelona / 11 Apr 2013 por Veronica Recanati
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A new partnership between Somos Más and Bridge For Good!

Somos Más and Bridge For Good launch a new partnership aimed to boost networking, sustainable development and social entrepreneurship related areas.

Bridge For Good is a social entrepreneurship project aimed to “build bridges” and create new and transparent partnerships between the private sectors and social projects, NGOs and no-profit organizations. Bridge For Good  provides also consultancy services in communication, cooperation, corporate responsibility and sustainable development.

Co-creation, collaboration, networking and participation are common values shared by the two organizations willing to make together a positive social impact.

Somos Más generates social and economic value through the mobilization of the civic society in social initiatives, participation in the social networks, communication of the social development and collaboration with the main players of the social net.

The Bridge For Good partnership will enhance Somos Más strategy and its objective of creating innovative ways of “building bridges” aimed to connect the different stakeholders in order to have a social change.

Here the complete article.

More information: www.bridgeforgood.org Facebook and Twitter: @BridgeForGood

 

SPANISH VERSION

Una nueva colaboración entre Somos Más y Bridge For Good

Somos Más y la asociación Bridge For Good lanzan una nueva colaboración con el fin de impulsar y comunicar temas relacionados con trabajo en red, desarrollo sostenible y emprendimiento social.

Bridge For Good es un proyecto de emprendimiento social enfocado en: “tender puentes” y crear nuevas y transparentes colaboraciones entre el sector privado y empresas sociales, ONG y entidades no lucrativas. Bridge For Good ofrece también asesoría y acompañamiento en el ámbito de la comunicación, cooperación, responsabilidad corporativa y sostenibilidad.

Co-creación, colaboración, trabajo en red y participación son áreas que unen a las dos organizaciones que lanzan la nueva colaboración para generar un impacto social positivo.

Somos Más es una Empresa Social con 10 años de trayectoria que cree en el poder del trabajo en red y el uso estratégico de tecnologías para generar impacto social. Con su trabajo logran que entre personas, jerarquías, barreras organizacionales, e incluso geográficas, pueda haber comunicación y colaboración abierta y sencilla. Para esto ha desarrollado numerosos proyectos con redes de ONGs, proyectos público-privados, entidades multilaterales, e iniciativas de responsabilidad social empresarial en latinoamérica y Europa.

La colaboración con Bridge For Good fortalece la estrategia de Somos Más y su objetivo de realizar formas innovadoras de “tender puentes” entre sectores y crear un cambio social.

Aqui el articulo completo.

Para conocer más sobre Bridge For Good y sus iniciativas, visita: www.bridgeforgood.org y/o redes sociales: Facebook y Twitter: @BridgeForGood

 

Comments Off on A new partnership between Somos Más and Bridge For Good! / 08 Apr 2013 por Veronica Recanati
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The Carbon Capture and Storage Debate: Are we “Locking Out” the low carbon energies of the future?

As explained in my previous post, Government policy can have enormous impact in shaping our technological base in the future by promoting the “locking in” or “locking out” of certain technological innovation.

Just as Governments can help incentivize the “lock in” of renewable energy technology into our energy future, their decisions can also play a large role in whether or not we can “kick the habit” for fossil fuels.

One example if this comes in the European Union’s support of Carbon Capture and Storage technology through the NER300 Programme.

Carbon Capture and Storage (CCS)

Carbon Capture and Storage is a technology meant to capture the CO2 emissions from coal, oil, or gas plants combustion and store it so that it is not emitted into the atmosphere, which would further aggravate climate change.

Sounds interesting right?

Some of the details still need to be resolved. For example, scientists are still working out where and how to store the CO2 once it has been captured. As of now, most scientific innovation is leading towards geological sequestration in saline aquifers in which the C02 is injected into these geological sites deemed safe for carbon sequestration. (For a more detailed explanation of CCS technology, visit this interactive website)

CCS and “Lock Out”

One of the main concerns regarding CCS is that it will likely promote the continued construction of fossil fuel plants in the future. Given that carbon plants have a lifespan of about 40 years, every new coal plant built this year will still be working, and polluting, in 2053.

If CCS technology becomes efficient and lucrative in the short term, it will quickly expand, therefore “locking us in” to carbon intensive energy production in the future. (With the additional process of storing that emitted carbon underground). Even worse, if CCS technology becomes widely adopted, some renewable energy technologies may be “locked out” of our technology base. Its implementation will likely cut funding towards renewable energy R&D projects – which may have been the future solutions to meet our energy demands.

CCS technology does not help the European Union reach its targets of becoming a truly low carbon economy in the future. It does not reduce CO2 production, but simply stores the CO2 being emitted. Carbon Capture and Storage may hinder us from fully reaching our low carbon economy potential.

So, why the interest in CCS?

Despite the fact that CCS technology is a “second best” option to curb CO2 emissions from being emitted into the atmosphere, there is a case to be made for its use – given our current political and energy situation. A prime example of the lack of political will in the international arena was seen last December at the Doha Climate conference.

The World Resources Institute identified that 1,200 new coal plants were in the planning stages in 59 countries last November – about three-quarters of those plants in China and India. These countries are “locking themselves in” to another 40 years of carbon intensive energy production. Without the interest and support of countries like the US, China and India, CCS may be the only way to avoid severe climate change.

Therefore, many argue that CCS technology would “buy us time” to allow political will to catch up and avoid a significant increase in climate change.

The global aspect of this issue makes the debate around CCS technology complicated:

May it keep us “hooked on” fossil fuels significantly longer that we should be?  – Yes.

But, might it be the only chance we have to keep the planet from warming more than the goal of 2 degrees Celsius? – From the looks of it, most likely.

 

In my opinion, CCS technology is a necessary evil. It is not a perfect solution, and will come with its own set of issues (possible leakages, geological disruptions, etc). However, with 1,200 new coal plants on their way, it may be the only option we have to avoid further climate change.

Given the current situation, James Smith, contributor for the Guardian, may be correct when he states:

We all must get real and get behind the [CCS] technology. Government and industry must work together urgently to build the essential demonstration projects over the next few years. The carbon market, post-2020, must be underpinned now with very strong signals for a carbon price that will stimulate all kinds of low-carbon investment, including CCS. And the government must continue with R&D to reduce costs and risks.

At least, in his promotion of CCS technology he also states the importance of strong carbon prices and “all kinds of” low carbon investments to compliment the continued use of fossil fuels…

Comments Off on The Carbon Capture and Storage Debate: Are we “Locking Out” the low carbon energies of the future? / 06 Apr 2013 por Amy Blyth
IMSD /

Smart Cities in the EU, Setis and CO2 abatement

The following post is a new topic that I will include into my master blog; is a sustainable idea that is having a strong impact in the European Society of this century as well as into the European Union. In the next lines I will try to explain the Smart Cities importance for the new society and their role in the European Union.

The city will be, without doubt, the dominant habitat type along the XXI century. More 50% of the world’s population already lives in cities, what has become the major consumer of resources and accelerating climate change. Thus, the model of development of cities should be complemented with some changes in the coming decades. This is extremely important if we what to reduce the environmental impact and climate they generate, their ecological footprint.

The key issues in the field of urban sustainability are aiming to answer fundamental questions such as how they can reduce the ecological footprint of cities, how to curb the growing social segregation within them or how to make cities places of social cohesion and equal opportunities for all its inhabitants.

But in addition to its negative externalities, cities are spaces focus on knowledge, innovation and capacity for action, since house the centers of political, economic, civil and thinking, and decision-making. It is for these reasons that cities are required and the potential generate the necessary paradigm shift. The objective is to start functioning efficiently.

According with the idea the European Commission, they create SETIS the “Strategic Energy Technologies System”. The objective of this tool is very ambitious and is as it follows:

Demonstrate the feasibility of rapidly progressing towards our energy and climate objectives at a local level while proving to citizens that their quality of life and local economies can be improved through investments in energy efficiency and reduction of carbon emissions.

From the city, the mitigation and adaptation to climate change should encourage energy saving, sustainable transport models and less consumerist lifestyles, must focus on eliminating fossil fuels in homes and workplaces, should promote an energy mix with a high share of renewable energy and should promote an urban planning and architecture that incorporates criteria that reduce energy demand for housing and to promote the recycling of materials and prudent use of resources.

The initiative of creating SETIS is based on the interest of the European Union that is within the current EU policies and national programs such as CIVITAS, CONCERTO and Intelligent Energy Europe.

The main driver of SETIS, are linked to:

• To trigger a sufficient take-up (reaching 5% of the EU population) of energy efficient and low carbon technologies to unlock the market.
• To reduce by 20% the greenhouse gas (reference year 1990) emissions by 2020, that will demonstrate not only environmental and energy security benefits but also to provide socio-economic advantages in terms of quality of life, local employment and businesses, and citizen empowerment.
• To effectively spread across Europe best practices of sustainable energy concepts at local level, for instance through the Covenant of Majors.

The smart cities development is supported by the European Commission, because they have many impacts of environmental and social, in addition it also has an impact on the fight against the cuts in carbon emissions by cleaner energy, be more efficient. Looking in terms of electrical use for, homes, offices, buildings, among others.

Cities are the major centers of consumption and waste generation.  Reducing the ecological footprint of cities goes to get a urban metabolism more efficient, to close cycles of products and extend its useful life to fully optimize their use. This implies generalization of a more responsible to reduce waste. The reuse and recycling of soil, water and materials must become a basic principle city in creating and maintaining it.

Take into actions this ideas is important to controlling and managing efficiently the new dynamics. We need to develop smart cities, incorporating the full potential provided by new technologies to improve performance and quality of life they bring to the citizens who live there.

Thanks for reading…

 

7 comentarios / 05 Apr 2013 por Carlos Omar Garcia Pascual
IMSD /

The air battle: aviation in the EU ETS

It is a fact. According to the United Nations Framework Convention on Climate Change (UNFCCC), current CO2 emissions from aviation account for around 2 and 3% of total emissions worldwide, being the sector with fastest growing emissions, increasing by 67% between 1990 and 2005 for Annex I countries*. Furthermore, the International Civil Aviation Organization (ICAO) estimates there could be an increase of between 300 and 700% by 2050 relative to 2005 levels.

Given this scenario and facing the achievement of the goal set by the Directive of the European Parliament and of The Council “of limiting the global average temperature increase to not more than 2 °C above pre-industrial levels” by achieving a reduction of its greenhouse gas emissions to at least 20% below 1990 levels by 2020, it was essential to incorporate the aviation sector to the EU ETS.

It was in 2008, when by an amendment to Directive 2003/87/EC, the European Union included aviation activities in the scheme for greenhouse gas emission allowance trading system within the Community and finally began operating on January 1st, 2012.

However, because of the nature of this activity, in which hundreds of international actors are involved, is necessary to create an inclusive strategy that can accurately quantify “in and out” emissions beyond the nationality of carriers.

For this reason, airlines with flights to and from the European Union were required to report their emissions in 2011.

The storm begins

In 2011, claiming the violation of sovereignty and the high costs for airlines, the Air Transport Association of America along with other organizations took the European Union to the European Court of Justice with the aim of not having to report emissions of airlines from that country. But the court failed in favor of the EU. The battle then moved to the US Congress, were they lobbied to ban US airlines to comply with the European.

Along with them, China and India missed to file in the data about their emissions, and around other 20 countries including Russia and Saudi Arabia met and agreed to coordinate vengeful actions against European Airlines.

It was then that actions started moving to more severe instances. Chinese airlines began to delay some orders from European aircraft producers and even a ban on European airlines to fly over certain territories was considered.

Turbulence continues

Given this situation, the meeting of the ICAO in November of 2012 marked a turning point for the negotiations and it was then the European Commission decided to“stop the clock, by temporarily deferring compliance obligations of aircraft operators in respect to incoming and outgoing flights under the ETS. Action should therefore not be taken against aircraft operators in respect of requirements resulting from Directive 2003/87/EC […] arising before 1 January 2014 for reporting verified emissions and for the corresponding surrender of allowances”.

Accurately, the European Union took this decision looking forward to achieve a comprehensive global legislation for aviation emissions under ICAO in which not only European, but all international actors are involved.

“Stopping the clock creates space for the political negotiations and demonstrates confidence on the side of the EU that together with international partners we will succeed in ICAO to agree on meaningful international action” said EU Connie Hedegaard, Commissioner for Climate Action.

Emergency landing

On the way to achieving a comprehensive agreement, the picture looks hazy. The EU expects a successful outcome of the 2013 ICAO Assembly. A global market-based measure should be decided and from it the creation and adoption of a framework that facilitates the application of this measure.

In the meantime, the Directive will continue to apply to flights between aerodromes in the EU (domestic flights). Therefore, all aircraft operators under these conditions are required to comply with the targets and of course with monitoring, reporting and verification requirements.

However, the plan to achieve this goal now has a major threat. At the beginning of 2012, US law that prohibits the compliance with the European scheme was passed and signed by President Obama.

Conclusion

In view of the United States decision, it is likely that other countries such as China and India will join the measure of not reporting emissions. It is certainly a situation of vulnerability to European legislation because aviation, like no other sector, requires the involvement of international actors. Considering a scenario in which only European airlines participate, would serve the purpose of reducing emissions but it definitely would not be as significant.
On the other hand in case of failure to reach an international negotiation, European companies competitiveness could be affected.

It is therefore necessary that the European Union consider the international arena it faces:

• United States and with very high probability China and India, would be outside the scheme being three of the greatest worldwide sector players, greatly affecting the result of emissions scheme.
• The ICAO will surely seek a solution to tackle the problem, however in words of ICAO´s secretary general, Raymond Benjamin “producing a global scheme by the next assembly is not realistic. What we have to do is answer whether is feasible or not. We are 191 countries, not 27. It is not easy to get an agreement”
• With the certainty of having to look for a market-based mechanism that tackles GHG emissions, it is possible that there are other options beyond the ETS that would better suit the necessity of a global agreement.

It will be in the coming months when the European Union deals with one of the biggest challenges at political and legal level in international negotiations, being today an open question whether if it’s the other actors who will fit this mechanism or if the EU will have to adapt to other schemes.

 

* “Annex I Parties include the industrialized countries that were members of the OECD in 1992, plus countries with economies in transition (the EIT Parties), including the Russian Federation, the Baltic States, and several Central and Eastern European States.” (UNFCCC)

Comments Off on The air battle: aviation in the EU ETS / 05 Apr 2013 por Monica Ducoing
IMSD /

Why did the European Union “Stop the Clock”?

According to ICAO the aviation sector is nowadays responsible for a share of 2% to 3% of global anthropogenic greenhouse gas emissions. However, it is one of the sectors that projects higher GHG emissions’ growth (up to 88% by 2020 and up to 667% by 2050, compared to 2006 levels).

As a result of a series of studies, 2001 ICAO Assembly has endorsed emission trading systems (ETS) for aviation as the most appropriate market-based measure to address the issue. Since then, ICAO has been struggling to achieve a global consensus on how to apply this measure. Understanding that climate change mitigation require urgent and effective actions, in 2008 the European Union decided to move forward before a global consensus and incorporated the aviation sector into the EU –ETS.

The EU Directive aims to reducing CO2 emissions by 46% compared to business as usual scenario. It means ‘saving’ around 183 Mt of CO2 per year which is equivalent to two times the amount of Austria’s annual emissions. The EU Directive basically establishes:

• EU – ETS applies to all flights arriving at and departing from the EU (plus Norway, Iceland and Liechtenstein) aerodromes.
• Base (historic emissions) to define the emissions cap is the average of sector’s annual emissions in 2004, 2005 and 2006 (221.4 Mt of CO2).
• In 2012 the cap is 97% of historic emissions (corresponding to 212.9 Mt of CO2), and 85% of the allowances are distributed free of charge (the remaining 15% are auctioned).
• From 2013 to 2020 the cap is 95% of historic emissions (corresponding to 208.5 Mt of CO2), and 82% the allowances are distributed free of charge (15% of the remaining are auctioned and 3% constitute a special reserve for new entrants and fast-growing aircraft operators).

Reactions to the EU decision came from all over the world. In 2010 American aircraft operators took legal actions against the measure alleging among other things that it infringed the Convention on International Civil Aviation, and interfered on the country’s sovereignty over its airspace. On 21 December 2011, the European Court of Justice stated that the inclusion of aviation in the EU-ETS does not infringe the principles of territoriality or sovereignty of third countries and that it “does not constitute a tax, fee or charge on fuel, which could be in breach of the EU-US Air Transport Agreement”.

However, aircraft operators’ complains echoed within American Congress and Senate which approved a bill (signed by President Barack Obama in November 2012) “to prohibit operators of civil aircraft of the United States from participating in the European Union’s emissions trading scheme”.

Following the American example, more than 900 Chinese and Indian aircraft operators have also refused to comply with EU-ETS and refrained from presenting the necessary documentation.

Taking into account all the international pressure the EU decided to ‘Stop the Clock’. “As a gesture of goodwill in support of an international solution”, it announced the postponement of the application of the ETS to flights into and out of Europe (i.e., international flights only) until after the ICAO General Assembly in autumn 2013.

Some questions have been raised around this ‘gesture of goodwill”. For instance, how does it relate to the fact that aircraft operators all over the world ‘alerted’ the EU about a possible reduction in the number of flights to the region as a result of the aviation inclusion in the EU-ETS? How did countries like Spain and Greece respond to this threat on their tourism sector revenues in the light of their already deteriorating economies? Is this gesture completely unattached to Chinese USD 4 billion contract to acquire European company Airbus aircrafts?

These questions may never be answered, but the fact is that economic interests have been playing a fundamental (and not necessarily positive) role in the discussions around climate change. The point is: considering all these so-often opposite forces, are we going to able to stop the clock of climate change before the point of no return?

 

Do you want to know your next plane travel carbon footprint? Click here.

Comments Off on Why did the European Union “Stop the Clock”? / 04 Apr 2013 por Andrea Mara Hanai
IMSD /

Why did the European Union “Stop the Clock”?

According to ICAO the aviation sector is nowadays responsible for a share of 2% to 3% of global anthropogenic greenhouse gas emissions. However, it is one of the sectors that projects higher GHG emissions’ growth (up to 88% by 2020 and up to 667% by 2050, compared to 2006 levels).

As a result of a series of studies, 2001 ICAO Assembly has endorsed emission trading systems (ETS) for aviation as the most appropriate market-based measure to address the issue. Since then, ICAO has been struggling to achieve a global consensus on how to apply this measure. Understanding that climate change mitigation require urgent and effective actions, in 2008 the European Union decided to move forward before a global consensus and incorporated the aviation sector into the EU –ETS.

The EU Directive aims to reducing CO2 emissions by 46% compared to business as usual scenario. It means ‘saving’ around 183 Mt of CO2 per year which is equivalent to two times the amount of Austria’s annual emissions. The EU Directive basically establishes:

• EU – ETS applies to all flights arriving at and departing from the EU (plus Norway, Iceland and Liechtenstein) aerodromes.
• Base (historic emissions) to define the emissions cap is the average of sector’s annual emissions in 2004, 2005 and 2006 (221.4 Mt of CO2).
• In 2012 the cap is 97% of historic emissions (corresponding to 212.9 Mt of CO2), and 85% of the allowances are distributed free of charge (the remaining 15% are auctioned).
• From 2013 to 2020 the cap is 95% of historic emissions (corresponding to 208.5 Mt of CO2), and 82% the allowances are distributed free of charge (15% of the remaining are auctioned and 3% constitute a special reserve for new entrants and fast-growing aircraft operators).

Reactions to the EU decision came from all over the world. In 2010 American aircraft operators took legal actions against the measure alleging among other things that it infringed the Convention on International Civil Aviation, and interfered on the country’s sovereignty over its airspace. On 21 December 2011, the European Court of Justice stated that the inclusion of aviation in the EU-ETS does not infringe the principles of territoriality or sovereignty of third countries and that it “does not constitute a tax, fee or charge on fuel, which could be in breach of the EU-US Air Transport Agreement”.

However, aircraft operators’ complains echoed within American Congress and Senate which approved a bill (signed by President Barack Obama in November 2012) “to prohibit operators of civil aircraft of the United States from participating in the European Union’s emissions trading scheme”.

Following the American example, more than 900 Chinese and Indian aircraft operators have also refused to comply with EU-ETS and refrained from presenting the necessary documentation.

Taking into account all the international pressure the EU decided to ‘Stop the Clock’. “As a gesture of goodwill in support of an international solution”, it announced the postponement of the application of the ETS to flights into and out of Europe (i.e., international flights only) until after the ICAO General Assembly in autumn 2013.

Some questions have been raised around this ‘gesture of goodwill”. For instance, how does it relate to the fact that aircraft operators all over the world ‘alerted’ the EU about a possible reduction in the number of flights to the region as a result of the aviation inclusion in the EU-ETS? How did countries like Spain and Greece respond to this threat on their tourism sector revenues in the light of their already deteriorating economies? Is this gesture completely unattached to Chinese USD 4 billion contract to acquire European company Airbus aircrafts?

These questions may never be answered, but the fact is that economic interests have been playing a fundamental (and not necessarily positive) role in the discussions around climate change. The point is: considering all these so-often opposite forces, are we going to able to stop the clock of climate change before the point of no return?

 

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Comments Off on Why did the European Union “Stop the Clock”? / 04 Apr 2013 por Andrea Mara Hanai
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