Sale of Emission Reduction Credits

Identifying financial and environmental, value-added benefits to projects already approved and underway.148

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Background: The Kyoto Protocol, enacted in 2005, is an international agreement between 175 countries to limit emissions of greenhouse gases. Greenhouse gases are a major cause of climate change. The United States is not a signatory.

One opportunity that came my way while working at Albertsons was to investigate the potential sale of Emission Reduction Credits.  Several vendor presentations to management had left people intrigued but unclear of the opportunities, risks, etc. Thus began my study of carbon credits, international credit trading, the Kyoto Treaty and the realization of a terrific way to maximize what was already a positive for the company.

Around the same time a summer of brownouts in California led to strong calls from California and several other states for businesses to curtail peak demand electrical usage. In response we tried something novel and turned off nearly half of the regular store lights.  To minimize customer concerns we placed signage in metal ring stands stating our efforts to dim lights was to reduce our impact on the local community.  A quick check with customer service revealed a majority of favorable comments with very few concerns or complaints.  It appeared we had a quick solution to addressing the call from state government while simultaneously improving store operating budgets.

Next we added technological improvements including anti-sweat heaters in the diary and frozen food case doors.  This technology keeps the glass doors on frozen food and dairy cases from condensing with moisture when opened.  They are much more efficient than conventional fans and less distracting to the customer shopping experience. Many other steps, including installation of new technologies and re-commissioning of existing HVAC equipment, were taken.

At the end of the day we had reduced the electrical energy demand for most stores by a significant percent.  Working with Blue Source we calculated the total voluntary reduction in kWh usage and hired a third-party engineering firm to verify that “X” amount of kWh reductions yields “Y” amount of CO2 Emission Reduction Credits (ERCs).  The total ERCs, voluntarily generated and third-party verified, were sold by Blue Source LLP on the international market.  We did not clear a huge amount of revenue but we did address climate change by instituting a process which tallied CO2 generation from our operations.

 

Around the same time our store development department was looking into building more “green” stores which would meet U.S. Green Building Council (USGBC) standards for LEED (Leadership in Energy and Environmental Design) certification.  LEED stores are cheaper to operate and maintain over time however the initial construction costs, coupled with the USGBC certification price ($50,000-$80,000 range), were seen as an immediate roadblock.

As a means of covering the higher “build” costs we used the ERC revenue to cover the higher LEED costs.  Albertsons’ store design improved by incorporating energy and environmental savings practices.  As a result, it was a great success story involving Emission Reduction Credits, long before the country was familiar with Greenhouse Gases.