The Cost of Climate Change

Written by admin on May 17th, 2011

“Extreme weather events are becoming increasingly frequent, wreaking havoc and destruction, costing companies and countries billions of dollars”, says Kevin James, CEO of Global Carbon Exchange, a South African-Australasian based carbon and energy reduction consultancy. A study conducted by a Deutche Bank economist states that “forest decline could be costing about 7% of global GDP”. This translates to staggering global losses of between and trillion per year, losses we can ill afford in the current economic market.

For businesses, addressing climate change is becoming increasingly important and the risks of inaction could have far reaching and dire effects on traditional business models. The introduction of carbon tax based on a company’s CO2 emissions could ”soon” be implemented according to Environmental Affairs and Tourism Minister, Martinus Van Schalkwyk when addressing cabinet in late July.” This would immediately create a liability on a company’s balance sheet that just wasn’t there before. Forward thinking companies have identified this as a risk to their future commercial sustainability and are taking action to at least know where they stand.” Added James

In addition, the cost of energy on individuals and corporations is also a growing financial burden. One of Eskom’s proposed policies is to penalize consumers across the board should they not reach sector-specific energy reductions. The reductions necessary would be 5% for agriculture, 10% for commercial and household consumption, 15% in the industrial sector and 20% for hotels and shopping malls. So it is clear, “The earlier action is taken, the less costly it will be”, as stated in The Stern Review.

A growing number of South African companies are taking action and enjoying savings by utilizing the services of climate change and carbon reduction consultancies.  There are four steps to reduce companies’ impact on climate change and maximize their energy efficiency, advises James. The first is determining a carbon footprint, which quantifies the amount of carbon dioxide and other greenhouse gases that a company emits per annum or per product. This is followed by investment detailed financial energy audit, which pinpoints exactly where and how much energy is being used in the company’s operations. That information is then used to implement reductions which maximise energy efficiency and lead to massive cost and emissions savings. Finally if any emissions should remain, there are a number of community driven carbon reduction and offset projects in which to invest, which also enhance a company’s social investment and reputation.

“Taking action on climate change has a strong moral appeal to consumers and this translates into extremely valuable marketing and branding opportunities for companies,” says James, who has been educating  management of various businesses on these opportunities in South Africa over the last 12 months.

Notes to Editors:

Global Carbon Exchange’s is a leading South African and International carbon and energy reduction consultancy which helps clients develop a comprehensive strategy to address climate change. Services include determining a client’s carbon foot print, then conducting an investment grade energy audit, to determine where and how energy efficiency can be maximised in a company. A reduction plan including a comprehensive internal staff education campaign is then implemented, leading to cost and energy savings of up to 30%. Unless the reductions lead to total carbon neutrality, Global Carbon Exchange will then provide advice and decision making criteria for the company to select an offset project most aligned with its brand or existing company policy. Global Carbon Exchange also helps the company explore the many existing branding and marketing opportunities which open up to it by investing in our climate. Unlike many other consultancies, Global Carbon Exchange offers brokerage and trading of Carbon Credits in the Mandatory and Voluntary Carbon Emissions Market.

Some of Global Carbon Exchanges clients include Nando’s, New Clicks Holdings, Spier, Peugot, Kleine Zalze, Old Mutual and Fair Cape

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