The World Needs a Ruler: Life With Carbon On The Balance Sheet

From the article by Larry Goldenhersh, president and CEO of Enviance, found in the latest issue of CIO Magazine:

In horse racing terms, the First Quarter of 2007 represented the “Trifecta” for greenhouse gas management and carbon constraint — with decisions in the scientific, financial and legal communities driving this nation past the tipping point on greenhouse gas (GHG).

1. A panel of over 2500 scientists from 130 countries announced that they were 90% certain that mankind’s activities had caused the global warming.
2. The financial community was rocked with news of TXU, the largest buyout at $44bb, predicated on a ground breaking deal with environmentalists to cut GHG emissions.
3. Finally, the Supreme Court, in Massachusetts v. EPA, took the last step, by finding that Environmental Protection Agency (EPA) could regulate GHG under the Clean Air Act and that the States had the right to sue if EPA failed to act.

With our nation having passed the tipping point, it is now clear that GHG regulation and restriction is coming and carbon is going on the balance sheet. What used to be free will now cost industry upwards of $20/ton!  With total costs in the U.S. estimated to be $50bb ($160bb world wide), the imposition of restraints on carbon (whether by tax or cap/trade) promise to deliver a wrenching financial restructuring.

Because of the financial implications of carbon going on the balance sheet, every affected organization must be able to measure its CO2 emissions.  The foundations for any GHG policy are systems that produces auditable, verifiable, standardized emissions data.

Affected companies like utilities and chemical manufacturers need to measure their footprint, disclose their financial risk to their investors, plan for reductions, and earn the credibility that is critical to getting a voice with policy makers.

Read the entire article.