Hot stuff - 22 Jul 08

Hot stuff - 22 Jul 08

Peter Day discovers that global warming could offer huge business opportunities for companies that can find new ways of tacking climate change.

Some ideas currently in development push the boundaries of energy conservation to new levels using solar panels and heat exchangers.

Others are no less than space age in scope.

Peter talks to the inventor of a 'parasol in the sky' that might shield the earth and cool it down - if trillions of dollars are invested in further research.

So what are the financial risks involved in such forward thinking?

And will these pioneers in the field find enough investors willing to take a risk?

By Peter Day

The former US vice president Al Gore told me two years ago that he was utterly convinced that whoever wins the Presidential Election in November, American policy on global warming would be reversed almost within hours of the new president arriving at the White House.

The USA would sign the Kyoto Agreement (for what it is worth), and a new climate regime would begin.

He is not the only one who thinks like that.

In March I went to a conference in San Francisco called Carbon Expo 2008.

It was swarming with people in suits, the bankers and investors who are poised to dive into an environmental revolution just as soon as full scale carbon trading has reason to start in the USA.

That will happen when and if the US ratifies the Kyoto Agreement... and then the fun starts.

The volume of carbon trading in the new markets is projected to surge from the equivalent of $64bn last year to, well maybe, $3,000 in 12 years time.

No wonder the traders and bankers are salivating at the idea.

For me, it goes against the grain to see sharp financial operators poised to make possibly huge profits out of an attempt to make the world a better place.

But if greed is one of mankind's motivating factors, then harnessing greed may be the way to get things done that the public in general seem reluctant to do.

If carbon trading, that is, setting a traded price for carbon emissions - actually works.

Well I cannot get very worked up about the boys in red braces and their trading room antics, but what is surely interesting is the impact of carbon trading on the businesses who are trying to find ways of limiting or reducing emissions.

By giving CO2 emissions a price in the marketplace, emitting carbon becomes a burden to the companies who do it... a matter of balance sheet and profit-and-loss concern to corporate boardroom members.

They will seek to limit their expensive exposure by either cutting down on their carbon footprints or buying allowances from people who have devised ways of taking carbon out of the air and locking it away.

Sequestration is the nice word for this, and it's hard to do.

Enter the businesses (and individuals) I've been hearing from for two Global Business programmes, one after the other.

Suddenly schemes that might otherwise seem wild and wacky are being taken seriously by brave entrepreneurs who say they want to change the world.

Many of the ideas sound strictly science fiction, but lots of things that have changed our lives once did.

These businesses are little more than seedlings, constructed on a scientific theory (and maybe some small scale experimentation, but not much).

But they are suddenly plausible propositions because if carbon trading becomes a significant activity, then companies who are trying to find ways to reduce or sequestrate CO2 will have a value.

They will become interesting.

Even to the traders in red braces.

Contributors

Thomas Melead
Maintenance Manager, FritoLay , Modesto, California

Al Halvorsen
Director of Environmental Compliance for FritoLay, North America

Lester Brown
Sustainability campaigner and author of ‘Plan B 2.0: An Urgent Call To Action on Sustainability'

Dan Whaley
Chief Executive Officer, Climos

Allen Wright
President, Global Research Technologies

Roger Angel
Professor of Astronomy, University of Arizona