“The World Bank, says Neal Dikeman, co-founder/CEO and Chairman of the Board for Carbonflow™, reports approximately $126 billion dollars in carbon offset transactions have occurred, of that only $500 million were in the USA.” Carbon offset trading is very active internationally and at some point will gain greater traction in the USA because this year, the American Clean Energy and Security Act (ACES) or the Waxman-Markey Bill was passed. For now, most of Carbonflow™’s potential customers are outside of the USA. Let me stop here for a moment to first discuss the international carbon offset trading marketplace. Providing the bigger picture will prove why Carbonflow™ looks like a winner.
The United Nations Framework Convention on Climate Change (UNFCCC) says “the central feature of the Kyoto Protocol is its requirement that countries limit or reduce their greenhouse gas emissions. By setting such targets, emission reductions took on economic value. To help countries meet their emission targets, and to encourage the private sector and developing countries to contribute to emission reduction efforts, negotiators of the Protocol included three market-based mechanisms – Emissions Trading, the Clean Development Mechanism (CDM) and Joint Implementation.”
“CDM offsets comprise 90% of all carbon offsets traded worldwide,” says Richard Barber, Chief Technical Officer/VP of Engineering at Carbonflow™. The UNFCCC further states, “CDM allows emission-reduction (or emission removal) projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one tonne of CO2. These CERs can be traded, sold, and used by industrialized countries to meet a part of their emission reduction targets under the Kyoto Protocol. The mechanism stimulates sustainable development and emission reductions, while giving industrialized countries some flexibility in how they meet their emission reduction limitation targets.” For example, it allows an already established manufacturing facility, time to transition into being more energy efficient. It also provides financial incentives for developing countries to execute energy efficient industrial projects.
“The projects must qualify through a rigorous, public registration and issuance process designed to ensure real, measurable and verifiable emission reductions that are additional to what would have occurred without the project. The mechanism is seen by many as a trailblazer. It is the first global, environmental investment and credit scheme of its kind, providing a standardized emissions offset instrument, CERs,” says the UNFCCC.
CDM uses three auditing companies in its approval process. They are Det Norske Veritas (DNV) of Norway, SGS United Kingdom Limited and TÜV SÜD in Germany. Neal added, “the development and approval of carbon offset projects remain very inefficient today. The need to find more efficient means to bring these projects to market faster and less expensively is imperative. Carbonflow™ has the solution.”
“SGS and DNV were involved with Carbonflow™ from the start, says Richard. They were at the initial workshops where we worked out what the product should do.”
“Carbonflow™ provides unique browser-based products and services that empower any organization to manage and monitor greenhouse gas reduction projects on a secure multi-party platform. Employing HOpE™ (Hybrid Operating Environment) principles, Carbonflow™’s solution provides accessible technology to everyone – including those in developing countries with limited online access.” (See following link for more information: http://www.carbonflow.com/hope_concept_software_design.php) It takes 2 years for a project to receive approval using the current CDM process; Carbonflow™ predicts that using their software will cut the CDM process down by six months to a year.
Why does the future for Carbonflow™ look bright? It is the only company working with CDM’s auditors to automate their process. It is likely the CDM system will be expanded to include the USA. Or, the USA will create a separate CDM system. In both instances, the CDM auditors will be consulted/used and Carbonflow™ will definitely benefit.
At first I thought Carbonflow™ was an enterprise carbon accounting company like Climate Earth, Carbon Networks, Planet Metrics or Verisae who includes Walmart as one of its customers. There are over 40 carbon software companies in the marketplace today. Large companies like SAP and Microsoft are purchasing them to get into the carbon accounting business. Carbonflow™ appears to be ahead of the curve. Neal says “Carbonflow™ has no competition.” The existing carbon accounting software companies are used in-house for carbon measurement purposes. Carbonflow™ provides a multi-party platform that coordinates CDM activities internationally.
What are the opportunities for entrepreneurs specifically in carbon software management/accounting and/or Cleantech? “Cap and Trade will put a new cost in everyone’s supply chain. It will be a 10 year exercise,” says Neal. Multiple green jobs and opportunities will be created to satisfy this demand.
Neal suggested I speak to Indira Balkissoon to understand the types of jobs that will be needed. She is the Director of the DNV (Det Norske Veritas) Academy for Climate Change Services North America. “The training at the academy builds carbon knowledge and confidence. Many of the projects that go through the CDM process are not approved,” said Indira. Some of the training is for companies interested in understanding the CDM process and how the auditors conduct their evaluation. Classes are offered in the USA for people interested in GHG or Energy Efficiency accounting. Check out the following website for more information about these classes offered by the DNV Academy for Climate Change North America. http://www.dnv.com/services/training/categories/environment_climate/index.asp
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