Carbon Action Yorkshire (CAY) is a programme within the Yorkshire and Humber Sustainable Futures Company (SFCo), a not-for-profit, wholly owned subsidiary of Yorkshire Forward, the regional development agency for the Yorkshire and Humber region.

CAY works in collaboration with the region's top organisations to combat global warming. CAY is charged with accelerating the development of a low carbon economy by bringing together both the public and private sector to cost effectively reduce carbon emissions in line with national and regional targets whilst stimulating the development and take-up of low carbon products and service and exploring the most effective, appropriate and profitable methods available for doing this.

Richard 'Rich' Hall is CAY's Programme Director and holds responsibility for the delivery of the programme, its development whilst also account managing a few of the largest partner organisations.

Rich has spent time within his career tackling the challenges of the agenda from different angles. Previously he was General Manager of the University of Hull Logistics Institute working with organisations to improve both bottom line performance and develop sustainable strategies across their Supply Chains. Prior to this Rich's career has been spent in commerce. He is a Fellow of the Royal Society of Arts, Manufacture of Commerce, a Member of the Chartered Management Institute and holds an Executive MBA.

What are the business drivers behind CAY's case?

"To understand CAY fully you need to look at the region we serve.

"Yorkshire and Humber as a region has a highly carbon-intensive economy with coal fired power generation, the chemical industry, glass production, steel foundries, other heavy industries and two of the big four supermarket chains thrown into our wealth-generating mix alongside the fourth largest ports complex in Northern Europe.

"It's all here and in terms of carbon emissions the Ruhr Valley in Germany is the only real comparative within Western Europe. As such there is potentially a greater risk to our region from a carbon constrained economy.

"Conversely we have the skills and ambition to maximise the opportunity and a fairly unique geography lending itself to both renewable generation across many forms and indeed large-scale carbon capture.

"CAY aims to drive our main organisations to action and assist them with such action. We work solely upon business drivers, meeting the risks of climate change whilst maximising the opportunities.

"In the current climate some of this centres around bottom line performance, reducing energy consumption hence cost and meeting other risks such as forthcoming legislation and risk to reputation. Much is also around developing the systems and business models that organisations will need to meet both the day-to-day and strategic issues whilst also looking at physical risks to infrastructure and supply chains. It's genuine cross industrial, cross discipline work and no two of our partners get exactly the same assistance..."

How do partners benefit from their association with you?

"Knowledge and support, not all gained from CAY or its delivery partners within SFCo.

"We do act as a facilitator in some aspects: each partner has a dedicated partner account manager who will help them with their efforts, signposting other National and RDA programmes and assistance where relevant.

"This isn't done lightly. We spend time with the organisations to establish where they are on the carbon reduction landscape their organisational objectives, aims and potential constraints. We aim to add value in a complex agenda with large complex organisations. We take time to identify a set of initiatives to assist.

"These can be at a strategic level with an executive board, the portfolio holder, the senior site engineers or finance directors etc, a combination of some or all. There generally is no one formulae. Each partner has unique aspects of delivery. In short, we provide bespoke analysis of how we can assist them tackle the agenda, often alongside high profile commercial professional service firms.

"In addition to the events such as 'seeing is believing' visits where partners get the opportunity to see best practise in person and the environmental index, we have a leaders and experts group - each in partnership with Business in The Community. The Business Council for Sustainable Development UK also input to the leaders' group. There really is too much to list; we deliver to many stakeholders within organisation, be that at a strategic or immediate impact level and there is activity for people in the roles that lead on such in organisations.

"Key though would be the organisational-to-organisational learning - when we get cross cutting themes we hold best-practice sharing sessions, tailored to the partners that we are working with. These tend to be smaller numbers of between 6 - 10 delegates that can actually talk in detail on what they have done, problems encountered and what how obstacles were overcome.

"Output for CAY to then develop is often encountered. We recently had several banks together to talk around what carbon footprint in that sector should comprise of and Asda, KPMG, NHS, Kingston Communications and Yorkshire Bank analysing how they might reduce business travel.

"There are other things: Carbon Trading, a small Capital Fund and there is much more on the way, all of which is developed to meet our partners' needs in addressing the agenda. There is also a lot of advocacy. We are fortunate in that partners such as Asda, KPMG, Yorkshire Bank and the like have assisted in spreading the message on action."

And what do you expect in return?

"A commitment to low carbon management; action to meet carbon reduction commitments; a commitment to explore the opportunities that lie in the growth in low carbon markets and a commitment to share best practise amongst the CAY partnership."

Please give some examples of firms you've worked with and how CAY has helped

"CAY works with both the Public sector, including the Regional NHS, Regional Police Authority, Councils and a couple of Universities and also the private sector with firms such as Northern Foods, KPMG, Yorkshire Bank, Asda, Jarvis, McCains and such like - to date we have around 70 partners.

"I won't divulge exactly what we do with each partner without prior consent: again multi-faceted assistance across several disciplines.

"However recent feedback from partners such as Northern Foods and Next Distribution has been excellent and there are case studies on the way for several partners on work we've done with them. Watch this space..."

Are firms in general prepared for the next phase of the Government's Carbon Reduction Commitment?

"In my opinion there is a great deal of uncertainty still.

"Certainly when I first took the role at CAY some nine months ago the situation, given the timescales of CRC, looked pretty dire if I'm honest.

"That's why we started to develop CTY (Carbon Trading Yorkshire - see below). There seems to be much misinformation out there - even very well informed individuals that have been consulted on CRC can have differing views in how exactly it will operate. It's not overly surprising given that there is still no clear blueprint on how it will work from Government and I hope that this is addressed with some haste...

"Key issues for me are the consideration of the data quality, deciding whom will have the authority to trade/purchase allowances, what the strategy of carbon reduction will be and ensuring the lines of communication are there to allow this.

"At the moment, though, there is bit of guesswork for some organisations: will they be involved? Will CRC eventually replace CCA's and how will the league tables reflect early adopters? Those firms that should be held as exemplars, having invested heavily in carbon reduction, need to have their reputations maintained under CRC."

How is CAY helping to acclimatise organisations to the realities of carbon trading?

"Well as a starter, in partnership with the Local Government Information Unit (LGIU), we have developed and are running Carbon Trading Yorkshire. It's the country's first voluntary carbon-trading simulation scheme for both public and private sector organisations.

"It's been deigned to provide the opportunity for participants to experience a simulation of carbon trading and test their skills and ideas in a low-risk environment. Its' a chance also to demonstrate leadership on climate change, act on climate change and for participants to encourage their whole organisation to make the changes needed."

Tell us, please, about your Technology Forums

"CAY's Technology Forums are designed to provide our partners with information on relevant technologies that can assist our partners reduce carbon. We aim to bring together the very latest in theory, technology and practice in a one day informative interactive events.

"Our first event was in collaboration with Philips, regional suppliers, and our current CAY partners. We presented the theory, showcased the innovations and share best practices being adopted, all with the aim of answering the questions: What can we do now? How can we do it? How much will it cost and what can we save in terms of CO2 money?

"Future events are in development including a workshop with Grimsby College of Technology looking at next generation refrigeration. We'll also review whether it always has to be 'next generation' as we are becoming increasingly aware of well-proven technology that is now cost-effective that hasn't been widely adopted."

Of which carbon reduction initiatives are you most proud?

"I think all at CAY would be unanimous that to date it would have to be Carbon Trading Yorkshire. Yorkshire Forward tasked CAY with being leading edge on delivery in carbon reduction and CTY is genuinely a UK, possibly European, first.

"It assists our regional organisations to get ahead. This will help organisations implement data and communications flows to allow efficient trading. It will also highlight and allow organisations to consider whom need what levels of authority and responsibility in what will be a new financial model to most.

"CTY's virtues have been widely extolled. But once the rhetoric has died down, it's about Carbon Reduction. There are 35 major organisations in CTY. They have submitted baseline data from a single large building to complete footprints.

"It's a market with 1million tonnes of carbon and a minimum of 50,000 tonnes of reduction: we'll do what we can to beat that figure."

What are you working on right now?

"CTY 2! Seriously, we believe that once the scheme becomes closer to finalisation there will be further demand. That gives us a compressed time scale to deliver to partners that may want to join, but we will endeavour to get value to them in any delivery.

"There is a lot of work ongoing to assist the CTY programmes such as developing online tools like the marginal abatement cost curves to enable them to plan more easily.

"Following the Carbon Trading theme we are working on internal carbon competition. Essentially we are developing this with one of our partners and will roll it out further. It adopts the league tables, the trading is replaced by some kind of incentive and each business unit or factory competes much like CRC. The difference being those at the top share the best practise with other units. It should make carbon reduction visible within the organisations."

"We are always interested in what is blocking carbon reduction, whether that is culture or reconciling shareholder value. We are developing very high level strategy workshops for senior board directors within our organisations and support following these to the potholder who holds the portfolio."

What advice do you have for fellow carbon reduction professionals?

"The environment has had to meet business in this arena. I genuinely believe that climate change is not only one of the greatest challenges environmentally that we have faced but also one the greatest business challenges. Corporate values and governance are starting to be examined in ways that would have been unthinkable several years ago, especially in the current climate...

"My advice is fairly simple: in tackling the issue, be honest about what is needed from you in your post, what you bring as an individual and ensure wherever possible that in your teams, networks or supply chain that you've got fast access to the other expertise and skills required to fulfil the objectives."

Business Critical? A Survey Of UK Views On The Low Carbon Economy

There are three major reasons that companies will respond to climate change legislation. The first is the public nature of the issue, as high public visibility is always a behavioural driver. Second, legislation prices carbon either through tax or cap and trade, which increases costs for energy, transportation and raw material input. Thirdly, the response on a national and international stage creates new product and market opportunities.

In the autumn of 2008, just over 200 members of the Low Carbon Innovation Network took part in a survey to explore the driving forces behind the actions now being taken in response to impending climate change.

In the current environment the key drivers of action are client expectations, market advantage, corporate tender requirements; investor perception, cost reduction and customer footfall. More than 38% of respondents said that corporate social responsibility issues are predominantly driving emissions awareness, with just under 30% citing energy prices. Legislation and brand/reputational risk came in at 12% and 13.5% while less than 7% saw a business risk.

A critical issue is an understanding of where carbon management impacts on company operations. While 71% said that responsibility for carbon management lies at board level, the remit clearly falls within either CSR, sustainability teams, energy management teams or facilities.

A number of companies report a mixed responsibility across a number of functions but not one had responsibility for carbon management within the finance function, despite a clear response to the survey suggesting that the critical issues are increased input costs, carbon management as a developing investment metric, and the potential costs of meeting emissions targets.

Reducing the risk to reputation

Perhaps the most interesting response in the survey was that, when questioned whether or not an increasing cost of carbon posed a threat to their business, more than 50% of respondents said no. Despite increasing concerns about competition, increased taxes and the introduction of the CRC, many businesses felt that they would not be negatively affected.

For some, it’s because their businesses are not resource intensive and for others, because it’s a cost that will affect all UK business, meaning no more of a threat to them than any other business. For those that are concerned, the dominant fear was increased inputs – in some cases increased input costs of 50% are predicted for 2009 – through power, heat and raw materials. At this point, IT and buildings management costs remain far lower down the agenda.

In order, the highest business risk was seen by nearly 40% as the danger to reputation of not engaging with the issue, with impact on competitiveness and the cost of complying with EU and UK legislation a concern to 26% and 28% respectively. Few were concerned about the cost of carbon measurement and, if carbon legislation remains static, there may be little concern here. While emissions measurement remains focused on power consumption and direct emissions, costs should remain measurable. If carbon supply chain analysis becomes prevalent, this may well become more of a concern.

Of the 93% with an environmental policy, just under 53% measure their direct emissions, or power use. Of the 15% of respondents who are already measuring emissions within the supply chain, only 75% of those are using those measurements to cut emissions. While many respondents are not yet measuring emissions within the supply chain, nearly 67% believe that they will be forced to begin such measurements within 18 months to 3 years – only 1.8% believe that this will never happen.

Nearly 33% of respondents see energy efficiency in buildings as the biggest opportunity for cuts to emissions, with the next highest opportunity lying in carbon footprint analysis at just 18.8%. Nearly 17% see opportunities within the manufacturing process, more than 11% in logistics, followed by waste disposal at less than 5%. However, a number of respondents made clear that the most effective approach to cutting internal emissions would be a combination of all the options where applicable in their own business.

A changing landscape for business

More than 70% of respondents believe that setting a carbon price will drive innovation in UK business, in stimulating new technologies and because business will be looking for the most cost effective means of mitigating that new cost – and that means new market opportunities. Resistance remains to the idea that simply setting a price for carbon will be a positive thing. Some respondents cited the privatisation of the water industry as an example where the increased cost of water has failed to deliver significant improvements to water management in the UK.

Around 66% of respondents believe that climate change concerns offered new revenue opportunities for their business: in new communications technology; new low carbon products; energy efficiency improvements; fee-based services for new technologies; consulting opportunities; gaining new clientele through improved green credentials; new opportunities in green markets and jobs.

Nearly 75% of respondents believe that they can save energy costs through emissions management, 22% see opportunities in new business, while carbon trading was seen as an opportunity by less than 4% of the group. Yet despite this, when asked if they believed that carbon trading will eventually affect all UK business, more than 83% agreed that it would.

Whatever policy tool is used to manage carbon emissions, UK business believes the revenues should be funnelled directly into supporting the development of alternatives for existing carbon intensive industries. Almost 80% of respondents believe that funds raised from cap and trade auctions for power generators, or from a carbon tax, should be spent on supporting UK business development in the sector. Suggestions included incentives for SMEs to effect change, stimulation of the development of low carbon technologies, grants for investment in clean technology – not loans or payback schemes – and early stage funding for business in new market segments. The need for education, from the general public, specific industries and at the school level was consistently underlined.

While only 36.5% of respondents believe that a polluter pays approach – taxing the point of generation for fossil fuel use – would be the most effective way to manage emissions, only 25.3% believed that a personal carbon trading scheme – under review by the UK government – would be any more effective. The overwhelming view of the market is that while this could drive consumer awareness and cultural change, it would be open to abuse and fraud, difficult to administer and would disproportionally impact on specific groups.

Scepticism remains

The majority of respondents don’t believe the UK can hit its targets. Less than 1% of respondents were very confident, and less than 9% were quite confident that this would be possible. More than 90% felt that it ranged from possible to unlikely that the government would reach its goals within the time frame. Part of the problem is a clear lack of belief in the measurements used, the targets set, or the policy frameworks in place to deliver success. The phrase “too little, too late” was used more than once, especially in light of the new focus on coal-fired power.

Felicia Jackson is an author and analyst focused on the low carbon economy. Her book ‘Conquering Carbon’, will be launched by New Holland Publishing in summer 2009. This article is based on a survey of members of the Low Carbon Innovation Network www.carbon-innovation.com