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‘Reducing emissions is too slow because carbon can remain for 100 years or more once emitted. With negative carbon, the energy industry can be transformed from a foe to a friend of the global environment.’
This is a major opportunity and is largely overlooked by small or medium-sized investors because it is not clear how the various economic factors play out, how large the sector is and how much it needs new investment for transformation.
Growing the carbon market The carbon market changes the entire pricing system for all goods and services in the world economy. Its “carbon price” favours clean products and clean growth, which then become more profitable. While US legislation is far from clear and positive for the environment, some of the largest states, such as California, have introduced a carbon market of their own.
Copenhagen, wording was introduced into the CDM to allow it to fund negative carbon projects. There is little time to achieve a reduction of carbon in the atmosphere without reducing carbon itself. Reducing emissions is too slow because carbon can remain for 100 years or more once emitted. With negative carbon, the energy industry can be transformed from a foe to a friend of the global environment. By helping to resolve the economic problems caused by the financial crisis through creating jobs and export revenues, the energy industry represents the largest business opportunity on the planet. It is a rapidly growing industry that has the power to attract the attention of some of the largest investors in the world, such as Silicon Valley in Excellence in Leadership
The US mid-term elections sent a clear message of support to California’s carbon sector, with voters repealing Proposition 23, which would have eliminated the carbon market. The US House of Representatives voted for cap and trade legislation in June 2009, and the Supreme Court gave President Obama and the Environmental Protection Agency the right to limit carbon emissions without Congressional approval, which led to the limiting of vehicle emissions in March 2010. Equally important as an indicator of the future is the shift in the private sector as a whole, over and above the power plant sector. Toyota was the first car manufacturer to commercialise a hybrid vehicle, the Prius, in 1997, which achieves speeds of more than 66mp/h using a combination of petrol and electricity.
Today, the company invests $1 million a day in developing new technologies, and eight out of ten hybrid vehicles in the world are built by the company. In April 2009, Prius sales topped 1,400,000 units, and the firm estimates it has reduced 4.5 million tonnes of CO2 with these vehicles. Yes, the green economy is real. It offers investors fantastic opportunities to create new jobs, expand export markets, produce killer applications and develop innovative technologies. It is possible to create economic growth with a safer atmosphere, pointing to a sustainable future with positive investment opportunities. It is our choice. ■
Graciela Chichilnisky Graciela Chichilnisky is co-founder and CEO of Global Thermostat. In addition to extensive management experience and a professorship at Columbia University, New York, she is an active scientist and acts as a special adviser to several UN organisations and heads of state. The architect of the Carbon Market of the Kyoto Protocol, her pioneering work uses innovative market mechanisms to reduce carbon emissions, conserve biodiversity and ecosystem services.
PHOTO: Chris Schmauch.
California. Clean tech is the fastest growing investment sector in the risk capital industry today.