Accounting and Sustainability

If there is one profession that has dived headlong into sustainability it is the accounting profession. While that might seem a bit hard to believe, the accounting profession -- it seems to me -- has often been perceptive about expanding its own business horizons beyond just numbers.

No professional organization within the accounting profession has been more involved in sustainability than the Association of Chartered Certified Accountants (ACCA), which is based in London but has members worldwide. On a quarterly basis, ACCA publishes Accounting and Sustainability, and the most recent issue (33) is now available.

The headlines in this issue provide a glimpse of the types of topics the newsletter covers:

• Human capital management (HCM) reporting research
  
• Discussion paper: 'Water: the next carbon?'
  
• ACCA publishes third in the series of member briefing papers on sustainability
  
• ACCA Australia publishes research on ASX50 corporate governance disclosures
  

Typical of the kinds of information that one will find in the newsletter are links to reports such as "Carbon Accounting: Too Little to Late?"

ACCA has also launched Accounting and Climate Change, another quarterly newsletter.  The first issue can be accessed here.

You can set up an e-mail subscription to these publications.

Russia's Gazprom and Nigeria Agree to a Major Gas-Related Joint Venture

Gazprom, the Russian owned gas giant, and the government of Nigeria have agreed to set up a joint venture to develop the west African country's enormous gas reserves.

According to a story yesterday in the Financial Times ("Gazprom's $2.5 Billion Gas Deal With Nigeria Raises European Concerns"), Gazprom will invest up to $2.5 billion in exploration and development projects.   Russian President Dmitry Medvedev said Russia hopes that the two nations will become "major energy partners."

You can imagine that this caused eyebrows to rise all over the European Union, which has had difficult relations regarding energy issues with the Russians over the past several winters.  The EU, whether it likes it or not, depends on free flowing gas from Russia to power its industries and warm its homes.  The last couple of winters, the Russians have either threatened to or actually turned off the gas spigots in their on-going spats with the Ukraine. Some of the gas involved was bound for the EU, and Brussels has not be thrilled about this.

This week's announcement of the Gazprom-Nigeria tie-up was characterized this way in the FT report:

"Gazprom's action to secure a foothold in Nigeria, where western groups have led the development of the oil industry for half a century, has given rise to concerns in Europe that Moscow is seeking to gain control of Nigerian reserves to tighten its grip on the European Union's gas supplies."

Now surely Moscow wouldn't be thinking the same thing, could they?  Of course they are.

There is also word that Gazprom is interested in helping fund at least part of the proposed trans-Saharan pipeline that would transport gas from Nigeria to Europe.

Curious, isn't it, that the EU seems rather subdued these days about Russia's so-called human rights violations.  A little concern about gas for the winter has a way of putting a damper on the EU's human rights campaigns.

And one more comment about Gazprom: Nigeria isn't the only place where the Russian giant is involved.  They have their fingers in many places in the world including Bolivia, Venezuela, and even the UK (where they operate a carbon trading firm).  We will be hearing more about Gazprom, particularly as the price of gas increases and they have even more money to invest.

In Historic Vote Waxman-Markey Energy Bill Passes U.S. House

In an historic vote, the U.S. House of Representatives late this afternoon passed the Waxman-Markey energy bill, the first piece of legislation ever approved by one house of Congress that would put a price on carbon dioxide emissions.

In a 219-212 vote, the measure passed and is now on its way to the U.S. Senate. Click here for a final vote tally.

The measure, co-sponsored by Congressmen Henry Waxman, California Democrat, and Edward Markey, Massachusetts Democrat, had been the focal point for the House Democratic leadership for weeks. In the end, despite the leadership's best efforts 44 Democrats voted against the bill. On the other hand, eight Republicans voted for it.

A few highlighted comments from interested stakeholders:

"In approving the Waxman-Markey climate bill, the House has chosen to ignore the legislation's harmful effects on American consumers, businesses and the economy. At a time when America is trying to recover from a serious recession, the House has approved legislation that would cost energy users billions of dollars and add new stress to the economy...We are hopeful that the Senate will produce a bill that does not harm the economy and includes a more balanced approach to transportation fuels and gas." Jack Gerard, president of the American Petroleum Institute

"The American Clean Energy and Security Act is the most important environmental and energy legislation in our nation's history. Today's vote is a huge achievement for the country and the climate...The bill that emerged from the House has the fundamental structure we need to significantly reduce carbon pollution while growing the economy. It puts a strong cap on emissions and reorients our energy market to make low-carbon power the goal. It ensures that utility rates will stay affordable and a competitive playing field for U.S. companies." Fred Krupp, president of the Environmental Defense Fund

"The [U.S. Chamber of Commerce] hopes, at some point, that Congress will find a way to balance the need for a strong U.S. economy while still addressing global climate change. Unfortunately, Congress has fallen short with this bill." William Kovacs,senior vice president of environment, technology and regulatory affairs for the U.S. Chamber

"With today's historic vote, Congress has taken the first step toward unleashing a true clean energy revolution...This bill sets the stage for the dawn of the clean energy future. While imperfect, it sets forth a set of goals America must achieve-- and exceed. Its most important achievement is setting the United States on a path to reduce carbon emissions some 80 percent by 2050." Statement by the Sierra Club

Significant "Upside" in Wind Energy, According to Pew Center Report

The United States could derive 20 percent of its electricity from wind by 2030 if wind turbines were installed twice as fast as the wind industry achieved in 2008.

A new report, "Wind and Solar Electricity: Challenges and Opportunities," published by the Pew Center on Global Climate Change, says, "There appear to be no fundamental material, manufacturing, or labor barriers to achieving this" target.

However, additional spending of between $3 and $4 billion per year would need to be invested in the transmission system. Moreover, the report suggested that the grid can manage 20 percent of wind penetration although at a cost of about five percent of electricity generated by wind.

Growing solar-generated electricity would be more expensive than wind. Reaching a one percent solar contribution by 2030 would mean installing 900 megawatts of capacity per year.

Currently, wind and solar contribute about two percent of the entire electricity portfolio. Conventional hydro provides an additional six percent.

Nano Renewable Energy Summit at the Cable Center, Denver, CO

Earlier this week on the DU campus, nano business leaders assembled at the Nano Renewable Energy Summit.  The summit brought together leading global experts involved in the relationships between nanotechnology and renewable energy.  

Of specific interest at the conference was the commercialization of emerging technologies.  Program sponsors included the National Renewable Energy Laboratory, from nearby Golden, Co., the Colorado Nanotechnology Alliance, and the Nano Business Alliance.

Lucy Daberkow, Assistant Program Director, represented the program at the event.  Her report follows:

"The Honorable Kelly H. Carnes, President and Chief Executive Officer of TechVision21 spoke on the "Outlook for Federal Funding" for renewable energy projects. Ms. Carnes served eight years at the highest levels of the U.S. government, working first as an aide to then First Lady Hillary Clinton, and later, as a senior technology policy advisor to four Secretaries of Commerce. 

In her speech, Ms. Carnes spoke about the federal stimulus package and its implications and possibilities for the new clean energy- based economy. Ms. Carnes talked about the Innovative Technologies Loan Guarantee Program which provides funding for early commercial projects that avoid, reduce, or sequester air pollutants.

She went on to talk about funding for the Solar Market Transformation program which encourages cities to integrate the use of solar energy whenever possible (Solar America Cities- Denver being one of them).

She also spoke about the USDA Rural Energy for America Program (REAP) which offers loan guarantees and grants for purchase and installation of energy efficiency appliances and renewable energy systems for agricultural producers and rural small businesses. 

Ms. Carnes reminded the audience about some of the programs the U.S. House of Representatives is looking to implement in the near future: $90 billion in new energy efficiency and renewable energy investments; cap and trade programs; global warming adaptation plans; establishment of a Clean Energy Deployment Administration at the U.S. Department of Energy; and higher energy efficiency standards for buildings, appliances, and industry in general. 

Finally, Ms. Carnes encouraged the audience to apply for grant opportunities which encourage the development of new technologies for renewable energy projects like many individuals and companies have done recently. More information on the availability of grants can be found at www.grants.gov and www.fedconnect.net/Fedconnect/." 

As Lucy's report clearly illustrates, there are enormous opportunities ahead in the renewable energy sector.  And Denver, in particular, is in the eyes of many "the hub of the new energy economy."   

Jobs, Pollution, and Health: The Vexing Challenges of Balancing Competing Interests

Many natural resources development firms now see the matter of "social license to operate" as one of the keys in whether a project is a success or not.

Put another way, even with all of the legal niceties in place (contracts, licenses to extract, etc.), will the community in which the project operates accept the project. Or will the community reject the project.

A story in today's New York Times ("In the Andes, a Toxic Site Also Provides a Livelihood") illustrates the complicated issues involved in addressing economic, environmental, and health issues. The story is about Doe Run Peru, which is owned by an American-based firm Renco.

Doe Run Peru, located in La Oroya, Peru, is a smelting operation that emits large amounts of lead. According to the story, "Ninety-seven percent of children under the age of 6 had lead levels that would be considered toxic by the Centers for Disease Control and Prevention in the United States, according to a 2005 study by scientists from Saint Louis University." On the other hand, the plant employs several thousand workers.

Consequently, as the title to article suggests, the plant provides jobs while also creating pollution and health problems. The same activity is considered in the minds of some an economic benefit while others see it as a health disaster. In La Oroya, residents seem to be split into these two camps.

What to do.

Those who pretend to know the solution to these sorts of predicaments are not, insofar as I am concerned, being honest. There are too many ways to look at the same activity. But what everyone should be able to agree on is that the environmental and natural resources communities need to take a harder and more holistic look at these types of developments.

In that regard, the graduate program will offer a one-week three-credit "short course" from Aug. 10-14. The course, "Community Relations in Natural Resource Development Projects," will be taught by Luke Danielson, an internationally known and respected expert in the field of sustainable natural resources development. (I mentioned going to see Luke in a posting last week.)

Mr. Danielson is recognized as a world leader, and those of us in the graduate program are delighted that he will be sharing his insights and experience with us. This issue is one that cries out for more attention and thought.

MIT Conference Concludes "No Credible Pathway" Towards Reducing Carbon Emissions Without Retooling Coal-Fired Power Plants

Authors of an MIT Energy Initiative report based on a major symposium have concluded that, "There is today no credible pathway towards stringent greenhouse gas stabilization targets without carbon dioxide emissions reduction from existing coal power plants."

The "Retrofitting of Coal-Fired Power Plants for CO2 Emissions Reductions" symposium included stakeholder representatives from academia, government, industry, public interest groups, and utilities.

The report's summary for federal policy makers says:

"The United States and China account for about 40 percent of global anthropogenic carbon dioxide emissions and for over half of global coal use. Both countries have immense reserves of relatively low cost coal. In the United States, almost half of all electricity is supplied by coal power plants that average 35 years of age and produce about a third of U.S. carbon dioxide emissions. China has brought on line in the last five years a coal electricity production capacity equal to the total U.S. installed capacity."

Among the observations of symposium participants related to reducing carbon dioxide emissions included:

• For existing coal plants, post-combustion capture followed by long-term, large-scale, sequestration is the most direct pathway to avoiding nearly all carbon dioxide emissions.
  
  
• Efficiency retrofits of existing coal plants can result in modest reductions of emissions per unit of electricity produced.
  
  
• Major rebuilds of existing coal plants should be considered.
  

"Time is of the essence," the report said, adding:

"The retrofit, rebuild, or re-powering of the existing coal fleet, in the U.S. and in China, to reduce carbon dioxide emissions dramatically is a necessary step towards achieving GHG stabilization targets. Practical options that will justify the vast investments needed over the next decades require validation from demonstration, development and research. Failure to do so will both drive up carbon dioxide prices (and the cost of electricity) and leave us with a continuing dearth of appropriate technology options."

Bienvenido a los Estados Unidos: Presidents Michelle Bachelet and Barack Obama Meet in Washington,D.C., to Discuss Clean Energy

Presidents Michelle Bachelet of Chile and Barack Obama met yesterday at the White House to announce several clean energy-related projects.

President Obama said, "There is enormous interest both in the United States and Chile in how we can develop solar power and wind power and biofuels and a whole host of other clean energy strategies that will make the people of both countries more prosperous and less dependent on imported energy needs."

President Bachelet said, "We are really enthusiastic about clean energy as we share the idea that the [climate change] crisis should be responded to," and added, "Chile has great conditions for solar energy."

Mr. Obama was also lavish in his praise for Chile and his Latin American colleague, President Bachelet:

"I look to President Bachelet for good advice and good counsel in terms of how the United States can continue to build a strong relationship with all of Latin America. And I think the good progress that we began to make at the Summit of the Americas can be built on with some very concrete steps in the months and years to come. We consider Chile to be one of our most important partners in that process. And so I expect that in the months to come we'll be working very closely together."

Obviously, the relationship between the United States and Latin America has not always been a smooth one. But projects, such as the one the two presidents put into place yesterday, are ways in which strong and enduring bridges can be built between the north and the south.

Since 2000, nearly 35 Latin American lawyers have earned their LLM degrees here. They have added immensely to the diversity of our program and their contributions to all of us -- professors, fellow students, staff -- have been and continue to be remarkable. These graduates are among the leading environmental and natural resources professionals across the whole of Latin America.

Let us hope that the cordial meeting between Presidents Bachelet and Obama will mark the beginning of a new chapter in our relations with energy, the environment, and natural resources being the cornerstone of mutual respect and benefit for all. Energy, environment, and natural resources -- as we all know -- do not fall precisely along geographic lines. Our responses to these great challenges should not either.

Waxman-Markey Energy Bill Heading for House Floor and Historic Vote

The U.S. House of Representatives is expected to debate the Waxman-Markey energy bill on the floor of the House as soon as Friday. A vote on the bill would be an historic first for a federal government that has generally -- until this year -- taken an ambivalent if not hostile view of climate change legislation.

The bill moves to the House floor with the support of Congressman Collin Peterson, Minnesota Democrat and chair of the House Agriculture Committee, who had fought his corner (i.e., protecting farm interests) right up to Tuesday afternoon. One concession that Mr. Peterson won from bill co-sponsor Congressman Henry Waxman is that the U.S. Agriculture Department rather than the U.S. EPA will manage the farm-related aspects of the bill. There will also be more emissions credits freely given to electric co-operatives, another major sticking point for Mr. Peterson.

Mr. Peterson may bring along as many as 50 moderate Democrats in support of the bill, and thus his support has been viewed as critical to the bill's passage. The final wording of the bill will come in the form of a manager's amendment that will be presented on the floor at the time the bill is taken up for debate.

As all of this was unfolding, the battle for winning passage hit full speed today. President Barack Obama said Tuesday afternoon, "This week the House of Representatives is moving ahead on historic legislation that will transform the way we produce and use energy in America...We all know why this is so important. The nation that leads in the creation of a clean energy economy will be the nation that leads the 21st century's global economy. That's what the legislation seeks to achieve. It's a bill that will open the door to a better future for this nation and that's why I urge members of Congress to come together and pass it." Similarly, and of no surprise, the National Association of Clean Air Agencies, urged the House to pass the bill.

Nearly two dozen U.S. electric utilities and companies published an ad yesterday in the Washington Post calling for passage of the measure. "We support this legislation because certainty and clear rules of the road enable us to plan, build, innovate, and expanded our businesses," the group, which includes Duke Energy, eBay, Nike, NRG Energy, and Starbucks, said.

On the other hand, the American Petroleum Institute said the measure would "drive up the cost of gasoline and other petroleum fuels for consumers and businesses." Senator James Inhoffe, Oklahoma Republican, also voiced opposition saying "Waxman-Markey is a massive energy tax on American families that will destroy millions of jobs and make America's businesses and entrepreneurs less competitive in a global marketplace."

Alongside the push and pull of the legislative process came two reports on what a cap-and-trade bill in the form of Waxman-Markey might mean for American households. The non-partisan Congressional Budget Office reported that the cost in the year 2020 (but expressed in 2010 dollars) would be about $175 a year. An EPA study said the cost would be in the range of $80-$111 annually.

The bill, which now weighs in at 1,024 pages, could be voted on by Friday evening.

Paco, my loyal research assistant, asks what I think is a very legitimate question: "Can we assume that no one in the House will have actually read through the entire bill by the time it's voted on? And in any case, does this make any difference?" My reaction: "Where you have been Paco? Since when was it necessary for congressmen and women to have actually read through and understood completely a measure before they voted on it?"

Oh the beauties of the American legislative process.

Sustainability Opinion Leader: Will Sarni, CEO of Domini Sustainability Consulting

One of the objectives of this blog is to share the insights and observations of opinion leaders who can help each of us as practitioners involved in environmental, energy, and natural resources issues -- and particularly the interrelationship among these issues -- understand the challenges and opportunities of today as well as tomorrow. In a word, how does the world "sustain" itself economically, environmentally, and socially?

Yesterday I had lunch with one of America's top sustainability opinion leaders, Will Sarni, chief executive officer of the sustainability consulting firm Domani. If you want to know more about sustainability, and how it is being carried out in one leading consulting firm, then I would suggest you get to know about Domani (which means "tomorrow" in Italian) and Mr. Sarni. His views resonate in the sustainability community and his experience demonstrates the types of professionals whose services are being highly prized today and will be even more so in the future.

But first a bit of background. Here's how Domani describes itself:

"A consulting firm focused on providing innovative business and technical sustainability solutions to companies committed to increasing revenue, mitigating risk and improving operating efficiency."

A glance at Domini's client list reflects why Will Sarni is a key player in the sustainability discussion:

• Alcoa
• BASF
• Cisco Systems
• Coca Cola Company
• Del Monte
• State of New Mexico

Mr. Sarni is just finishing his second book, "Greening Brownfields: Remediation Through Sustainable Development," which will be published by McGraw-Hill later this year and he has been featured in a documentary "Life 2.0 Better Living Through Clean Technology."

What makes Will Sarni an interesting and thought-provoking voice for sustainability, I think, begins with his own career. Educated as an earth and environmental scientist, Mr. Sarni's first jobs were in the environmental consulting field. His expertise was ground water and he was involved in many environmental clean up projects. However, after having done that for a decade his views began to change as he saw one clean up after another. Why can't things be built right the first time, he wondered, thus obviating the need for a later clean up.

With that in mind, he became involved in more "comprehensive" consulting solutions that involved sustainability rather than just how something is cleaned up. Starting at that point, he began to look for holistic solutions that were sustainable.

His commitment to that underlying philosophy holds true even in today's economy. He recently told the magazine Sustainability, "I see people examining their budgets, but I don't see anyone pulling the plug" on sustainability-related projects. "Everyone realizes they need to protect their brand." Looked at in a broader context, he noted, "We really have an opportunity to build on the destruction of the old economy."

Mr. Sarni's views on how sustainability projects are unfolding are illuminating:

• All professionals -- business people, consultants, engineers, lawyers and other legally trained experts, marketers, et.al. -- need to understand that the pursuit of sustainable solutions is a collaborative effort; no one person or profession holds all of the answers.
• Enormous opportunities are at hand for individuals and firms that are perceptive and forward-thinking.
• Business and technical issues related to resource management must be approached in a creative yet practical manner.

For most people the term "sustainability" is a rather fuzzy nondescript term. For Will Sarni it is a way forward to address the challenges that we face today. There is much to learn from individuals like Will Sarni, and fortunately for us his blog is available for us to read and think about.

Save the Environment: "Can" the Spam

One rather quick way to improve the environment would be to eliminate all spam e-mails. How is another matter.

Last year, an estimated worldwide total of 62 trillion spam e-mails were sent, according to a new report, "The Carbon Footprint of E-mail Spam," commissioned by McAfee. Looked at in terms of energy, spam uses 33 billion kilowatt hours. That amount represents all the electricity used in 2.4 million American homes. Put another way, that usage is equivalent to driving 1.6 million trips around the world in terms of carbon emissions.

I'm ready to do my part -- I will cease sending unrequested e-mails containing Aunt Minnie's apple pie recipe (even though I'm told it won first place in the 1915 Ford County, Kansas, county fair).

Meet Joan Policastri, Foreign, Comparative & International Law Librarian

Potential students often ask about the types of resources that will be available to them if they attend our program. Consequently, over the next few months I will be writing about several of the key -- and talented -- individuals who are part of our program.

Today I would like to introduce Joan Policastri, Foreign, Comparative & International Law Librarian for the Westminster Law Library (this is another great resource available to students) at DU. After 10 years as a paralegal, Joan began her law library career in 2005, in the acquisitions department of the Westminster Law Library. Subsequently, she has provided classroom instruction in legal research for many areas of foreign, comparative and international law. She has also played a key role in creating (along with Sergio Stone, the foreign, comparative and international law librarian at Stanford Law School and a former librarian at DU) an electronic research guide on International Humanitarian Law for the American Society of International Law.

Joan received her BA and MA degrees (political science) from the University of Colorado; a paralegal certificate from the Denver Paralegal Institute; and a Masters of Library and Information Science from DU. In addition, she had previously served as a Research Assistant at CU Denver’s Fourth World Center for the Study of Indigenous Law and Politics, and she has also spent a year doing graduate work at the University of British Columbia where she took classes in political science and at the law school.

Research for her Master’s thesis took her to Nicaragua for 2 weeks in 1989/1990, and in Fall 2000, she had the privilege of working on Semester at Sea, visiting Japan, China, Vietnam, Malaysia, India, Kenya, South Africa, Brazil, and Cuba, an experience that has proven useful in her new position. She has also traveled to England, France, and the Netherlands. Having studied French in high school and college, she is now learning Spanish. She has also dabbled in German and Tibetan.

As the Foreign, Comparative & International Law Librarian, Joan provides:

• Research assistance to students, faculty, and the public;
• Is responsible for the library’s Natural Resources Web Links web page;
• Provides classroom instruction in all facets of foreign, comparative and international law;
• Creates and updates research guides;
• Keeps faculty and students apprised of new materials and resources;
• Assists faculty with materials for their syllabi;
• Provides lectures, workshops, and library tours;
• Serves as the library’s liaison to the Josef Korbel School of International Studies; and
• Belongs to the American Association of Law Libraries, the American Society of International Law, and the International Association of Law Libraries.

Take it from me, Joan is a great asset to the graduate program. Just today, for example, I was intending to show a student from the DU business school what resources the library had on a specific topic. Well the "show" didn't go quite as I had expected. The student and I spent 20 minutes or so looking around (mostly unsuccessfully) for materials only to be helped by Joan at the last minute. She did in 60 seconds, what I had been unable to do in 20 minutes!

Life in Colorado: There's No Other Place Quite Like It

Frequently potential students ask about what it is like to live in Colorado -- what is the environment like, what does the state look like, is the state diverse or just one big collection of ski areas (and snow!).

Earlier this week, I traveled to Gunnison in south central Colorado to meet with Luke Danielson, one of the world's leaders regarding the often vexing issue of sustainable development in mining and oil and gas projects and a good friend of the DU community. On my way to Gunnison from Denver (about a 3.5 hour drive), the views were spectacular and I wanted to share several pictures with you.

The picture directly above was taken about 4 p.m. in the afternoon from near the top of Monarch Pass. The picture is looking towards the north. As you can see, much snow still resides on the top of these mountains (many of which are above 13,000 feet in elevation and perhaps a few over 14,000 feet).

The middle picture was taken about 2 p.m. on my way from Gunnison to Taylor Reservoir (and then on to Denver). The mountains in this picture are obviously a bit lower since there is not much snow. I'm always drawn to wooden fences, and that is what is in the foreground.

The third picture (below) was taken about 6 p.m. 10 miles east of Gunnison. The blue ski, white clouds, and greens and browns of the land illustrate yet another landscape in Colorado.

As you can see, Colorado's lands are a composite of different scenes, and I haven't even included pictures of the high plains in eastern Colorado!

In my mind, Colorado has the best of almost everything -- great blue, clear skies, sunny days, cool nights, snow in the mountains in the winter, hundreds of thousands of acres of forest and park land. What's not to like. And that's the reason that a fairly small (in population) state has grown from 2 million to nearly 5 million in the last 40 years.

With this growth has come the "migration" of many bright and talented individuals to Colorado, and this is clearly the case in the environmental and natural resources sectors. It has always amazed me to find how few of the people I know and deal with regularly actually are Colorado natives! Most of us (including me) are from other parts of the U.S. and the world for that matter.

I have not met one person who has been disappointed about moving to Colorado for study or work or both. People here have a passion for the outdoors and for what a clean and healthful environment means for all of us.

On the other hand, the state's long tradition as an energy provider (first coal, then oil and gas, and now renewables) means that you can always find someone to talk to about the important relationship of meeting society's energy needs in a manner that respects the environment.

Those of us who live here wake up every day and look at our state in amazement. And it is "our" state irrespective of whether one is from Argentina or Florida or Ohio or Oregon or Saudi Arabia.

As the highway signs on the roads into Colorado say, "Welcome to Colorful Colorado!"