Climate Credits: Big Business Needs Greener Incentivization

News | World | Sustainable Development

expanding_climate_creditsAccording to a recent survey conducted by, the overall health of California is good, with a low prevalence of smoking and obesity, the Golden State would have ranked higher than #16 if it wasn’t for its infamous gridlocked cities and smoggy air. Californian hippies and surfers can now breathe easier thanks to the state’s efforts to fight climate change. Or can they? How California’s Carbon Caps Work?

Recently, Operations Manager for a manufacturing facility in California made an analysis. He explained that the state’s commitment to limit the amount of carbon pollution emitted into the atmosphere is a bit strange.

An Operations Manager for a manufacturing facility in California summarized the state’s approach by explaining that the state charges permit fees from power plants and industrial companies that pollute the air. It then offers the monies collected as “climate credits” to households and small business to help them “invest in energy-saving devices and home improvements.” This is planned to continue until 2020.

Isn’t there something fundamentally wrong with this approach? Wouldn’t the air – and the public interest – be better served if the state helped the real emissions movers and shakers effectuate change?

Getting More Bang for Your Climate Credits Buck

In fact, according to the United States Environmental Protection Agency (EPA), commercial buildings and industrial facilities generate 45% of the country’s greenhouse gas emissions. The rest comes from transportation, agriculture and residential exhaust.

The report further reveals that in buildings, 30% of energy is used inefficiently or unnecessarily. Consider this: if commercial and industrial buildings improved their energy efficiency by just 10%, $20 Billion would be saved and the amount of greenhouse gas emissions that would be saved would equal that of getting 30 million vehicles off the road.

You can find more interesting statistics about energy use (and abuse) here, but it seems that the state may have chosen to credit energy consumers who do not necessarily pose the greatest opportunity for energy waste reduction.

This Operations Manager says that he did receive such a “climate credit” on his home energy bill, but nothing on the corporate bill. He went on to admit that he did not use the $26 semi-annual credit to invest in any home energy-saving devices. Some of his neighbors hadn’t even noticed the credit taken off their bill and just paid the bottom-line number to the utility company.

Having energy costs on his mind because of his work, he asked around and none of his friends had made any adjustments to their usage or invested in any new devices or technologies with the credit they received.

However, he told me that a modest rate reduction on the corporate bill would give him the financial leeway he needs to invest in an energy management solution that would truly help curb waste and carbon emissions.