Global warming and you

In my opinion, the man who perhaps should have received the Nobel Prize for his work on global warming is Bjørn Lomborg of the Copenhagen Business School in Denmark. Lomborg takes a contrarian view of predictions of a worldwide catastrophe. In his book, Cool It: The Skeptical Environmentalist's Guide to Global Warming, he examines those predictions, the scientific record, and the economic impact of global warming.

Here are a couple of provocative ideas from the book: Lomborg notes that more people die each year from cold than from heat, and he suggests that a warmer Earth might actually save lives. He also makes a compelling argument that the Kyoto Treaty will hurt business while doing little to forestall a rise in temperatures.

With so much talk these days about the future of our planet, whether from pessimists like Al Gore or optimists like Bjørn Lomborg, we chose for our cover story an article on why companies should measure their supply chains' "carbon footprint." If you believe that the Earth is heating up because of greenhouse gases, then this should be an area of concern to you, since manufacturing, distribution, and transportation generate enormous amounts of CO2.

"How big is your carbon footprint?" was written by three consultants from Booz Allen Hamilton, which is working with the Carbon Trust in the United Kingdom. The Carbon Trust, a quasigovernmental agency, is developing a method for calculating a supply chain's carbon footprint. Once that method has been approved, the U.K. may mandate that all products carry labels indicating how much carbon dioxide was produced during their manufacture and distribution.

The thinking behind that measure is that consumers might select items based on whether a company did an environmentally friendly job of producing and transporting its products to the retail shelf. I'm skeptical about that rationale. Although a few folks might choose products on that basis, most will still make their selections on the basis of cost and perceived value.

Will measuring carbon footprints be another onerous requirement with no benefits for business? Actually, it might prove to be a fruitful exercise—and not just for reasons of social responsibility. As the price of oil nears $100 a barrel, companies must work harder to wring energy efficiencies from their operations. Measuring a supply chain's carbon footprint will help them to save energy, and hence cut costs.

Measuring carbon emissions will not be easy, and it will require a considerable amount of time to conduct a proper analysis. The exercise will push companies to examine the tradeoffs among inventory, production, and transportation. Ultimately, it will force them to change their supply chain practices in order to cut back on energy usage. That will indeed be time well spent.