Achieving net-zero greenhouse gas emissions might seem a simple enough concept to some: the idea that you can cut environmental impact to a level where your output does not exceed the gases being removed from the atmosphere, leaving you with an overall balance of zero. More and more countries and companies are taking the pledge, promising to hit net zero by 2050 or sooner.
However, in many scenarios, this is easier said than done. Much of our industrial processes in sectors like agriculture remain highly carbon intensive, so finding alternative workflows in order to achieve this goal may seem difficult — and what incentive is there for businesses to make the change? Apart from tackling the climate crisis and future-proofing growth, many countries are imposing — or have already — carbon taxes in order to further incentivise companies to make the change.
What Is a Carbon Tax?
As the name might suggest, a carbon tax is a toll levied on the carbon emissions required to produce goods and services. More than 40 governments worldwide have now adopted some sort of price on carbon, either through direct taxes on fossil fuels or through cap-and-trade programs.
For example, Canada currently has one of the most ambitious carbon pricing programs in the world. Participating provinces and territories set their own taxes that meet or exceed the current standard, or use a cap-and-trade system that achieves the same result. If a province has no plan, or if it’s below the standard, the federal government applies a “backstop” that applies the minimum price through federal taxes. Heavy industry has a different pricing system than the above one for consumers. It measures how emissions-efficient a corporation is compared with its industry peers to decide how much it should pay.
As the world seeks urgent ways to curb the effects of global change, economists suggest that carbon taxes are the most efficient and cost-effective way to curb and address climate changes. So one might say that implementing a carbon tax system could provide an incentive for businesses and industries to develop more environmentally friendly production processes.
The looming threat of carbon taxes isn’t the only reason why companies should be making net-zero plans. Our outlook on the environment and sustainability has changed drastically over the last few years and now it is expected that companies “think green”. Having an achievable and robust plan to reach net zero has become a huge competitive advantage when dealing with investors, shareholders and customers alike.
The first thing any business should do is take a comprehensive measure of all of their emissions. You need to have a clear idea of what emissions you are producing before you can work on bringing them down. This data is vital to any net-zero plan and will give you a baseline to measure future reductions — making it easier to set realistic and achievable targets and report on your successes.
Monitoring Your Supply Chain
Another key way that businesses can look to reduce their carbon emissions is by examining their supply chains. By identifying where in their supply chain the current bulk of their emissions are happening, and historically where high-risk areas have been located, businesses can reduce those areas and plan accordingly.
Let us take a business operating in the palm oil industry as an example. One of the key things they can do to curb their carbon emissions is to make sure that their palm oil plantations are deforestation-free. By monitoring their deforestation levels they can identify high risk areas in their supply chain. For example, by using proxy data this company can monitor their current production coming out of a 50 mile radius around the palm oil mill where they're sourcing from. If a mill’s capacity is around two million tons of palm oil, but there are only one million tons coming off of that landscape right now, then that is an area where you're likely to experience much more land-use change as they increase plantation areas to increase palm oil production.
Another aspect of this would be to better engage with growers and suppliers in areas where the highest emissions are coming from. They can also look at a different area that's going to stay the same because the plantation age is quite young, so a bunch of new production is going to come online as the trees get older and start to produce more fruit. This type of analysis can be done so that companies can avoid areas where there's going to be potentially a higher chance of deforestation and thus stop them from achieving their net-zero goals.
How Satellites Help
We can now agree that monitoring your supply chain is of the utmost importance for businesses looking to achieve net zero, but how exactly do they monitor it? By using satellites. Where once the use of satellite data was rare due to high costs and lack of availability, nowadays anyone with a stable internet connection can access them. This has helped drive innovation in a variety of sectors, especially environmental protection. However, processing this satellite data into actionable insights is costly and requires intelligent technology.
Satellites capture signals from the Earth and translate these into images, but the data first needs to get to the ground. Once there, you need to determine what data is needed for the goal you have in mind. Satellites gather a huge array of information from temperature changes, CO2 levels and precipitation, forest fires and deforestation. In this case, companies will need to monitor their carbon emissions.
Using a combination of satellite data, space-born LiDAR, machine learning technology and supply chain information, you can now effectively calculate and monitor your carbon emissions. Even your historical carbon emissions from past deforestation can also be determined. This will allow your business to set an accurate baseline so that, going forward, satellites can measure how much carbon is being lost from land use change and how much is being captured from restoration and tree crops.
There is still time for businesses to get their net-zero plans in order before carbon taxes become more widespread, and satellite data is a quick and easy way to get started. They allow for measuring and monitoring the carbon in your supply chain, especially as more companies commit to net-zero and forest-positive supply chains.
Alan Kroeger is head of supply chains and natural climate solutions at Satelligence.
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