Category Archives: Carbon GHG

Will Factories in a Box Revolutionize Sustainability Initiatives?

Gizmodo just ran a very interesting, and vey insightful article on how “The Next Industrial Revolution Starts in this 20-foot Shipping Container” about Re-Char and their “Shop-in-a-Box” that can perform rapid fabrication of steel parts by way of software and a CNC plasma torch. With the Shop-in-a-Box described in the article, Re-Char can produce 600 lids for Climate Kilns. This is a specialized lid-and-chimney integration that adapts a 55-gallon drum to produce the soil amendment biochar. (In Kenya, farmers burn sugarcane debris in an open field and release tons of carbon. A Climate Kiln controls the burn to produce the carbon-rich charcoal biochar that, mixed into soil, reduces the fertilizer requirements for crops by half.) This required the precision cutting of 18-gauge metal, which, in East Africa, leaves you the option of using a guy with an oxy-acetylene torch on the side of the highway or importing a full production run out of China, one full shipping container at a time. But for 30,000, Re-Char was able to produce a Shop-in-a-Box metal cutting and joining setup that could be run by two two people and produce 600 lids as a time, when needed, where needed (as the shop in a box can be moved to a new community when the needs of the current community have been fulfilled).

From a sustainability perspective, this is incredible. It’s lean, green, and completely against the routine. Actually, lean is an understatement. The power requirements are limited to what is needed to produce the lids. The energy required just to light, cool, etc. an average factory typically takes a 600 V feed … or two … or three. It’s green in that it can be powered by sustainable energy, including wind power, water power, or solar power – whatever is available. (Transformers come with the standard kit, along with generators for [natural] gas power for stability. Just add batteries and a UPS and it’s 100% green power most of the time.) And it’s completely against the routine. When the industrial revolution started, you can be that the robber barrons never predicted a moveable factory.

To date, the most (wide-spread) innovative use of containers has been data center modules, with Google a leader in this technology. (But this has been taken to the next level. For example, Green Data Center has designs for completely self-contained data center modules that you can drop anywhere. Just hook-up a power feed and an internet feed, and you’re literally good to go. (And since you can easily put a generator, or two, in a second container, you don’t even need a power feed. Just a natural gas feed, split between a couple of generators if you don’t have a sustainable power feed, for a primary feed.)

But we don’t have to stop at data centers and steel-part fabrication shops. Especially when we are talking about the developing world (which still includes much of Africa, South America, and parts of Asia). Do we really need to refine cane sugar 2,200 kgs at a time, for example? Or how about water purification? If we’re talking about a small community of a couple of hundred people, and the primary focus is clean drinking water, we don’t need to purify 100,000 liters a day! Purifying 1,000 liters would do nicely! Both processes would fit nicely in a container system. (After all, the sugar refinement process is not radically different from micro-brewing in terms of what is needed, and you could fit that nicely in a container too — although we can’t necessarily bring the same humanitarian arguments if we did.)

And when we’ve insured that everyone has the absolute necessities of clean air, clean water, and healthy food — we could ship them clothing factories in a box. It doesn’t make sense to sew shirts in sweat-shops on another continent just to ship them to small communities in Africa, or South America, or Asia, where the living wage is $2 a day or less. Considering the shipping costs alone, you couldn’t set the price at a point where you’d make many sales. Just ship a container to the town, train a few locals on the cloth-cutting production lines and find a few budding seamstresses to do the stiching, and produce the clothing where it will be sold. A zero-mile supply chain that emits zero-carbon and has zero shipping costs. And since you don’t have time-sensitive fashion industries in developing economies, you could even rotate it between a few small communities in the beginning while the consumer base and local economy built up. (Hopefully you’d also move the employees too if they were willing, as you could outfit another container as temporary living quarters without much cost or effort.)

I think the physical manifestation of the Solution-in-a-Box approach has the potential to revolutionize manufacturing, distribution, and sustainability. And it’s not like we have a shortage of containers thanks to the outsourcing craze of the last fifteen years. They’re just sitting there waiting for a good use. And with all the super-panamax ships, and super-panamax capable ports, that we have at our disposal, we can get them from any continent to any other continent with ease, in bulk, and pretty close to where we want them. And then we just need a freightliner to haul them, and there’s no shortage of those.

If You Don’t Understand Your Energy Risk …

… those hard-earned “savings” could disappear overnight if:

  • oil surpasses $100 a barrel again
    (which many economists and futurists think it will do by the end of the year)
  • carbon taxes are imposed
    (which are unlikely to be postponed much further)
  • energy grids hit capacity
    (and the organization is forced to get its own power plants up and running quickly)

And if that isn’t scary enough, there’s a 69% chance that your organization does not understand it’s energy risk, according to a recent survey by Treasury and Risk (as quoted in a recent Technology Review article on “Navigating Your Energy Risk”). It’s about time your organization calculates its carbon footprint. Unless the risk is known, the organization will be unable to mitigate it when energy prices rise rapidly or carbon taxes are introduced in one of its locales of operation.

Is a 45,000 fine in your future?

Any UK organization with half-hourly metered electricity that used more than 6,000 MWh in 2008 that does not register for the UK-wide CRC Energy Efficiency Scheme before September 30, 2010 could be fined as much as £45,000!

Previously known simply as the Carbon Reduction Commitment, the CRC Energy Efficiency Scheme is an emissions trading scheme introduced by the UK government to cut greenhouse gases by 1.2 million tonnes of carbon per year by 2020. Organizations are now required to monitor their emissions, and if they exceed this threshold, they need to purchase allowances to emit additional tonnes of CO2 or face a hefty fine.

The government estimates that as many as 5,000 organizations exceed the threshold, but only 1,229 have registered to date. Eligible private and public sector organizations that don’t meet the registration deadline will be immediately fined £5,000 plus an additional £500 penalty for every subsequent working day the company fails to register, to a maximum of 80 days. Is your company one of the roughly 3,800 that hasn’t registered yet? Are you sure?

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You Did Not Predict the Weather? Too Bad. See You In Court!

As if you didn’t have enough risks to worry about, now, as per this recent article in Industry Week on “Climate Change Risk Management”, you now have a new risk to worry about. If you don’t anticipate extreme weather events that can cause sudden and material damage to business assets, interrupt business operations directly, or disrupt key elements in transportation or support activities, then you might be sued by your investors for losses from your failure to disclose and anticipate those risks, just like American Electric Power Company was sued by the state of Connecticut.

Right now most of these claims are limited to “public nuisance” claims based on GHG emissions (which, according to various plaintiffs, have contributed to events like Hurricane Katrina), but they could be brought under security laws in the near future, now that the SEC has issued interpretative guidance for publicly traded companies related to climate change disclosure. Any company that fails to disclose in accordance with the guidance could be on shaky ground, especially now that shareholders’ resolutions for disclosure of management’s responses to climate change are becoming much more frequent in proxy statements.

In other words, if you’re not identifying all your risks, disclosing all your significant risks, and preparing to mitigate those risks, you’re not only on the fast track to major disruption and loss, but lawsuits that drag on forever.

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A Great Argument for Carbon Taxes (and Credits)

A recent article in Knowledge @ Wharton Universia on “phishing, bribery, and falsification: combating the complexities of carbon fraud” provides a great argument on why cap and trade should be abandoned in favour of straight carbon taxes (and credits if the goal is to encourage corporations to be as efficient with carbon emissions as possible). According to the article, carbon trading systems, especially when coupled with lax Internet security and third party verification, pose a great opportunity for crooks who want to defraud honest companies out of millions of dollars.

The first example the article gave was of a group of rouge traders who, earlier this year, stole as much as $4 Million by posing as regulators, setting up a fake, but official-looking website, and using it to obtain carbon trading account information from companies and traders who thought they were complying with government requests. The scheme forced the German Emissions Trade Authority to suspend trading, but not before 250,000 permits had been stolen.

The second example was that of Carbon Harvesting Corp who’s director has been arrested and charged in connection in an alleged scheme to pay $2.5 Million to “rent” a fifth of Liberia’s forests and profit by selling the credits that could be obtained from the carbon absorbing trees.

All in all, Europol estimated that tax fraud associated with carbon trading reached 6.5 Billion over 18 months, and in some countries, up to 90% of trading volume resulted from fraudulent activities. A recent report on “Ten Ways to Game the Carbon Market” identified 10 scams common to carbon trading … and the list was not necessarily all-inclusive.

But if there’s no trading, there’s no opportunity for trading fraud. And there’s no need for trading if governments simply levy a tax on every tonne of carbon emitted. Furthermore, if the goal is to compensate companies that are being extra efficient about carbon emission, there can also be carbon credits where companies that emit below a floor can get tax credits. In fact, it only takes a simple algebraic formula to capture taxes and credits in a joint system: (tons emitted - tons allowed) * tax per ton. For example, if it’s $10 per tonne, the company has an allowance of 1,000 tons, and the company emits 2,000 tons, then the company would pay (2,000-1,000)*10 = 10,000. And if it’s $10 per tonne, the company has an allowance of 1,000 tons, and the company emits 500 tons, then the company would get a credit of (500-1,000)*10 = 5,000 on its tax return. Simple.

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