Carbon: Wealth Creation through Carbon Reduction

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June 2012 issue of THE GREEN ECONOMY

Text of Carbon: Wealth Creation through Carbon Reduction

  • June 2012

    NEW TECHNOLOGYArray Power: getting more out of solar.

    CARBON WAR ROOMBillions for the battle: 1 gigaton at a time.

    GREEN LIGHT ENERGYYoung entrepreneurs trading on carbon.

    New DiamondsWealth Creation through Carbon Reduction

  • Letter from the publisher.

  • 3The carbon we use to create energy -- whether natural gas, petroleum or coal -- takes millennia to create from decayed plant matter. Take a few more millennia, and that coal becomes diamonds. In the past, fortunes were made in the extraction and use of carbon. But for many forward thinking companies, searching for and finding ways to reduce the amount of carbon we use to create energy is the next great path to wealth creation.

    In this issue, we focus directly on some of the strategies being used to create that wealth. The Carbon War Room wages a calculated battle by bringing together people and money to find ways to reduce carbon at the gigaton level. One young company is betting on the RECs (Renewable Energy Credits) that are helping utilities to bypass the lengthy carbon cycles by going directly to natural resources such as sun, water and wind. And Californias cap and trade program is putting a price on carbon, and planning on generating capital for new industries as well as to reduce air and water pollution.

    Carbon reduction as well as the careful use of natural resources is the next generations revolution. That revolution will transform the planet in unexpected ways. As Jose Maria Figueres, President of the Carbon War Room puts it, recognizing that the planet has limitations does not mean an end to corporate growth in fact he believes the reverse. Corporations that do not recognize planetary limitations are the ones that will become the dinosaurs of the future. One has only to look at companies like Panasonic, Veolia, Duke Energy and GE Ecoimagination to see that future.

    THE GREEN ECONOMY is proud to bring you these stories. Our circula-tion is now over 20,000 and climbing. We have gone from being in the top 2.5 million web sites to being in the top 1 million in the last year. We have exponentially grown our Twitter, Facebook and Linkedin groups, and are planning more in the coming months. Our Linkedin group has helped form the discussions that we put in our magazines, so we can hear what you think about the topics we are following and publish your responses. Some of our most frequent contributors started as Linkedin chats and have turned into important articles for our eMagazine and website. We recently went through a face-lift online, and will be launching an iPad and Android app in September, so you can read us on your favorite tablet.

    We appreciate our readers and look forward to your comments and sug-gestions. You can reach me directly at Thanks.

    A. Tana Kantor, Publisher

    Letter from the publisher.

  • 4 Features

    06. Readers SpeakShould companies get rewarded for carbon reduction?

    28. Array PowerDC-AC: New technology for increasing efficiency and lowering costs.

    31. GM: New IdeasGM looks to reinvent the automobile for an urban future.

    34. Long-Term GreedyRushton Atalnatic thinks for the long term.

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  • 5

    THE GREEN ECONOMYJune | 2012


    Demystifying Carbon

    08. Strategic Moves to Climate Wealth- Interview with the Carbon War Rooms President.

    - Carbon War Rooms Creating Climate Wealth symposium.

    - $1 Billion in Tax Credits, 40,000 jobs.

    14. Demystifying CarbonWhat is a carbon?

    16. Green Light EnergyYoung entrepreneurs diving into Carbon Markets.

    18. Who Cares?Research on corporate attitudes about carbon reduction.

    22. GlossaryClimate Terms

    24. Cap n TradeAll eyes are on California.

  • 6What Readers Should businesses be rewarded for reducing their carbon footprint? If so, how?

    Follow the discussion on Linkedin and Facebook.

    Businesses should be rewarded for managing their impact on natural capital and reducing their carbon footprint. The eco-commerce economy needs to begin where the [old] economy began, from land management resources. Government, NGO and Industry are saying they want sustainability, but are reluctant to pony up together to create an effectual demand for ecosystem services. The ecosystem is a bigger deal [than] projects and programs, [and] needs to be an integral part of the economy. [M]ost people today do not sense that natural capital and ecosystems are a very large part of the economy possibly because it is ubiquitous, hiding in the wide open every where. It is more than carbon emissions.

    Tim Gieseke, President Ag Resource Strategies, LLC

    Free market is a theoretical construct that cannot exist due to human nature a false premise in any argument. Consider a baseball game: Would you buy a ticket, or even bother to watch a baseball game with no rules and no umpires to enforce the rules?

    Pollution reduction can realistically be considered either a common good with all-cost / no-profit to private sector, or a very, very, long-term and subtle brand value to private sector. Hence, the population/citizenry as a whole needs to act on it through the government. [I think] Cap n trade carbon credits would be good policy. [However] I believe the real name for the policy should be Hey, either dont make a mess of our air, land

    and water; or clean up your mess; or well clean it up and make you pay us.

    Steve Reichenstein, CEOBioMART

    Corporations will not act on a public good unless there is a clear reason to do so. Most buyers (businesses or consumers) do not place public beneficence at the top of the list of criteria for selecting either products or services -- hence there is no clear marketing benefit to companies to justify investing millions in carbon footprint reduction.

    That leaves us with the choice of carrot or stick. A penalty approach will simply make a group of lawyers rich and take years to enforce (if the courts in fact uphold it). Further, if we take the auto industry as an example, required improvements get watered down in Congress. What you get in the end may not be worth the effort. The carrot that other countries use is the carbon credit, which gives us a way of converting carbon reduction into a monetary asset. The size of that asset can be enough to affect behavior. Its not perfect, but it has a positive track record.

    Victor Crain, Senior Partner Crain Associates Research

    It occurs to me that the investment in processes [and] equipment should be tax deductible in the year(s) they occur. As long as those processes/equipment remain in place, an additional tax credit based on the carbon based savings divided

  • 7What Readers Should businesses be rewarded for reducing their carbon footprint? If so, how?

    Follow the discussion on Linkedin and Facebook.

    by the number of years it is projected to be in place.

    Chris Byrne, Owner & PresidentNHT

    As Wal-Mart drives all its suppliers to be more energy efficient in their production, they can lower costs while at the same time lowering carbon emissions per unit sold. (Offset a bit because at lower prices they are probably selling MORE stuff.) So their reward is more revenue for being more carbon friendly.

    Jeremy Kranowitz, Director, Education Policy Roundtable, Keystone Center

    Businesses will be rewarded for their sustainable efforts (reducing their GHG emissions as part of this larger picture) by default by way of better corporate image (works for some), maybe by increased sales (how well they market their efforts), and possibly by NGOs tracking their transparent efforts (via their sustainability reports, unless it is perceived as greenwashing).Basically, the reward businesses should seek is how their employees feel about their efforts.

    Gabe Crognale, Owner & Founder MCG Associates

    No, subsidized programs are not sustainable. This is not to say corporate carbon reduction is a bad idea. Let the free market decide. There is definitely [a push] from consumers in supporting CSR [Corporate Sustainability Reporting] efforts.

    Victor Coppola, Environmental Advisor GreenWorks Environmental, LLC

    The concept of lowering taxes is important to me so I would vote in favor of decreasing subsidies to ALL types of energy companies (polluting and non-polluting).

    Dr. Maximo Gomex Nacer, President Zoo-Mechanics, Inc

    If the taxation system taxed bads (like CO2 emissions) instead of goods (like income, and actual, physical goods for that matter), then companies wouldnt need rewards/incentives for reducing emissions - it would happen as a normal part of doing business.

    Daniella Leifer, Program Manager, CUNY Building Performance Lab

    The objective behind tax shifting is to stop taxing the things we do want (like income and savings) and shift towards taxing things people collectively do not want (like waste and pollution). The current tax system encourages the depletion of natural resources and the unsustainable degradation of the environment, while discouraging job creation. Ideally, a shift toward taxing unwanted effects over desired ones, without increasing the total tax