Solar energy dominated global investment in new power generation in 2017

The world installed a record 98 gigawatts of new solar capacity. Solar power also attracted far more investment, at $160.8 billion, up 18 percent, than any other technology. It made up 57 percent of last year’s total for all renewables (excluding large hydro) of $279.8 billion.

The Global Trends in Renewable Energy Investment 2018 report, released by UN Environment, Frankfurt School – UNEP Collaborating Centre, and Bloomberg New Energy Finance, finds that falling costs for solar electricity, and to some extent wind power, is continuing to drive deployment. Last year was the eighth in a row in which global investment in renewables[1] exceeded $200 billion – and since 2004, the world has invested $2.9 trillion in these green energy sources.

“Investments in renewables bring more people into the economy, they deliver more jobs, better quality jobs, and better-paid jobs. Clean energy also means less pollution, which means healthier, happier development,” said UN Environment head Erik Solheim.

Overall, China was by far the world’s largest investing country in renewables, at a record $126.6 billion, up 31 percent on 2016. There were also sharp increases in investment in Australia (up 147 percent to $8.5 billion), Mexico (up 810 percent to $6 billion), and in Sweden (up 127 percent to $3.7 billion).

A record 157 gigawatts of renewable power was commissioned last year, up from 143 gigawatts in 2016 and far out-stripping the net 70 gigawatts of fossil-fuel generating capacity added (after adjusting for the closure of some existing plants) over the same period.

Global investments in renewable energy of $2.7 trillion from 2007 to 2017 (11 years inclusive) have increased the proportion of world electricity generated by wind, solar, biomass and waste-to-energy, geothermal, marine and small hydro from 5.2 percent to 12.1 percent.

The current level of electricity generated by renewables corresponds to about 1.8 gigatonnes of carbon dioxide emissions avoided – roughly equivalent to those produced by the entire U.S. transport system.

 

China meets 2020 carbon target three years early

China reached its 2020 carbon emission target three years ahead of schedule with the help of the country’s carbon trading system.

China, the world’s biggest energy consumer, cut its 2005 carbon intensity level by 46 percent in 2017, Xie Zhenhua, China’s chief negotiator at the Paris Agreement said. China originally promised to cut its 2005 carbon intensity by 40 percent to 45 percent from the 2005 level by 2020.

The country’s carbon emissions trading system was introduced in 2011 and includes power generation, iron and steel production and cement manufacturing sectors in seven provinces and municipalities including Shanghai, Xie said.

Transactions totaling 200 million tons of carbon emissions quotas had been completed via the platform by the end of 2017.

Raising ambitions for a low-carbon future even further, the National Development and Reform Commission launched a nationwide carbon emissions trading system in the power generation industry in December last year.

Under this program, businesses are assigned emissions quotas, and those producing more than their share of carbon can buy unused quotas on the market from those that emit less.

Xie said the new system is a step toward establishing a national carbon market across all industries, and that the national market, though only at an embryonic stage, already covers about 1,700 power firms with total carbon dioxide emissions in excess of 3 billion tons, making it the world’s biggest. He noted China would continue to work to expand coverage to other industries.

EU ETS Monthly Report – March 2018

March was one of the most volatile months in EU ETS history. Prices ended the month 31% higher than February’s close at €13.28, having traded in a range between €9.92 and €14.17 throughout the month. EUAs have now risen for eleven consecutive months!

A few statistics to demonstrate just how far the market has come: March ended with prices 62% higher than they began the year. Front-December EUAs have doubled in price since September 2017. March 28 saw the biggest daily volume since 2016, while March 21 saw the biggest one-day price increase (9.5%) since September last year.

Trading was dominated by a combination of continued speculative buying and industrial demand, as installations topped up their EUA balances ahead of the April 30 compliance deadline.

Traders expressed shock at the scale of the market’s increase, expecting that each new euro of gain would lead to a correction as speculators took profit, only to be surprised by yet more advances in the price.

It has been the rise of speculative traders that has attracted most attention this month. Most traders believe that large hedge funds started late last year to build large positions as prices began to rise, and the more rapid increases of the last three months will only have added to their number.

The high cost of EUAs adds a considerable burden for industrial companies that don’t get free allowances matching their emissions. Many have been accustomed to buying what they need every March without worrying too much about the cost – but this year is very different.

Towards the end of March we heard some reports of industrial companies almost panicking as they tried to buy EUAs before prices rose even further. The deadline to surrender EUAs is at the end of April, but for various reasons many companies will want to have completed their annual buying in March.

The price has already exceeded even the most optimistic analyst forecasts for 2018, and we expect most to issue updated predictions early in April.

The coming week will see publication of verified emissions data for 2017. Most analysts expect that CO2 emissions grew by around 0.5% last year, as industrial output increased. At the same time, poor nuclear reliability and very low hydro levels meant that more fossil fuels will have been burned to generate power, but increased penetration of renewable energy will have offset those gains.

In terms of price expectations, it has become difficult to develop technical price targets. Because EUAs are now trading at levels that have not been seen since June 2011, analysts have to look a long way back to identify support and resistance levels.

Traders are very reluctant to call an end to this rally, since previous guesses have been proved wrong. Towards the end of the month support appeared to consolidate at €13.00: the market made a couple of attempts to drop below but was met with determined buying each time.

Clean and accessible water for all: World Water Day

World Water Day, on 22 March every year, is about focusing attention on the importance of water. The theme for World Water Day 2018 is ‘Nature for Water’ – exploring nature-based solutions to the water challenges we face in the 21st century.

Damaged ecosystems affect the quantity and quality of water available for human consumption. Today, 2.1 billion people live without safe drinking water at home; affecting their health, education and livelihoods.

Sustainable Development Goal 6 commits the world to ensuring that everyone has access to safe water by 2030, and includes targets for protecting the natural environment and reducing pollution.

Specifically, Goal 6 says that clean, accessible water for all is an essential part of the world we want to live in. There is sufficient fresh water on the planet to achieve this. But due to bad economics or poor infrastructure, every year millions of people, most of them children, die from diseases associated with inadequate water supply, sanitation and hygiene.

Water scarcity, poor water quality and inadequate sanitation negatively impact food security, livelihood choices and educational opportunities for poor families across the world. Drought afflicts some of the world’s poorest countries, worsening hunger and malnutrition.

By 2050, at least one in four people is likely to live in a country affected by chronic or recurring shortages of fresh water.

But we don’t have to wait until 2050 to see the consequences. Cape Town in South Africa is facing the prospect of all its taps running dry by July this year. Since February, the city’s residents have lived with restrictions of 13.2 gallons of water a day per person, or roughly enough for a brief shower and three toilet flushes.

Other cities such as Tokyo, Miami, London, Mexico City, Moscow, Beijing, Istanbul, Moscow, Jakarta, Cairo, Beijing, Bangalore and São Paulo are likely to run out of water too.

So, everyone must do their part to improve the situation: individuals, governments and companies. Otherwise, something that looked like a dystopia can be real.

 

McDonald’s plans to reduce its Greenhouse Gas Emissions by 36% by 2030

 

McDonald’s has announced it will partner with franchisees and suppliers to reduce greenhouse gas emissions related to McDonald’s restaurants and offices by 36% by 2030 from a 2015 base year in a new strategy to address global climate change. Additionally, McDonald’s commits to a 31% reduction in emissions intensity (per metric ton of food and packaging) across its supply chain by 2030 from 2015 levels.

Through these actions, McDonald’s expects to prevent 150 million metric tons of greenhouse gas emissions from being released into the atmosphere by 2030. This is the equivalent of taking 32 million passenger cars off the road for an entire year or planting 3.8 billion trees and growing them for 10 years. The target will enable McDonald’s to grow as a business without growing its emissions.

“To create a better future for our planet, we must all get involved. McDonald’s is doing its part by setting this ambitious goal to reduce greenhouse gas emissions to address the challenge of global climate change,” said Steve Easterbrook, McDonald’s President and CEO. “To meet this goal, we will source our food responsibly, promote renewable energy and use it efficiently, and reduce waste and increase recycling.”

To reach its target, McDonald’s will work across its supply chain, offices and restaurants to be more innovative and efficient through improvements such as LED lighting, energy efficient kitchen equipment, sustainable packaging, restaurant recycling, and by elevating and supporting sustainable agriculture practices. In collaboration with thousands of franchisees, suppliers and producers, McDonald’s will prioritize action on the largest segments of its carbon footprint: beef production, restaurant energy usage and sourcing, packaging and waste. These segments combined, account for approximately 64% of McDonald’s global emissions.

McDonald’s work to care for the planet and communities spans nearly three decades, including the establishment of a groundbreaking partnership with Environmental Defense Fund (EDF) on packaging and waste reduction. More recently, in 2014, McDonald’s released an Energy and Climate Position Statement, establishing the company’s view on taking effective, collaborative action to tackle climate change. Additionally, in 2015, McDonald’s developed a Commitment on Forests that addresses supply chain impacts on deforestation. This strengthened the foundation of the company’s climate strategy as deforestation accounts for an estimated 15% of global greenhouse gas emissions.

 

North American Carbon Markets Review

North America is currently one of the most vibrant regions of the world in terms of carbon pricing. Despite the lack of a federal climate policy in the US, states are pressing ahead with existing and new emissions pricing systems, and markets are expanding as more states decide to take the lead in climate action.

It’s appropriate that North America, where cap-and-trade as invented, should be seeing rapid developments. Since the Acid Rain Program of 1995 set up emissions trading systems for sulphur dioxide and nitrogen oxides, the US has been at the forefront of cap-and-trade development; not always for greenhouse gases, to be sure, but its experiences are highly relevant.

With the decision to withdraw the US from the Paris Agreement, the federal government has ceded the momentum of successive attempts to build a nationwide emissions market, particularly the efforts of Congressmen Henry Waxman and Edward Markey in 2009.

The 2014 Clean Power Plan, developed by the Environmental Protection Agency in 2014, came closest to reality before the election of Donald Trump in 2016 ensured that it would not be rolled out.

North of the border, Canada’s Liberal government is making up for lost time. The previous Conservative government under Prime Minister Stephen Harper resisted calls for a nationwide market-based approach to climate change, and it was only under the Liberal leader Justin Trudeau that the federal government took steps to roll out carbon pricing across the country.

The Pan-Canadian Framework on Clean Growth and Climate Change represents the government’s plan to persuade provinces and territories that setting a price on carbon is the best way forward. The plan stipulates that provinces may establish carbon pricing, be it tax or market, but that the price must be at least C$50/tonne by 2022.

Below we have reviewed those carbon markets that have developed and are being planned at a non-federal level, both in the US and in Canada. Some of these markets are now joining together to create what is effectively international emissions trading, well in advance of the anticipated mechanisms that are to be realized under Article 6 of the Paris Agreement.

Regional Greenhouse Gas Initiative

The nation’s oldest carbon cap-and-trade system groups nine states in the northeast of the country. Ranging from Maine and Vermont in the north to Maryland in the south, RGGI caps utility emissions and issues permits solely through quarterly auctions.

The market currently caps emissions at 60.3 million short tons (54.7 million metric tons), declining by 2.5% a year to 56 million short tons in 2020. Like other US markets, RGGI operates with three-year compliance periods, meaning that by the end of January 2018 covered entities will need to have surrendered allowances covering their entire 2015-2017 emissions.

Since its inception in 2009, RGGI has allowed the use of offsets, but because the market has historically been oversupplied with allowances, there has been no demand for offsets – in fact, just one offset project has been developed.

Prices are currently capped by a mechanism that releases additional permits when price levels rise above a specific threshold. From the start of the next compliance period in 2020, a new mechanism will withhold allowances from auctions when price levels drop to particular levels.

RGGI is not linked to any other market, hampered as it is by its coverage of just one sector of the economy. There are currently no plans to widen the scope of the market, but New Jersey, an original member that withdrew from the market in 2011, is expected to rejoin the market, while Virginia’s incoming governor has also pledged to participate in RGGI.

California (Western Climate Initiative)

Presently the largest market in the US, California’s emissions market covers the entire economy, from utilities to transportation fuels.

California’s market was originally set up as part of the Western Climate Initiative, a group of five US states and Canadian provinces that in 2007 pledged to build a cross-border market. By 2011 all US states except California had withdrawn.

The market sets a goal of reducing emissions by 3% a year from 2015 to 2020, and has a cap of 359 million metric tons in 2018.

Allowances are mostly auctioned; power distributors and natural gas utilities must sell their freely-allocated permits at auction to return the value of allowances to customers.

Installations may use offsets to meet up to 8% of their compliance obligations each year. Offsets may come from projects that adopt offset protocols approved by the state’s Air Resources Board.

Like RGGI, California’s market sets three-year compliance periods, but requires participants to surrender allowances and offsets representing a percentage of emissions each year. The third year requires the entire balance of emissions to be surrendered by the following November.

Major rule changes are set to be implemented from 2020 including stricter limits on the use of offsets both in terms of quantity and source: Under the aegis of the Western Climate Initiative (WCI), California’s market was linked to Quebec’s in 2014, and to Ontario’s at the start of 2018. All three jurisdictions now hold common auctions, and emissions permits from all three are fungible throughout the market.

Other states

The state of Washington has seen numerous efforts to implement carbon pricing, most recently a cap-and-trade proposal that was defeated in the courts in 2017. Governor Jay Inslee is now proposing a carbon tax of $20/tonne.

Meanwhile, lawmakers in Oregon have this month tabled a bill that would establish a carbon market and link it to the Western Climate Initiative (California, Ontario and Québec).

Canada Federal Price policy

Since the election of Justin Trudeau as Prime Minister, Canada has thrown its weight behind carbon pricing. In 2016 the country unveiled the Pan-Canadian Framework on Clean Growth and Climate Change, its plan to establish a country-wide “backstop” carbon price, to be implemented wherever provinces failed to establish their own pricing system. Legislation to implement the framework will be introduced this year.

The framework commits the country to setting economy-wide carbon pricing by the end of 2018, and has triggered policy developments in a number of provinces such as Nova Scotia. Others, however, have yet to announce any specific measures, and the framework allows the federal government in such cases to implement measures including a fossil fuel levy and carbon pricing systems.

The overall goal is to set a country-wide minimum price for carbon equivalent to C$10/tonne in 2018, rising to C$50/tonne by 2022. Any provincial market-based system that achieves this price will be exempt from federal measures.

Ontario (Western Climate Initiative)

Ontario launched its carbon market in January 2017 and as of January 1 2018, its system is now linked to the Californian and Quebecois markets through the WCI.

Ontario set a 2017 cap of 142 million tonnes, and will reduce the limit by just over 4% a year, with the aim of achieving a reduction of 15% from 1990 levels by 2020, and 37% by 2030.

Installations with emissions of more than 25,000 tonnes/yr are covered by the market, while offsets may also be used to meet 8% of installations’ compliance protocols. At present relatively few offset protocols have been approved for compliance use in Ontario.

However, a provincial election scheduled for this summer could threaten Ontario’s continued participation. Conservative lawmakers have pledged to scrap the cap-and-trade system and replace it with a carbon tax.

Québec (Western Climate Initiative)

Québec introduced a provincial cap-and-trade system in 2013, covering power generation and industry. In 2015 the system was broadened to include emissions from fossil fuel use. Installations with emissions of more than 25,000 tonnes/yr are covered by the system. In 2015 the emissions cap was approximately 65 million tonnes.

In 2014 Québec linked its market to that of California through the WCI, creating a single trading zone and offering permits jointly at four auctions each year. Offsets may be used for compliance, with most offset protocols in line with California’s existing rules.

Alberta

Alberta’s emissions market, established by the Specified Gas Emitters Regulation in 2007, does not set a cap, nor does it have a specific reduction goal. Instead, covered entities must achieve an annual 2% reduction in emissions intensity, that is, emissions per unit of output, compared to a 2013-2015 average.

Companies that do not achieve the 2% annual goal may purchase compliance credits directly from the provincial government at C$30/tonne, or may buy Emission Performance Credits from companies that have achieved or over-achieved their annual goals. Alternately, they may buy carbon offsets from projects located in Alberta that are not already covered by the system.

Nova Scotia

Nova Scotia, Canada’s second-smallest province, announced in 2016 that it will launch this year a cap-and-trade system in order to meet the federal government’s national carbon price initiative.

The proposed market is likely to cover around 20 companies emitting more than 100,000 tonnes/yr of CO2. It will not link to other cap-and-trade systems in Canada.

As of January 2018, there is no information available regarding the cap or the likely price of emissions permits.

Trading

Permits from California, Québec and Ontario can be used for compliance in each other’s systems, and the market trades largely at the price set for Californian allowances. There is an active over-the-counter market, while futures contracts for California and Ontarian permits are also listed on ICE Futures.

Carbon taxes

Other provinces, such as British Columbia and Manitoba, have opted to tax carbon emissions. British Columbia imposed from 2008 a tax on fossil fuel use ranging from domestic heating to power generation and transportation (the tax is currently C$30/tonne), while Manitoba will from impose a carbon tax of C$25/tonne from 2018 through 2022.

New Brunswick’s premier said in December that the province will not establish a new carbon tax, but will instead shift revenues from the current gasoline tax into a climate fund. It’s not yet clear whether this measure will satisfy the federal government.

Other measures

The province of Saskatchewan has said it is opting for neither a carbon market nor a tax, but exact details of its measures are being discussed with the federal government.

Other provinces

Currently, Newfoundland and Labrador’s provincial government is expected to unveil its plans in 2018. Prince Edward Island has not yet released any details of its proposed response, while officials from the territory of Nunavut have requested an exemption. The territory of Yukon appears to be prepared to accept federal measures, while the Northwest Territories have yet to decide.

Our view

It’s clear from the political activity on both sides of the border that carbon markets are still a controversial topic. Resistance from conservative politicians seems on the surface to be counter-intuitive, particularly when they offer carbon taxes as an alternative, but the current political thinking is that small government is better, and the large administrative task of developing and operating a cap-and-trade system is not as attractive as a straightforward tax.

However, economists tend to agree that a cap-and-trade system guarantees the desired environmental outcome, whereas taxation guarantees only revenues. A dynamic system of carbon pricing that puts a positive value on actual mitigation drives innovations such as fuel switching, renewable energy and energy efficiency. A flat tax merely represents an additional cost, with no dynamic incentive to reduce greenhouse gases.

The differences we observe among the various North American markets are often very technical, including methods of establishing auction floor prices or price control mechanisms, for example. But they all appear to work; emissions in the nine RGGI states have tumbled so quickly that the regulators have been forced to recalculate the cap, develop systems to withhold surplus permits from the market, and still the allowance price remains as low as $4/short ton.

The fact that allowance prices differ so greatly between RGGI and California reflects the former market’s utility-only model compared to the latter’s economy-wide coverage, and we would always prefer the economy-wide model that offers the chance to bring as many different mitigation potentials into play.

We are nevertheless very fortunate to see these markets thriving, and to learn of discussions among North and Latin American jurisdictions to develop more such systems. The more markets there are, the more linking can occur between them, and this creates momentum of its own.

Over 100 cities around the world now get majority of their electricity from renewables

CDP, an international organisation which has built the most comprehenisve collection of self-reported environmental data in the world, has published a new report whose data has been very positive: Over 100 cities around the world now get majority of their electricity from renewables. They’re proof that a low-carbon future is not only posible.

Of the 570 plus global cities reporting to CDP, over 100 now get at least 70% of their electricity from renewable sources such as hydro, geothermal, solar and wind and CDP expects to see even more cities targeting a clean energy future. Cities not only want to transition to renewable energy but, most importantly they can.

This includes Reykjavík, Iceland where geothermal and hydro-power are powering much of the city, and Basel, Switzerland where 100% of renewable power comes from the city’s own energy supply company.

In the US, where some 58 cities and towns have now committed to transition to 100% renewables, cities such as Burlington, Vermont are showing what’s possible with all electricity now coming from wind, solar, hydro, and biomass.

Another interesting fact is that there is immense solar and wind power potential across many African countries and from Dar es Salaam, Tanzania, Harare, Zimbabwe and Mazabuka, Zambia, cities are already tapping into the benefits. Meanwhile, in Nairobi, Kenya, geothermal power is helping them meet energy needs with clean sources.

This data is from cities disclosing to CDP in 2015, 2016 and 2017. 314 cities in 2015 increasing to 533 in 2016 and increasing again to 570 in 2017.

More information here

The EU could double the renewable share in its energy mix, cost effectively, from 17% in 2015 to 34% in 2030

The EU could double the renewable share in its energy mix, cost effectively, from 17% in 2015 to 34% in 2030. This is one of the finding from a new report carried out by the International Renewable Energy Agency (IRENA), prepared in co-operation with the European Commission.

For more than two decades, the European Union (EU) has been at the forefront of global renewable energy deployment. The adoption of long-term targets and supporting policy measures has resulted in strong growth in renewable energy deployment across the region, from a 9% share in gross final energy consumption in 2005 to 16.7% in 2015.

The rest of the key findings of this study, apart from the apart from the above mentioned are:

All EU countries have cost-effective potential to use more renewables.

-Renewables are vital for long-term decarbonisation of the EU energy system.

-The European electricity sector can accommodate large shares of solar photovoltaic (PV) and wind power generation.

-Heating and cooling solutions account for more than one third of the EU’s untapped renewable energy potential.

-All renewable transport option, including both electric vehicles and biofuels, are needed to realise long-term EU decarbonisation objectives.

-Biomass will remain a key renewable energy source beyond 2030.

Tapping the additional renewable energy potentials identified in the study would propel the EU further on a decarbonisation pathway compatible with the ‘well-below’ 2°C objective established in the Paris Agreement. The importance of both an EU-wide target and national-level commitments are critical, as is the faster deployment of renewables, feasible with today’s technology. Finally, substantial socio-economic and environmental benefits across the EU would be garnered from additional renewables deployment.

View report

World clean energy investment totalled $333.5 billion last year, up 3% from 2016

World clean energy investment totalled $333.5 billion last year, up 3% from 2016 and the second highest annual figure ever, taking cumulative investment since 2010 to $2.5 trillion, according to a study carried out by BNEF.

Jon Moore, chief executive of BNEF, commented: “The 2017 total is all the more remarkable when you consider that capital costs for the leading technology – solar – continue to fall sharply. Typical utility-scale PV systems were about 25% cheaper per megawatt last year than they were two years earlier.”

Solar investment globally amounted to $160.8 billion in 2017, up 18% on the previous year despite these cost reductions.

Overall, Chinese investment in all the clean energy technologies was $132.6 billion, up 24% setting a new record. The next biggest investing country was the U.S., at $56.9 billion, up 1% on 2016 despite the less friendly tone towards renewables adopted by the Trump administration.

Large wind and solar project financings pushed Australia up 150% to a record $9 billion, and Mexico up 516% to $6.2 billion. On the downside, Japan saw investment decline by 16% in 2017, to $23.4 billion, while Germany slipped 26% to $14.6 billion and the U.K. 56% to $10.3 billion in the face of changes in policy support.

Solar led the way, as mentioned above, attracting $160.8 billion – equivalent to 48% of the global total for all of clean energy investment.

Wind was the second-biggest sector for investment in 2017, at $107.2 billion. This was down 12% on 2016 levels, but there were record-breaking projects financed both onshore and offshore.

The third-biggest sector was energy-smart technologies, where asset finance of smart meters and battery storage, and equity-raising by specialist companies in smart grid, efficiency, storage and electric vehicles, reached $48.8 billion in 2017, up 7% on the previous year and the highest ever.

BNEF’s preliminary estimates are that a record 160GW of clean energy generating capacity (excluding large hydro) were commissioned in 2017, with solar providing 98GW of that, wind 56GW, biomass and waste-to-energy 3GW, small hydro 2.7GW, geothermal 700MW and marine less than 10MW.

The Travel and Tourism Industry Must Lead on Climate Change

Perhaps no industry is at greater risk from the catastrophic weather events caused by climate change than travel and tourism. Droughts, floods, rising seas, wildfires, hurricanes and other severe weather catastrophes incurred hundreds of billions of dollars in economic losses in communities dependent on tourism. In the USA alone, there were at least 16 climate-related disasters in 2017, resulting in hundreds of deaths and economic losses exceeding $300 billion. All of this threatens air, train and car travel, cruise ships and hotel occupancy. Even one major storm can result in billions of dollars in damage and lost spending. Business conferences are being cancelled. Hundreds of thousands of passengers are being stranded. Family reunions and destination weddings are being postponed and cancelled. Airports and hotels are being damaged or shut down.

Even as it is adversely affected by climate change, the travel and tourism sector also adversely impacts the environment. The industry accounts for about 5% of global greenhouse gas (GHG) emissions. A single roundtrip transatlantic flight can create 2-3 tons of greenhouse gases per person, two-thirds of the amount typically emitted from a car in an entire year.

The good news is that the private sector – and most nations in the world – are mobilizing to fight climate change. In the United States, cities and states from Arizona to Vermont have made similar commitments. Clearly, the travel and tourism sector has a critical role to play. Indeed, given its need for predictable weather and its own substantial contribution to global greenhouse gas emissions, it has a particular responsibility to act.

Many airlines, theme parks, booking agencies, cruise lines and other travel companies have taken significant steps to operate more sustainably. The International Tourism Partnership (ITP), a coalition of over 24,000 hotels in over 100 countries, is actively encouraging its members to reduce GHG emissions by 90 percent from 2010 levels by 2050. This would allow the ITP’s members to keep pace with the goals outlined in the Paris Agreement that was approved by 195 countries in 2015. The ITP also developed the Hotel Carbon Management Initiative, a toolkit that allows property managers to better understand and address their environmental impacts.

Critical to this work is measuring and reducing GHG emissions, both of which tend to have the added benefit of reducing operating costs by eliminating inefficiencies. Once measured, steps to reduce GHG emissions can include investing in energy-efficient lighting, reducing and recycling food and other types of waste, using recycled paper products, and developing a ride-sharing program for employees who commute to work.

But even the most efficient businesses incur unavoidable environmental impacts. It is because of the need to address these unavoidable emissions that the United Nations (UNFCCC) urges companies and government agencies to purchase greenhouse gas offsets. A greenhouse gas offset usually referred to as a ‘carbon offset’, is a reduction in greenhouse gas emissions achieved in one location in order to compensate for unavoidable emissions incurred elsewhere. Offsets can create meaningful links between high-income countries and emerging economies, bringing investors in climate mitigation and communities together for the common good. For that reason, they are essential if humanity is to make rapid progress towards addressing global climate disruption.

It is a market primed for huge economic and ecological influence, likely to involve hundreds of billions of dollars of investments in the new decade or so. Moreover, if designed intelligently, offset investments can also advance other urgent sustainability goals, especially those known as the UN Sustainable Development Goals (SDGs).

By Kevin Fertig. He is the Director of North American Business Development for the ALLCOT Group, a global developer and marketer of carbon offsets that align with the UN SDGs. He can be reached at kf@allcot.com