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Jan. 5, 2011

Green Supply Chain Year in Review 2010

 

Progress Stalls in some Respects, with Cancun Dud Chief Example, but WalMart, P&G, Kraft and others Make Progess

 
By The Green Supply Chain Editorial Staff

It was an interesting year for the Green Supply Chain in 2010, with the level of interest going sideways at best by many accounts.

This was probably best exemplified by the lack of interest in the December Cancun global climate meeting, with received just a fraction of the media coverage versus the meeting in Copenhagen the previous year. Combined with the fact that no meaningful agreement was reached at Cancun, and it appears the current Kyoto protocol will expire without being extended, and this is not good news for the Green SCM movement, as lack of a regulatory framework means each company is simply free to pursue whatever Green initiatives it chooses to or not.

There was also quite a bit of soul-searching by Green advocates during the year as to why consumers are not embracing Green products at the level many assumed they would.

Green "fatigue," a still wobbly economy that puts the bottom line or personal wallet first, the controversy over global warming data and brutal winters that have left many consumers not quite so worried about supposed warming trends - all these and more may be factors in why Green went sideways in 2010.

 
The Green Supply
Chain Says:
There was also quite a bit of soul-searching by Green advocates during the year as to why consumers are not embracing Green products at the level many assumed they would.

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That said, there were several important developments pushing the Green agenda during the year. The most important is probably the decision by the US Environmental Protection Agency (EPA) to move forward with efforts to regulate Greenhouse Gas (GHG) emissions on its own accord, despite the lack of legislative action in Congress, or more specifically the Senate, which never passed a Cap and Trade bill as  the House did previously.

The power for the EPA to do this stems from a Supreme Court decision in 2007 that affirmed the EPA's right to regulate CO2 and other greenhouse gases as being a health hazard to US citizens. President Obama has said he will look to other means to reduce C02 if no supporting legislation come from Congress. Just this week, the EPA said its proposed regulations on GHG emissions have now taken effect, requiring new and upgraded power plants to install technology to reduce GHGs. Further, these plants have to obtain permits demonstrating that they’re best practices to minimize GHG emissions - though the state of best practices is very unclear.

Also, in California, voters overwhelmingly rejected a ballot initiative that would have delayed an aggressive state law mandating significant reductions in GHG emissions in the state until the unemployment rate fell below 5.5%. Though the path forward is unclear, the ballot failure mean the state should issue tough regulations soon, especially on utilities and oil refiners, for acceptable levels of emissions, and possibly even the creation of a Cap and Trade regime unique to California, or possibly a Western regional program. How this will actually play out will be very interesting to see.

And of course, oil and diesel fuel prices have made a sharp run, to over $90 per barrel of oil, once again giving companies a very strong economic incentive to increase transportation efficiencies and reduce their oil and oil-based product consumption.

Other important Green Supply stories of 2010:

  • In January, French president Nicolas Sarkozy vows to push for even tougher carbon emissions in his country and throughout Europe, but calls for strong "carbon tax or tariff" on imports from countries in Asia and elsewhere that have not put similar regulations in place, so as not to disadvantage European manufacturers. Such a tariff would be very complicated to devise, however.
  • Throughout the year, a growing number of scientists, including some previously on the global warming bandwagon, presented models predicted a period of global cooling was coming, not warming.
  • In February, by a 3-2 party line vote, Security and Exchange (SEC) commissioners approved a resolution saying public companies should be required to disclose their "climate change risk" to shareholders in various filings. Though such a rule could have a significant impact on company practice, the rule has yet to be put in place.
  • Also in February, Kraft Foods said it had reduced 150 million pounds of packaging materials from its supply chain since 2005, reaching the goal it had set in that area two years ahead of schedule.
  • In March, WalMart announced a new set of programs to reduce carbon emissions in its supply base, with a fairly heavy-handed approach in which it will get very proactive in working with suppliers on the specific of products and processes.  It is not clear, however, that much progress is made on this initiative in the rest of the year.
  • In May, consumer products giant Procter & Gamble announced it was going to require suppliers to report their carbon emissions, and developed a framework and spreadsheet tool (with the help of key suppliers) that it made "open source," meaning any company was free to use it for their own needs.
  • In  May/June, a climate bill in the Senate that initially seems to have garnered enough Republican support to get through falls apart. The November election results later mean any chance of climate legislation is about nil for at least the next two years.
  • In June, the annual BP Statistical Review of World Energy finds that coal  is the largest source of global energy production, and at 29.4% has reached its highest share since 1970.
  • Throughout the year, China's current near monopoly on so-called "rare earth" metals - critical to production of many clean energy technologies - makes big news, and the country cuts back on exports of the metals. Many believe this will give China a huge advantage in producing clean energy products.
  • To the surprise of many, California votes in late August reject a statewide ban on the use of plastic bags in retail.
  • In  October, Frito-Lay announced it was killing its totally bio-degradable bag for its Sun Chips line, as the extremely loud crunching sounds the material makes sends sales plummeting as consumers can't stand the noise.
  • Also in October, WalMart announced plan to invest billions in support of its fresh produce supply chain and commitment to use more locally grown produce, under a "sustainable agriculture" banner.

Those are the top Green Supply Chain stories for 2010. We'd be happy for insight on anything you think we missed.

What's your take on how the Green Supply Chain movement went in 2010? What were other top stories/trends? Let us know your thoughts at the Feedback button below.

 

TheGreenSupplyChain.com is now Twittering! Follow us at www.twitter.com/greenscm

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