Obama's budget: ready for cap & trade?

Yesterday was a big day for policy, with the Obama
Administration unveiling its budget. Among its strategies for
paying for the budget is implementation of an economy-wide
cap-and-trade program. Basically, cap-and-trade would raise money
by requiring companies to buy allowances when they exceed pollution
limits.

Cap-and-trade isn’t official yet, but as this Washington
Post
article explains, the Obama Administration is counting on
cap-and-trade as a lynchpin for paying for multiple programs. If I
were a betting man, I’d say some form of cap & trade will soon
be reality.

Assuming cap & trade will happen, and setting aside the debate
over its effectiveness as policy, managers in industry need to ask
themselves: are we ready for the type of emissions  tracking
that will allow us to precisely and efficiently comply with a cap
& trade policy? For many enterprises, the answer is probably
no, quite simply because many companies lack the type of software
needed to record, monitor and manage emissions and greenhouse gas
(GHG) trends for their facilities. Fewer still comprehensively work
with suppliers or logistics partners to track indirect emissions.
Under what’s known as “Scope 3″ indirect type emissions, some
companies even track the impact of things like worker commutes.

The simple point here is that cap & trade is likely to become
policy, and enterprises need to be ready for it. Good places to
find out about emissions and GHG tracking include the Greenhouse Gas Protocol
Initiative’s Web site (their standard is widely used), the U.S.
Environmental Protection Agency’s Climate Leaders program, which
offers a
guidance document on emissions categories, and the Carbon Disclosure Project.

Look for Cap & Trade to have some significant ramifications in
terms of supporting software technology, just like Sarbanes-Oxley
did back in 2002.