Why concern about climate change is a waste of time

As the second decade of the twenty-first century begins two very different concepts with inherent tensions begin to influence our lives. The first is the imperative to learn to live sustainably so that the planet can continue to support life (as we know it) for future generations. The second is a political necessity to continuously improve people’s standard of living.

Living standards, however, cost money to improve – money which individuals, businesses and ultimately governments must earn. Yet when money can not be further earned through business (as a result for example) of economic constraints, it must be saved by business. The most effective tool that is currently available to economists and environmentalist alike is energy efficiency. Although it doesn’t provide all the answers it provides some.

As the use of energy is universal, its economic and environmental impact is significant. In recessionary times thrift through a cut in energy spend can partly make up for lost opportunities in higher sales. It is common for businesses to have energy spend which is equivalent to 10 to15 percent of their net earnings. This means any fall in energy spend directly raises the profit margin.

There are several ways of making a noticeable cut in energy costs. Energy price fluctuations affect profitability and disposable income for businesses and individuals. It is thus wise to review the energy buying process. Do you have someone in the business who knows how the energy markets work or do you sign a last minute agreement based on an offer from the local energy supplier? Are contracts still valid or did they end many months ago? If you don’t have a valid contract your energy rates will be at least double the normal rates. This will be a significant drain on your earnings.

Businesses pay for electricity metering. This is normally a quarterly bill which may pass unnoticed. There are ways of reducing this cost too but it will require careful investigation to find out what suits the business best.

Electricity and gas tariffs (the construction of the bill) also have a large bearing on cost. A frequent review of tariffs is essential. In many cases, old tariffs are being applied which do not fit in with current business activity. This means the business may be spending far too much on its electricity or gas. Annual savings of up to £60,000 are possible.

After assessing better energy buying opportunities, look at how to use less energy. Regardless of the business sector, be it commerce, industry, public sector or education,10 to 25 percent of the energy used could be reduced through efficiency improvements.

Commissioning an energy survey of your buildings and operations is a good start and, if your energy spend is greater than £30,000 per annum, the Carbon Trust provides free surveys. The survey will identify what opportunities there are at your site and rank them by the traditional simple pay back model. To satisfy the sustainability imperative, the survey will also quantify how much CO2 may be saved through efficiency gains. Small to medium enterprises can receive interest free loans and grants are also available to assist with implementing environmental measures.

Energy efficiency projects can pay back handsomely. For most projects the break even period is anything from six months to two years. These are very attractive rates of return that are not readily available elsewhere. They satisfy the traditional money measures model and by saving CO2 they tick the environmental and climate change model too.

So why be concerned about climate change? Take simple actions now. Move your business forward by making it more energy efficient. Reduce CO2 emissions and improve business profitability at the same time. Then communicate this to your customers and industry peers; they will be most impressed.

For more information contact Robert Gevargiz at ADIAN Consulting; email: robert@adian.co.uk or visit: adian.co.uk