Carbon – what does it cost you?

Talk about carbon and climate change can be difficult to sell to the average person. With so many things taking up a person’s time just how can we, as environmentalists, sell managing this damaging environmental impact?

The answer depends on the people you are trying to influence. In the past many campaigns have tried to shock the population into action with classic examples such as Al Gore’s An Inconvenient Truth and the more recent Years of Living Dangerously documentary series from National Geographic. Whilst this tactic has undoubtedly increased the profile of climate change, I would argue that it has also created a sense that the problem is so big that no individual can make a difference. Certainly when speaking to people about this issue one of the most common comments is “what can we do when the likes of China are building a power station every single day?”.

Whilst there is a robust response to that point, the purpose of this article is to highlight that we should be taking ownership of the language we use when promoting action to reduce carbon emissions. In a business context, unsurprisingly the most effective language is that of cost, profit and return on investment. Mastering this language and then adding in the social and environmental benefits will help avoid getting into difficult debates such as the one above.

So, what is the cost of carbon?

In fact, the average cost per tonne for any business will vary according to how they are producing that carbon. If we look at the simple business example below we can see that their carbon footprint consists of three emissions sources: Fuel, Electricity and Natural Gas. Comparing the Carbon and Cost pie charts shows a significant variation, particularly in the case of fuel, which has increased from 20% of the share of carbon to 30% of the share of cost.

Example Business Carbon - Cost

This comparison both shows the cost to the business and also what areas would benefit most from investments in energy efficiency.

This is all still a little bit complicated however and lacks the “punch” that a single figure will provide the environmental professional. Now, if we divide the total cost (£4400) by the total carbon (12.9 tonnes) then we get an average cost per tonne of £341.

And there you have it. This one figure can now act as your rallying cry  when discussing carbon with colleagues, finance managers and business leaders. For every tonnes of carbon produced, it is costing you £341. How much is that overall? Just multiply by the number of tonnes reported.

This takes out the emotional arguments and commentary on geo-political trends around the world and boils it all down to one simple point. Do you want to continue spending that much money to power your business?

This article focuses solely on the direct cost of a tonne of carbon. A future article will address indirect costs of carbon including cap and trade schemes, air quality, health and issues arising from sea-level change and resource availability. In fact, that might take several articles to cover.

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