A conventional approach to obtaining an accurate carbon footprint for a product is life cycle assessment (LCA) by expert consultants. Though we hope to replace traditional LCA in some applications, we also believe that LCA can be an excellent complement to our offering and we have been tracking its evolution.

A 2006 survey conducted by Joyce Cooper at the University of Washington and James Fava at Five Winds International helps explain how LCA studies are being conducted and used. Below are a few of the results that we found most interesting. The complete results of the survey can be found online. Cooper and Fava also published a paper on the survey in the Journal of Industrial Ecology (Cooper, J.S. and J. Fava. 2006. Life Cycle Assessment Practitioner Survey: Summary of Results. Journal of Industrial Ecology. pp. 12-14).

How is LCA Being Used?

Since LCA studies are relatively expensive and time consuming, they are often best suited to targeted, well-defined projects such as assessing specific product formulation or process changes, and in answering questions about a product’s life cycle that require a high level of detail and precision. This is reflected in the frequent use of LCA for research and development of product and process design. Also, though many respondents to the survey claimed to use LCA as a guide for business strategy, their comments suggest that most haven’t found substantial ROI in this application. For example, one company said LCA drives “strategic development and business improvement” but also “LCA’s costs outweigh the perceived business benefits.”

• Highly reusable data models
• Software to streamline the assessment process
• Analytics that make footprint information accessible to non-technical users

We believe that providing software that accomplishes these three goals will make footprint information more useful for guiding operational decisions such as procurement in addition to strategic and product decisions.

What data do LCA studies use?

LCA studies draw data from a variety of sources in order to develop an accurate picture of a product’s life cycle impacts, including its greenhouse gas GHG emissions impacts. The primary sources used by the respondents in Cooper and Fava’s study, industry and non-LCA literature, tend to involve a significant amount of work to extract useful results. Given the prominence of these two sources, it’s no surprise that 68% of respondents ranked data collection as the most time-consuming part of LCA and 63% said it was the most costly.

While extensive industry and process-specific data collection results in the most accurate footprint reasonably possible, we believe that the costs of this precision can exceed the business benefits in many cases, especially when a company is just beginning to assess its GHG emissions impacts. By aggregating life cycle emissions data from major LCA and life inventory data sources and leveraging our extensive database across all of our engagements, the EcoSynergy process helps lower the costs associated with collecting emissions data. Also, our hybrid LCA approach, allows us to balance accuracy, completeness and cost to maximize the return on investment for any footprint assessment.

Barriers to LCA

Despite being well suited to solving certain problems, respondents identified barriers that prevent LCA from being used more widely within their organizations. We believe that software is the key to overcoming most of these barriers.

Reducing barriers to the use of life cycle information is a major motivation behind our Emissions Intelligence™ software. We believe that our streamlined methods can replace LCA in many applications and open up new footprinting opportunities that were previously cost prohibitive. Nonetheless, certain problems still require the scientific precision of LCA and we plan to partner with consultants to complement our offering in these situations.

Founded by the British government in 2001, the Carbon Trust is an independent organization working to deal with climate change by lowering carbon emissions in the U.K. and globally.  One of the means they are pursuing is a Publicly Available Specification (PAS) for measuring and reporting on carbon emissions.  Their PAS 2050 speaks directly to our work at EcoSynergy; it aims to “create a single standard that will enable a consistent approach to measuring the embodied greenhouse gas emissions from products and services across their lifecycle”.

At EcoSynergy, we believe that measurement and reporting standards will be crucial to effectively integrating carbon into corporate decision-making. Here are seven key things we think are significant about the upcoming PAS 2050:

1.  The first stage of consultation for PAS 2050 took place in October, 2007 and involved over 200 stakeholders and experts in the field of carbon emissions measurement and analysis.  The second stage of consultation took place in March, 2008.  The Institute plans to publish an initial version in late September / early October of 2008.

• Based on robust, precise and accurate data.
• Consistent in methodology and data.
• Simple enough so that any organization can complete a baseline analysis.
• Inexpensive enough for small organizations.

These are good priorities for a measurement standard though fulfilling all of them simultaneously will be somewhat challenging.

• Robust: By supplementing precise information from Process-LCA with I/O-LCA estimates, H-LCA achieves high accuracy without sacrificing completeness.
• Simple:  H-LCA can use relatively straightforward I/O analysis to pinpoint “hot spots” to be filled in with more exact data through process analysis.
• Cost:  H-LCA is much cheaper than full Process-LCA.

Our Emissions Intelligence platform uses Hybrid-LCA for the same reasons. The hybrid process should help the PAS achieve a good balance of cost and accuracy.

4.  The PAS claims that there should be a defined minimum amount of primary process data included in every H-LCA. Beyond a certain point, primary process data is usually the most difficult and expensive to obtain so this could be one of the more onerous requirements of the PAS. Nonetheless, primary data is crucial to accuracy and assuming the PAS makes allowances for differences between industries this could still be a fair and manageable requirement.

5.  The standard endorses a British National Life Cycle Inventory Database to maximize the comparability of GHG data across different studies. Many other standards endorse a particular set of emissions factors for basic calculations such as fuel and energy consumption. Extending this concept to broader lifecycle inventories would be very valuable.

6.  The Carbon Trust aims to establish a working group to evaluate and endorse H-LCA software that meets their standards. As an Emissions Intelligence software company we certainly agree that software will be critical to efficiently meeting these standards. Once the PAS is release we will be working hard to ensure our software conforms.

7.  The standard demands complete system boundaries – including the input of capital goods and intermediate services.  Because the majority of the emissions associated with a given product often occur upstream or downstream in the supply chain (75% or more), using a complete system boundary is important to assessing the full greenhouse gas impacts of a product.  Of course, for most products it would be too onerous to collect all the necessary data to ensure a complete system boundary.  However, the HLCA approach allows for the input of capital goods and intermediate services by estimating the emissions associated with a product throughout the entire economy using I/O-LCA, thus yielding a complete system boundary.

Overall, we feel that PAS 2050 is a step in the right direction for product footprinting standards and that it touches on the important points—methodology, data, scope, and quality control. Also, by promoting a hybrid-LCA process the PAS effectively balances the need for accurate reporting against the costs of increased precision.

Given our focus on Hybrid-LCA and the breadth of our data sources, the EcoSynergy solution is well positioned to conform to PAS 2050. We will continue to follow the progress of PAS 2050 and provide more information when it is finalized.

Something special happened to oil prices a couple of months ago- the oil futures markets reached “contango”, meaning that traders were pricing in continuous increases in oil price from now on, for the next 8 years (the furthest out futures contracts are traded). While contango is not unusual in the oil futures market, this instance was quite notable, because we were already sitting at record prices of over $130/barrel. Oil was the most expensive it had ever been, yet the market suddenly swung to anticipate a continuous rise for the foreseeable future. I seem to remember the whole energy world thinking China was quite pessimistic when they signed a 20 year contract with Iran a couple of years ago for oil at $85/barrel, which was a 33% premium at the time. Now, it seems that the consensus is finally pronouncing the era of cheap oil over. Supply is currently being stretched to its limits by growing demand in China and India, huge consumption with unknown elasticity in the US, upheaval and a move to nationalization in oil producing countries, major oil fields in terminal decline in the North Sea and the Gulf of Mexico, and there is no real promise of substantial additional supply on the horizon. Are the markets now telling us that Peak Oil is on the horizon?

I was first educated on the theory of “peak oil” and peak resource production in general about 5 years ago (when oil was about $35 a barrel), as part of my graduate studies in New Zealand. New Zealand had just experienced “peak gas”, as their large Maui natural gas field had just peaked production earlier than forecast. The actual peak was in 2001, but the peak was just beginning to be recognized and discussed in early 2003. Since natural gas is costly to import by sea, and the Maui field had historically provided around 80% of New Zealand’s natural gas supply, this threat of diminishing resources represented a huge risk to New Zealand’s energy security. Their electricity production is heavily dependent on hydroelectric dams (55%), with natural gas being the second largest source at 22%. It was a drought year, and New Zealand’s reservoirs only have about 6 weeks or so of storage capacity. So, natural gas is used as back up, as gas electric plants can be quickly turned on to meet demand shortfalls. In addition, gas electric plants can be installed far quicker than coal, hydro, or geothermal facilities using essentially off-the-shelf parts. So, in short, the reduction in availability of natural gas had huge implications that would resound throughout New Zealand’s economy. Upon further study of books like Kenneth Defeyes’ “Hubbert’s Peak”, the spectre of a global peak in oil production began to concern me as much climate change, and the convergence of the two compound one another.

The story of the US$ is inextricably linked to the story of oil since the nearly concurrent advent of both a fiat currency system and OPEC (who denominates all oil transactions globally in US$), so disruptions in oil availability could seriously reverberate throughout our financial system. And, with the California energy crisis in ‘99-’00, we saw firsthand that energy prices can and do go parabolic when shortages occur. There’s only so much demand that can be cut, and California’s 10-15% reductions, while laudable, still weren’t enough to keep electricity spot prices from going up 5,000% at times. Perverse market structures kept these price signals from being passed on to the end user, but it still nearly bankrupted the state. What would happen if we experienced a national or global crisis of the same nature?

It’s hard to underestimate the impact that sustained high oil prices or extreme volatility could have on our American standard of living. Yet, given the geological evidence, it’s hard to imagine a return to the very cheap energy that helped build our diffuse, highly mobile society. It seems to me that we need a crash course on how oil price spikes and volatility will impact other aspects of our economy. Using life cycle analysis, whole systems thinking, and a perspective that looks further than the next quarterly report or election cycle, we might be able to get started on an impact assessment and begin to identify future tactics to handle a long period of stagnant or decreasing oil availability. And, smart companies are beginning to use these same tools to not only assess their impact on the environment, but to look at the impacts that future shortages or price spikes may have on their own operations. We, as consumers and citizens, could also use an education in life cycle thinking, as most of us have very little idea how something like oil prices may affect our day-to-day beyond our trips to the gas pump. The collection, organization, communication, and use of lifecycle information is a small but basic step we could all participate in to empower ourselves for what could be a bumpy ride.

Eighteen years ago the F.D.A. succeeded in passing a bill requiring all food and drink products sold in the United States to be labeled with certain nutritional information. Today, although we don’t always use this information wisely, we take for granted the nutrition label on the back of every bag of Dorritos.

Now that concern for greenhouse gas emissions is beginning to mirror concern for fat intake in the nineties, the seeds of a carbon “nutrition label” are beginning to take root. As companies like EcoSynergy develop better and better methods for performing scope 3 emissions analysis (which includes emissions from every step in the life cycle of a product, from raw materials to factories to shelves), questions about what to do with product life cycle information become more and more pressing. To whom should companies report their scope 3 emissions? How should they communicate these emissions to the general public?

One answer to these questions is carbon labeling. Supporters of this type of plan – such as “Carbon Label California”, a state-level advocacy group – believe that through effective emissions labeling the public “could be armed with enough information to make a difference, not through regulation or taxation, but through the power of consumer choice”. A carbon label would function much like a nutrition label, allowing consumers to compare the carbon emissions of various products with a quick glance at the back of their packages.

Already there are a few key organizations developing such a labeling scheme, as well as a growing number of businesses feeling out the public’s response to environmental labeling. The Carbon Trust, a non-profit organization founded by the British government, began a pilot carbon label program in 2007 in partnership with three companies: Walkers Crisps (potato chips), Boots Plc (shampoos) and Innocent (smoothies). Each company measured the scope 3 emissions of certain products, then stamped them with the Carbon Trust’s “black footprint” label, thereby marking them with the amount of CO2 equivalent emitted in their life cycle from “cradle to shelf”. Since then, the U.K. supermarket giant Tesco has agreed to try out the black footprint on twenty different consumer goods in their stores. Other companies are devising their own labels, such as the French supermarket chain Casino, which plans to use a color-coded scheme for three thousand of its own brand products by the end of 2008. Sapporo is planning a carbon label for its beer.

There is good reason for companies in Europe to believe that carbon labels will give their products a competitive edge. A study issued in August 2007 by L.E.K. consulting showed that more than half of U.K. consumers desire more information about the GHG emissions of products they purchase, and 44% would switch to a product with a lower footprint – even if it would not otherwise be their first choice.

Still, skeptics worry that carbon labels could become just another tool for “greenwashing”; without clear standards for measuring emissions and labeling products, consumers will find it difficult to trust or even understand what they see on a label. Furthermore, if companies continue to develop their own labels instead of subscribing to a common design, consumers could have trouble comparing products across brands.

There are potential solutions to all of these problems. The first and most obvious is for governments or other industry regulators to develop and enforce clear standards for measuring and reporting GHG emissions, thereby allaying the “trust” problem. (This is, of course, much easier said than done.) The other problems are all issues of consumer understanding. If carbon labels are to be successful, they must help consumers quickly gather information and compare products with very little translation or calculation. This means they must be highly commensurable. Just as nutrition labels always present consumers with the same list of basic nutrients and invoke the same two-thousand calorie diet, all carbon labels must present consumers with the same kind of emissions data and relate that data to a common measuring stick. Only then will consumers be able to quickly “count carbon” in the same way that they “count calories” at the grocery store.

At the moment, the Carbon Trust’s black footprint label presents consumers with a measurement: grams of CO2 equivalent. Sometimes the label also compares this number with the emissions of a similar product. Carbon Label California calls this kind of labeling “carbon scoring”. Scoring makes a group of products relatively easy to compare across both category and brand – so long as all of the products are labeled and close at hand. However, at this point in time, very few consumers can make sense of the measurement “500 grams” without other products readily available for comparison. For this reason, carbon scoring labels must give consumers some kind of measuring stick that they can use to quickly make comparisons when evaluating even a single product. Of course, there are other options for carbon labeling. For example, “carbon rating” systems place products on a scale comparing them to other products in the same category. For example, Casino’s scale is color coded, green to red. Another option is “low-carbon seals”, granted only to products that meet certain low-carbon requirements.

Whatever system is eventually settled upon, standardization will be the key to success. If carbon labeling becomes standardized to the point where distrust and misunderstanding are no longer barriers to consumer participation, it will be an extremely profitable outlet for the kind of emissions intelligence that EcoSynergy provides.

Carbon Label California

The Carbon Trust

44% Of UK Shoppers Would Buy Brand With Smaller Carbon Footprint

Our hybrid-LCA process is designed to provide a good approximation in absence of precise data. The article below is a very abstract description of our concept of approximation (sampling) vs. precision (monitoring).

We are not at a stage where we have this real-time availability of data but the journey from sampling to monitoring is a good parallel for the journey we are embarking on. Its my opinion that the long term goal is to get to the point where a significant portion of the data we use comes from monitoring not just sampling.

From Sampling to Monitoring to Gulping Data Down in Great Big Chunks

Welcome to the new EcoSynergy blog. We will be using this space to provide updates about our products and services and share some of our thoughts on the world of sustainable business.