World's Top Firms Cause $2.2 Trillion of Environmental Damage

Published on Friday, February 19, 2010 by the Guardian/UK
World's Top Firms Cause $2.2 Trillion of Environmental Damage, Report Estimates
Report for the UN into the activities of the world's 3,000 biggest companies estimates one-third of profits would be lost if firms were forced to pay for use, loss and damage of environment

by Juliette Jowit

The cost of pollution and other damage to the natural environment caused by the world's biggest companies would wipe out more than one-third of their profits if they were held financially accountable, a major unpublished study for the United Nations has found.

[Black clouds over the central business district, Jakarta. The report into the activities of the world's 3,000 biggest public companies has estimated the cost of use, loss and damage of the environment. Photograph: Jewel Samad/AFP/Getty Images]Black clouds over the central business district, Jakarta. The report into the activities of the world's 3,000 biggest public companies has estimated the cost of use, loss and damage of the environment. Photograph: Jewel Samad/AFP/Getty Images
The report comes amid growing concern that no one is made to pay for most of the use, loss and damage of the environment, which is reaching crisis proportions in the form of pollution and the rapid loss of freshwater, fisheries and fertile soils.

Later this year, another huge UN study - dubbed the "Stern for nature" after the influential report on the economics of climate change by Sir Nicholas Stern - will attempt to put a price on such global environmental damage, and suggest ways to prevent it. The report, led by economist Pavan Sukhdev, is likely to argue for abolition of billions of dollars of subsidies to harmful industries like agriculture, energy and transport, tougher regulations and more taxes on companies that cause the damage.

Ahead of changes which would have a profound effect - not just on companies' profits but also their customers and pension funds and other investors - the UN-backed Principles for Responsible Investment initiative and the United Nations Environment Programme jointly ordered a report into the activities of the 3,000 biggest public companies in the world, which includes household names from the UK's FTSE 100 and other major stockmarkets.

The study, conducted by London-based consultancy Trucost and due to be published this summer, found the estimated combined damage was worth US$2.2 trillion (£1.4tn) in 2008 - a figure bigger than the national economies of all but seven countries in the world that year.

The figure equates to 6-7% of the companies' combined turnover, or an average of one-third of their profits, though some businesses would be much harder hit than others.

"What we're talking about is a completely new paradigm," said Richard Mattison, Trucost's chief operating officer and leader of the report team. "Externalities of this scale and nature pose a major risk to the global economy and markets are not fully aware of these risks, nor do they know how to deal with them."

The biggest single impact on the $2.2tn estimate, accounting for more than half of the total, was emissions of greenhouse gases blamed for climate change. Other major "costs" were local air pollution such as particulates, and the damage caused by the over-use and pollution of freshwater.

The true figure is likely to be even higher because the $2.2tn does not include damage caused by household and government consumption of goods and services, such as energy used to power appliances or waste; the "social impacts" such as the migration of people driven out of affected areas, or the long-term effects of any damage other than that from climate change. The final report will also include a higher total estimate which includes those long-term effects of problems such as toxic waste.

Trucost did not want to comment before the final report on which sectors incurred the highest "costs" of environmental damage, but they are likely to include power companies and heavy energy users like aluminium producers because of the greenhouse gases that result from burning fossil fuels. Heavy water users like food, drink and clothing companies are also likely to feature high up on the list.

Sukhdev said the heads of the major companies at this year's annual economic summit in Davos, Switzerland, were increasingly concerned about the impact on their business if they were stopped or forced to pay for the damage.

"It can make the difference between profit and loss," Sukhdev told the annual Earthwatch Oxford lecture last week. "That sense of foreboding is there with many, many [chief executives], and that potential is a good thing because it leads to solutions."

The aim of the study is to encourage and help investors lobby companies to reduce their environmental impact before concerned governments act to restrict them through taxes or regulations, said Mattison.

"It's going to be a significant proportion of a lot of companies' profit margins," Mattison told the Guardian. "Whether they actually have to pay for these costs will be determined by the appetite for policy makers to enforce the 'polluter pays' principle. We should be seeking ways to fix the system, rather than waiting for the economy to adapt. Continued inefficient use of natural resources will cause significant impacts on [national economies] overall, and a massive problem for governments to fix."

Another major concern is the risk that companies simply run out of resources they need to operate, said Andrea Moffat, of the US-based investor lobby group Ceres, whose members include more than 80 funds with assets worth more than US$8tn. An example was the estimated loss of 20,000 jobs and $1bn last year for agricultural companies because of water shortages in California, said Moffat.
© 2010 Guardian/UK

Quality Info on CO2 Emisssions

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Biomass concerns aren't just happening in our neck of the woods. Here is a letter from Lisa Arkin concerning a proposed biomass plant in Eugene Oregon. Thanks to Susan Laing for passing this on.



Dear Administrator Jackson,

Oregon Toxics Alliance, Central Latino Americano and the Oregon Chapter of the American Lung Association filed a request for Alternative Dispute Resolution to the Environmental Justice Division of EPA Region 10. We remain extremely concerned about the public health impacts from the pollution and greenhouse gases that will be emitted from the proposed Seneca biomass plant to be located in Eugene, Oregon.

We understand that the US EPA is currently not accounting for CO2 and CO2 pre-cursor emissions from biomass burning in the regulatory process. This is a significant oversight. Greenhouse gases are determined to be air pollutants and also have a negative impact on the public health of communities in the near vicinity of biomass power plants.

We wish to submit these comments which describe the negative impacts of air pollutants and greenhouse gases on residents of West Eugene, Oregon if a proposed 18.8 MW co-generation biomass plant (Seneca Sawmill permit application submitted January 29, 2009) is approved as submitted. The community is demanding that maximum emissions control technology is required for construction, in this case, RSCR or Regenerative Selective Catalytic Reduction. If the permitting agency doesn’t require RSCR, the biomass plant will be a major source of CO2 (according to their own consultants, 212,000 tons/year).

Biomass incineration, the process of burning wood for fuel, converts large amounts of carbon from a solid state to a gaseous state. Although biomass is viewed as being ‘carbon neutral’ by virtue of using biogenic carbon, biomass energy production can adversely affect atmospheric greenhouse-gas concentrations in important ways. The form in which carbon is transferred from the biomass stock to the atmospheric stock is critically important from the standpoint of greenhouse forcing impacts.

Burning woody biomass releases reduced carbon (methane or CH₄), which is twenty-five times more potent as a green house gas than oxidized carbon (CO₂) on an instantaneous, per-carbon basis. Maximum control technology (RSCR) will better control methane (CH₄) emissions and reduce greenhouse gas effects.

In the process of converting carbon from a solid state to a gaseous state, biomass incineration directly affects the climate of surrounding neighborhoods, in that most of the gases produced are greenhouse gases or its pre-cursors. These gases trap pollution and infrared radiation.

Thus, biomass incineration will saturate the local climate of Eugene with greenhouse gases (CO₂, CH₄,), many other pollutants and particulate matter, with the most intense impacts to West Eugene neighborhoods. West Eugene has high concentration of low income, disabled and minority residents. This has the effect of creating a local micro-climate that leads to phenomena such as thermal inversions and acidic rain.

These phenomena will occur because, once continuous point-sources of greenhouse gasses are installed, their release rate may exceed the dispersion rate, creating a permanent accumulation of these gases in the atmosphere. This effect is compounded by the number and volume of point source polluters. The fact that Eugene sits at the bottom of the Willamette Valley and is surrounded by mountains disrupts the dispersion of gases and aggravates this micro-climate effect.

So, even if one accepts that the process is carbon neutral, a biomass plant has a significant potential for changing the quality of life for the communities nearby if maximum air emission equipment is not used. Oregon Toxics Alliance asserts that biomass energy plant poses a severe air pollution and public health hazard for nearby communities.

Thus, in order to maintain the quality of our local atmospheric conditions, it’s necessary to reduce gaseous pollutant sources and control industrial gaseous outputs with maximum control technology. EPA's regulations must account for emissions from power plants that use biomass burning to generate electricity.

Sincerely,

Lisa Arkin

Executive Director, Oregon Toxics Alliance

Email: larkin@oregontoxics.org

Website: www.oregontoxics.org

Office Phone: 541-465-8860

Street Address: 1192 Lawrence Street

Eugene, OR 97401

Some Serious Biomass Concerns

What happened in Maine can also happen here.

Although Mayor Martin deserves credit for setting up a fact-finding board for the proposed biomass plant in town, I hope it isn’t staffed by industry types who will sell their product under the guise of truth. Experience is an equally valuable commodity and Martin would have been well served had he attended a lecture which documented what happened to several towns in Northern Maine that went the biomass route and might serve as both an example and a warning. This information was brought to a small meeting in Greenfield several weeks ago in the person of Hillary Lister, a well-informed Down East activist whose parents live in our town. What made Lister’s presentation so memorable was her calm, un-dramatic demeanor which only intensified some of the uglier facts behind the biomass industry and how vigilant we Franklin County citizens need to be. Her audience was made up of concerned adults. There were no howling cries about saving Mother Earth, no Cassandra like doom-saying or self-indulgent clownishness. Just the facts, Ma’am, soberly presented. Not surprising seeing that the biomass plant in her hometown, Athens, Maine, also came with rosy promises but actual misfortune.

Biomass has been falsely presented in two forms. One is that it is a green form of renewable energy. The other is that it will benefit the town by adding corporate tax revenue to our depleted coffers which will then lower property taxes and save the average homeowner a bundle of money. While the second point has some apparent truth to it, there is much that is unsaid that will counteract any supposed benefits we might expect.

The concept behind biomass being green is that plants only burn clean unadulterated wood chips or forest debris. Supposedly, this is what is written into the town’s contract with Madera Energy. However, according to Lister, it is common for these large energy companies to sell themselves to others once they amass a substantial profit whereby the new owner “amends” the contract and the rules. At which point, up to half their burning materials can (and often do) consist of construction and demolition debris (or CCD), not to mention other questionable items like tires and carpets. All of these materials, which can contain lead, arsenic, PVCs and various carcinogenic toxins, are not only included in the smoke plume which will descend on downwind residents, but will also form a bulk of the mountains of ash that the incinerator will inevitably produce. In April 2007, a biomass plant in Bradley, Maine covered parts of the town with a blanket of black soot that, when tested, yielded high levels of lead as well as killing two pet dogs. Lister related an unsettling observation of the stack emissions hanging low over her town on misty, overcast days, adding to the smog and painting the sky a sickly bright orange on cloudy nights.

And where does all that ash go? To begin with, it will fill some of the up to 120 trucks that will rumble through town daily at the rate of one every twelve minutes. Besides increasing road reconstruction costs (which will come out of the Greenfield taxpayers’ pockets), these trucks are known to overturn, spilling their toxic debris on some unlucky resident’s lawn. Even without the capsizing, Lister related their experience of having the ash dumped in local landfills (where they can leech into neighboring water supplies) and given to farmers as compost without telling them what toxins that compost contained.

It should come as no surprise that asthma rates have been known to skyrocket in the vicinity of bio-mass plants and that the American Lung Association has come out condemning them. Not to mention our own Greenfield Board of Health. Therefore, if you like to breath clean air, you should be worried about this.

Of course, the biomass industry has conducted their own safety test but their method is to move the testing area further and further away from the plant where the dioxin levels are the highest. These rigged findings are then offered in the official study.

As far as benefitting the town and its homeowners, Lister addressed these points with some common sense advice. While it’s true that Greenfield homeowners will reap an initial reduction in their property taxes. But as the health and environmental hazards generated by Madera become more evident, outsiders will be reluctant to buy a home in Greenfield, especially if they are anywhere within a few miles of the plant. That reluctance will devalue the worth of everyone’s home in town and therefore counteract any tax benefit. Maine homeowners in towns where these plants have been located have all had a difficult time selling their homes, even before the decline of the housing market. And when housing values decline, the towns suffers reduced revenue which completes the vicious cycle. Not good for Greenfield homeowners, businesses or the town itself.

There’s that old adage, which says if something is too good to be true, it probably isn’t. Biomass, a huge industry poised to take advantage of some serious Federal energy policy funds, doesn’t tell the entire truth, according to Lister, and has yielded deficiencies in her own town that make its value dubious at best. While I know that the lure of easy money is a strong temptation for those who manage Greenfield, they better make sure they aren’t entering into a devil’s bargain that will eventually ruin our town and our county along with it.

Daniel A. Brown has lived in Franklin County for 40 years and is a frequent op-ed contributor to the Greenfield Recorder newspaper as well as a guest on the "Local Bias" show on GCTV. He is a professional landscape painter (www.danielbrownart.com), photographer and writer as well the de facto historian of the Renaissance Community.