Understanding Supply Chain Emissions for Climate Action in Organizations

1. NRG 173: Carbon Footprints for Climate Action in Complex OrganizationsSpring Term 2011Class 11 of 20May 5, 2011 Kelly Hoell Good Company Eugene, OR

2. overview • discuss assignment #1: carbon footprint and personal climate action plan • discuss context for why supply chain emissions matter • dive in to EIOLCA.net!

3. objectives • review lessons learned from first assignment; develop a list of climate action opportunities • understand context for supply chain emissions and why they are important • learn to use a public-domain tool to understand supply chain emissions and inform the life-cycle of various products/industries

4. personal carbon footprint and CAP • Grades and documents with tracked changes sent by e-mail. • REMEMBER: you can re-write assignment to get full credit! All good docs go through iterations! • This time: no points taken off for failure to send as PDF and Word doc; not including NRG 173 in subject line of e-mail; not including name or initials in document title. That will not be the case next time… • Assignments not optional – must be completed. 10% taken off for late assignments.

5. calculate emissions supply chain: two views of US emissions Source: EPA’s Opportunities to Reduce Greenhouse Gas Emissions through Materials and Land Management Practices

6. sense of scale for supply chain emissions Why do supply chain emissions matter? • they might be big • they may show you additional opportunities for climate action or climate influence • they may be directly tied to your organization’s mission or business model • they might help you understand your organization’s cost-of-carbon risk

7. sense of scale for supply chain emissions national emissions: USA + ~3-21% “Embodied Emissions of Trade” (Net)

8. sense of scale for supply chain emissions community emissions: Portland Metro

9. sense of scale for supply chain emissions absolute emissions: City of Hillsboro

10. sense of scale for supply chain emissions absolute emissions: OHSU

11. supply chain emissions methodology options to quantify embodied emissions • Building for Environmental and Economic Sustainability (BEES) • Inventory of Carbon & Energy (ICE) of Building Materials • process life-cycle assessment (PLCA) • Economic Input-Output Life-Cycle Assessment (EIOLCA)

12. supply chain emissions methodology supply chain carbon: EIOLCA • powerful web-based, public-domain tool • translates economic activity into GHG emissions (and other things) • easy to use (especially compared to the alternative) • free, based on deep research, continually updated • Website: http://www.eiolca.net/ • Economic Input-Output (EIO) = • model of the US economy (and others too!) • includes 428 economic sectors (explore them all!) • based on 2002 data • Lifecycle Assessment (LCA) = • details from academic and technical literature on GHG emissions (and other impact categories)

13. supply chain emissions methodology words of caution • EIOLCA has limitations • a chainsaw, not a scalpel; don’t end up a bloody mess! • results capture national averages • cannot compare products within one sector • 2002 data set: Inflation correction • trade not included (yet) • opportunities to avoid EIOLCA altogether • if you have narrower needs with easily available data (e.g., ICE for construction materials) • if your supply chain constitutes a small portion of overall emissions (example coming)

14. using EIOLCA • we used one equation when we wanted to calculate total cost-of-carbon financial risk • we use a different one when converting dollars into CO2e

15. supply chain emissions methodology approach: converting dollars to CO2e • $ = expenditure • CO2e/$ = “carbon intensity” of expenditure • CO2e = final estimate of total emissions in expenditure • repeat this equation for each category of purchases

16. calculate emissions scope 3: supply chain • data: annual expenses by purchasing category • source: accounting department, expense report, etc. • emissions factors: MT CO2e / $ or quantity • Carnegie Mellon, Green Design Institute’s Economic Input-Output Life-cycle Assessment Model: eiolca.net • Bath University’s Inventory of Carbon and Energy (ICE) • Athena Institute • NREL: U.S. Life-cycle Inventory Database • unit conversions: inflation correction • Consumer Price Index • Turner Building Cost Index

17. supply chain emissions methodology What is analyzed in EIOLCA?

18. EIOLCA: an introduction key point: every sector of the economy consists of itself and bits of a bunch of other sectors

19. supply chain emissions methodology EIOLCA example: construction expenses The municipal government of Anywhere, OR spent $1,000,000 in construction expenses. What are the estimated upstream emissions from this construction?

20. supply chain emissions methodology EIOLCA: example

21. supply chain emissions methodology EIOLCA: example

22. supply chain emissions methodology EIOLCA: example Results: $1 million dollars of purchased “Nonresidential commercial and health care structures” (2002 dollars) results in 566 MT CO2e emitted in the supply chain (up to the point of purchase).

23. EIOLCA: example

24. examples: three industry sectors • coal mining • tire manufacturing • flour milling • Question: What does a GHG inventory of a certain thoroughness tell us? • Or put it this way: how much of a sector’s life-cycle GHGs are in Scopes I and II?

25. Have a good weekend! Feel free to contact me: Kelly Hoell kelly.hoell@goodcompany.com (541) 341-GOOD (4663), ext. 217