The global carbon crisis emerging carbon constraints and strategic management options

The Global Carbon Crisis Emerging Carbon Constraints and Strategic Management Options The Global Carbon Crisis Emerging Carbon Constraints and Strategic Management Options Timo Busch and Paul Shrivastava First published 2011 by Greenleaf Publishing Limited Published 2017 by Routledge Park Square, Milton Park, Abingdon, Oxon OX14 4RN 711 Third Avenue, New York, NY 10017, USA Routledge is an imprint of the Taylor & Francis Group, an informa business Copyright © 2011 Taylor & Francis Cover by LaliAbril.com All rights reserved No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe British Library Cataloguing in Publication Data: Busch, Timo Emerging carbon constraints and strategic management options (The global carbon crisis ; v 1) Carbon dioxide mitigation Industries Environmental aspects Industries Social aspects I Title II Series 658.4’083-dc22 ISBN-13: 978-1-906093-61-7 (hbk) Contents Acknowledgments vii Introduction Part I: A strategic view of carbon constraints The two sides of the carbon coin Emerging carbon constraints Strategic benefits of carbon and climate strategies 13 25 Part II: The carbon crisis: physical science, economic, and equity perspectives 33 Evolution of carbon utilization Climate change challenges ahead Carbonomics and beyond 34 43 60 The intra- vs inter-generational equity dimension 74 Part III: Strategic options for a low-carbon economy 87 Lessons from the financial crisis 88 vi The Global Carbon Crisis Macro level: industrial policies for climate change 105 10 Meso level: inter-firm breakthrough steps in a low-carbon future 135 148 164 170 180 186 11 Micro level: proactive carbon management strategies 12 Synthesis: the mitigation–adaptation nexus References Glossary Index About the authors 200 Acknowledgments This book would not have been possible without the support and help of many people and organizations We want to acknowledge the support of several institutions and individuals involved in the development process We thank the students and faculty at ETH, Zurich, and Concordia University, Montreal, the institutions where this project lived for nearly two years We acknowledge the David O’Brien Centre for Sustainable Enterprise at Concordia University for the support of Timo Busch’s visit to Montreal, where the main part of this manuscript was finalized Several individuals helped us in developing, reviewing, and strengthening this book We would like to thank Stephanie Berger, Grace Goss-Durant, Volker Hoffmann, Andrew Ross and Malte Schneider, for feedback and editing support on earlier versions of the manuscript The team from Greenleaf Publishing, notably John Stuart, Dean Bargh, and Gillian Bourn, provided professional advice and support at every stage of this book’s development Finally, a big thank you to our spouses, Nina Busch and Michelle Cooper, for putting up with us while we were away from home and family working on the manuscript Introduction The motivation behind this book is simple For at least a decade the science of climate change has warned us of the dire need for action And action is needed from the corporate sector, which is the main engine of economic production and consumption Yet managerial and corporate understanding of climate change and related energy issues remains fragmented, incomplete, and lacks the urgency this problem deserves So, this is a book for a corporate and academic audience: managers in business as well as teachers of our business students—the managers of tomorrow’s businesses It brings climate change and energy discussions to the corporate context in a business framework and language In the past, the environment of business was seen as constituted largely of economic, technological, regulatory and political, and social and cultural forces To a much lesser extent it included the “natural” environment as a source of raw materials, and as a compliance issue Costs associated with environmental issues were erroneously understood to be small and were generally externalized out of company accounts Discussions regarding climate change and finite fossil fuel reserves of the past two decades have reversed the order of importance of these elements Climate change has caused the environment of business to change completely and permanently Similarly, we are on the verge of depleting natural fossil fuel reserves Now the natural environment issues of resource availability, fossil energy, carbon sinks, Glossary 183 Carbon risk (Hoffmann and Busch 2008) This ratio is based on a firm’s carbon exposure for two different years By considering both exposure values, the firm’s carbon risk allows assessment of the extent to which the financial implications of a firm’s carbon usage have changed over time This indicator is of special interest for financial analysts: based on such information they are able to evaluate the carbon risks of different portfolios and investments and which companies are managing their climate liabilities appropriately Climate feedback (www.ipcc.ch/pdf/ glossary/tar-ipcc-termsen.pdf) An interaction mechanism between processes in the climate system is called a climate feedback, when the result of an initial process triggers changes in a second process that in turn influences the initial one A feedback can either intensify the original process, or reduce it Deforestation (www.ipcc.ch/pdf/ glossary/tar-ipcc-termsen.pdf) Conversion of forest to non-forest GHG (www.ipcc.ch/pdf/ glossary/tar-ipcc-termsen.pdf) Greenhouse gases are those gaseous constituents of the atmosphere, both natural and anthropogenic, that absorb and emit radiation at specific wavelengths within the spectrum of infrared radiation emitted by the Earth’s surface, the atmosphere, and clouds This property causes the greenhouse effect Water vapor (H2O), carbon dioxide (CO2), nitrous oxide (N2O), methane (CH4), and ozone (O3) are the primary greenhouse gases in the Earth’s atmosphere Moreover there are a number of entirely human-made greenhouse gases in the atmosphere, such as the halocarbons and other chlorineand bromine-containing substances, dealt with under the Montreal Protocol Besides CO2, N2O, and CH4, the Kyoto Protocol deals with the greenhouse gases sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), and perfluorocarbons (PFCs) 184 The Global Carbon Crisis Kyoto Protocol (www.ipcc.ch/pdf/ glossary/tar-ipcc-termsen.pdf) The Kyoto Protocol to the United Nations Framework Convention on Climate Change was adopted at the Conference of the Parties in 1997 in Kyoto, Japan It contains legally binding commitments for countries that signed it Countries included in Annex B of the Protocol (most countries in the Organisation for Economic Co-operation and Development, and countries with economies in transition) agreed to reduce their anthropogenic greenhouse gas emissions by at least percent below 1990 levels in the commitment period 2008 to 2012 Low-carbon innovations In response to emerging carbon constraints companies should seek to develop low-carbon innovations Such innovations can be processed-based (e.g., substitution of fossil fuel in a production system) or product-/service-oriented (e.g., end-products that emit only a minimum of carbon dioxide) Low-carbon innovations can generate competitive benefits in an increasingly carbon-constrained business environment Mitigation (www.ipcc.ch/pdf/ glossary/tar-ipcc-termsen.pdf) An anthropogenic intervention to reduce the sources or enhance the sinks of greenhouse gases Montreal Protocol (www.ipcc.ch/pdf/ glossary/tar-ipcc-termsen.pdf) The Montreal Protocol on substances that deplete the ozone layer was adopted in Montreal in 1987 It controls the consumption and production of chlorineand bromine-containing chemicals that destroy stratospheric ozone, such as chlorofluorocarbons (CFCs), methyl chloroform, carbon tetrachloride, and many others Glossary 185 Peak oil (Hubbert 1956) The term peak oil is usually used to refer to the depletion mid-point This is the point in time after which half of the available resources of a fossil fuel have been used Scope (WBCSD and WRI 2004) The Greenhouse Gas Protocol Initiative developed three scopes to measure a firm’s GHG emissions Scope takes a “gate-to-gate” view and comprises all direct emissions: e.g., stemming from a firm’s internal heating system Scope accounts for all emissions that are related to the firm’s energy purchases: e.g., the GHGs that were emitted by the electricity generation by an independent (i.e., thirdparty-owned) energy utility Scope ideally includes all further emissions that can be ascribed to a firm’s business activities when taking a full-life-cycle perspective As such, they would include suppliers’ emissions, transportation, etc In reality it is difficult to precisely determine all Scope emissions Reforestation (www.ipcc.ch/pdf/ glossary/tar-ipcc-termsen.pdf) Planting of forests on lands that have previously contained forests but that have been converted to some other use Sequestration (www.ipcc.ch/pdf/ glossary/tar-ipcc-termsen.pdf) The process of increasing the carbon content of a carbon reservoir other than the atmosphere Biological approaches to sequestration include direct removal of carbon dioxide from the atmosphere through land-use change, afforestation, reforestation, and practices that enhance soil carbon in agriculture Physical approaches include separation and disposal of carbon dioxide from flue gases or from processing fossil fuels to produce hydrogen- and carbon-dioxiderich fractions and long-term storage underground in depleted oil and gas reservoirs, coal seams, and saline aquifers Index Page numbers in italic figures refer to figures and tables Abatement cost glossary 180 Abatement cost curve 63–7, 64 Abu Dhabi Masdar Initiative 144–7, 146 Adaptation 180 anticipatory 165–6 autonomous 166 different degrees of necessity for 166–7 key area for urgent action 124 mitigation–adaptation nexus 168 planned 166 Adaptation and abatement geoengineering 133 Adaptation processes global carbon crisis scenario 94–5 Afforestation 128, 180 Africa negative consequences of climate change 53 Agriculture consequences of global warming 55 threats from carbon crisis 81 AMAP see Arctic Monitoring and Assessment Programme Amazon rainforest 55 Anthropogenic greenhouse gases consequences of 46 main source of climate change 47–9 Arctic Tundra biodiversity affected by rising temperatures 52–3 Arctic Monitoring and Assessment Programme (AMAP) 52 indicators showing further and extensive changes 59 ASPO see Association for the Study of Peak Oil and Gas Asset development inter-firm collaboration 135–47 Association for the Study of Peak Oil and Gas (ASPO) oil and gas production profiles 37–9, 38 Australia climate change and energyrelated regulations and policies 107–8 REDD Forests Tasmania Project 128 Auto industry demand for fuel-efficient cars 19 Availability of natural fossil fuel 34–7 Index 187 Babcock Ranch project 139 Batteries recyclable lithium-ion, for electric cars 161 Battery charging Better Place’s charging network 161–2 Battery switch stations 162–3 Battery-leasing and maintenance service for electric cars 161 BaumInvest Reforestation Project 129 Better Place electric vehicle service provider 161–3 Beyond carbonomics 69–73 Biodiversity Arctic Tundra affected by rising temperatures 52–3 Borneo reforestation 128 Boulding, Kenneth 10 BP accident in Gulf of Mexico 28–9 Building sector needing significant energy efficiency improvements 72 Business see Companies Business case for corporate carbon management 148–50 Business environment shift towards low-carbon society Campbell, Colin 37 Canada Greenhouse Gas Emissions Reporting Program 108 Western Climate Initiative (WCI) 108 Cancun Climate Change Conference 3, 28, 71, 99, 102, 114 Cap-and-trade measures 21 Carbon basic element 34 use of, as strategic variable 30–1 see also under Low-carbon Carbon abatement cost curve 181 Carbon accumulation anthropogenic origin of 58 Carbon-based resources unsustainable use of 80 Carbon capture and storage see Carbon sequestration Carbon challenges for the Earth’s atmosphere 58 Carbon and climate strategies potential for competitive advantage 25 Carbon constraints from input dimensions 17–19 from output dimension 19, 20, 21–4 glossary 181 input dimension 67–8 input and output dimensions of production processes 14, 16 use of the term 13 Carbon costs 182 Carbon dependency 159, 181 Carbon dioxide fertilization effect 48 Carbon dioxide emissions from changes in land use 44 from fossil-fuel burning and industrial processes 44 related to infrastructure settings 72 role within natural environment 43 significant increase 43–4 see also Emissions reduction; Greenhouse gas (GHG) emissions Carbon dioxide mitigation 119 Carbon dioxide removal techniques 132 Carbon Disclosure Project (CDP) 22 Carbon efficiency glossary 181 Carbon-equal fund see Global carbon-equal fund Carbon exposure glossary 182, 183 188 The Global Carbon Crisis Carbon footprint of aviation technologies and industrial agriculture 70–1 energy consumption correlating with 75, 76 and humanity’s overall ecological footprint 78, 79 incentive to reduce 122 significant increase 35 Carbon footprint reduction formula to establish Green Climate Fund 121 Carbon improvements reducing energy and fossil fuel consumption 151 Carbon input taxes 18 Carbon inputs see Carbon efficiency Carbon intensity 181, 182 Carbon issues strategic management of 29–30 Carbon leakage 182 defined 106 likelihood reduced by sectoral approaches 125 Carbon legacies 80 Carbon loading reduction throughout the supply chain 122 Carbon management adaptation strategies in case of emergency 167 proactive 148–63 VITO elements of environmental strategy 149–50, 150 see also Corporate carbon management framework Carbon management framework 155–60, 155 Carbon outputs inter-firm collaboration 135 see also Carbon efficiency Carbon performance indicators 181 status quo analysis 156–7 Carbon price European Union’s Emissions Trading Scheme 117 Carbon-related changes corporate sensitivity towards 157 Carbon-related costs corporate carbon management 150–5 Carbon resources destabilization of 6–7 Carbon risk 159, 183 Carbon scenarios definition of 157 Carbon sequestration approaches to 185 arguments against public funding for 130–2 and carbon leakage 182 Carbon sinks Arctic melt diminishing carbon in soil 48 forests as natural 127 oceans warming and holding less CO2 48 permafrost locking in methane 48 Carbon tax system 121–2 Carbon trading schemes 151 European Union Emissions Trading Scheme 21, 117, 118, 151, 182 Carbon transformations 17 Carbon usage and carbon intensity ratio 182 Carbon use in industrial process potential negative effects 13–24 Carbonomics and “beyond carbonomics” 60–73 CDP see Carbon Disclosure Project Change strategic perspective for proactive 30 Chicago Waste to Profit Network 136 China Colorado’s help with clean coal technology 77–8 Clean Development Mechanism 123 Clean energy technologies fostering investment in 119 Climate agencies foundation of local 123–4 Climate and carbon strategies potential for competitive advantage 25 Index 189 Climate change abatement cost curve 63–7, 64 adaptation to 180 avoidable catastrophe 79–80 contrasting positions on 8–9 corporate contribution to 26 costs of 61–3 direct and indirect effects of 19, 20, 21 firms enhancing competitive position through innovation 154 implementing industrial policies 123–30 IPCC agreed on six gases responsible 44 nations most negatively affected 74–5 nations responsible for 74–5 need for global climate governance structure 71–2 security implications 77 stagnating international negotiations 115 three principles to be “lived” 168–9 time lag of effects 80–1 United Nations Framework Convention on Climate Change (Kyoto) 184 Climate change mitigation absence from current policy agendas 66–7 Climate Change Mitigation Facility proposed by United Nations Development Programme 123 Climate change negotiations sectoral approaches 125–7 Climate change risk carbon constraints 17 engagement of financial market intermediaries 22–4 Climate consciousness influencing emissions reduction 21–2 Climate feedback 183 Climate policy see Global climate policy Climate variability IPPC research on 49, 50, 51 Climatic changes sources of 45–7 CO2 see Carbon dioxide Coastal flooding 54 Collaboration inter-firm 135–47 Communication corporate carbon management framework 159–60 Companies exposure to climate change risk role in context of carbon crisis 7–8 Competitive advantage enhanced by high level of legitimacy 152–3 options for potential 25, 27, 30 through carbon management efforts 154 through climate-friendly business structures 148–9 Concentrating solar power Masdar City 145, 147 technology 141, 142, 143 Consensus global, to manage and finance adaptation 120 Consistency strategy management of carbon issues 25–6 Consumer preference changes carbon constraints 18–19 Consumers climate consciousness 21–2 Consumption behavioral shifts 19 importance of accelerating restructuring 82–3 see also Energy consumption Consumption per capita impact of human beings on ecological system 11–12 Copenhagen Climate Change Conference 3, 71, 99, 102 Copenhagen Accord 114 Corporate carbon management framework 148–63 drivers of 150 implementation 158–9 190 The Global Carbon Crisis Cost reductions driver of corporate carbon management 150–2, 150 Cost sharing inter-firm collaboration 135–47 Cost–benefit analyses climate change mitigation 66–7 Costs of climate change different views of 61–3 Crisis management teams companies combining resources 167 Crude oil estimates for world proved reserves 36–7, 36 Daly, Herman 10 Data and information key to benchmark performance 126 Debt creation of debt 100, 101 Decarbonization of energy mix 12, 70–1, 104 of industrial technologies 26 Decarbonized economy overall strategic objective 168 Decision makers pace of responses 101–2 Decoupling carbon issues and climate change from economic system 97 economic growth and energy demand 12, 70–1, 104 Deffeyes, Kenneth S 37 Deforestation 183 increasing carbon dioxide concentration 44, 46 Desalinization of water Masdar City project 147 DESERTEC estimated cost of project 143 other benefits 141, 142, 143 pros and cons 143 renewable energy project 139–43, 140, 142 Developing nations helped by industrialized countries 124 most negatively affected by climate change 75 predicted effects of changes in weather patterns 53–4, 56 severely affected by financial crisis 93–4 support from climate agencies 124 Development differential 77 see also Economic development Disclosure new disclosure rules regarding climate change 160 Diversification Abu Dhabi’s Masdar Initiative 144–7, 146 Dow Jones Sustainability Indexes 23 Earth summits 28, 102 Earth systems engineering questionable solutions of 132–4 Earth’s carrying capacity 58 Ecological challenges contributions in scientific literature 9, 10 Ecological problems systemic global solutions 77–8 Ecological system measuring impact of human beings on 11 threatened by rising temperatures 55 see also Industrial ecosystem Economic analyses of costs of climate change 61–3 Economic approaches beyond carbonomics 69–73 Economic development dimensions of regional equity 77 Economic growth decoupling from energy demand 12 spurred by increased consumption 101 Economic growth reduction global financial crisis 93 Economic system no decoupling of carbon issues and climate change from 97 Index 191 The Economics of Climate Change The Stern Review 46, 54, 60, 62–3, 66, 122, 127 “The Economics of Ecosystems and Biodiversity” Ecosphere emerging carbon constraints 14, 16 Efficiency strategy management of carbon issues 25 Effizienz-Agentur local energy and environment agency 123–4 Ehrlich, Paul 67 El Niño 51, 56 Electric vehicles battery-leasing and maintenance service 161–3 Electricity generation Switzerland’s electricity mix 26 see also Photovoltaic electricity Electricity networks long-distance “high-voltage direct current” 140 Emissions reduction European Emissions Trading Scheme see European Union Emissions Trading Scheme material exchange networks 136 offsetting 182 setting targets 125 see also Carbon dioxide emissions; Greenhouse gas (GHG) emissions Energy climate change and energyrelated regulations and policies 107–13 expensive and uncertain supply 92 see also Primary energy Energy consumption correlating with per capita carbon footprint 75, 76 global expansion of Energy Information Administration estimates for world proved reserves of crude oil 36, 36 Energy procurement exercising discretion 26 Energy reductions industrial symbiosis network 137–9, 138 “ENERGY STAR” 21 Energy supply disruption global carbon crisis scenario 94–5 Energy system reorientation global carbon crisis scenario 95 Entrepreneurship carbon-equal funding fostering 127–30 Environment see also Natural environment Environmental degradation security implications 77 Environmental impacts of industrialization 70 Equities distortion of intergenerational 101 distortion of intra-generational 99, 100 Equity global carbon crisis from equity perspective 82–5 inter-generational dimension 78–82 intra-generational dimension 74–8 three general equity principles 83–4 Ethics of different climate change impacts 75 ETS see European Union Emissions Trading Scheme European Union Emissions Trading Scheme 71, 108, 116 carbon costs 182 market-based mechanism 21 proposals for changes in policy direction 118 release of CO2 as an additional cost factor 151 Ex ante knowledge phenomenon 96 Extreme weather costs driven by damages 19, 20, 21 weather-related risks 23–4 Feedback mechanisms accelerating climate change 48 water vapor evaporation 57 192 The Global Carbon Crisis Financial crisis see Global financial crisis Financing mechanisms creation of a global carbon-equal fund 120–30 for investing in clean energy technologies 119–20 Firms see Companies Fisheries threats from carbon crisis 81–2 Flood risks 54, 81 Florida Babcock Ranch 139 Forestation curbing 127 Forests afforestation 180 burning releasing captured CO2 44, 46 deforestation 183 Forum of the Swiss Academy of Sciences on arguments of climate skeptics 57 Fossil fuels anticipated future consumption 35, 35 availability 34–7 CO2 emissions from burning 44 limited resources 6–7 price fluctuations 18 reserves 80 scarcity 17–18, 37–9, 38 transportation system reliant on 72 Fossil fuel dependency current production and consumption patterns 40 Foster & Partners architects for Masdar City 145 France Tradeable White Certificate (TWC) Scheme 109 Fuel-efficient cars consumer demand for 19 Gas global production profiles 37–9, 38 GDP see Gross domestic product Geoengineering questionable solutions of 132–4 George, Susan Whose Crisis, Whose Future? 71–2 Geothermal power 147 German Aerospace Center DESERTEC project 140 Germany carbon input tax 18 Renewable Energy Act 108 GHG see Greenhouse gas (GHG) emissions Glaciers melting 54 Global carbon crisis between generations 78–82 irreversible nature of effects 102, 103 nations most negatively affected 74–5 nations responsible for 74–5 strategic management beyond carbonomics 69–73 three principles to be “lived” 168–9 Global Carbon Footprint Network humanity’s ecological footprint 78, 79 Global carbon price payable to carbon-equal fund 121, 122 Global carbon-equal fund creation of a 120–30 fostering of low-carbon entrepreneurship 127–30 foundation of local climate agencies 123–4 funding adaptation projects 167 implementation of sectoral approaches 125–7 to finance Green Climate Fund 121–3 Global climate policy enabling and incentivizing local action 123 lack of financing 118–20 lack of stringency 115–18 requiring significant reframing 114–15, 120 Global financial crisis 29 lessons from 88–104 Index 193 Global financial crisis/Global carbon crisis differences between 101–3 key lessons 103–4 parallels between 96–101 Global financial system too complex, interconnected and obscure 89 Global interconnectedness 98 Global warming central consequence of climate change 47–8 feedback mechanisms 47–9 major consequences of 81–2 Global water system climate change implications for 54 Governance to allocate carbon-equal funding 124 Government interventions global financial crisis 93 Green Climate Fund carbon-equal finance project 120–1 Greenhouse effect necessity of 46 “Greenhouse Gas Protocol” 156 Greenhouse Gas Protocol Initiative Scopes to measure GHG emissions 185 Greenhouse gas (GHG) emissions 183 calculating in terms of “carbon efficiencies” 126 changing concentrations of 46 definition of reduction measures 157–8 factors determining emissions reduction 12 focus on emissions reduction 21–2 increasing levels of 43–5, 45 objective: significant and verified reductions 115–18 reduction target formulated by EU and G8 11 time lag of effect 80 see also Carbon dioxide emissions; Emissions reduction Greenland temperature rise and snow melt 52 Gross domestic product (GDP) impact of human beings on ecological system 11–12 Home Depot 167 Hubbert, M.K 17, 37, 185 Huber, J 29–30 Human activities consequences of 45–6 Human Development Report 79–80 Human elements causes and effects of global carbon crisis 69–70 Human systems consequences of global warming 55–6 Hurricane Katrina disaster 167 Ice and snow cover decline of 52 “Ice-albedo feedback” 48 IEA see International Energy Agency IFEX see Insurance Futures Exchange Income regional inequity 75 Industrial ecosystem inter-firm collaboration 135–47 Industrial policies for climate change 123–30 Industrial symbiosis Abu Dhabi’s Masdar Initiative 144–7, 146 adaptation incorporated in mitigation approach 167 in the carbon context 136–9, 138 DESERTEC project 139–43, 140, 142 Industrialization externalizing negative environmental impacts 70 unparalleled pace of 58 Industrialized countries helping developing countries 124 Industries exposure to climate change risk role in context of carbon crisis 7–8 Inequity implications of energy price rises 78 194 The Global Carbon Crisis in regional development and lifestyles 75 Infrastructure elements causes and effects of global carbon crisis 72 Input dimension of an environmental management strategy 149 of carbon constraints 34, 35, 67–8 depletion of natural resources 101 substituting carbon-based with renewable 25, 26 VITO view of sustainable organizations 14, 15, 16, 17–18 see also Vision, Inputs, Throughputs, and Outputs (VITO) model Insurance Futures Exchange (IFEX) weather-related risks 23–4 Interconnectedness 98 Intergovernmental Panel on Climate Change (IPCC) agreed on six gases responsible 44 research on climate variability 49, 50, 51 scenarios for temperature anomaly 46–7, 47 special report on carbon capture and storage 130–1 International Energy Agency (IEA) fossil fuel price forecast 18 World Energy Outlook 40, 41 International Monetary Fund on bad loans globally in 2009 89 International political environment dramatic changes 28 International Renewable Energy Agency (IRENA) 145 Investment strategies long-term 30 IPCC see Intergovernmental Panel on Climate Change IRENA see International Renewable Energy Agency Israel commitment to electric vehicle infrastructure 162–3 Italy Tradable White Certificate (TWC) Scheme 109 Kalundborg, Denmark industrial symbiosis network 137–9, 138 “Kaya identity” equation in the carbon context 12 Knowledge sharing inter-firm collaboration 135–47 Kramer Junction, California solar power generation 141 Kyoto Protocol 99, 102, 114, 116, 128 Clean Development Mechanism framework 144 glossary 183, 184 Land use changes in 44 Leakage see Carbon leakage Legitimacy, enhanced driver of corporate carbon management 152–3 Lifestyles consumer behavioral shifts 19 Little Ice Age 49, 51 Loans bad loans and global financial crisis 89 Local climate agencies foundation of 123–4 Low-carbon business opportunities 160–3 Low-carbon economy 27–8 Low-carbon entrepreneurship fostering 127–30 Low-carbon future breakthrough steps in a 135–47 lack of preparedness for 73 Low-carbon infrastructure fostering investment in 119 Low-carbon innovations 184 Low-carbon society business environment shift towards mechanisms for an accelerated path towards a 11 Low-carbon strategy 26–7 Index 195 Markets oil scarcity induced adjustment processes 39, 41–2 Marks & Spencer reduced carbon footprint 152 Masdar City world’s largest carbon-neutral development 145–7, 146 Masdar Initiative 144–7, 146 Carbon Management Unit 144 Clean Tech fund 144 Industries Unit 144 Property Development Unit 145 Material exchange networks 136–9, 138 Meadow, Dennis 10 Medieval Warm Period 49, 51 Methane locked in permafrost 48 Mitigation financial/carbon crises compared 102–3 glossary 184 mitigation–adaptation nexus 168 with/without adaptation 167–8 Mitigation investment cost–benefit analyses 66–7 Mitigation policies implementation will take time 165 Montreal Protocol elimination of CFCs 71, 114 glossary 183, 184 Natural environment changing due to climate change 52–6 Negative abatement costs availability of technologies with 64, 65 Networks material exchange 136–9, 138 New Zealand Emissions Trading Scheme 109 Ocean acidification 55 Ocean circulation related to climate variability 51 Oil global production profiles 37–9, 38 Oil dependency of industrialized economies 40 Oil price fluctuations see Price fluctuations Oil reserves estimating global 35–7, 36 Oil scarcity emerging 37–9, 38 market responses 39, 41–2 Online databases material exchange networks 136 OPEC see Organization of Petroleum Exporting Countries Organization of Petroleum Exporting Countries (OPEC) cuts and price mechanisms 18 decisions on production capacities 42 Organizational elements causes and effects of global carbon crisis 70 Organizational fields formed around a central issue 152–3 Output dimension climate change current generation causing a climate debt 101 elements of an environmental strategy 149 VITO view of sustainable organizations 14, 15, 16, 17, 19 see also Vision, Inputs, Throughputs, and Outputs (VITO) model Outputs carbon-efficiency of 25 sourcing carbon efficiencies 27 Palm-oil industry 128 Papua New Guinea issue of unsustainable development 79 Parabolic mirrors 141, 145, 147 Path dependencies and resource extraction costs 68 Peak oil 185 fossil fuel scarcity 17–18, 37, 39 196 The Global Carbon Crisis Permafrost importance as carbon sink 48 thawing of 52 Peru Madre de Dios Amazon Project 129 Photovoltaic electricity positive growth prospects 154 Photovoltaic method capturing solar power 145 Policy climate change and energyrelated regulations and policies 107–13 global climate policy requiring significant reframing 114–15 industrial policies for climate change 105–34 Policy agendas absence of climate change mitigation from 66–7 Policy governance structures limited capacity of 98–9 Political environment dramatic changes 28 Pollution corporate ability to shift pollution burdens 71 Population expansion unparalleled pace of 58 Population forecasts impact of human beings on ecological system 11–12 Positive abatement costs options associated with 66 Poverty World Bank’s findings 75, 77 Preparedness elements causes and effects of global carbon crisis 72–3 Price fluctuations factors influencing 18 global carbon crisis scenario 92 oil scarcity induced adjustment processes 39, 41–2 Prices for fossil-fuel-based energy 104 resource markets disguising reality 68 Pricing methods to generate monetary values of climate change 61–2 Primary energy world demand 35 Proactive carbon management see Carbon management Production patterns importance of accelerating restructuring 82–3 Production profiles oil and gas 37–9, 38 Profit maximization corporations and investors embedded in 70 Project framing corporate management framework 155–6 Public opinion awareness of climate change and energy security 28 Recycler’s World 136 REDD Forests Tasmania Project 128 Reforestation 128, 185 Regional equity dimensions of 77 Regulation climate change and energyrelated regulations and policies 107–13 need for long-term-focused global 98–9 Regulatory elements causes and effects of global carbon crisis 71 Regulatory shortcomings lack of international climate policy enforcement 72 Renewable energy consumption 7, 71 Renewable energy sources transition to 104 Renewable energy technologies TREC network 139–43, 140, 142 Reporting corporate carbon management framework 159–60 Index 197 mandatory reporting guidelines 159–60 Resource conflicts global carbon crisis scenario 95 Resource extraction costs and related path dependencies 67–8 Resource markets disguising reality 68 Resource scarcity determining 37 impacting market reactions 17 Resources see also Carbon-based resources Restructuring of government systems global financial crisis 94 Revenue increase driver of corporate carbon management 153–4 Rio Earth Summit, 1992 10, 28, 102 Risk associated with carbon storage 131 carbon risk 159 element in global financial crisis 89–90 related to geoengineering 133, 134 see also Climate change risk Roundtable on Sustainable Palm Oil 128 Royal Society study investigating geoengineering options 132–4 Scarcity emerging fossil fuel scarcity 37–9, 38 resource extraction costs and related path dependencies 67–8 Scepticism regarding carbon scarcity 39–40 Scopes Greenhouse Gas Protocol Initiative measures 185 Scrap trading 136 Sea ice decline and thinning 52 Sea levels projection 54 rise 81 Sectoral approaches global policy targeted at specific industries 125–7 Security implications of environmental degradation 77 Sequestration see Carbon sequestration Short-term reward corporations and investors embedded in 70 Shuman, Frank 141 Simon, Julian 67 Skepticism regarding climate change 56–9 Smits, Willie 128 Snow and ice cover decline of 52 Solar energy capturing methods 145, 147 harvesting 139–43, 140, 142 reception, absorption and emission 46 Solar power concentrating solar power technology 141, 142, 143 Solar radiation management 132–3 Spain renewable energy plans 109–10 Stakeholders awareness of climate change and energy security 28 climate consciousness 21–2 Steiner, Achim 88 Stern, Sir Nicholas The Stern Review 46, 54, 60, 62–3, 66, 122, 127 Strategic management of carbon issues 29–30 Stringency essential to climate policy 115–16 Sufficiency strategy management of carbon issues 30 Supply chain initiatives reduction of carbon footprint 22 Sustainable development inter-generational equity 78–82 .. .The Global Carbon Crisis Emerging Carbon Constraints and Strategic Management Options The Global Carbon Crisis Emerging Carbon Constraints and Strategic Management Options Timo Busch and. .. remain in a carbon- locked position This results in the risk that a global carbon crisis will emerge There are many parallels between the global financial crisis and a potential carbon crisis The main... Source: Busch and Hoffmann 2007 Figure Emerging carbon constraints for companies Ecosphere 16 The Global Carbon Crisis Emerging carbon constraints 17 Earth’s capacity to handle carbon transformations