applying a design process to create a reduction ...

Proceedings of the ASME 2010 International Mechanical Engineering Congress & Exposition IMECE2010 November 12-18, 2010, Vancouver, British Columbia, Canada

IMECE2010-39382

APPLYING A DESIGN PROCESS TO CREATE A REDUCTION PLATFORM OF GHG IN INDUSTRIES Javier Ávila1 Facultad de Ingeniería Universidad Nacional Autónoma de México México, D.F. 04510,México [email protected]

Vicente Borja Facultad de Ingeniería Universidad Nacional Autónoma de México México, D.F. 04510, México

Silvia González Facultad de Ingeniería Universidad Nacional Autónoma de México México, D.F. 04510, México

Alejandro C. Ramírez Facultad de Ingeniería Universidad Nacional Autónoma de México México, D.F. 04510, México

Marcelo López Parra Facultad de Ingeniería Universidad Nacional Autónoma de México México, D.F. 04510, México

ABSTRACT Based on a web platform TCC will provide companies with information on carbon legislation and a centralized location to find transparent and certified methodologies for carbon emission assessment.

This paper describes the final results of a project aiming at addressing climate change by creating a GHG reduction platform for businesses with carbon management needs in global markets. The project was carried out during a New Product Development course in a bi-national program between The University of California at Berkeley (UCB) and the National University of Mexico (Universidad Nacional Autónoma de México, UNAM) in Mexico City. The program features collaboration between the Engineering and Design Schools at UNAM and Engineering and Business Schools at UCB and the College of Architecture CCA.

The differences between the US and Mexican markets lead to advantages for each part. The US market is full of developed consulting enterprises, which is not the case in the Mexican arena, giving to TCC the opportunity of being pioneers to regulate and manage large and small emitters, government environmental agencies and ERP (Enterprise Resource Planning) companies. INTRODUCTION

The project, The Carbon Collaborative (TCC) is aimed at consolidating and managing the wide variety of policies and instruments created by governments and environmental organizations to mitigate climate change, and the anthropogenic gas emissions emitted by industry in particular in the US and Mexico.

Climate change refers to a change in the state of the climate that can be identified (using statistical test). Climate change may be due to internal processes or external forcing. Some external influences, such as changes in solar radiation and volcanism, occur naturally but there are other

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external changes such as the change in composition of the atmosphere resulting from human activity that began with the industrial revolution [7].

These strategies are developed in the light of expectations and assumptions concerning firm´s internal competencies and the external market and nonmarket environments. These expectations are shaped by institutional forces at multiple levels, including the firm itself, the national industry, the global industry, governmental policies and specific environmental issues 8.

Analysis of the warming observed over the past century suggests that the likelihood of some extreme events, such as the increment of the average air and ocean temperatures, widespread melting of snow and ice, the rising global average of the sea level, the heat waves, rainfalls and floods has increased due to green house emissions [7].

In the following sections of this paper are presented the background of the carbon market of Mexico and the USA in which environmental data, the industry position in respect to climate change actions in both countries after that it is explained the stages of the design process and the tools used on each stage. In the final section conclusions on the design process and the importance of mitigation of GHG in the industry are given.

Global greenhouse gas (GHG) emissions due to human activities have grown since pre-industrial times, with an increase of 70% between 1970 and 2004. Carbon dioxide is the most important anthropogenic GHG. Its annual emissions have grown by about 80% from 21 to 38 Gigatonnes (Gt) and represented 77% of total anthropogenic GHG emissions in 2004. The largest growth in GHG emissions has come from energy supply and industry [7].

BACKGROUND The US Carbon Market Although the United States is not part of the Kyoto protocol, an international agreement to reduce GHG, a wide amount of alternative approaches to combat climate change has emerged at all levels of government.

Humankind must now respond to climate change by adapting to its impacts and by reducing GHG emissions.

In the last years, United States focused on encouraging voluntary measures and scientific research rather than adopting emission reduction targets and regulatory limitations.

There are a wide variety of policies and instruments available to governments for mitigation of GHG emissions in industry; these include regulations and standards, taxes and charges, voluntary agreements, subsidies and financial incentives. All of these policies can contribute to sustainable growth of developed and developing countries alike.

Nowadays US is working on new legislations on energy and climate change that would establish a mandatory economy-wide cap on emissions, with emission reductions beginning in 2012 and becoming more stringent annually thereafter, leading to GHG reduction of approximately 83% below 2005 levels by 2050 9.

Reducing emissions across all sectors requires a portfolio of policies tailored to fit specific national circumstances as well as the formulation of strategies.

On the regulatory side, the Supreme Court’s April 2007 decision in Massachusetts, gave the Environmental Protection Agency (EPA) the authority to regulate carbon dioxide (CO2) as a pollutant under the Clean Air Act. On March 10, 2009, EPA released a proposed mandatory greenhouse gas (GHG) reporting rule, which will require annual reporting of GHG emissions from 13,200 facilities, beginning in 2010. Also, in April the EPA released its long-awaited “endangerment” finding on CO2, citing greenhouse gases as pollutants 4.

Giving solutions to climate change is an important driver of strategy which most of the times requires the hardest innovation holding political frameworks and policies. The formulation of a strategy is generally treated as a process of matching corporate capabilities to market demands. But this does not always account well for corporate strategies toward complex environmental issues such as climate change.

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 Through a national program, the American Recovery and Reinvestment Act (ARRA), the US allocated over $ 90 billion for investment in clean energy technologies to help combat climate change. Furthermore in June 2009,US announced a new partnership on clean energy and climate of the Americas to promote clean energy technologies across the Western Hemisphere, in collaboration with key partners such as China, India, the European Union, Canada, Brazil, Mexico, Russia and others to combat climate change9.

The Mexican carbon market In the global context Mexico contributes with the 1.6 percent of the world´s total emissions, handling the 13th position among the emitters list 5. Mexico has developed approaches to address climate change, in August 2008; the President of Mexico presented the National Strategy of climate change, which contains mitigation and adaptation goals. It is important to notice that in the National Development Strategy, it is the first time that the topic Climate Change has been cited as a national goal 5.

The US recognizes that a strong set of national policies and measures is critical to achieving the emission reduction goal. A combination of near and long term, voluntary and regulatory activities have been set in the following sectors: Residential, commercial, industrial, transportation, waste and agricultural sectors.

Mexico has assumed the goal of reducing by 2050 the 50% of emissions below 2000 levels.

The US Chamber of Commerce, on behalf of business and industry, strongly supports comprehensive legislation to reduce emissions of GHG while providing for a strong American economy. 12. The Chamber discourages illconceived climate change policies and measures that could severely damage the security and economy of the United States. The US Chamber encourages positive measures, such as long-term technological innovation and clean technology development and deployment. The US Chamber of Commerce supports legislation that would 10:           

Increase energy security and energy efficiency.

According to the Mexican Business Council, Mexico faces the lack of a regulatory framework for GHG mitigation and an integral energy reform. These are real barriers to transit successfully into a green economy 3. The business chamber has proposed actions to address climate change such as: •Corporate GHG inventories preparation. •A reliable database in terms of sector indicators. •The development of mitigation strategies and reduction targets. •Development of domestic energy efficiency programs. •Identification of risks coming from climate change.

Minimize the impact on major emitters. Reduce price volatility for consumers. Protect global competitiveness. Invest in renewable energy sources. Take advantage of nuclear power. Streamline the permit system. Make US the "Saudi Arabia of clean coal" by fostering carbon capture and sequestration technology. Commit to increase environmentally responsible onshore and offshore oil and gas exploration. Contain consumer and intellectual property protections. Protect against agency regulation under existing laws not written for greenhouse gases. Strengthen the hand of international negotiators.

AN OPPORTUNITY FOR MITIGATION Climate change is a global issue which requires actions and strategies at all levels focused mainly in two aspects the adaptation and the mitigation. The environmental legislation has determined a change in the current industrial practices in order to reduce the GHG levels to combat climate change and to set a transition in the economical and social issues to a sustainable growth.

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DESIGN PROCESS

THE CARBON COLLABORATIVE (TCC)

The Carbon Collaborative concept was developed during a New Products Development course taught at Universidad Nacional Autónoma de México in collaboration with the University of California at Berkeley 1. This course was focused on the creation of new products harnessing new opportunities in different markets.

The Carbon Collaborative was created by business and engineering students from the University of California at Berkeley and Universidad Nacional Autónoma de México (UNAM). The Carbon Collaborative aims to develop a reliable platform to manage GHG emissions in industry by giving actionable recommendations for carbon emission mitigation, and transparent methodologies in a certified database as well as acting as a consulting service for industries with specific problems.

During the course methods and techniques were used to identify product features able to face customer needs.

USER NEEDS The project development was divided into 4 stages in order to clarify the objectives and goals achieved in each stage 2. 1.

2.

3.

User needs: The main issues in this stage were the customer observation and understanding in order to generate new ideas to face customer needs. Framework: Particular patterns were identified as well as innovation opportunities. A large amount of information was processed. The tools used during this stage: 

Personas: Here was given virtual customer profiles called personas which keep features of real customers.



Mind maps: Flexible tool to organize the information we have gotten trough the research in order to analyse it.



AEIOU diagrams: It is a reliable tool part of the innovation process; it studies the activities in order to extract information about the environment, the interaction, the objects and the user when the product is used.

Fig 1. Segmentation of user needs Customer request identified with the interview involved sentences such as:  Credible, standardized and transparent assessment methodology  Customizable for specific facilities  Affordable carbon assessment  Confidential, protecting our proprietary information  Consolidated and streamlined reporting to customers and suppliers,  Consolidated and streamlined reporting to regulators.

Concept generation and selection: Based on creative thinking techniques. Some of these tools are used to facilitate the generation of concepts and ideas centred in the user. 

4.

To identify customer needs (Fig 1), interviews were conducted among enterprises and clean tech companies in the US. In Mexico the Minister of Environment and a Senior advisor on Climate Change and Vice-president of the group II of the IPCC were interviewed.

Brainstorming: Tool used to generate ideas based on freedom itself with no judgement or critics 6.

Prototyping and Testing: In this stage functional prototypes were built to evaluate the acceptance of the product by the customers.

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The study of the user request leads us to the following final imperatives: 1. Consolidated 2. Credible 3. Certified 4. Transparent 5. Customizable

The American Carbon arena can be classified into three different groups. External Reporting  The Climate Registry: Consistent and transparent standards to calculate verify and publish GHG emissions reports.  CSR Ware: Sustainability software to manage and report efficiency and carbon management.

FRAMEWORK Finding particular patterns and innovation opportunities is the final aim of this stage. To identify them it is necessary to characterize users. In this case the users were companies that could use TCC services. The companies were identified by their mission statement and the interviews. By using this method we could confirm the needs defined in last stage.

Assessment Services  Carbon Disclosure Project: Is an independent not-for-profit organization holding the largest database of primary corporate climate change in the world  Pew Center: Credible information and innovative solutions to address climate change.  Planet Metrics: Rapid carbon modeling RCM software. It is used to model and analyze the life cycle carbon emissions and energy use throughout the entire value chain. Consultancy services  Clear Carbon: Strategic carbon management with strategic goals.

After getting a large amount of information it was convenient to use the mind mapping tool (Fig 2) which helped us to identify innovation opportunities former to the concept generation stage.

Mexican Carbon Arena The market field in Mexico is not as sodden as American market, this gives the opportunity of being pioneers in mitigation and management of emissions. Nevertheless the Mexican carbon arena keeps the same structure of the American one. External Reporting  GEI Mexico: Voluntary national program of accounting and reporting GHG and emission reduction projects. Assessment Services  Green Momentum: Promotes and accelerate the introduction of clean technologies, processes and business models to Latin America.  EC Ambiental: Environmental education services.  The Institute of Ecology INE: Generation of scientific and technical information on environmental issues. It supports the Ministry of Environment and Natural resources to fulfill its goals.

Fig 2. TCC mind map CONCEPT GENERATION AND SELECTION In this stage of the process we conducted a market research of all the carbon management services existent in the US and Mexico in order to set new specifications and to fulfill the lack of the existent ones. US Carbon Arena

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Consultancy services:  The Federal Attorney for Environmental Protection (Profepa): Evaluation of industrial process in order to mitigate GHG in industry.

mitigation actions will take place using as a reference the data arose in the report by locating in a qualitative way the areas on which actions can be done, the industry corporative image will get increased through environmental certification.

During a brainstorming exercise, based on the requirements and the data arose in the framing stage; a series of proposals were generated (Fig 3). A solution space was defined by deeply understanding of the market research conducted and user needs (Fig 4).

Fig 3. Concept generation

•

Offering 2. Access to a wide variety of certified methodologies on carbon mitigation. The user is able to download these methodologies in a certified database, the firm itself will manage the methodologies according to its own needs. The methodologies are focused on the improvement of the efficiency of processes and machines, clean energy use and save all these approaches will impact the productivity and the reduction of GHG inside the facility.

•

Offering 3. Monitoring and consulting services for emitters with specific mitigation goals. This service will provide a holistic approach, consultants will handle an analysis of reduction opportunities in the facility, the monitoring of GHG is needed to evaluate the reduction actions provided.

POTENTIAL MARKET

USERS

AND

TARGET

Taking into account the TCC concept defined and the information gathered in the initial stages of the project, the following potential users and markets were identified: a) Fig 4. Solution Space FINAL CONCEPT Through this iterative design process, a final concept was proposed which relies on three main furndamental services. •

High scale carbon emitters. International companies with deeper experience in carbon management with the highest corporate responsibility. In Mexico companies of this group include: Cement industry, Energy generation, Oil&Gas extraction, automotive industry and appliances industry.

b) Low scale carbon emitters. Small companies with no experience in carbon management with a moderate corporate responsibility. Tier 2 and 3 suppliers in the automotive industry have been identified as members of the group.

Offering 1. Updated Carbon reporting, related information on regulators and policies with global coverage organized in a database with expert’s insights and interpretation of regulatory changes, the

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•Evaluation of environmental impact and risk studies • Strategies for Sustainability •Restoration and conservation • Land use Planning • Education and environmental training

Standardization in the target market cannot be done since US and Mexico are not similar in legislation and the amount of clean tech companies in Mexico is not as large as in US. It is developed a customer acquisition graph (Figure 5) for both markets.

Since the main campus of the UNAM can be considered as a city, due to its large infrastructure which includes schools, institutes, research centers, museums, hospitals, stadiums, electrical power stations, water treatment plants, transportation system and super markets we consider it the ideal location to test TCC platform and provide services to mitigate GHG emissions. TCC considers that our product is scalable and by testing our results here we would be able to scale our service to industries. Our goal is to create a specific plan for UNAM which includes the following points. Fig 5. Customer acquisition

a) Identify the GHG generation sources. b) Conduct a preliminary monitoring of emission sources of GHG. c) Propose strategies for GHG mitigation and focus on more efficient processes. d) Implement appropriate methodologies and guidelines for its reduction. e) To conduct a follow-up monitoring to estimate the levels of reduction. f) Generation of a final report to highlight the results obtained in that period of time. In developing this plan we considered pilot tracking energy consumption by reviewing energy invoices, strategies and measures for the mitigation would be in TCC website, and would be consulted after an on-site registration.

FINAL PROTOTYPE & TESTING A functional prototype was implemented by TCC(Fig 6); It is a web site that includes a user friendly interface created using html language.

We are implementing the pilot scheme by the end of the year 2010 with the aim of creating an inventory of GHG pollutants that allows us to obtain the cost-benefit of mitigation of the pollutants reached.

Fig 6. TCC Final Prototype To carry out the testing of TCC, an organization was selected to applied the TCC´s services. The organization selected was the Universidad Nacional Autónoma de Mexico.

CONCLUSIONS Climate change is a global issue; nowadays it is included in the most important objectives among the development plans of dozens of countries. Its solution demands the participation of all nations for the development of strategies and mechanism of adaptation and mitigation. There is evidence of greater vulnerability of specific groups in developing and developed countries as

UNAM has an environmental program which coordinates the works and studies related to the following research schemes. • Environmental Diagnostics • Environmental Feasibility

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REFERENCES

well. Adaptation and mitigation can complement each other and together can significantly reduce the risk of climate change. The investment that can be done today is not even comparable with the future cost that the problem of Climate Change will represent.

[1] Agogino Alice ,Beckman Sara,Shedroff Nathan, Borja Vicente, Lòpez Marcelo, Ramirez Alejandro“Teaching multinational, multidisciplinary sustainable product development” Proceedings of the ASME 2008 International Design Engineering Technical conferences& computers and Information in Engineering Conference [2] Borja Vicente, Gómez Lia, Palmer William, Garcia Daniel, Mendoza Marcos. “Diseño de nuevos productos con un enfoque orientado al usuario” Memorias del XV Congreso Internacional Anual de la SOMIM. [3] Consejo coordinador Empresarial, ”Cambio climático: Oportunidad para el Sector Empresarial, Visión del Sector Empresarial Mexicano sobre el Cambio Climático”; Octubre 2009. [4] Deloitte, Climate Change and Carbon Markets, “Confronting the carbon challenge: Business implications of the developing North American carbon markets”. [5] Diario Oficial de la Federación, “Programa Especial de Cambio Climático” 2009-2012 – DOF 28/08/2009 [6] Harris Robert, “Creative Thinking Techniques”, January 5, 2002. [7] LeTreut,H.,R,U.Cubasch,Y.Ding,C.Mauritzen ,A.Mokssit,T.Peterson and M.Prather,2007:”Historical overview of Climate Change.In Climate Change 2007:The Physical Science Basis. Contribution of working Group to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change”. Cambridge University Press,Cambridge,United Kingdom and New York,NY USA. [8] Levy, D. L., & Rothenberg, S. (in press). “Heterogeneity and change in environmental strategy: Technological and political responses to climate change in the automobile industry”. In A. Hoffman & M. Ventresca (Eds.), Organizations, policy and the natural environment: Institutional and strategic perspectives. Stanford, CA: Stanford University Press.

In this paper a mitigation of GHG concept was presented, it was followed a methodology for the development of new products centered in the user, in this case the methodology was applied for the development of a service with positive results. By using this process the risk of investment and the amount of future extra-expenses gets reduced. The recognition of user needs and the exploration of the carbon arenas let us know, the real specifications that our service must deal with. The Carbon Collaborative ultimate goal is to distribute technological frames for industries to address climate change as well as leveraging strategic partnerships with governments, environmental agencies, environmental foundations and private companies to increase the value of our service. ACKNOWLEDGMENTS The members of the Carbon Collaborative are: Tobias Schultz (MS In Mechanical Engineering U.C.Berkeley), Mikael Hajjar (M. Sc., LEED AP, Haas School of Business UC Berkeley), Nicole Ballin (MBA Candidate, Haas School of Business UC Berkeley), Yuichiro Okano (MBA Candidate, Haas School of Business UC Berkeley), Javier Avila (ME in Mechanical Engineering, UNAM), Silvia Gonzalez (ME in Mechanical Engineering, UNAM), Amhed Castro (ME in Mechanical Engineering, UNAM). The authors recognized the guidance of the teachers of the New Product Development Course: Alice Agogino, Sara Beckman, Vicente Borja, Alejandro Ramírez, Marcelo Lopez, Arturo Treviño and Luis Equihua.

[9] United States Department of State.U.S. “Climate Action Report 2010”. 5th ed. Washington: Global Publishing Services, January 2010

The work reported in the paper has been sponsored by the CONACYT and by the UNAM DGAPA-PAPIIT program.

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[10] U.S. Chamber of commerce, Environment, Technology & Regulatory Affairs Division, “Annual Report 2009”. [11] Instituto nacional de ecologia, Semarnat, Descargas.http://www.ine.gob.mx/descarga s/ipcc_nobel.pdf [12] The US Chamber of commerce; Environment, Technology & Regulatory Affairs Division www.uschamber.com/issues/index/environ ment/

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