Information Systems for Environmental Sustainability

IT, Resource Productivity, Environmental Preservation, and the Fourth Industrial Revolution

Do Carbon Emission Reduction Projects Pay Off?

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According to the latest CDP Global 500 report, payback period varies significantly by type of GHG reduction initiative: behavioral change activities have the highest percentage of sub-year payback period initiatives, while energy efficiency (process) has a high percentage of sub-3-year payback period initiatives.

Kudos to CDP for asking better questions each year and providing refined descriptive statistics on the collected G500 data.

A few things to keep in mind when interpreting these numbers. These are self-reported initiatives: is there bias towards reporting higher payback projects? Also, unclear whether “no payback” means unsuccessful project, abandoned project, have yet to reach actual payback time period, etc.

It would be helpful to get a sense for the correlation between emission reductions of each activity and the financial payback, suggested by the single data point provided by Praxair:

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Author: nigelpm

Associate Professor of Information Systems, Stephen M. Ross School of Business, University of Michigan - Helping organizations to navigate digital transformation.

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