French SMEs: towards carbon neutrality

Panel: 1. Policies and programmes to drive transformation

Author:
Antoine Bonduelle, E&E Consultant SARL, France

Abstract

The world economy has to become neutral in carbon emissions around the middle of the century. This is what IPCC demands in order to respect the goal of limiting global warming “well under 2°C”. For the target of 1.5°C the ambition is even more stringent. This means carbon neutrality for all firms in a short time.

Present policies concentrate mainly on larger firms. Such firms are already involved in complex precedures such as EU quotas, with in-house specialized staff. This makes sense for policymakers, because these firms represent over 80% of emissions. But carbon neutral means not only removing tons from the country balance, it leads also to stopping emissions of any firm.

Small firms represent 99.8% of the total, with about 50% of employment. It is thus essential that SMEs become involved by the carbon regime, beyond goodwill and green labels. New instruments have to be implemented so that carbon neutrality become a winning strategy.

How to adapt existing policies such as research, subsidies and fiscal policy ? What carbon accounting will be adapted to SMEs and how will it be reported? What is the role of sectors and professions and what responsibility can be devolved directly to the small firm? Can small firms become early adopters of carbon free technology and practice? Finally, what perimeter should be considered when dealing with small firms? In particular, should the downstream productions be considered including emissions incurred by the consumer of the service or the product? Is the aim of de-carbonization an enabler of larger change such as the circular economy or de-materialization?

The paper will build on the debates held in the French Social, Economic and Environmental Council (CESE), an advisory body of Professionals, Unions and NGOs. The CESE constitutes the third assembly of the French Republic. Antoine Bonduelle is the rapporteur of this report, due to be voted during the Fall of 2018.