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We’re Taxing Ourselves for Carbon Emissions

It’s always been our mission at Wholegrain to be a zero carbon business. It’s an ambition that we’ve made good progress towards but which has been much more challenging than we originally anticipated. As the urgency and severity of human-induced climate change becomes increasingly apparent, it’s clear that there’s both a moral and practical imperative for all businesses to move rapidly towards zero carbon regardless of whether national and international authorities obligate us to.

Kevin Anderson of the Tyndall Centre for Climate Change Research said in 2012 that we need to be reducing emissions immediately by 10% per year as a minimum. Now, five years later, having failed globally to reduce our emissions, the emissions reductions that we now require per annum are even greater. Part of the problem is that without government intervention, there is in many cases, little commercial incentive for businesses to reduce emissions. The film “Before the Flood” by Leonardo DiCaprio, which we highly recommend watching, proposes that in the absence of a global or national carbon tax, businesses should self-impose a carbon tax.

Why on earth would we tax ourselves?

We live in a culture where taxes are seen by businesses as an inherently bad thing to be avoided at all costs. In fact, the opposite should be true. Well-designed taxes are simply collective contributions towards projects that make society and business better for all. In the case of climate change, a carbon tax would help achieve two things.  It would incentivise businesses to reduce emissions rapidly while also providing funding to help us transition to clean and efficient technologies.  Considering that climate change is the single biggest threat ever faced by the human species (and are therefore by businesses), a carbon tax would seem like an inherently good idea.

That’s why we’ve introduced our own carbon tax of £30 per tonne of CO2 equivalent, which is a bit more than the maximum amount suggested by the European Commission (30 Euros per tonne). Arguably, it should be even higher but this is the starting point for our experiment. We’re hoping that this will focus on minds on reducing emissions wherever possible.

What will we do with the money?

It’s important that the money gets funnelled into projects that directly help to tackle climate change. Identifying and selecting a suitable project was surprisingly difficult but we’ve now chosen SolarAid for 2017 tax contributions. Based on our 2016 emissions of 12 tonnes of CO2 (actually 11.5 but we are rounding up), we’re making a £360 contribution to SolarAid. It doesn’t sound like much but according to SolarAid’s own data, this will achieve considerable emission reductions as well as improve the health and education of people living in poverty in Africa.

Here are the headline stats:

  • 90 solar lights being provided to families in Africa without electricity
  • £13,062 saved by families on fuel over the lifetime of the solar lamps
  • 90,530 extra hours of child study time thanks to availability of light to study
  • 95.5 tonnes of CO2 emissions averted
  • 192 people experiencing better health thanks to reduced pollution from kerosene lamps in homes

That is a pretty incredible return on investment!

How is this different from carbon offsetting?

We’ve been offsetting our carbon emissions for several years but the concept has never been entirely satisfactory to us. Conceptually, carbon offsetting creates the illusion that it’s okay to emit greenhouse gases so long as you pay someone else not to. In a world that needs to be zero carbon, this makes zero sense. It’s equivalent to cheating on your spouse and paying someone else not to cheat on theirs. Theoretically, there’s been no net increase in cheating and you are now “cheat neutral” but in actual fact, you cannot escape the fact that real harm has been done. There has also been a lot of controversy around carbon offsetting schemes and debate over whether they really deliver the emission savings that they claim. I would also argue that they’re far too cheap to encourage genuine behaviour change.

A self-imposed carbon tax is by no means a silver bullet but there are some differences that make it worthwhile experimenting with.

Firstly, it openly acknowledges that the business has emitted carbon and that this is a bad thing.  It is after all a tax on pollution rather than an “offset”.  Its objective is to incentivise emission reductions rather than to legitimatise the emission of greenhouse gases, which is what an offset does.

Secondly, the penalty money is used to support people who are making positive change rather than pretending to neutralise the emissions created. Unlike carbon offsets, there’s no direct link between these two activities and they are not considered to be equivalent to each other.

Finally, the much higher cost of a carbon tax (if priced correctly) compared to offsetting will hopefully deliver real behaviour change.

We’ll report on how this experiment goes in practice. We’d love to hear from others who have tried similar concepts.