On Friday, the World Trade Organization (WTO) and the United Nations Environment Program (UNEP) published a report that indicates increased economic activity could result in a rise in carbon dioxide emissions. However, the report also stipulates that increased ease of trade can also help combat climate change through delivering energy efficient and renewable energy technologies to more markets.

Although these findings align with the existing beliefs of numerous business managers and policy makers, the conclusions issued in the report are significant because this is the first time the WTO and UNEP have collaborated to examine the connections between trade and climate change. These types of multilateral cooperation and findings are critical measures to ensure the success of the upcoming UN climate negotiations in Copenhagen (December 2009).

In summary, the report illustrates that it is within the scope of WTO rules to enact trade policies that address climate change at the national level, but that the efficacy of these policies are determined by the design of the policies and the implementation conditions in the local regions. Although the report does not highlight specific examples, it does assert that the energy intensive sectors of our global economy (agriculture, forestry, fisheries, tourism and transport) can reduce their contribution to GHG emissions if we increase the diffusion of mitigation technologies through free trade policies.

In support of this notion, WTO Director General Pascal Lamy and UNEP’s Executive Director Achim Steiner are urging nations to adopt policies that open up trading for environmental goods and services as a means of reducing GHG emissions. Specifically, Lamy and Steiner issued a joint news release, urging the international community to finalize the stalled Doha trade talks that began in 2001 in hopes of and opening trade reducing barriers for innovative products and services that support cleantech economies.

The comprehensive, 161-page report examines the relationship between trade and global climate change through four perspectives:
1) Climate change science
2) National and international economics
3) Multilateral efforts to combat climate change
4) The implications of national climate change policies on trade.
The report provides an overview of the traditional regulatory instruments, economic incentives and other financial measures that have been used worldwide to increase energy efficiency and to reduce emissions. More in-depth coverage of the mainstream pricing mechanisms (carbon tax and emissions trading) provide insight into how to prevent emissions leakage through off-shoring production and how to protect competitiveness across markets.

A common concern among policy makers is that new taxes and tariffs could be put in place, which protect domestic industries and exclude products and services that are made available through countries with weaker environmental standards. The new report indicates that these types of border adjustment measures would become trade barriers that negatively impact the shared international goals of increasing income and reducing harmful impacts to the environment.

Environmentalists, economists, business leaders and policy makers may differ in their beliefs regarding the potential for free trade policies to successfully address increasing global GHG emissions. However, the consensus seems to be that climate change and free trade are intricately linked and that there is a critical need to address both arenas when shaping a new, clean energy economy.

Recent studies estimate that the IPCC’s projections of an 18 to 59 centimeter rise in sea level due to the melting of the Antarctica and Greenland ice sheets is well within the range of possibilities during this century. In fact, a study conducted by the Arctic Climate Impact Assessment estimates that a sea level rise of 2 meters is an unfortunate possibility. The implications of a dramatic rise in sea level on the 634 million people who live along coastlines in the Low Elevation Coastal Zone represents the potential for a vast displacement of refugees on a scale that our planet has never seen.

The World Resources Institute estimates the total number of potential refugees to be 144 million in China alone. Countries such as India, Bangladesh, Vietnam, Indonesia, Japan, Egypt and the United States also have massive numbers of vulnerable people in low lying areas. Urban centers such as London, New York, Shanghai and Kolkata are at risk, along with the agricultural regions of Asia, which supply food throughout the world.

As a result, there has never been a more compelling reason to support international policies that seek to regulate human-induced climate change. Exciting progress is being made along this front, as exemplified by the American Clean Energy and Security Act and the upcoming UN climate negotiations in Copenhagen. Supporting climate change legislation that regulates greenhouse gas emissions not only protects our limited and valuable natural resources, it also protects the livelihood of one eighth of the world’s urban population. Getting involved today by learning about and lobbying for your country’s climate change legislation can help to ensure the safety of millions of potential climate refugees worldwide.

Earlier this week, a study published in the Proceedings of the National Academy of Sciences confirmed that refrigerant chemicals known as “F-gases” pose a greater threat to global climate change than was previously thought. The paper, which was authored by a team of scientists from NOAA, EPA, Dupont and the Netherlands Environmental Assessment Agency, estimates that the growth of F-gas emissions due to increased cooling needs represents a grave enough threat that it may undo nearly half of the efforts to stabilize greenhouse gas emissions as a means to combat global climate change.

Found in everyday products such as refrigerators, insulation foams and air conditioning units (including units in homes, building and cars), fluorocarbons were designed by chemical engineers to trap heat in modern cooling appliances. In this light, hydrofluorocarbons (HFC) are the quintessential greenhouse gases. The intention behind the design of HFCs was to combat the impact of cooling chemicals such as Freon on the depletion of the ozone layer, and they were developed before the impact of human-induced climate change was widely understood.

The environmental impact of F-gases
F-gases are roughly 20,000 times more potent in contributing to global warming than carbon dioxide, and the IPCC has determined that the accumulation of these gases in our atmosphere was responsible for roughly 17% of human-caused global warming in 2005. The NAS study stipulates that the usage of HFCs is on the rise with increased consumption in developing nations. Specifically, the NAS study projects that these chemicals could be heating the atmosphere with an impact equivalent to that of seven or eight billon tons of carbon dioxide.

The market opportunities
So that’s the bad news. The good news is that the recent findings open new opportunities for businesses to emerge with innovative product alternatives and new service offerings such as retrofitting of existing equipment, appropriate disposal services and consultation for finding alternative product options.

One such example is an HFC-free refrigerant technology known as Greenfreeze, which was developed by Greenpeace in 1992. Companies such as Whirlpool, Samsung and Electrolux now have roughly 300 million HFC-free refrigeration units being used worldwide. This number of units is estimated to have removed 43,000 pounds of fluorocarbons from our atmosphere, which is equivalent to the pollution contribution of 10 million automobiles. However, due to concerns over the flammability of Greenfreeze’s hydrocarbon system, the EPA has not certified the technology for use in the United States.

Nonetheless, the U.S. market for this type of technology is quickly emerging. Last year, Greenpeace came to an agreement with the EPA that allowed them to test 2,000 Greenfreeze freezers in Ben & Jerry’s retail stores in Boston, Washington D.C. and Vermont. In October of 2008, General Electric petitioned the EPA for approval to sell its new Monogram line of refrigerators, which use isobutane as the refrigerant and hopes to launch the new line to the United States in 2010. Allowing for product alternatives to enter the market directly combats the impact that increased emissions of HFCs may have on global climate change.

Support for substituting harmful fluorinated gases reaches much farther than just Ben & Jerry’s, Greenpeace and GE. Refrigerants Naturally is a corporate initiative to reduce the use of F-gasses such as CFCs, HCFCs and HFCs. Its sponsors include IKEA, McDonalds’s, Coca-Cola and the United Nations Environmental Programme. The European Union also currently has plans to phase out HFCs in new automotive air conditioning systems in the coming years. All these signs indicate that there is strong international support to curtail the impact the f-gases will ultimately have on heating the Earth’s atmosphere.

The opportunities for policy development
In addition to federal approval for product alternatives, it is also critical that we adopt policies to regulate the emissions of these harmful chemicals. Existing treaties such as the Montreal Protocol represent opportunities for national governments to limit the emissions of what is a significant and now a documented threat to the health of our planet. Whether or not regulation of HFCs will make it into the American Clean Energy and Security Act and the upcoming climate negotiations in Copenhagen remains to be seen.

For years, Patagonia has established itself as one of the strongest leaders of sustainability within the business community. Although it’s a well-deserved reputation, there are a number of innovative strategies behind why Patagonia’s industry leading reputation is so widespread. From their product catalogs, which serve as environmental education materials to their product labeling strategy that touts organic and reused materials, Patagonia clearly knows the value in communicating their message through innovative and effective channels.

The Tin Shed, Patagonia’s latest sustainability communication tool is no exception. The Tin Shed is an interactive web application that combines the stories and dispatches of Patagonia’s sustainability ambassadors from around the world. The “tin shed” is a reference to Patagonia’s origins which was an old shed that Yvon Chouinard began forging his pitons in. Today, Patagonia’s virtual tin shed serves as the platform from which the company integrates the breadth and depth of their environmental and human sustainability initiatives.

The Tin Shed provides site visitors with easy access to exploring the wide variety of Patagonia’s environmental efforts ranging from community relief in regions affected by natural disasters and political struggle to the journeys of surf mavericks fueled by waste vegetable oil. Additional highlights include Patagonia’s work to establish wildlife corridors for threatened species as well as their advocacy for the protection of endangered marine mammals. When it comes to providing access to a company’s philanthropic work and building a passionate and loyal customer base around their values, we can all take a page from Patagonia’s sustainability playbook.

Patagonia has built an outstanding and justified reputation founded on the company’s guiding principles that inform their business practices. Patagonia has taken the core values of their mission and has applied them to product design and manufacturing, employee programs as well as customer service. Additionally, Patagonia demonstrates their environmental and social commitment through a high impact outreach effort that supports an elaborate network of company ambassadors.

Patagonia’s history is rooted in the 1960’s California counterculture that embraced environmentalism and today, the company has been able to retain these core values while also maintaining a dedication to running a profitable company. At Patagonia, there’s no question whether or not the company is about affecting social change or making profit; it’s clear that company is about both. Fortunately for Chouinard, the two go hand in hand. The full story of Patagonia and Chouinard’s approach to business management are detailed in Chouinard’s biographical book, “Let My People Go Surfing” which has become a cult favorite among aspiring and established sustainable business leaders.

Patagonia has an impressive list of environmental and social sustainability programs. After reviewing the list, I’m not sure what’s most impressive; the breadth of their activities, their ability to adhere to a strong environmental commitment while maintaining profits or, their ability to communicate and leverage the company values towards growing and ensuring a loyal customer base. The question I am left is, “Is Patagonia’s success founded in their ability to connect with an audience that shares their values or, is it found in their ability to shape and inform the values and interests of their expanding customer base through their innovative approaches to product marketing?”

A full listing of Patagonia’s sustainability programs can be found here.

Earlier this week, Volvo introduced a new model that integrates a lug-in lithium battery and a diesel engine, which Volvo plans to make available by 2012. When compared to Volvo’s earlier plan to have a hybrid vehicle available in 2012, the new plug-in model represents a more aggressive move on Volvo’s behalf.

Notably, this move could position Volvo as the world’s first provider of a plug-in diesel model. Although the technical specifications are a work in progress, the company says that the new plug-in will emit less than 50 grams of carbon dioxide per kilometer. When compared to the average emissions rate of roughly 90 g/km found among most European subcompacts, Volvo’s 2012 plug-in is a big leap in automotive efficiency.

Other manufacturers have touted plans for upcoming hybrid vehicles however; none have presented plans for a plug-in component to their diesel engine models. The usage of a lithium-ion battery will likely drive up the costs of Volvo’s plug-in model. Chances are that in order for this model to be a cost-effective option for consumers, a tax incentive for low-emissions vehicles will be required. With goals of offering a product that allows drivers to cover longer distances with a manageable recharge time (5 hours), Volvo believe the new model is a response to market needs.

In order to deliver the new technology, Volvo has partnered with Vattenfall, a Swedish electric utility company. The partnership has resulted in the development of an automotive battery that will provide drivers with the ability to run on battery power for up to 50 kilometers. The structure of the partnership is such that Volvo Car Corporation (a subsidiary of Ford) will manufacture the vehicles and Vattenfall will develop the charging systems that supply the cars with the necessary electricity. Touting at-home fill ups and reduced fuel costs, and reduced environmental impacts, Volvo believes that the new plug-in model is a purchase option that the market is eager for.

In addition to finalizing the technical specifications of the lithium-ion battery technology, Volvo is also finalizing the safety specifications of the vehicle in order to comply with current European safety regulations.

The company’s CEO, Stephan Odell has stated that, “I would go so far as to say that the plug-in electrical hybrid we will launch in 2012 will be a true dream car. With the innovative solution we will offer, the car owner will be able to drive a thoroughly enjoyable car packed with Volvo’s renowned high safety and genuine driving pleasure.”

A major new player in the energy management software arena named, Hara began selling their software-as-a-service offering on Monday. With a $6 million investment from Kleiner Perkins Caufield & Byers, Hara has launched with a promise to enable customers to reduce the cost of doing business through monitoring and managing their consumption of natural resources.

Started by alumni of SAP and Oracle, Hara launched with a number of municipal and corporate customers already on board, including Coca Cola Co. and the city of Palo Alto. Whether it’s through a cap-and-trade regime or a direct tax, if congress passes legislation to put a price on greenhouse gas emissions, businesses will need this exact type of enterprise software for managing their carbon emissions.

Based out of Menlo Park, California, Hara’s software calculates how much energy and water a company is consuming as well as how much carbon and other waste are being generated. The customer is able to realize financial savings through acting upon the forecasting data that Hara’s software provides. Tracking progress towards goals, creating an audit trail and developing an environmental record are added benefits of Hara’s new energy management software.

The city of Palo Alto has been using all four available modules in Hara’s software and now expects to save roughly $600,000 per year through reductions in gas and electricity consumption. Although software pricing is not available at this time, the city of Palo Alto has indicated that they paid $24,000 for their annual subscription.

Through a pilot project, Coca-Cola has been working with Hara to leverage their software tools for tracking the greenhouse gas emissions for 1,000 facilities throughout the world. It is believed that the use of Hara’s software influenced Coca-Cola’s cost-driven decision to replace crude oil with natural gas at it’s facilities in South Africa. The Hara software has also been supporting Coca-Cola’s U.S. based work to revamp their lighting systems.

Although Hara has launched with an impressive offering, this is an already competitive space that is quickly gaining traction. Hara has plenty of competitors in this space including, ClearStandards, Adura Technologies and Enviance (there’s many others). Additionally, Cisco, IBM and SAP have all indicated plans to support enterprise solutions for energy and resource consumption accounting.

Despite the competition, a demanding market is growing. The likely passage of legislation, which places a price on carbon emissions, indicates that a company like Hara has an exciting future that we should all pay close attention to in the coming months.