(check out this link for more pics of NH: http://mistoverfm.org/sps/flood/)
Here’s a picture of the massive cathedral in the city center – quite a sight:
The real excitement, though, came from the conference. It really brought home for me how fast the carbon markets are growing. I’ve been meaning to give an overview of carbon finance, the basics behind cap & trade schemes, etc. and I will soon, but for now I’ll just run through some of the highlights.
The EU ETS (emissions trading scheme) traded around €9.4 billion in 2005, since it went into effect when
With this huge growth comes some exciting times – the market has a real ‘wild west’ feel to it, with tremendous opportunities. The head of one of the bigger firms in the space referred to it as a “land-grab.” And another noted the market is “full of cowboys.” All of this made for really exciting atmosphere at the conference and a great job market.
Participants were all over the map – but mostly policy and finance types (i.e. a lot of suits, the conference was all business). There were a few of the big banks there (Goldman, Morgan Stanley), technology providers (including GE), government reps from all over the world, World Bank reps, carbon finance firms (EcoSecurities, Natsource, CO2e, Asia Carbon Funds), reps from the exchanges, market news firms (Bloomberg, Reuters, PointCarbon), and a slew of CDM project developers and consultants.
We caught up with a bunch of the experts who have been reviewing and commenting on CDM Select (the tool we’ve developed as part of our thesis), and we got a lot more interest from other project developers, investors, NGOs and governments who said they would have a look and provide feedback.
I was surprised (pleasantly) by how much the market is focused on the CDM (refresher: the Clean Development Mechanism (CDM) is a Kyoto instrument, which allows projects that mitigate GHG emissions in developing countries to generate credits called Certified Emissions Reductions (CERs) that can then be bought by industrialized nations (or companies in them) to meet their emission reduction commitments). A lot of the ‘low hanging fruit’ projects are going fast – these are mostly industrial gas destruction projects that are relatively cheap and straightforward (end-of-pipe technologies) that create a lot of CER revenue due to the high global warming potential of the gases. But more and more developers of all types and sizes (large and small private firms, governments, World Bank, etc.) are looking to more involved with potentially more beneficial kinds of projects like renewable energy, energy efficiency, afforestation/reforestation, etc.
On the political side, there was very little talk of the
Anyway, I’ll stop here, and promise to have more posts on the carbon market soon – which I’ve neglected on the blog, because I spend so much work-time on it – but I think it really is the most exciting aspect of sustainable development going on today. So, the bottom line is that it was a great time with a great bunch of people with all kinds of backgrounds and motivations, the market is unlike any other, but has shown signs of quick maturity (including weathering its first “crash” over the past couple weeks, and models on the exhibition floor at the conference), and there’s plenty of opportunity to ‘do well while doing good’ in environmental markets. Stay going…
There’s no doubt the hype is growing in the ethanol space – as this article from my brother points out – certainly wouldn’t recommend buying stock at this point. But I think there’s little doubt that ethanol and other biofuels (methane, biodiesel) will play a significant role in a sustainable future – as they already are in
Another big piece of news in the space is that the IRS just published Form 8911 Alternative Fuel Vehicle Refueling PropertyCredit which provides the first ever federal income tax credit for the installation of E85 fueling systems. It was part of the 2005 Energy Policy Act and provides a 30% federal income tax credit, up to $30,000 per property, to install alternative fuel dispensing systems (this news from the National Ethanol Vehicle Coalition)
Clearly the momentum is building in the
First: ‘ethanol takes away from needed food production.’ This is a marginal concern – we subsidize farmers not to grow food, global hunger is not a supply issue, and obviously it’s irrelevant in the case of biomass ethanol (produced from crop residues or other biomass, not necessarily food like corn, sugar cane or beets).
Second: ‘it still emits CO2.’ This is true, but it theoretically could be a ‘carbon neutral’ process because the carbon from the biomass will be stored in new biomass – so it’s not a violation of Sustainability Principle 1 (substances from the crust). In reality it's not completely true - E85 means 85% ethanol, 15% gasoline, which is sometimes needed for cold starts. Also, currently in practice, ethanol uses fossil fuel inputs for production, transport, agricultural production, etc.
Third: ‘it deprives the soil of nutrients.’ Here’s where it gets interesting. Fritjof Capra (fantastic writer on sustainability) more or less writes off ethanol for this reason. And he’s got a valid point – soil is the basis of civilization, and oil is not the scarce resource of the future – phosphorous is (with
A whole-system perspective highlights some of the threats of a large-scale shift to ethanol – and there are more than those addressed here, many specific to various regions (particularly water) – but it also highlights the opportunities. While there are only ~600 filling stations with E85 pumps in the US, that number is growing and that tax incentive will surely help. There are already over 5 million flexi-fuel vehicles on the roads in the
The shift to a renewable fuel base will likely happen fast once it reaches a critical mass, as is happening in Sweden, and as it does, it will be vitally important to have this whole-system perspective to ensure that it’s done right. Stay going…