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Organizations sell carbon neutral products/services at no cost by integrating offsets into shelf prices. Purchase of goods funds mitigation.


Description

Summary

Carbon Neutral Checkout™ enables businesses and consumers to help stop climate change by creating and purchasing products and services that directly reduce carbon emissions via carbon credits.

Unlike large scale carbon offsetting methods, which incur high direct upfront costs, CNC™ breaks the cost of offsetting down across all products or services sold. This economy of scale makes it financially feasible to engage millions of consumers by offering a simple way to contribute directly to mitigation of GHGs with the purchase of carbon neutral goods and services.

CNC™ utilizes a partial life cycle assessment to quantify the carbon footprint of an individual product or service. CNC™ calculates emissions from cradle to gate: from raw material acquisition, to purchase of a final product by consumers. The program uses the following calculation standards to determine a carbon footprint:

•   Greenhouse Gas Protocol (GHG Protocol) - Product Life Cycle Accounting and Reporting Standard

•   PAS 2050:2011 Standard

 

The calculation exercise will yield:

•   Kg CO2e per unit (single product)

•   Dollar value per unit needed to fully offset a products' footprint

Companies implement the price to offset a product or service into its shelf price. Consumers shop as usual, additional consumers are attracted to the products for their carbon neutral factor. Revenues raised by the program are used to fund emission reduction projects which directly mitigate GHGs of adopting companies' specified products on a regular basis.

Companies obtain a better understanding of which raw materials, as well as which specific segments of a supply chain are carbon hot-spots. CNC™ then gives organizations a means to mitigate that footprint at no cost via the sale of their products and services.

CNC has the potential to mitigate billions of tonnes of CO2e globally, at an industrial scale, allow companies to cut GHG emissions, give society a way to stop climate change, while creating real environmental benefits for all.


What actions do you propose?

Carbon Credit Capital (CCC) proposes that Carbon Neutral Checkout™ (CNC™) is adopted and implemented globally in all sectors, by large and small enterprises alike, organizations, and institutions, to the fullest extent financially or technically possible to mitigate emissions from their operational, product or services.

Mass behavioral change has proven incredibly difficult over a span of several decades. It's not easy to get people to change their habits. CNC™ allows business leaders to turn their products from sources of GHG pollution, to sources of GHG solutions while maintaining regular business operations through the sale of their products and services. The program has been designed to universally accommodate any organization, in any sector, globally. 

 

Implementing CNC™ requires 5 key steps, which are as follows:

 

1. Engage: Businesses express a willingness to understand and mitigate  all, or part of their products’/services’ carbon footprint.

Actions: A business owner/leader commits to participate in the CNC™ program - understanding their businesses’ and products' carbon footprint and mitigating the GHG emissions that result in the production and distribution of their products or services. They decide whether to make their products entirely carbon neutral, or whether to only offset a portion of their emissions, as well as the offset projects they want to support (forestry, bio-gas, wastewater treatment, etc.).

 

2. Calculate: CCC calculates the carbon footprint of a product or service from its life cycle through data analysis of relevant corporate information related to a given product or service.

Actions: Adopting companies commence collaborative data reporting with CCC. This reporting involves identifying key data points, such as figures from energy bills, procurement, sourced materials and their origins, shipping routes and methods. CCC helps to find reliable current data to be submitted for analysis and carbon footprint estimation. Adopting companies determine the extent to which they undertake this process and the boundary they set - they can calculate one product, or 50, just energy emissions, or their whole supply chain. However, if a company wants to boast carbon neutral products to consumers, they need to submit all possible inputs for analysis.

 

3. Estimate: The above analysis results in a carbon footprint for a specific product or service from cradle to gate, as well as a price per unit to offset.

Actions: No action necessary at this stage for adopting companies - CCC assumes all carbon calculation responsibilities. Upon the completion of the carbon footprint calculation exercise, CCC will deliver a carbon footprint per product or service. This process is executed by taking all data submitted and determining the carbon emissions as outlined by the GHG Protocol, and PAS 2050:2011 Standards. CCC does research and purchases emissions factor databases as needed to ensure accurate estimation. 

Technical partnerships are to be forged on a constant basis with entities like the MIT Climate CoLab so that CCC can keep up to date with all developing emissions factors as they are determined.

 

4. Integration: By engaging, calculating, estimating, and implementing adopting companies and organizations end up financing carbon offset projects through consumer contributions.

Actions: Adopting organizations decide whether to integrate carbon pricing into individual units of product or service, making them carbon neutral upon purchase by a consumer, or whether to take the cost of the program on directly. CCC does not charge for its calculations and advocates for a direct product pricing implementation, as consumers have an equal share in responsibility for the GHG emissions of products that they consume. Organizations determine whether to offset annually, bi-annually, or quarterly, their billing methods, and which of CCC's portfolio projects to use for integration.

 

5. Mitigate: Consumers' purchase of a product mitigates the carbon footprint of the product upon checkout. 

Actions: Individual products and services often only amount to a few kilograms of GHGs, however, hundreds and thousands of products end up producing hundreds and thousands - even millions - of tonnes of CO2e. At specified intervals, CCC will ask companies for production data from that interval of all products produced.

The number of products produced multiplied by their carbon emissions will yield a specific dollar amount required to offset the emissions of all products produced and sold within a given interval. 

Adopting companies will be invoiced, with the invoice matching the funds raised through CNC™ exactly. Upon the receipt of payment, CCC will retire an equivalent amount of carbon offsets on behalf of the adopting company and its products specified under the program.

At this stage, adopting companies need only report final production data which seamlessly translates into the amount of CO2 to be mitigated by CCC's projects. Companies will enjoy the added benefits of marketing, outreach, and promotional support of being a carbon-neutral brand or business which are afforded complimentarily by the CNC™ initiative. Completion of this 5 step cycle results in scientifically proven reductions in atmospheric GHGs.

 

Preliminarily, CCC proposes to partner with MIT’s Alumni Club to integrate carbon pricing and mitigate emissions, including but not limited to:

1) Having MIT alumni commit the companies they manage to participate in CNC™ to understand their businesses’ carbon footprint, offset their products (either via an internal budget, or the end consumer), attain carbon neutral status, and support environmentally friendly carbon mitigation projects.

According to a recently released report, MIT alumni have launched 30,200 active companies, employing roughly 4.6 million people, and generating close to $1.9 trillion in annual revenues.

The wide range of companies and sectors, from consumer products to manufacturing, do not only control a great amount of social and natural resources, but also generate a significant amount of operational carbon emissions. The novelty of the CNC™ program lies in its capability to achieve real emissions reductions without overhauling a supply chain, or paying for offsets directly. This allows companies to save the time and money that would have otherwise been put towards purchasing offsets, and to direct those resources to the development of low impact materials, renewable energy, and the operational efficiencies. This initiative buys critical time for true behavioral change, in the form of modified or reduced consumption, to manifest.

If MIT alumni-managed businesses were to engage in CNC™, a reduction of atmospheric GHG emissions by hundreds of thousands, or even hundreds of millions of tonnes could be achieved every year. Below are actions that can be taken, the positive environmental impact those actions would have, and implementation scenarios as to how they can actually be executed.

2) Businesses engage with CCC to share key data points, implement carbon pricing by unit, support high quality offset projects, and nullify the carbon emissions of their products and services by conducting business as usual.

MIT alumni-managed businesses account for a potentially substantial carbon footprint globally. By engaging in the actions described above, these businesses can substantially, or completely mitigate their footprints via CNC™. These actions can be as simple as an adopting company  providing their electricity usage for one year and building that cost into their goods and services, or as complex as making, say, 50 products with varying value chains carbon neutral. The inclusion of carbon pricing into products and services is flexible, and can vary according to corporate structure, the company’s supply chain, and the line of products and services themselves. Companies can construct an implementation of CNC™ that best fits their business, budget, or goals.

3)  MIT Materials Systems Laboratory members can support the development of CNC™ emissions factor database by sharing their latest research findings for the carbon footprint of materials as well as their assessment of different materials, assessment of processing technologies, and evaluation of both the economic and non-economic consequences of each alternative.

The direct action proposed here is a partnership of information sharing between CCC and the MIT Material Systems Laboratory, in order to expand the spectrum of products and services that CCC can help make carbon neutral through CNC™. Implementation of these actions is simply up to the MIT Material Systems Laboratory as to whether they would enter into such a partnership, and to what scale and scope.

SO, WHY SHOULD ANY COMPANY TAKE THESE ACTIONS?

It is well documented that climate action and adaption preparation right now will save considerable amounts of money spent on damage control from environmental disasters and catastrophes in several years' time. The Risky Business Report suggests that without climate action now, we are setting ourselves up for billions of dollars worth of clean up and disaster mitigation efforts over the next 100+ years. A few billion dollars spent now on the goods and services we use every day, through a model that completely distributes cost will avoid some of the most costly damages and climate scenarios.

There are a few clear paths that have since emerged as viable ways to arrive at a low-carbon global society and economy. Proliferation of renewable energies and energy efficiency, both in design and in practice, have led the way in terms of sustainable development. Many of the largest companies and biggest national emitters in the world have plans and guidelines for consumption and low carbon production.

One considerable problem remains however: Lack of political and social will have failed to move the needle at the pace we need. The rate at which renewable energy is being produced, and at which energy efficiency and efficient design are being brought to scale globally, if maintained will all but guarantee we do not keep planetary warming below 2 degrees.

Carbon offsets are by no means the all-in-one solution, however, the currently presiding model, "reduce what you can, offset what you can't," must be amended to encourage the adoption of offsetting programs in conjunction with the other two main pillars of sustainability. Emissions reductions that take years to achieve via efficiency can be achieved in months with carbon offsets. The CNC™ model allows all companies and all consumers to buy ourselves more time to achieve adequate renewable and efficiency advancements. This initiative is designed to make businesses leaders in the sustainability field by giving them the tools to reach neutrality in the short term, while not losing sight of what it will take to be a low-carbon enterprise in the long term.

Furthermore, switching to renewable energy and the task of achieving energy and material efficiency may be doable for large companies, but changing the behaviors of large masses of society has proven considerably difficult. People want to do good, but are often left with limited options to do so. CNC™ capitalizes on the publics wishes to do good for the environment by affording this opportunity with no substantial change in their own habits. Asking people to consume less, or to substitute products is tricky, however, if the products and services they consume are simply altered on the back-end to have a smaller net-carbon footprint, they can easily support climate action without leaving their comfort zone.

There are few opportunities for such action for today's consumer. CNC's™ goal is to afford an opportunity to make a real difference without bearing a serious cost burden, while also making it incredibly financially attractive for adopting businesses.

Business owners can make products actively green, without incurring any cost, and gain a positive brand image as a leader and innovator.


Who will take these actions?

CNC™ engages a wide range of parties, which consist of:

The Business Sector

Business sector entities will join CNC™ as members and will collaborate with us to provide general data and information for the calculation of a product or services' carbon footprint. The actions taken by businesses are simply involvement, data sharing, implementation of product carbon pricing, supporting high quality offset projects, reporting of production/sales, and payment of invoice (using revenues received through CNC™) to facilitate the retirement of carbon offsets. By taking these actions, companies set the stage for consumers to take actions to influence the market by purchasing and demanding carbon neutral products where the opportunity for such actions was previously close to non-existent. CCC has already client companies engaged in CNC™ for over a year.

Research Institutes and NGOs (IP, EDU, AWARE)

CNC can also partner with any organization working on analysis of raw material life cycles to support the calculations of product carbon footprints. This kind of partnership can fully utilize research findings in a laboratory setting and actually put this research to work while further advancing carbon impact research and its subsequent implementation into daily life.

Consumers / Public

Individual consumers play a key role in the proliferation of CNC™. If a product’s carbon footprint remains unmitigated or is particularly large, consumers will tend to increasingly avoid purchasing products that produce more carbon emissions. The public’s choice can ultimately drive companies to strive for greater efficiencies in the production of their products, or to refine/change their supply-chains. As product materials and production cycles continue to become less carbon intensive and more efficient, the price to offset individual items will decrease, which will make purchasing such products more feasible for a greater percentage of society, until all products are efficiently made and fully offset.

 

 


Where will these actions be taken?

The actions described will typically be taken in two locations: at a company’s corporate offices (for the implementation and execution of the Carbon Neutral Checkout™ program), and in corporate retail stores, or in consumer’s own homes in the form of online shopping. The dichotomy can be identified simply by actions taken on the “supply side,” (actions taken by companies, institutions, and supply chain players) or those taken on the “demand side,” (actions taken by consumers of goods and services and constituents of institutions).

Supply Side Action Locations

Actions taken by corporations and institutions anywhere in the world will mostly be confined to offices where decisions are made. However, it is entirely feasible to anticipate that final numbers collected and delivered to CCC will have come from members of a company’s supply chain in the field (at a factory, a distribution center, or even literally from the field of a farm, for example). As such, this chain of reporting will bring awareness to a larger number of employees within a company or institution about carbon impacts within the company.

Demand Side Action Locations

This, too, is a diverse consideration. There are, of course, retail stores with a large share of consumer-facing operations, and, thus, where a large percentage of Carbon Neutral Checkout™ transactions will take place. However, the explosion of online shopping and the nature of various services available to the general public for consumption indicate that demand side actions can be taken from within one’s own home, in a public park or building, even at a private location for a wedding, or conference, for example.

While the actions associated with Carbon Neutral Checkout™ will generally be limited to decision making, implementation, purchasing, reporting, and offsetting, there is no limit as to where specifically any of these actions will take place, as every business and individual is different, both in preference and physical location.

 


How will these actions have a high impact in addressing climate change?

In order to ground the impact in a tangible way, we will use NIKE’s 2013 LCA on the Pegasus 25, Pegasus 30 and Flyknit Lunar2 as an example, to show the potential carbon reductions CNC™ can achieve.

NIKE states that the planning, design, production, distribution, sale, use and reuse of each sneaker resulted in 10.9 kgCO2e, per shoe, by 2014. If NIKE sells an average of 120 million pairs of sneaker a year, then the total GHG emissions of these shoes comes out to around 1,308,000 metric tonnes of CO2e annually.

The cost of a CNC™ integration across that many shoes comes out to anywhere from $0.05 - $0.25 per pair. If one can afford to pay $125 for a pair of shoes, one will likely will also be able to pay an extra $0.10-$0.15.

This way NIKE spends $0 to eliminate $6-30m worth of GHGs, while the consumer hardly sees any financial cost.

NIKE is but one of millions of businesses in the world. With CNC™ any company has the capability to achieve total emissions reductions at no cost.

 

 


What are other key benefits?

Project Level

Projects that CNC supports are implemented in impoverished rural communities to support the health and economy of local communities, while also protect the environment.

Corporate Level

  • Increase brand strength
  • Demonstrate business leadership
  • Distinguish products and services from competitors
  • Be a climate change solution as opposed to source
  • Understand product, service, value-chain carbon footprints
  • Exemplify responsibility to society and consumers
  •  

Societal Level

When more products are made carbon neutral through CNC, more community-transforming and environmentally beneficial projects will be financially feasible and executed. More opportunities for work will be afforded to poor community members where these projects are executed. More employees will have more money to exercise purchasing power as consumers who can potentially influence demand for more carbon neutral products, which further fuels this cycle of environmental preservation, carbon mitigation and poverty alleviation.

 


What are the proposal’s costs?

The costs associated with the program consist of direct and indirect monetary costs and opportunity costs.

Direct Costs: There is no charge for the services (i.e. carbon accounting & marketing benefits), which makes Carbon Neutral Checkout™ unique. There are, however, direct monetary costs that are passed on to either consumers, or the adopting company or organization through CNC™. 

Carbon Neutral Checkout's™ flexible implementation options allow adopting companies to take on offsetting costs directly, which vary depending on the size of the organizations’ carbon footprint. This method of implementation is often only preferable if companies have small footprints or enough of a profit margin to absorb such direct costs.

However, if costs are passed on to consumers via integrated shelf pricing of daily products and services, the cost increase is usually limited to around or below 1% per unit.  Most estimates conducted for CNC™ current clients and potential clients have ranged from under $0.10 to $1.50 per product or service. We have yet to see a product that costs more than $1.75 to fully offset. Costs vary based on the carbon intensity of a product or service - leather, or a car will cost more than paper or a glass bottle to offset.

Indirect Costs: Indirect costs associated with adopting CNC™ are opportunity costs, which manifest in both potential loss of customers due to marginally increased price, and loss of work productivity due to time spent on implementation of the program. These indirect costs can also be minimized based on implementation method. Indirect costs also depend on the unique nature of every carbon footprint – or more specifically, the carbon intensity of every product and service’s value/supply chain. Again, generally the price increase of most products and services is no more than 1%, and in most cases, except for particularly inelastic goods, consumers are willing and able to contribute to environmental mitigation if the cost to do so is small.

 


Time line

Short Term: Database and Membership Development.

Needed Actions

Further enrich the database to support accurate calculations of a product or services' carbon emissions by:

1) Partnering with research institutes and other NGOs to update and broaden the database of CNC

2) Keeping track of publicly available resources and data to enrich the database.

To grow membership CCC must engage more organizations to use CNC™ while also developing partnerships with key players to promote CNC™.

Estimate Results

Within 5 years, CNC™ will develop within small, medium, and large enterprises. Members will be spread across different sectors, including, but not limited to retail, hospitality, distribution service, and manufacturing. Within 15 years, CNC™ will have been implemented within enough organizations to drive development of not just the program itself but the socio-economic factors described in the Summary and Key Benefits sections as well.

Medium Term: Maintain and advance development of the micro systems of fundraising and carbon mitigation that in turn create a virtuous circle of interactions between businesses, consumers, and the communities in which projects are implemented.

Needed Actions

Carbon Neutral Checkout™ will focus on cultivating micro systems of carbon mitigation distributed throughout society.

Estimate Results

At this stage, there will be a fully developed, and continuously evolving network of carbon mitigation activities tied directly to carbon financing through provision of carbon neutral products and services.

Long Term: Find carbon balance between technology, process, and mitigation through offsets

Needed Action

Eventually, technology and supply chain management, as well as materials sourcing and production will provide sources of overall carbon footprint reduction, and carbon offsets will only be necessary to mitigate a small residual carbon footprint – for absolute net-zero impact.

Estimate Result

A globalized low carbon society should be formed at this stage.


Related proposals

N/A


References

Carbon Credit Capital, A Survey on Eco-Consumerism Preference, 2016, available at http://carboncreditcapital.com/dev/wp-content/uploads/2016/02/CCC-Eco-Consumer-Preferences-Report.pdf

NIKE, Inc., COMPARATIVE PRODUCT LIFECYCLE ASSESSMENT, available athttp://www.nikeresponsibility.com/report/uploads/files/Product_LCA_Method.pdf

Edward B. Roberts, Fiona Murray, J. Daniel Kim, Entrepreneurship and Innovation at MIT, Global Entrepreneurship Institute, Jan 6, 2016,http://news.gcase.org/2016/01/06/mit-report-economic-impact-of-mit-alumni-entrepreneurs(last visited April 5, 2016)


Edward B. Roberts, Charles Eesley, Entrepreneurship Impact: The Role of MIT, February 2009, available at https://entrepreneurship.mit.edu/sites/default/files/documents/Entrepreneurial_Impact_The_Role_of_MIT.pdf

MIT, Materials Systems Laboratory, http://msl.mit.edu/ (last visited April 5, 2016)


Environmental Defense Fund, Picturing A Ton of CO2, 2007,http://blogs.edf.org/climate411/2007/02/20/picturing-a-ton-of-co2(last visited April 12, 2016)


Risky Business Project, A Climate Risk Assessment for the United States, June 2014, available athttp://riskybusiness.org/site/assets/uploads/2015/09/RiskyBusiness_Report_WEB_09_08_14.pdf