The Imperfect Business of Greening the Games

Nine Vancouver companies could cement a reputation for trail-blazing the development of clean and sustainable technologies, thanks to the international platform and the monumental challenge of making the 2010 Olympics carbon-neutral.

In an effort to host the most sustainable Games in history, the Vancouver Olympic Organizing Committee (VANOC) secured an estimated $5-million sponsorship from Offsetters Clean Technology, also of Vancouver, to invest in projects and businesses in an attempt to nullify—or offset—the carbon emissions of the 2010 Games.

The task of greening the Games has been doubted and criticized almost as equally as it’s been lauded and celebrated. But according to James Tansey, the CEO of Offsetters, one of the accomplishments of a green (and for that matter, even a green-washed) Games will be the heightened attention on B.C. technology.

“The story is really about showcasing the BC clean technology sector,” said Tansey.

Nexterra, Sempa Power, Lignol, Ballard Power and Powertech are the first five of up to nine energy companies chosen by Offsetters to contribute to the astounding goal of making the Games carbon-neutral.

The relationship between Offsetters and the energy companies is a fundamental aspect of carbon exchange and carbon-neutrality. Theirs is an economic partnership that allows organizations to buy and trade carbon emissions with the ultimate goal of funding energy projects or similar ventures that attempt to counter climate change.

Tansey explained that Offsetters pays organizations such as VANOC to install technologies from companies such as Sempa Power, which uses a patented hybrid system the heat commercial buildings. In turn, VANOC can claim they are mitigating the creation of carbon emissions by heating venues and offices more efficiently.

“We pay them to do something they wouldn’t normally do to generate additional emissions reductions,” Tansey said.

The commoditization of green

Described as many things, including brilliant, energetic and boyish, Offseters CEO and co-founder Tansey received his PhD from East Anglia a decade ago and has since lectured in Britain at the Said Business School in Oxford. He has consulted with the World Economic Forum, Environment Canada and the Canadian Environmental Assessment Agency.

He joined UBC’s Sauder School of Business in 2006 and his research interests have recently focused on emerging international markets for carbon exchange, social determinants of health in developed countries and the governance of biotechnology and genomics in this country.

His interest in carbon exchange provides the impetus for Offsetters.

“That’s what we built the company around,” he said.

To explain the principles of carbon offsets, the David Suzuki Foundation gives the example of a business partnership with a wind farm wherein a company gives money to the wind farm in exchange for offsets.

“The wind energy company benefits because the carbon offsets it sells make such projects more economically viable. The buyers of the offsets benefit because they can claim that their purchase resulted in new non-polluting energy, which they can use to mitigate their own greenhouse gas emissions. The buyers may also save money as it may be less expensive for them to purchase offsets than to eliminate their own emissions.”

In other words, the company may not have altered how it consumes energy; instead, it gave money to a secondary energy provider that is developing sustainable technologies. Tansey sees this as an investment and believes the strength of the Offsetters mandate is to introduce energy technologies that can be adopted and applied by users, not just funded. The five Vancouver energy companies selected so far stand to profit immensely, generating revenue for all aspects of their business and bringing international admirers and potential investors.

Purchasing carbon offsets is like making a promise to finance projects that aim to reduce carbon emissions. The promise, at this point in time, is hard to certify.

Daniel C. Esty, director of the Center for Business and the Environment at Yale University and author of “Green to Gold,” a book about companies that use environmental strategies to their advantage, told the New York Times in January: “The carbon market is a leading example of the challenge of making sure that when people put their money into what they hope will improve their planet, that there is real follow-through.”

“Is there green substance behind the green sparkle?” Esty asked.

Not all emissions are created equal

In its 2007 discussion paper, “Meeting the Challenge,” the Suzuki Foundation made the point of regulating the carbon exchange. “Because offsets are an intangible commodity, and the offset purchaser is not involved in the activities that produce them, it is important that offsets be consistently quantified, verified by third parties, and tracked and retired through a public registry.”

Adding to the immense task of making the 2010 Games carbon neutral—and the reason the goal is often criticized—lies in estimating the carbon emissions for the event. Indeed, Tansey said the first move is the measure these emissions.

“There’s been an effort to unify what the direct emissions are and what the indirect emissions [are],” he said. “The direct emissions are 110,000 tonnes and the indirect emissions are from people flying to the Olympics, [which] is about 190,000 tonnes.”

The Greenhouse Gas (GHG) Protocol lists three levels of emissions, the first being direct carbon or GHG emissions and the second two being different kinds of indirect emissions. Direct emissions include those that come from generating electricity and the transportation of materials, waste, people and products that are owned or controlled by the organization. Direct emissions also include fugitive emissions, which are leaks from equipment.

Indirect emissions are harder to estimate because they are drawn from the emissions that are not a direct consequence of the organization (such as VANOC) but rather the sub-contractors, potential affiliates and their employees or guests.

Linda Solomon contributed to this story

Photo above of James Tansey from his Facebook profile.