| Global warming, carbon footprint and “cap and trade” currently are among the leading news topics around the world. Already this year more than 40,000 English-language stories have been published on these very subjects. Carrier’s Vice President of Government and International Relations, John Mandyck, has a wealth of experience as principal liaison to governments and international associations. ContainerLINE met with Mr. Mandyck to get some answers designed to help you make sense of the global discussion on carbon emissions:
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ContainerLINE: What is happening globally with respect to CO2 regulations?
John Mandyck: The United Nations and many countries around the world are looking to slow greenhouse gas (GHG) emissions, like carbon dioxide (CO2), to reduce the negative impacts of climate change. World scientists have concluded that GHG emissions must be reduced 60 to 80 percent by 2050 to reverse the human impact on climate change. CO2 represents about 90 percent of all GHG emissions. Hydrofluorocarbons (HFCs), which are used as refrigerants, represent less than 2 percent. The Kyoto Protocol was a first attempt for developed countries to reduce GHG emissions by 5.2 percent from 1990 levels between 2008-2012. It’s likely that this treaty will fall short of its goals. Last year, the world community met in Bali, Indonesia to discuss the path forward after 2012, when Kyoto expires. The “Bali Roadmap” calls for a new international framework by the end of 2009 to address climate change by both developed and developing countries. Just recently, the G8 countries pledged to cut emissions by 50 percent by 2050 and called on developing nations such as China and India to follow suit. CL: Why is this of interest to the container industry?
JM: Climate change regulations will constrain carbon emissions. For containers, the impact could come in two principal forms: (1) the energy used to operate the refrigeration system, and (2) the refrigerant used as the cooling gas. CL: What experience does Carrier have in dealing with global environmental regulations on the scale of GHG emissions reduction?
JM: For decades, Carrier has been an industry leader in environmental stewardship. In 1994, we were the first company to phase-out chlorofluorocarbons (CFCs) in air-conditioning systems on a global basis – two years ahead of requirements in the U.S. and 16 years ahead of mandates in developing countries. We are committed to offering systems that minimize environmental impact, such as our investments in products that do not deplete the ozone layer. We work proactively with governments to provide the status of environmental technologies. And we strive to offer our customers a choice of environmentally sound solutions. CL: Explain what is meant by the term “cap and trade?”
JM: The centerpiece of most climate regulatory proposals is a market-based approach called “cap and trade.” The “cap” is where a government would establish a discreet limit of carbon emissions that decreases over time. While systems can be designed in a number of ways, it is envisioned that caps would be assigned to different sectors of the economy that emit large quantities of GHG. Those sectors that reduce emissions below the capped levels would be able to sell credits to those sectors that exceed the limits. This is the “trade.” Currently, the EU is operating a cap and trade system that covers about 12,000 large emitters of CO2 primarily in the electrical generation, cement and steel production industries. The EU is looking to add other sectors to its emission trading program, including shipping. CL: In June, the U.S. Senate voted against the Climate Security Act, which would have set up a market-based cap-and-trade system for sharply cutting emissions by 2050. Similar legislation has been proposed in the U.S. House of Representatives. What effect will these actions have going forward?
JM: While the Senate bill did not pass this year, it was the first to pass out of committee with mandatory targets and timetables. In this instance, the Senate bill would have reduced greenhouse gas emissions 70 percent by 2050. In the House, legislation has been introduced to cut emissions 80 percent by 2050. Both would rely on a cap and trade approach. It appears that climate legislation will continue to be debated in Congress, with some hopeful for final passage in the next two years. In the meantime, states such as California have passed their own laws. Whatever the outcome and timeframe, reductions of GHG emissions will remain a public policy priority. CL: According to an April 26 article in The New York Times, The European Union increased food imports 20 percent in the last five years. The value of fresh produce imported by the United States nearly doubled from 2000 to 2006. In real terms, what impact does refrigerated shipping have on GHG?
JM: Although refrigerated containers represent no more than 10 percent of all boxes on a ship, Carrier is focused on how we can help our container customers move product from point A to point B with the fewest carbon emissions. For example, our new PrimeLINE unit is the most energy-efficient unit on the planet, and with QUEST power-saving mode conserves even more power. It follows that when you reduce energy requirements, you can reduce power generation and, hence, related emissions of GHG such as CO2 and particulates. So we are making a very real difference.
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