(DRAFT) Carbon Accounting for Everyone?

DRAFT

I recently got invited to speak at a conference on enterprise carbon accounting in Boston (I accepted, but can't link to a webapge since they don't seem to have a one yet). In the blurb on the conference it asks the following question: "Will my organization be one of the estimated 1 million firms impacted by Greenhouse Gas regulation?". You could argue semantics and ask what "impacted" means, but the statement seems to imply that a million companies will have to do carbon accounting as a result of legislation.

This comes after a string of discussions with startups and VCs who are already in, or are exploring businesses to help companies do carbon accounting. I generally hear a similar story: once GHG legislation hits, everyone will have to do it.

Now before I go further, let me state that I'm a huge fan of voluntary reporting of GHG emissions, as well as other environmental impacts. At Sun this is a regular part of our CSR and environmental reporting, and we even go so far as to report all of our Scope 1 and 2 sources (look for our data in OpenEco.org). I think there's huge value in this for companies to understand the scope and causes of their impacts, and its also important for them to be transparent with their various stakeholders.

That said, having it be a legal, formal reporting requirement would surely add some cost, without any benefit that I see coming back to Sun. So when I hear that a million companies will have a legal requirement, I have to imagine that a Fortune 250 company will be among the million.

But wait a minute, like lots of companies, Sun's total GHG emissions are a result of energy usage: electricity and natural gas in our facilities, gasoline in a few vehicles, and diesel for some backup generators. We don't have any emissions as a result of chemical or material processes from our own manufacturing processes.

Are we going to have to file a legal report of our emissions? Are we going to have to go out and buy emissions allowances in the carbon market?

Personally, I don't think so. I'm finding it harder and harder to believe that every energy user is going to have to participate at that level in a carbon cap and trade system, or in a carbon tax. Sure, the price you pay for your energy will include the extra cost that someone paid for and accounted upstream, but the legal requirements on a company like Sun won't be any different than they are today.