Carbon moving to the center stage

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I am returning to my blog after a long gap. The last few years I was  totally gone under, strengthening and guidinging our startup. 

Wait, on second thoughts as excuses go this one sounds pretty lame!

A lot has happened with the carbon in this period. The Carbon market in Eurozone, following in the footsteps of the economic woes, almost collapsed. A nascent carbon market (Cap-and-Trade program) , on the other hand, sprung up in California, where the auction price for carbon went up in the second round.  By burning natural gas, instead of coal, its dirtier cousin, US reduced emission of carbon dioxide.  California, taking a lead again, pushed (and fought) successfully tougher mileage norms for vehicles. We went through a cash-for-clunker program to reduce number of old polluting vehicles on the road, while putting some money into the hands of the needy.  Fracking  entered into the public debate. Keystone pipeline became a medium to convey not only a mixture of tar and sand, but also promised to deliver a heady concoction of reducing energy dependence and rejuvenating economic activity.

The biggest fillip came on June 25, 2013, when the President announced  his policy on climate change. He proposed imposing carbon emission norms on power generating plants, where none exists today. Since those standards will be difficult to meet (1,000 pounds of CO2 for every megawatt-hour of electricity produced) in a coal-fired plant, the mining lobby started crying foul.  With 40% of electricity generation from coal, the specter of rising cost to consumers raised its head again.

Somewhere in the policy announcement, President also talked about new efficiency standards for appliances. Given that our economy is mostly consumer driven, this step will help catalyze significant progress, as argued by DailyBeast here.

And as +Al Gore stated "...the climate crisis requires a new political reality: one marked by a willingness to accept solutions commensurate with the challenge."

The game, once again, is heating up...and we hope that carbon will take the lead!

Individual Carbon Saving: Collective Carbon Trading

All policy prescriptions, public debates, climate discussions, and political jockeying have been ignoring the huge potential of individual contributions to carbon reduction initiatives. The broad assumption behind all such debates is based on the notion that individuals are the final consumers and thereby should bear ultimately responsibility for all carbon emissions. And any carbon reduction initiative has to transfer the burden to them whether directly (reducing consumption and lifestyle) or indirectly (via increased cost or taxation). While this is a fact there is no recognition of individual’s effort to rein in carbon consumption without dislocating everyday life or commerce too much.

Maybe it is too difficult. For how do you account for the fact that some one has started carpooling or driving less or rides a train or bikes to work a few days in a month, or has switched over to energy efficient appliances or switches off electrical devices when not in use or curbs consumption to reduce waste? There is no system at present that computes and track the day to day carbon savings by each one of us that can be accrued, or carbon savings that can be collected over the entire economy.

Now imagine a bank where a person opens a carbon account. Every time this account holder engages in any activity that saves on carbon, the amount of savings (however fractional) gets credited to this account. The bank then accumulates the carbon savings into tradable Carbon Units and starts participating in Carbon markets. The proceeds from sale of these units go back into individual accounts…and voila! the individual starts getting direct benefit (in the form of cash) from her daily carbon saving initiatives.

This would bypass the trickle down effect of the benefit from carbon saving businesses to individual (too remote and indirect).

Cannot be done? Too difficult? Think again!

Implications? Many...and far reaching...but that is a topic for another day!