Variance and Risk in GHG Emissions Calculators

WSJ published an interview with Ken Parker, the global head of Deutsche Asset Management, a unit of Germany’s Deutsche Bank AG.  The interview focused on Mr. Parker’s views on climate change and his leadership of related investment management activities within Deutsche Bank.

Mr. Parker, a member of Deutsche Bank’s group executive committee, oversees $613 billion of assets under management. Four years ago, he launched what are thought to be the first investment products focusing on businesses that will help mitigate the effects of climate change. Those funds currently have about $4 billion in agribusiness, clean technologies, energy efficiency, environmental management and water.

A believer that information breeds action, Mr. Parker’s next project is to raise awareness about the daily greenhouse-gas emissions around the world by setting up a second-by-second counter in New York City.

An interesting idea.  However, there is no standardized method for calculating CO2 or other GHG emissions.  Numerous studies have been conducted in recent years comparing the popular on-line “carbon footprint” calculators, including EPA’s.  These studies (links to two of them are posted below) consistently demonstrate the significant variation in results from the same inputs. Further, the major engineering trade associations in the US have only now recognized the need for their direct involvement in bringing impartial, independent and technically valid scientific rigor to the development of GHG/CO2 emissions calculations.

But until such a consistent and valid calculation methodology exists, numbers generated from the current calculators may create potential risks to those relying on them.  Especially in the litigious US.


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