Beating the carbon trap for a sustainable future
Most companies have already set an internal price on carbon, in order to make it an intrinsic consideration in all their decision making.
Here’s how key players are pledging to create a better tomorrow.
There was a time when people the world over viewed environmental degradation as the price we paid for progress. We all knew that something needed to be done, something needed to change, but we also believed that it just wasn’t possible to have the level of progress and growth we wanted, while also being responsible towards the planet.
Clearly, we as a civilization have challenged and discarded that assumption; and we only have to look at the investments that are being made in sustainable energy, experimental transportation systems like the Hyperloop, and stringent emission norms being adopted unanimously by the auto industry to see that the worldview has changed for the better. We’re demanding more from science and business, and they are responding to the new demand.
The next argument we see a lot of, is that these investments, initiatives and norms are easier for developed nations, and not realistic for developing ones. The assumption here seems to be that unless a country has reached a certain level of development, it’s just too hard to adopt sustainable technology, processes and practices. Can we, as a developing nation with significant poverty, realistically cut emissions, reduce reliance on fossil fuels, and adopt stringent standards while still putting our best foot forward on economic growth?
If India’s commitments at the historic Paris Agreement on Climate Change are anything to go by, it seems we’re ready to challenge that worldview too. Rarely is there is a consensus among nearly all nations on a single topic. But with the Paris accord, leaders from around the world collectively agreed that climate change is driven by human behaviour, that it’s a threat to the environment and all of humanity, and that global action is needed to stop it. It also created a clear framework for all countries to make emissions reduction commitments and strengthen those actions over time.
Not only has India committed to reduce emission intensity of GDP by 35% (2005 levels) by 2030, we’re also committing to derive 40% of our power from non-fossil fuels in the same period. These targets are more ambitious than those adopted by the EU and the US. The matter of pride here is that independent bodies like the Climate Action Tracker have assessed that India is already on track with achieving these commitments ahead of the deadline, just on the basis of currently implemented policies.
So what are these policies? Well, for starters, all our vehicles will need to be electric by 2030 (keep that in mind when you shop for your next car!), and India is making no new expansions into coal power after 2022. The only reason that the cutoff starts from 2022, is to allow time for projects that are already underway to come to fruition.
Additionally, the govt is setting up rewards for industry: a Carbon Market mechanism for MSMEs (Micro, Small and Medium Enterprises) and a Perform Achieve and Trade policy for Enterprise level businesses. The net outcome of both these sets of policies is to not only encourage businesses to be environmentally sustainable but to reward them as well. It also allows for much-needed flexibility. For instance, if you’ve had a few good years, you can trade your carbon credits or bank them for future use. Similarly, start-up businesses don’t have to take on everything at once: they can buy carbon credits for the time they need initially to find stability as a business, and once stable, can aggressively target sustainability measures… and be rewarded for them!
The response from industry has been better than expected. The Carbon Disclosure Project is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. In their annual report this year they state that 79% of companies perceive commercial risks arising from climate change, while 85% perceive commercial opportunities! 74% already have strategies in place to manage these opportunities and risks.
Additionally, they found that businesses are increasingly focusing on setting emissions reduction and renewable energy targets. Energy efficiency continues to be a top choice for emissions reduction initiatives. Of course, the demand for renewable energy is high, and continues to climb. Most companies have already set an internal price on carbon, in order to make it an intrinsic consideration in all their decision making. Those that haven’t done so yet, plan to.
The highest participation in this survey and report came from the BSEs Top 200 companies, and the A-listers who scored highest were nearly all IT and ITES companies. Of course, this comes as no surprise as service-based companies have a lower ecological footprint than manufacturing, and there exists a tried and tested formula for sustainability in the case of service-oriented businesses.
When it comes to manufacturing though, each industry must chart its own path. While this means that there is a certain amount of trial and error involved, the payoff for companies that get it right first, is also huge. There is significant room for innovation here, and for the market advantages that it confers.
Take for instance Tata Steel, a company that has integrated sustainability into the very fabric of its business. Be it supply chain, production processes or product design: each area is responsible for their own targets. Internal pricing for CO2 is in use, serving as a driver for responsible decision making. So far, Tata Steel Jamshedpur has managed to reduce its CO2 intensity by more than 25% over the last decade (while improving output!), whereas Tata Steel Kalinganagar boasts of a 14% reduction over 2017.
These numbers are the outcome of innovation at every level. Coke rate in furnaces is being reduced by a number of improvements, reducing the carbon consumption overall, which is the largest factor in reducing emissions. New technology adoption in the form of Top Recovery Turbines and Waste Heat Recovery Systems make operations more efficient, and less wasteful. Using a Variable Frequency Drive allows them to cut back on overall power consumption while replacing coal-fired power plants with by-product gas firing ones brings tangible CO2 reduction. In the same vein, coal-fired boilers have been replaced with those that use by-product gas. They are monitoring all stacks in real time, which allows them to upgrade air pollution control systems as the need arises.
While Tata Steel has been dedicatedly striving to lower its emissions for the last 25 years, a dedicated Centre of Excellence focused on sustainability has been set up in 2018 to take this even further. And of course, the Tata Steel R&D labs are hard at work to come up with more innovations that will help them further reduce their greenhouse gas emissions.
Additionally, Tata Steel is also working toward increasing its impact on the creation and maintenance of carbon sinks. i.e. forests. Reforestation efforts at Noamundi, Joda, Sukinda and Jharia mines are particularly noteworthy. Not only have these forests sprung back successfully, but have also been certified by the International Union for Conservation of Nature (IUCN) for their ecological resilience through comprehensive biological assessments. Using the Miyawaki method, Tata Steel has managed to recreate these forests composed solely of indigenous plant, tree, and shrub species… setting the stage for biodiversity in both flora and fauna. There are currently eight biodiversity management plans being implemented across mining locations. The company has also eliminated the use of timber supports in all mines - a move that saves over 2,00,000 trees every year. That’s 4700 tons of carbon sequestration potential.
A strong start has been made here, in an industry where the gains from such initiatives are truly significant. While the steel manufacturing industry can adopt the Tata Steel model as is, other manufacturing industries need to build their own. The need of the hour is robust, all-inclusive models that bring about low carbon transformation along the entire value chain. With the right will, it can be done… as Tata Steel has so ably demonstrated.
Today, India is being viewed as the test case for the enablement of a low carbon, and sustainable future. Should we maintain our growth rates, and downshift our carbon footprint in manufacturing, we are poised to be the world leaders in sustainable growth. We don’t have to repeat anyone else’s mistakes; we don’t need to follow paths other economies have trodden. Instead, this time, we get to blaze our own trail and create a roadmap for other developing economies to follow.
This is a partnered post.
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TV Narendran said that the Jamshedpur-based behemoth will fuel its growth ambitions to more than double its output
The blast took place at around 10:20 am, and the injured employees were admitted to Tata Main Hospital