G8 Environmental Futures Forum 2000

Detailed Description of Best Practices
United States of America No.11

I. Title of the Best Practice

Climate Challenge and Climate Wise

II. Overview of the Best Practice

Climate Wise and Climate Challenge are two models of comprehensive U.S. programs that encourage and recognize industrial and utility companies and businesses that undertake energy efficiency improvements and reduce their greenhouse gas emissions. Working with industry (Climate Wise) and utilities (Climate Challenge), these programs help companies to develop comprehensive action plans to reduce greenhouse gas emissions. Participation in these programs facilitates educational exchanges on the most effective methods to reduce greenhouse gas emissions, and allows participants to demonstrate achievements through voluntary efforts. These programs have been effective in shifting the thinking of the management and strategic planners in businesses so that GHG reduction is incorporated into their corporate culture and philosophy.

A. General Description
Climate Challenge is a joint, voluntary effort of the U.S. Department of Energy (DOE) and the U.S. electric utility industry to reduce, avoid, or sequester greenhouse gases. Electric utilities identify and implement cost-effective activities which are specified in individual agreements between DOE and individual electric utilities. The electric utility national trade associations are active in promoting the program and in developing industry-wide initiatives.

The actions that utilities have committed to in their individual agreements include: efficiency improvements in end-use, distribution, transmission, and generation; increased use of energy efficient electro technologies; fuel switching to lower carbon fuels such as natural gas, nuclear, or renewable energy; transportation actions, including greater use of natural gas powered and electric vehicles; forestry actions; recovery of methane from landfills and coal seams; and the use of fly-ash as a Portland cement substitute.

Climate Wise is a voluntary program of the U.S. Environmental Protection Agency (EPA) that works with industrial companies to develop comprehensive action plans that document energy efficiency and environmental protection measures and report the results of their actions. Through this process, Climate Wise helps companies to document cost savings and productivity benefits as well as emissions reductions. The program allows companies to identify the most beneficial actions for their organization and to develop innovative approaches. Climate Wise encourages companies to set aggressive emissions reduction targets and develop a detailed plan that will enable them to meet that objective.

The program provides tailored technical assistance, supporting documentation, and software to help companies identify and implement emissions reduction actions. An Action Plan review process ensures that plans contain aggressive strategies and goals appropriate for each company. Climate Wise also works with Partners to establish baselines and report the results of their actions annually.

The Climate Wise Annual Achievement Awards Program recognizes the top performing companies in the program. Award winners share their accomplishments at an annual event and through case studies published and distributed throughout the year. The recognition opportunity allows companies to benchmark their performance against other companies. Recognition supports company decisions to invest in energy efficiency and greenhouse gas emissions reductions and encourages future investments.

B. Special Characteristics of the Best Practice
Voluntary Reporting: Climate Challenge and Climate Wise participants report through the Voluntary Greenhouse Gas Reporting Program, developed pursuant to Section 1605(b) of the Energy Policy Act of 1992. 1605(b) established a mechanism by which corporations, government agencies, individuals, trade associations and other organizations can report to the U.S. Department of Energy's Energy Information Administration any actions taken that have or are expected to reduce/avoid emissions of greenhouse gases. This program is described in a separate section of the U.S. submission on climate best practices.

Flexible Partnership Approach: Climate Wise focuses on removing managerial as well as technical barriers to implementing greenhouse gas reduction measures. Climate Wise provides companies with information on a variety of emissions reductions measures and tools to analyze the data. The program works with companies to develop a mix of activities that works best for the organization. By allowing flexibility in the type of actions that are selected, the program has greater assurance that the measures will actually be implemented. The approach also allows for companies to develop innovative new approaches tailored to their operations.

Peer Exchange Infrastructure: Climate Wise has developed a model for information dissemination and program implementation support called the Climate Wise Peer Exchange Partnership. Partner companies meet on a quarterly basis to share information on successful projects and approaches to industrial energy efficiency. Each meeting is held at the site of a different partner company. In order to host a meeting, the partner company must have submitted a Climate Wise Action Plan. Each host presents their action plan and the elements that have been most successful. The meetings also provide an opportunity for the program to present the latest tools and materials it has developed and for companies to discuss local events that may affect their energy efficiency and greenhouse gas reduction efforts. The meetings are also used on occasion to recognize partner company achievements at the state or local level. Partners are encouraged by their peers to host meetings and most companies that attend eventually decide to join and participate actively in the program. The peer exchange meetings are typically facilitated and managed by a state or local government and regional representative to ensure local support and recognition of partner activities.

Climate Wise Emissions Tracking Software: Recently the program has developed an innovative new software tool designed to help companies monitor their greenhouse gas emissions and track the results of their emissions reduction projects. The software not only tracks greenhouse gas and energy use related emissions, but also tracks water use efficiency and hazardous and solid waste emissions and reduction projects. The multimedia tool is designed to operate on a companies intranet so that facilities around the world can share information at the same time that they track and manage their emissions and projects. The program also automatically generates the Climate Wise Action Plan and Voluntary Reporting of Greenhouse Gases reports and other reports specifically for the companies internal use.

C. Reasons for Inclusion as a Best Practice
Climate Challenge and Climate Wise have served to raise the awareness of staff and management in corporations throughout the U.S. on methods of estimating GHG emissions, as well as on the range of possible reductions measures that are available.

The Climate Challenge program now has 124 Participation Agreements signed through September 1999. The 124 agreements represent 651 of the over 800 utilities that have expressed interest in the program, and 71% of 1990 electric generation and utility carbon emissions -- a majority of the U.S. electric utility industry.

In 1998, Climate Wise Partners reported reduced greenhouse gas emissions by nearly 4 million metric tons of carbon equivalent (MMTCE) and US$500 million in savings. Climate Wise Action Plans document more than 2600 energy efficiency and environmental performance measures. Process improvements, equipment enhancements and energy management systems are key projects companies are undertaking through the program. In addition to saving energy and reducing carbon dioxide emissions, Climate Wise Partners are undertaking more than 500 waste reduction, water conservation, and pollution prevention actions. The thirty Climate Wise State and Local Government Allies are building technical assistance capacity at the state and local level and forming productive partnerships with hundreds of local businesses.

These programs have resulted in a significant shift in the corporate culture and philosophy of U.S. businesses, particularly electric utilities and manufacturers. This is evidenced by increased activity involving greenhouse gas mitigation by companies and industry-wide organizations since the inception of the two voluntary programs. U.S. businesses, particularly electric utilities and manufacturers, participating in these programs have already reported very significant greenhouse gas reductions.

While Climate Challenge and Climate Wise are not the catalyst for industry action in all cases, these programs provide useful resources and tools to support and encourage private sector action. In addition, companies benefit from the publicity these programs provide, which in turn promotes additional action. Examples include:

Climate Challenge:

Tennessee Valley Authority is planning to co-fire wood waste on a continuous, commercial basis at several of its plants. Substituting wood waste for coal causes no net addition of CO2, since the CO2 emitted is part of the natural carbon cycle.

Several utilities, including Jacksonville (Fla.) Electric Authority, have committed to landfill gas and generation projects. Others, such as Allegheny Power, are seeking to recover methane from coal mining operations.

In the first market-based CO2 emissions trade between electric utilities, Niagara Mohawk Power exchanged 1.75 million tons of CO2 reductions for Arizona Public Service Company's 25,000 tons of SO2 allowances (which have an established market value under the 1990 Clean Air Act Amendments). Niagara Mohawk then donated the SO2 allowances to a non-profit environmental group to be retired, helping mitigate both acid rain and global climate change.

EnviroTech provides US$52 million in venture capital funds committed to accelerate commercialization of renewable energy and energy-efficient electro technologies.

Earth Comfort Program promotes a ten-fold increase in the purchase of energy-efficient geothermal heat pumps.

Climate Wise:

The DuPont Corporation was the first company to join the Climate Wise Program in 1994. DuPont developed an aggressive action plan designed to reduce greenhouse gas emissions by 18 million metric tons of carbon dioxide by the year 2000. In 1995, DuPont undertook a wide range of energy efficiency and environmental performance measures at fifteen facilities. Most of the actions required little or no capital investment, but resulted in more than US$31 million in cost savings annually. This year, the corporation reported that despite a 35 percent growth in production, energy use remained flat over the entire decade.

III. Categorizing the Best Practice

The following responses are combined for all programs listed in this section.

1. Classification(s) (Indicate main classification(s) only.)
( ) Regulatory Approach (Policy approaches-- regulations, incentives, etc.)
( ) Practical Action (Action undertaken independently by a social actor)
( X ) Social Network Mechanism (Cooperative structure)

2. Social Actor(s) Involved (Indicate main social actor(s) only.)
( ) Citizens
( ) Central government
( X ) Local government
( X ) Business

3. Sector(s) (Indicate main sector(s) only.)
( X ) Energy - electric utilities (Climate Challenge)
( ) Household
( ) Transportation
( X ) Industrial Enterprises (Climate Wise)
( ) Other (Non-Industrial) Business
( ) Agriculture/ Land Use/ Forestry
( ) Other (Please specify.)

4. Target Greenhouse Gas(es)
( X ) CO2
( X ) CH4
( X ) N2O
( ) HFC
( ) PFC
( ) SF6
( ) Other (Please specify.)

IV. List of References


V. Please indicate a person to contact for more information about this Best Practice.

Contact Person: Larry Mansueti
Title: Director, Climate Challenge Program
Organization: U.S. Department of Energy
Email: lawrence.mansueti@ee.doe.gov
Tel: 202-586-2588
Fax: 202-586-1640
Address: 1000 Independence Avenue SW, Washington, DC 20585 USA

Contact Person: Pamela Herman-Milmoe
Title: Climate Wise Program Director
Organization: U.S. Environmental Protection Agency
Email: herman-milmoe.pam@epa.gov
Tel: 202-260-4407
Fax: 202-260-0512
Address: 401 M Street SW (2126), Washington, DC 20460 USA

Detailed Description of Best Practices - USA No.11

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