Carbon Market Presentation Nov 3 2011 Totten

8/3/2019 Carbon Market Presentation Nov 3 2011 Totten

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Carbon Forum Asia 2011"Money": The Role of Finance Related to

Climate Security and Energy Security

Michael P. TottenSenior Advisor, CI [email protected]

November 3, 2011


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Founded: 1987

Employees: 900+

Global Offices: 30+

Partners: 1,000+ around the world

Funds: $338 million in grant funds

Charity Navigator Rating:

Our VisionWe imagine a healthy prosperous world in

which societies are forever committed to

caring for and valuing nature for the long-

term benefit of people and all life on Earth.

Our MissionBuilding upon a strong foundation ofscience, partnership and field

demonstration, CI empowers societies to

responsibly and sustainably care for nature

for the well-being of humanity.


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Leading the ResponsibleCorporate Movement


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Business &Sustainability

Council


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Triple S Portfolio


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Pervasive Information & Communication Technologies Key to Success

Using portfolios of multiple-benefit actions to becomeclimate positive and revenue positive

Ambitious, Continuous

Efficiency Gains

Smart Green PowerProtecting

Ecosystem Services

Adopting Cost & Risk-Resilient Portfolio


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1)SHRINKING - CONTINUOUS EFFICIENCYAdopt decoupling+ and comprehensive IRP fordelivering utility services to the point of use at leastcost & risk, fully including end-use efficiencyimprovements and onsite/distributed generation

2)SHIFTING GREEN/SMART ENERGYSelect only verifiable green power/fuels that areclimate- & biodiversity-friendly, accelerate not slowpoverty reduction, & avoid adverse impacts

3)SOURCING - ECOSYSTEM OFFSETSAdd standards-based (CCB) carbon mitigationoptions to portfolio that deliver triple benefits(climate protection, biodiversity preservation, andpromotion of community sustainable development)

Promoting Triple S Portfoliothrough Innovative Policies


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$1.14 billion savings

over 5 years on energy,

water & chemical costs.670% ROI

If the chief executive is

not totally committed, it

wont succeed,

Pasquale Pistorio, CEO,

STMicro, 1987-2005.

So the financial incentive is there, but as CEO

Pasquale Pistorio stressed, its not enough.


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Between 1998-2010 STMicro

planted 10 million trees inreforestation programs in

Morocco, Australia, USA, France

and Italy (9,000 ha total).

179,000 tons of CO2 sequestered.

SOURCE:Compensate the remaining direct CO2emissions through reforestation or other

carbon sequestration methods, to reach

CO2 direct emissions neutrality by 2015.

SHRINK:Reduce total emissions of CO2 due to our

energy consumption (tons of CO2 per

production unit) by 5% per year:

STMicro Carbon Positive

& Revenue Positive

SHIFT:

Adopt whenever possible renewable

energy sources of wind, hydroelectric,

geothermic, photovoltaic, and thermal

solar.

Source: STMicroelectronics, Sustainability Report 2010, Our culture of Sustainable Excellence in Practice,

www.st.com/internet/com/CORPORATE_RESOURCES/FINANCIAL/FINANCIAL_REPORT/ST_2010_sustainability_report.pdf
http://www.st.com/internet/com/CORPORATE_RESOURCES/FINANCIAL/FINANCIAL_REPORT/ST_2010_sustainability_report.pdfhttp://www.st.com/internet/com/CORPORATE_RESOURCES/FINANCIAL/FINANCIAL_REPORT/ST_2010_sustainability_report.pdf


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Dow slashed energy intensity by ~40%

between 1990-2005.$9.4 billion savings between 1994-2010

940% ROI

CO2 reductions at

negative cost


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Zero net cost counting efficiency savings. Not counting the efficiency savings theincremental cost of achieving a 450 ppm path is55-80 billion per year between 20102020 for

developing countries and4050 billion for developed countries, or about half the215

CO2 Abatement potential & cost for 2020

Breakdown by abatement type

9 Gt terrestrial carbon (forestry/agriculture) 6 Gt energy efficiency 4 Gt low-carbon energy supply


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Portfolio Part 1

SHRINKINGecological footprints

(emissions, pollutants, waste, water, energy,

land, & capital) through aggressive,ambitious and continuous efficiency gains


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Rob Walton, Chairman, Walmart Mike Duke CEO, Walmart


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Our Licenseto Grow isthreatened

2004 in the Bulls eye


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138 million customers every week

100,000 product lines60,000 suppliers in 70 countries

8,500-plus storesand clubs1.7 million associates

Walmarts World


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SouthKorea

HongKong

Taiwan

China

Guatemala

Brazil

Philippines

India

Malaysia

Thailand

Indonesia

Bangladesh

Pakistan

SriLanka

Top 15 Countries Walmart Imports 2008Honduras

70% W l I f Chi 2008


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70% Walmart Imports from China 2008

25% from 14 other nations ( )


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Most ofWalmarts impact & cost is imbedded in products

Packaging

Agriculture

Water

Marine

Factories

Indirect Impact =

92%


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We are looking at innovative ways to reduce ourGHG emissions. This used to be controversial, but

the science is in and it is overwhelming.

Climate change doesnt cause hurricanes, but hot

ocean water makes them more powerful. Climate

change doesnt cause rainfall, but it can increase

the frequency and severity of heavy flooding.

Climate change doesnt cause droughts, but it

makes droughts longer.

Lee Scott, CEO21st Century LeadershipPresentation Nov. 24, 2005

On Climate Change Action

We believe every company has a responsibility toreduce GHG as quickly as it can. Wal-Mart can help

restore balance to climate systems, reduce

greenhouse gases, save money for our customers,

and reduce dependence on oil.


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We are committed to aggressively investing $500 million annually in

technologies and innovation to do the following:

Reducing GHG at our existing store, club and

Distribution Center base around the world by

20 percent w/in 7 years.

Designing and opening prototype stores 25-30% more efficient and 30% fewer GHG emissions

within the next 4 years.

Increasing fleet efficiency 25% in 3 years, and

doubling efficiency in the next 10 years.

Sharing all learning in technology with the world,

including our competitors (the more people who

can utilize this type of technology the larger the

market and more we can save our customers)


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100%

RE

ZeroWaste

LCA

goods


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In 2006, Walmart set a goal of

reducing energy consumption

& CO2 emissions in the USA byselling 100 million CFLs in 1

year.

Walmart exceeded that goal,

selling 137 million.

By the end of 2010,

Walmart had sold nearly

half a billion CFLs.

New & Expanding

Business in CO2-

Reducing Product lines


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[source: SafeClimate.net]

-50

0

50

100

150

200

250

300

Investment lst year 2nd year 3rd year 4th year

6-pak CFLs Dow -Jones Average Bank Account

$

$10 CFL 6-pak Purchase Value


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source: A. Gadgil et al. LBL, 1991

CFL factories displace power plants

The $3 million CFL factory (right) produces 5 million CFLs peryear. Over life of factory these CFLs will produce lightingservices sufficient to displace several billion dollars of fossil-fired power plant investments used to power less efficientincandescent lamps.


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You cant just keep doing what works one time. Everythingaround you is changing. To succeed, stay out in front of change.

Sam Walton, founder

LEDlight-

emittingdiodesNew Goal to Supersede CFLs with LEDs

LED light output (lumens)

and luminous efficacy

(lumens per watt of

electricity) are doubling

every 20 months.

High-brightness LEDs

compound annual growthrate of 24% worldwide.

US$ 15 billion market in

2013.

1/3

rd

Asian incandescentsreplaced by LEDs by 2020.


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We are committed to the following:

Assisting in the design and

support of a green company

program in China, where

Walmart would show preference

to those suppliers and their

factories involved in such a

program.

Initiating a program in the U.S.that shows preference to

suppliers who set their own goals

and aggressively reduce their

own emissions.

Lee Scott, then-president and CEO of

Walmart , speaking to

1000 Suppliers in China,

October 2008

W l R d 20 illi


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Over the next five years were going to be focusing on

certain categories, certain businesses where the biggest

opportunity exists, where its the most efficient and mostcost-effective to remove that GHG from that supply

chain. Whether it be in apparel, whether it be in food,

whether it be in home line products, were looking at the

category of products where theres great opportunity.

Reducing carbon in the lifecycle of out products will

often mean reducing energy use. That will meangreater efficiency and, with the rising cost of energy,

lower costs, making our business stronger and more

competitive. And, as we help our suppliers reduce

their energy use, costs and carbon footprint, well be

helping our customers do that same thing.

Walmart to Reduce 20 million

tons CO2 by 2015

Matt Kistler, Senior VP

of Sustainability at

Walmart Stores

Mike Duke, CEO, Walmart

Walmarts Biggest Competitor


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Walmart s Biggest Competitor

High Oil & Utility Prices

Aggressively pursuing regulatory and policy changes that will

create incentives for utilities to invest in energy efficiency and

low or no GHG sources of electricity, and to reduce barriers to

integrating these sources into the power grid.

I d R Pl i (IRP) & D li l f


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New York

California

USA minus CA & NYPer CapitalElectricityConsumption 165 GWCoalPowerPlants

Californians have

net savings of$1,000 per family

[EPPs]

For delivering least-cost & risk electricity, natural gas & water services

Integrated Resource Planning (IRP) & Decoupling sales fromrevenues are key to harnessing Efficiency Power Plants

California 30 year proof of IRP value in promotinglower cost efficiency over new power plants orhydro dams, and lower GHG emissions.

California signed MOUs with Provinces in Chinato share IRP expertise (now underway in Jiangsu).


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global cumulative electric utility

infrastructure investment needed

between 2007 and 2030.

US$26.3 trillion

Source: IEA, in 2007 US$; GEF & Global Smart Energy. 2008. The Electricity Economy,http://www.globalenvironmentfund.com/data/uploads/The%20Electricity%20Economy.pdf

12.7 trillion kWhAdditional generation by 2030

C t f d li d l t i it (US/kWh)
http://www.globalenvironmentfund.com/data/uploads/The%20Electricity%20Economy.pdfhttp://www.globalenvironmentfund.com/data/uploads/The%20Electricity%20Economy.pdf


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Amory Lovins & Imran Sheikh, The Nuclear Illusion, May 2008, www.rmi.org

nuclear coal CC gas wind farm CC ind

cogen

bldg scale

cogen

recycled

ind cogen

end-useefficiency

CCS

Cost of new delivered electricity (US/kWh)

US currentaverage

2 471: 93 kg


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Amory Lovins & Imran Sheikh, The Nuclear Illusion, May 2008, www.rmi.org

nuclear coal CC gas wind farm CC ind

cogen

bldg scale

cogen

recycled

ind cogen

2

end-use

efficiency

47

32

23

g

CO2/$1Coal-fired CO2emissionsdisplaced per dollar spenton electrical services


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Now use 1/2 global power

30-50% efficiency savings achievable w/ high ROI

ELECTRIC MOTOR SYSTEMS

M t M k t T f ti


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Industrial electric motor systemsconsume 40% of electricity

worldwide, 50% in USA, 60% in China

over 7 trillion kWh per year.

Retrofit savings of 30%, New savings

of 50% -- @ 1 /kWh.

2 trillion kWh per year savings equal to1/4th all coal plants to be built through

2030 worldwide.

$240 billion savings per decade.

$200 to $400 billion benefits per decadein avoided emissions of GHGs, SO2 and

NOx.

Efficiency OutcomesDemand Facts

Support SEEEM

(Standards for Energy

Efficiency of Electric

Motor Systems)

SEEEM (www.seeem.org/) is a comprehensive markettransformation strategy to promote efficient

industrial electric motor systems worldwide

Motor Market Transformation

Path to Multi- Trillion Dollar Savings

M R t il Effi i P Pl t EPP
http://www.seeem.org/http://www.seeem.org/


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Less Coal Power Plants

Less Coal Rail Cars

Less Coal Mines

More Retail Efficiency Power Plants -EPPsLess Need for Coal Mines & Power Plants


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Portfolio Part 2

SHIFTINGTo green power and fuel options that are both

climate & biodiversity positive, and have the

smallest combined ecological impacts


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Over 4000 Walmart stores with

white roofs, and standard

practice since 1990

Reflects away 80% of solar heat

SOLAR REFLECTORS

W ld f S l R fl ti Citi


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Hashem AkbariArthur Rosenfeld and Surabi Menon, Global Cooling: Increasing World-wide Urban Albedos to Offset CO2, 5thAnnual California Climate ChangeConference, Sacramento, CA, September 9, 2008, http://www.climatechange.ca.gov/events/2008_conference/presentations/index.html

World of Solar Reflecting Cities$2+ Trillion Global Savings Potential, 59 Gt CO2 Reduction

100 m2
http://www.climatechange.ca.gov/events/2008_conference/presentations/index.htmlhttp://www.climatechange.ca.gov/events/2008_conference/presentations/index.html


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2.7 km/l

529 million liters

[6.4 mpg

140 million gal]

121,000 hectares

Land required if

Wal-Mart Class 8

large truck fleet

Switched fromFossil Diesel to

BioDiesel from

Oil Palm

Plantations


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2.7 km/l 529 million liters

5.5 km/l 265 million liters

8 km/l 176 million liters

40,000 hectaresWhen the truck fleet achieves triple fuel efficiency

2004 2011


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$-

$10

$20

$30

$40

$50

$60

$70

biodiesel truck efficienc

$65

$15

perbarrelcost

Cost Comparison Biodiesel vs Truck Efficiency

Multi-billion $ Savings & Cost-free CO2 Reductions


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Walmart is on the path to triplingits truck fleet efficiency.

Over the past 2 years Walmart

replaced ~2/3rd of their fleet with

more efficient tractors.

Achieved 65% reduction in fuel per ton km over

past 5 years.

In 2010, Walmart delivered 57 million more

cases, while driving 79 million fewer km.

Avoiding ~40,000 t/CO2 -- equivalent to taking

7,600 U.S. cars off the road.

Source; Building the Next Generation WalmartResponsibility,2011 Global Responsibility report

l d


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27 wind turbines in

La Ventosa, Oaxaca

67.5 MW to power 348 stores,

clubs, restaurants, and distributioncenters

100% dedicated to Walmart

Mexico

Eximbanks Deal of the Year

awarded to turbine manufacturer

by President Obama

Walmart Mexicos Oaxaca I Wind Farm

Now examining large-scale

aggregation purchasing from

independent suppliers at

competitive price to utility rates


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Portfolio Part 3

SOURCING OFFSETSremaining footprints by prevention of threatened

tropical forests (REDD+) and other intact ecosystems

(e.g., mangroves, peat lands, grass lands) throughstandards-based conservation carbon offsets


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High Quality Multi-Benefit

L C REDD C b P j d


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$4 million to protect the Tayna andKisimba-Ikobo Community Reserves ineastern DRC and Alto Mayo conservationarea in Peru.

Will prevent more than 900,000 tons ofCO2 from being released into theatmosphere.

Using Climate, Community & Biodiversity

Carbon Standards.

Largest Corporate REDD Carbon Project to date

Protecting Critical


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Protecting Critical

Wilderness to Offset

Operation Footprints

In 2005, Wal-Mart adopted the

goal to permanently offset the

land footprint of all their USA

stores and distribution centers by

protecting critical wildlife habitat

in the USA.

Walmarts $35 million donation

over 10 years enables purchasingenough land to account for its

stores current land-use, as well as

the companys development

throughout the 10-year period --

roughly 60,000 hectares.

Need to Halt Deforestation & Ecosystem Destruction


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IPCC LULUCF Special Report 2000. Tab 1-2.

Gigatons global CO2 emissions per year

0

5

10

15

20

25

Fossil fuel emissions Tropical land use

Billion tons CO214 million hectares burned each

year emitting 5 to 8 billion tons

CO2 per year. More emissions

than world transport system of

cars, trucks, trains, planes, ships

GHGlevels

Need to Halt Deforestation & Ecosystem Destruction

Outsourcing CO reductions to become Climate Positive


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IPCC LULUCF Special Report 2000. Tab 1-2.

Gigatons global CO2 emissions per year

0

5

10

15

20

25

Fossil fuel emissions Tropical land use

Billion tons CO25 to 8 billion tons CO2 per year

in mitigation services available in

poor nations, increasing their

revenues by billions of dollars

annually ; and saving better-off

nations billions of dollars.

GHGlevels

Outsourcing CO2 reductions to become Climate Positive


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$-

$5

$10$15

$20

$25

$30

$35

$40

$45

$50

CCS REDD

Geological storage (CCS) vs

Ecological storage (REDD)Carbon Mitigation Cost

U.S. fossil Electricity CO2mitigation cost annually

(2.4 GtCO2 in 2007)

~$100billion

~3 per kWh

~$18 billion

~0.5 per kWh

$ per ton CO2

Carbon Capture & Storage (CCS)

Reduced Emissions Deforestation

& Degradation (REDD)

Source: Michael Totten, REDD is CCS NOW, December 2008

0

U.S. fossil Electricity in 2007 $7.50 per ton CO2


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2.4 billion tons CO2 emissions

Tropical Deforestation 2007

13 million hectares burned

7 billion tons CO2 emissions

$7.50 per ton CO2

1/2 cent per kWh

$18 billion/yr REDD trade

Poverty reduction

Prevent Species loss

A win-win-winoutcome

A win-win-winoutcome


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1824 Liters per year(10.6 km/l x 19,370 km per year)

4.8 tons CO2 emissions per

year

~$48 to Reduce Emissions from Deforestation at $10 per tCO2

Adds 7 cents per gallon

=

Stay Tuned for Part 2


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Green

ATP

Michael P. Totten, [email protected]

Stay Tuned for Part 2

Accelerating & Scaling Best Opportunities
mailto:[email protected]:[email protected]

Documents

Carbon Market Presentation Nov 3 2011 Totten