The following open letter is a part of the Presidio Graduate School's Capital Markets course. For one of the course assignments, students write a letter to an oversight body, government entity or other appropriate institution. The topic: changing the sector of capital markets that relates to their chosen topic so it reinforces principles of sustainability. Follow along here.
My name is Rachel Balsley, and along with Christy Hurlburt and Laura Waters, am finishing my MBA at the Presidio Graduate School in Sustainable Management. We are responding to the public call for emissions reduction offset project ideas on the Climate Action Reserve (CAR) website. We would like to propose that CAR explore the development of a recycling offset protocol. We believe that creating supplementary market-based incentives for certain recyclable materials would be beneficial greenhouse gas (GHG) emissions reduction project additions to the existing CAR protocol list. Indeed, the amount of municipal solid waste going to landfill in the U.S. has risen 60% since 1960 to 132 million tons discarded in 2009. California landfilled close to a quarter of the U.S.’s solid waste, at over 31 million tons.
As an example of what we are proposing, we have chosen carpet as a material that could be featured in a new emissions reduction protocol. Carpet is one of the 10 most prevalent materials in California landfills and accounts for an estimated 3.2% of waste, over 1 million tons. While recently passed California legislation AB 2398, the Carpet Stewardship Program, is expected to increase carpet recycling, with only 4.3 percent of carpet recycled currently, there is much room for improvement. Given the right market conditions, significantly increased carpet recycling could be an effective way of both reducing GHG emissions and adding value to manufacturing.
We will briefly address the six questions put forth on the website that CAR takes into consideration when assessing a project type for further development:
Does the project type create direct or indirect emission reductions?
The proposed project would create direct emissions reductions for carpet manufacturers while simultaneously creating indirect emissions reductions for contractors, installers, architects and interior designers.
What are the total potential GHG reductions that could result from this type of project?
The top three materials that carpet is recycled into are: carpet pad, molded products for automobiles and backing for commercial flooring tiles. According to the U.S. Environmental Protection Agency (EPA), these various products have different emissions reductions associated with them. For each ton of recycled carpet made into carpet pad or cushion, 7.96 metric tons of carbon dioxide equivalent is reduced. [source PDF]
What is the likelihood that the sector where the project activity occurs will be covered under a future cap-and-trade system?
Currently there are no proposals to include carpet recycling in any existing cap-and-trade systems. However, AB 32 will include a cap-and-trade program and it’s possible that carpet manufacturers could fall under future phases of its implementation.
Are there potential positive or negative environmental impacts from this type of project activity?
The positive environmental impacts of carpet recycling are realized from material diversion out of landfill, reducing petroleum use and GHG emission reductions, outweighing the minimal energy use and transportation impacts needs to process the recycled carpet.
Are there existing methodologies or protocols that could serve as a starting point?
CAR’s own Organic Waste Composting Protocol that sets precedence for measuring greenhouse gas emission reductions from materials diverted from landfills can serve as one starting point. Current EPA data can be referenced as a basis for the development of a carpet recycling protocol.
Are there high quality datasets to evaluate “business as usual” activities for the sector in which the project activity occurs?
The Carpet America Recovery Effort (CARE) represents “at least 90 percent of United States carpet manufacturers and 95 percent of the volume of carpet sold in the United States” and could provide a valuable partner in establishing “business as usual” activities. With fewer than 20 carpet recycling facilities in California, baseline data and new diversion efforts should be easy to determine.
In closing, we ask that you consider the financial upside of our proposal. Someone wishing to recycle old carpet must pay between 5 and 25 cents per pound to recycle, which acts as a disincentive. Providing the opportunity for carpet recyclers or manufacturers to gain revenues from carbon credits/offsets is likely to reduce the fees that businesses and consumers have to pay to recycle carpet.
Thank you for your consideration of a recycling offset protocol; specifically, carpet recycling. We would very much appreciate feedback on this idea and look forward to further discussions with you about our proposal.
Rachel Balsley, Christy Hurlburt and Laura Waters