Live Blogging Beyond Carbon 2008

Beyond Carbon 2008 is a conference in Adelaide exploring the challenges and opportunities presented by the transition to a carbon constrained economy, from multiple perspectives and for multiple audiences.

The program is organised by CEDA and sponsored by Australian Clean Tech, Hughes People Services, LocalGovernment SA, City of Onkaparinga and University of Adelaide.

Today, I will be live blogging the full day conference with the help of my friend P Y Wong. The program will start soon. Thanks to John O’Brien, the Managing Director of Australian Clean Tech and one of the organisers of this event for inviting me to this event.

The program is in 3 parts. Starting with an introduction from Mike Rann, Premier, of South Australia . The morning sessions are around “Climate Competitiveness”, a lunchtime keynote address and the afternoon sessions are around “Climate Leadership”.

8:30 AM –The conference attendees are coming in, everybody is settling down and even some of the media people are here. The Premier, Mike Rann is here now. That would mean the conference will start soon.

8:40 AM – Tim Hughes, from Hughes Public Relations is convening the event and has got this program going.

The first session will be with 4 speakers for 10minutes each and then followed by a panel discussion. Then some morning tea, some networking drinks, followed by lunch and then the afternoon sessions.

08:45 AM –Fred McDougall, Deputy Vice-Chancellor & Vice President (Academic), University of Adelaide is providing the Introduction.

The University has launched a new research institute bringing together a multi disciplinary approach to understand the complex questions produced by climate change. It is about developing adaptive strategies to combat the challenges.

The University is creating new courses for students and also changing its operation by managing waste, cutting down on energy and creating new business practices.

08:50 AM- Mike Rann has opened the event officially.

Rann suggests that South Australia is leading in this area. Coming from his recent trip to the UK, the Premier has met with some politicians and public servants there. The idea was to create a regional level strategic agreement at the state and city level across the world.

Rann talks about the mining boom in SA, the rise of the education sector, the increasing population and the economy. As Minister for Sustainability and Climate Change, he suggests that economy and the environment need to work together. At the same time, the government and the business need to work together to achieve this. When the price of carbon becomes a reality with the coming up of the emissions trading we need to be ready for that regime.

With the launch of Australia’s first climate change legislation, SA is providing sector agreements for industries to lead in this area. An example is the first voluntary sector agreement of the wine sector where the industry has agreed to cut down the carbon emissions voluntarily. This is because of the changing markets and the lesson from the London Wine show is to go green or wither away.

Another example of SA govt. and industry is wind power. 2002 did not provide a single wind power generator. With SA’s new legislation, in 2008 SA has 47% of Australia’s wind generating capacity. This is because of clear policy and direction from the govt.

SA is showing leadership in Australia in the COAG meetings and also commissioning Ross Garnaut on the emissions trading report. The climate change act has the following goals and some facts about SA.

  • 20% of Renewable energy capacity of SA from wind solar by 2014. However, SA will reach this target next year.
  • 100% carbon neutrality for SA’s govt. offices by 2020.
  • 50% of state energy will be green power.
  • 60% reduction of carbon emissions of the state by 2050.
  • 80% of Australia’s investment in Geo thermal in SA.
  • SA has 40% of Australia’s grid powered solar energy. In the coming months, a net metering solar grid system legislation will provide double the price of retail power for households.

Rann provides a positive orientation to SA’s work in this area and is showing an understanding of the requirement to work with industry and maximise the sustainable energy potential.

A new announcement. The new Goyder pavilion, will be Australia’s largest rooftop Solar panels generating enough power 200 households. The govt. will provide $8 million to the installation. This is landmark installation and will provide a demonstration of the commercial potential of Solar power.

Why should the govt. demonstrate? As suggested by Tim Flannery, this will provide an example to people and industry to create their own.

The Climate Change council will discuss with community, industry and other institutions to help the govt. create a better climate change policy. A good collaborative approach.

Rann talks about the voluntary sector agreements as a leading collaborative policy for the future.

09:10 AM – John O’Brien thanks the Hon Mike Rann.

He is a CEDA member and will be introducing some of the speakers. Ray Garrand, Chief Executive of the Dept. of Trade and Economic Development.

09:13 AM – Ray Garrand, CEO of Dept. of Trade and Economic Development.

A great opportunity for SA to harness its research, entrepreneurial and technology for the opportunities present in this carbon constrained world.

$250 million dollars clean tech fund from Abu Dhabi. Singapore has done the same thing. The investment in sustainable technologies is over $100 Billion.

These opportunities are really global. Energy investment is needed and has great potential. Companies need to take into account the Carbon footprint. Tesco is a good example which is mapping the entire life cycle of all its products and their carbon footprint. This is important for maintaining market share. All due to the change in consumer behaviour.

Companies need to change their operations, supply chain etc to supply this new market. Many companies are reducing energy consumption of 20% and with paybacks of 2-3 yrs. The low hanging fruit.

The market will respond to carbon prices. The carbon economy if managed well has the greatest potential for SA’s companies. SA is in a unique position to respond to this and create jobs in the new sustainable future.

09:30 AM – Prof Dexter Dunphy, Visiting Prof. at the Univ. of Technology, Sydney. His field is sustainability and business.

We are faced with a unique situation. Human beings are threatening our own species.

There is a false optimism about easy fixes. The targets need to be harsher, something like 80% by 2050. Warming, bio fuels problem and other issues are driving this.

From Stern, “he underestimated the effect of climate change in his report, emissions are growing faster, the absorptive capacity is lower than thought and the speed of climate change is faster”.

Prof Dunphy is positive about SA’s work. He is talking about the changing understanding in professions, business, education, govt. etc. Every century has a defining theme. 20thcenturywas about economic development. The defining theme of this century is sustainability and dealing with the unintended consequences of economic growth. It is time to take action, not discuss.

We need to learn from nature. In nature, there is no waste, only under utilised resources. Today, we will here examples of people who are already doing it.  Sydney has water shortages but do not capture rain water or waste water recycling. Sydney has not water problem.

Manufacturing needs to move from linear model to a circular model.

Most important are representatives from the financial, banking and superannuation sector. It is a great thing for them to come into this new paradigm. It is tough for CEOs because they are evaluated by the financial markets everyday. The pressure is enormous.

What constraints should banks have in lending for building companies? Should it be five or six star green buildings. It is clear that financial institutions are seeing the implications of a carbon constrained economy.

If we can’t measure something, we can’t control it. This is where reporting comes up. Example of energy in UTS. We know the total energy but not who is using it. Putting meters in each building and then meters in each section of the building. Measurement is vital, some metric is vital for progress.

We will learn in the next two days of the conference, we will see what the govt. will be doing. The world needs cross disciplinary work and that is how the world is in reality. The local govt. are moving into this kind of a role. Then come the academics and they have produced the technologies which have plundered the planet. Universities have been the paid workers of industries. Now, universities are changing.

Business needs to be an integral cell in the biosphere, community and society. What can I do? It is easy to be in despair, but each of us can choose one area o action, and make a contribution in that area. This will create enough momentum. By the end of the conference we should have an answer to this question.

This seminar is forward looking and is covering people of all ages including 10 and 12 standard students on Thursday. The problem is multi generational and we need everybody to understand and work on it.

Here is an opportunity to become more informed citizens and select a point in society where as individuals we select a inflection point. May be only our own household. The Prof.’s last electricity bill was 54c due to the installation of solar panels.

The keynote session is completed.

09:45 AM – Now, the speakers for the first session. This is a representatives of the clean tech industry. Each speaker has 10min and then panel discussion.

Terry Kallis, MD of Petratherm.

Could be the leading Geo thermal company in the world.

Petratherm is a Adelaide based company listed in the stock exchange. Work in SA, 4 projects in Australia. 7 projects in Spain and partnerships with Chinese govt. orgs.

The global context of renewables.

Lot of uncertainty in the global economy. Cost of power is increasing. There is social pressure to cut down emissions. We need large, low-cost base load energy. Opportunities in wind, solar and geo thermal. In that context Petratherm makes decisions.

Work in SA is busy with hot rocks. 33 players. 10 MW resources. 1000’s MW possible. Many innovations will be available.

Wind Farms. 19 active projects in SA. 335MW operating. 340 MW under construction. More in the pipeline. SA is the wind capital of SA. High penetration on a international scale.

Where is the renewable cost going? Lot of emerging technologies cost curve is coming down quickly. Its now around $80, geo thermal is at the bottom of the cost curve.

45000 GW is the opportunity from the 20% federal govt. target for 2020. If CO2 is $40+ per tonne then renewables will come.

SA has natural endowment of solar and geothermal. About $20 B investment and 50,000 jobs potential in renewables by 2020. This is about location, location, location. SA is in the right place. It is easier to get business down, permits, legislation etc. SA can be the leader in renewables in Australia.

10:00 AM – Joe Flynn, CE of Water Industry Alliance.

Opportunity of the global and national area of how a less carbon intensive economy looks like.

The costs. The Curang is dying. Farming is suffering. Water is a big issue. Crime against a kid to play under a hose is not right. Solutions are here right now.

Solutions. Food. 250L is the global water consumption per person everyday for household needs. 5000L for food production. The elephant in the room is food.

Food Miles and sustainability. Food miles are not very intuitive. (something we have already discussed here on worldisgreen.com).

Food needs to be resolved from science. Example of food science. A local company into tomatoes.

Waste water is recylced. Tomato nutrients are added. In a glass house. CO2 is increased. Heat is provided. Tomatoes take them up. Rainwater from roof is harvested. 12 times tomato plant yield, 1/10th of normal water and selling at twice the prices.

Energy, food and water need to done at the same time. It is about optimizing and solving them in tandem. In he above example are 30 SA companies involved. This is happening locally.

29% of SA’s water is reused. Leader in Australia.

Salisbury wetland example of waste water purification. Holden is using that water for their process needs. Schools are using it.

Will. We are getting the future generations to subsidize the costs of the current generation. We need to stop that. The price rises will happen. This is inevitable. We need to figure out a better way to share this.

The Water Industry Alliance is made up of 200 companies. Water based technologies export has grown from $25 M to $400M in 8 years. Enormous opportunity.

The launch of the Australia Clean Tech network, first Tuesday of every month. A forum and collaboration for people in this area. SA has a national and global opportunity.

10:08 AM – Vaughan Levitzke, CEO of Zero Waste SA.

Zero Waste is about using materials in a cycling way. Concepts of reducing the ecological footprint. Zero Waste SA is a change agent.

It is in the sector agreements.

We take, we make, we waste. Everything we use becomes a waste. Energy is one side.

Consumption has increased. This is a global phenomenon.

Waste reduction has been on the leading edge. Kerbside pick up from 1994. Container deposits for 30 yrs. Garbade trucks and biodiesel for 5 yrs. Doubled our domestic recycling yield. We recycle 68% of waste stream, 408 tonnes of domestic waste, and a total of 2.4M tonnes from everything.

A great reservoir of intellectual property. Exports to interstate and overseas of these recycled process waste. SA is second in Australia in per capita recycling after ACT.

4 top areas are concrete, steel, timber and garden organics. We are saving 920 tonnes of CO2 by recycling.

Aluminum is big. Steel is too.

Achieved from council systems, technology.

3% of greenhouse gases come from landfill. Main element, Methane. Slow down process. Waste now will break down in 50 yrs or more. 17 yrs for paper. 20 yrs for food.

Food like water is a major issue. UK study, 1/3rd of supermarket consumption is wasted. Domestic organic waste needs to be reduced. Organic compost is a solution. Industry is moving, M&A happenning, partnerships. What works in other places may not work here.

Boom times for recyclers. Commodities can be a volatile. How do companies can invest in reducing energy and material consumption?

Waste disposal is low cost because life cycle costing is not done.

Carbon sequestration in soils has huge opportunity for industry. Biological process can sequester into the ground. Can national trading scheme include recycling?

We are using a economic instrument to change behaviour. We need more fundamental instruments. Humans look at many different ways when changing.

Green design opportunity are bound for many different products. Real issue is changing people’s behaviour fom material aspects to Sustainability.

10:20 AM – Fiona Wain, CEO of Environment Business Australia.

Clean tech sector in Australia is $20 B (outdated figures). Carbon Disclosure project is important.

EBA members are from technology and finance. EBA works on market failures for technology that cannot come. Reducing negative externalities and valuing positing externalities.

Govt. policy is important. We are at a cusp of a new area. We need urgency. We have Peak Oil, Peak Fish, Peak Rare Metals and we have green drain?

Climate change is a social, security issue. Environment degradation is costing 3% of GDP per annum officially. It is almost 8% to 9% in real. This message is taken seriously in China. It is not taken seriously here in Australia.

Why is the clean tech era here? Oil price is rising. This is not a bubble. Gas has doubled.Black thermal coal has risen 6 times in the last 12 months.

What is not talked about the seepage of these costs in general commodities like food. Coal contracts are being renegotiated in the next 3 years. That will increase the price of energy. We have been naive of energy in the developed work.

EBA is pushing for the national emissions scheme. This is part of the solution. It should have a energy efficiency target. Some napkin calculations.

Can we do 87% by 2050? Suggesting 40% custs by 2020.

Energy efficiency, solar thermal, recycling, fuel switching to gas, wind, wave, geo thermal. Total possibility – 61% by 2020. No carbon sequestration. So 40% is possible.

Carbon sequestration in a bio mimicry sense.

Regulatory. All sectors. All permits should be uactioned. Revenue possible is $12 B per year. Used in renewable energy, can buy some a lot of action. Climate bond, clean tech fund for investors. Money is available but no time.

Questions time!

How about nuclear power in Australia and biggest opportunity in this carbon constrained world? – from John O’Brien.

Terry Kallis – Nuclear power can be possible. Near to the market. Need to manage waste. Depending on emission cuts.

Big opportunity in the gas sector.

Vaughan Levizke – Possible in some places. Australia has other easy solutions like geothermal and other renewables.

In the area of intellectual property, how to do these things. Ausralia is small. Our influence needs to come from innovation and specific IP.

Jeo Flynn – James Lovelock answer. Nuclear risks can be managed. For a solution for climate change we need it.

Opportunity in food yield.

Fiona Wain – Australia does not need Nuclear energy. Solar thermal is big.

We can export uranium, in terms of processing and spent rods. Thorium plants are coming up. So Uranium may not come up fast.

Opportunities to develop whole new indusries.

Another question. Rather than cotton or rice in the Murray Darling area but Canibis.

75% of SA water goes into Agriclture and a lot of that goes into pasture. 4% improvement in this would remove Adeaide’s water restrictions.

Fiona – We can grow much better crops.  Mineral and nutrient value in food has come down by 17% in the last 30 years (from Science).

What about biofuels?

10:40 AM – Conclusion of the first session. Break for morning tea.

10:48AM – Session – 2 Climate Competiveness.

Chair : Sean Wiles, CVC Sustainable Investments.

CVC has been investing in the sustainability sector, energy, waste, renewablesand working with these companies. They are raising money for a new fund.

Panel Members.

11:00 AM – John Ballard, Australian Association of Angel Investors.

A brief on Angel investing. Angel groups have been investing in early stage companies for 100 years starting with the theatre. From 80s they have been doing a lot more in companies. In the last 15 yrs they have been coming together has groups. They are investing their own money.

In the US, they have 150 groups averaging 50 investors. Each group invested in 7 early stage investments. Avg investment is $1 M. Since this may not be enough for commercialization, they are moving them to other investors. They also operate “side car” funds, which invest automatically.

What type of investees do they invest in? Typically in the start-up stage. Preferred or convertible preferred stage. Generally in tech sector. Clean tech coming up in the last 3-5 yrs.

Valuations generally less than $2M for companies can come to Angel investors. Exits through trade sales.

Angel groups are new in Australia. 4 angel groups in Australia.

Bio Angels in Adelaide, Capitals Angels in Canberra, Brisbane Angels and Victoria’s venture partners. One coming up in Sydney.

All Association members are considering clean tech investments. New investments in Applimex, Pristine Forage in Pasture plans, Universal Energy storage systems and Hybrid Motorcycle.

In US, MBA students work with these groups, but still not happening in Australia.

11:06 AM – Julian Turecek – Clean Tech Ventures

VCs and this new economy.

The VC industry is changing. Clean tech is up 257% from 2001-2007. KPCB raised $500M for the clean tech sector. Last time during the dot come period. Will this bubble pop? The drivers are strong, so may not.

Deals in Australia. Drivers for Australia. Commodity boom has lot of investment and govt. funding. Technology readiness and high level of innovation in this country. A strong community for financing and technology in SA.

Policy from the emissions trading scheme will effect this. What does this mean for VCs?

Stern called this the greatest market failure the world has ever seen. Carbon price is important. Emissions trading will delink energy growth from economy growth. Price will create headroom for new technologies.

Electrictity, cement, etc will change. $30 tonne per carbon will increase 27% in retail electricity. 7c for transport fuels. That repricing will bring about new technolgies to come into the market.

Two classes. The obvious solutions and the non-obvious ones.

This is the interesting part for the VC world. How do we get this into the market? VCs will play a role in this.

The carbon price will reorient the capital market including the VCs.

Cleantech ventures is for investing in the clean tech sector. They have 2 funds in active investment. 12 deals in the last 5 yrs. CO2 seperation, welding tips, battery, energy efficiency, water technology.

11:15 AM – Amanda Heyworth, Playford Capital

Playford has brought in more than $70M into the SA technology sector. She congratz John for the event and the area this is concentrating on.

An early stage technology fund. A very broad range of industries. Money is important especially for international markets. Seed capital is important.

Helping these companies for market entry. This is very important for breaking into the market. People are important. Very shrew about producing what is a saleable market.

In the clean tech space, Playford is a reciculating fund. Exits provide more money. At any time they work in 6 companies.

Water rights, water broker. In 2 yrs from a nascent company to the largest water broker in the country.

Another company into Wine Barrel cleaning. They have huge market in the broader food processing area. If we can save 1 day in 9 days for making coffee, that will save resources.

More companies in the water industry, energy efficiency area. Playford’s job is to get them to a stage to reach growth stages.

How important is VC for cleantech? VC is small in Australia. Last year, it was 17 investments from VCs. Cleatech is a small part of that. This is because only a handful of super annuation funds are visionary.

Cleantech will provide new opportunities. Fundamental decisions are price of carbon and price of water and growing consumer and corporate demand.

Cleantech will provide savings.

How do we make this happen in SA?

1. Focus- In the global area, energy is the main area. Except for hot rocks, this is not a big area for SA. The companies at early stage are in the agriculture, water and waste industries.

If you are young person wanting to create should look at these areas.

Some of technologies come from university and the defence sector.

2. Funding – There is a capital gap in this area. An ambitious early stage business needs million of dollars for growth.  A median size of VC funding in the US is $33M, Australia is $6M and SA is $3-5M.

3. International connections – This is about selling to other people all over the world. Collaboration of researches is important.

Sales and Marketing people in international markets are important to recruit.

4. Ambition – The willingness to go after the big time and create a new future.

11:30 AM – Frances Magill, CEO of Statewide Superannuation

How can a super fund address climate change?

We can’t on our own. As a industry with $1.2 trillion can direct new investments. Super funds are future focussed. They provide retirements savings for Australia.

How do you marry sustainability concerns with the quest for economic benefits?

It is in our best interests to look at sustainability as it can have some material impact. Change is bringing opportunities. Focussed on the long term is important. Incorporating sustainability needs longer time frames than normal and so, a super fund can influence this.

If we can achieve this, members can benefit in the future. Embedding sustainable factors in investment decisions is becoming common with traditional investment analysis. There is now a global effect to include a wider stakeholder group. Statewide is forming a sustainability policy. There needs to be investment opportunities for investment. However, this is small.

Newcorp, Westpac, IPG, etc are doing it already. More companies are doing this in the investment sector like Goldman Sachs.

What is Statewide doing?

Conducted an internal analysis. Sustainability is about transforming in a changing environment. In investments, how are ESG (Environment, Social and Governance) factors are in the analysis? ESG factors and investment horizons.

We developed ESG risks for statewide’s largest investments. This has become crucial for whole of statewide investments. Also, helpful for aligning with global investment standards.

Statewide is one of the first 5 super funds in Australia to sign the UN principles.

There are win-win opportunities in adopting ESG principles. Statewide can influence others in doing this.

Question time!

An audience question, “New investments are possible by Federal govt. deficits. Balancing budgets is not needed.”

Julian – the magintude of the problem is bigger than federal govt. budgets. There needs to be markets in this area.

Sam asks whether capital raising is tougher now. Julian – it is still possible, in the clean tech space there are interests from govt., super funds etc. It has slowed by it is still there.

Amanda – Govt. can have some roles. They put in money in the research sectors. R&D. Some generous grant programs are available. That was cut in the recent budget. Regulatory role in providing a price on carbon and water. That is what only govt’s can do.

Fiona Wain – Govt. needs to create infrastructure. Govt. procurement and investment can be huge in this area. Govts agencies should be using the same standards as the private companies.

Question – How do we deploy the institutional money into early stage ventures? Are we ready for new financial products, fund of funds? Like California Pension funds have done.

Frances – Members of funds look at cost of funds and not how clean it is. Education is imporant to get this done.

John – Entrepreneur needs to understand where they are and how they are attractive to what investments. They need to match the risks of their business to the requirements of particular investors. (I think this is an important point which is being made)

Amanda – She believes a lot in the power of financial markets. It will figure out.

11:50 AM- Pre-lunch networking.

12:45 AM – Lunch and Keynote Address

Katherine Wells, Consultant, Finlaysons

Embracing the rapid change is important. Katherine talks about how climate change science has moved forward and CO2 emissions are higher and there will be a 6 degree rise by 2100.

This would mean we need to be more innovative. Looking at the science, We need to challenge to what is radical?

Example, Putting $10B ino CCS over the next 5 years.

Phasing out the coal industry by 2020.

We can either embrace or resist this, but only embracing this change can only make a difference.

01:15 PM – Alison O’Flyon – Fujitsu Consulting, Greening IT – Delivering Business Sustainability

Drivers for Sustainaility for Business.

Risks, Leadership, Operations (supply chain, greenbuildings), profitability (if CO2 price is $30), community expectations (consumer demand, employee retention, public perception), shareholder value (board, investors), Regulatory (carbon price, against green washing from TPAs), Reducing Carbon footprint, doing the right thing.

IT industry is responsible for 2% of CO2 emissions, same like the airline industry.

IT Challenges –

  • Energy expenditure of IT. Economic interest.
  • Data Center capacity. Heating problems
  • Inefficiency (PC’s are inefficiency, NCs may be better)
  • Total Cost of Ownership (TCO)
  • Green Procurement
  • Accountability & Brand
  • Environmental management (PC waste)

Impacts across the value chain. Example of Tesco (have carbon content of food, labels). Visy, packaging and changing suppliers. Influencing the value chain has good market opportunity.

Role of IT Industry – To minimize environmental burdens of their customers.

An example: Printers & Printing Project

  • Understanding their current situaton
  • Industry standards
  • 50% reduction in energy and paper.

Toyota Australia

  • Working on their Green IT
  • Benchmarking them against the industry
  • Virtualisation
  • Turning screen savers off
  • Lifecycle management of IT Assets

Questions!

Is it too late?

Katherine – It is never too late. We cannot stop, we need to work on this.

Teleconferencing and video conferencing can cut down carbon emissions.

What is Fujitsu doing with toxic e-waste?

Fujitsu goes through a disposal process. They get 95% of recycling through Bite Back. In Japan, they are leading in the marketplace.

What are PC manufacturers doing with power supply?

Fujitsu has developed a patent to create the PC casing coming from corn. With the input price increasing they are looking at different options.

How can universities create the workforce we need for a green future? University of Adelaide has focussed on climate change and sustainability as a key research center. More from the scientific end. Now moving into business school, economics etc. They are looking at how they can provide awareness and teach the problem solving skills.

01:45 PM – Vote of Thanks from Ian stirling, CEO of ElectraNet.

02:30 PM – Session 3 – Risks, Rights and Responsibilities of Climate Change

Darren Blisborough, Director Sustainability, Parsons Brinckerhoff

Darren talks about PBs response to climate change and their journey to carbon neutrality.

They had a Climate change workshop in Feb 2007 and then started the climate change business unit. That is how Darren has come into the organisation.

  • Why Carbon Neutral? It aligns with their vision & values, environment policy, ISO 14001 commitments.
  • PB’s emissions profile. 45% is flying. 39% is stationary energy. 12% is transport. What do you do next?
  • How do you deal with the Carbon footprint? Join the Greenhouse Gas challenge plus program.
  • Buying carbon credits through AGO approved provider. Working with somebody like Carbon Planet to decrease the emissions.

PB Cimate Change Business Unit.

This is where the market opportunity is there. Using current PB skills in the new area.

  1. Emissions reduction and Carbon Accounting
  2. Adaptation Strategies in response to changing climatic conditions

02:45 PM – Arif Paul, MD of Emission Finance Advisory

Emission Finance Advisory is a carbon trading and advisory company. Geared towards moving companies into moving into a carbon constrained economy. Through education and information.

How do we achieve mitigation? This comes from capital. Can come from carbon funds, institutional funds and other common areas. Carbon abatement can be created. The company will provide services to negotiate a good price for this globally.

We do not have to wait for the Australia ETS. It takes 15-18 months to get it approved and so we need to get going now.

Last year the carbon market was Euro 40B. This year about Euro 60B. This is a large market. The market that can gone down into carbon mitigation is high. Australia can target this market. It is in our best interests to launch a ETS that can connect to the world or European carbon trading scheme.

Mitigation is happening in a slow pace. What is next is adaptation. Low-island countries etc need this. How do we engage the private market to move from the developed countries to the developing countries? Without incentives they will not do this. The carbon credit revenue will make this viable and also builds a sustainable brand.

It also helps the developed countries to secure carbon credits at a low price through the Kyoto CDM. The CDM has been having standard issue and some companies may not using this above business as usual. The process has now become more strict and rigorous. The auditors were questioned and now reassessed all the projects. Some 3/4 of them have gone through.

He envisions a $2 Trillion market by 2020. The US will be 70% of that. Australia will be only 5%. It then makes sense to connect this to the global schemes. Then, we can earn the least cost carbon credit.

What does that mean to a company? Assess a carbon baseline, get carbon credits now and lock in a price. Arif’s modelling talks about Euro 50 by 2020. Look at how it can be abated and how the savings can be commercialized.

03:00 PM – Suzanne Dickey, Finlaysons

Energy and Emissions reporting scheme and the legal risks and rights that come with this.

National Greenhouse and Energy Reporting Act 2007 – This will effect some 700 corporations in Australia.

There are thresholds for companies now and lower ones in the future. Mandatory reporting. Once a company has met this threshold, then they need to register by Aug of the next financial year. There are penalties for not reporting, $220,000 for reporting. This reporting does not take into green power. Only the gross consumption.

Some issues are definitions and regulations for this act. What does it mean to have operational control? What does service contracts say?

Risks are high due to misrepresentation and you would not want to do with the TPA. Public scrutiny will be there. Some can be trade secrets and they will be in the public domain. There are some provisions.

Opportunities can be in voluntary reporting if you do not qualify.

The Features of the ETS:

  • Cap on emissions.
  • Permit allocations
  • Offsets
  • Transitional measures
  • Penalties

Success factors of a ETS

  • Accurate and complete measurement of emissions
  • Substantial and automatic penalties
  • Significant coverage
  • Strong Administering Authority

Garnaut ETS proposal

  • Govt. sets national emissions limit
  • Graduated emissions trajectories with 5 yrs notice
  • Covers all six GHGs and most sectors
  • Point of obligation at source
  • All permits auctioned
  • Hoarding of permits allowed,
  • No price controls
  • Domestic offsets allowed
  • Protection of TEIIs
  • Independent adminisrative authority (carbon bank)
  • Support for R&D

Emission Opportunities

  • Voluntary Reduction
  • Sector agreements
  • Manadatory Renewable Targets
  • Energy Efficiency Schemes

This is only a means and not the end. This will be painful and cost money. This can be a key part to Australia’s response to climate change.

03:15 PM – Dave Sag, Founder and Executive Director, Carbon Planet

Carbon Planet was founded 8 yrs ago expecting carbon emissions trading. Now present in all over the world. Mostly a engineering firm. Life cycle analysis, Audits. Creating a carbon footprint. Reporting to the regulatory authorities. A carbon commerce division which does carbon trading. Sell Ausralian carbon credits. Impacts of businesses on biodiversity and social aspects. Third parti is my carbon planet. Offsetting for consumers. Educate and inspire people. A kiddies program is launching next week.

Dave wants to talk about optimism.

Everyday I say new reasons to be optimistic. New projects come everyday. The corporate goal is to cut down global carbon excess emissions of 1% by 2010.

Pessimism is the killer of organisations.

Lot of people draw the analogy between Y2K and Climate change. People think nothing happened. Because, $6 trillion was spent to solve it. Hence, nothing happened. It fuelled the dot com boom.

Climate change is the same. We will look back and it was a bull shit. Because we restructured the global economy and spending $20-$30 trillion every year. Y2K gave the reasons for business to upgrade technology and systems. Now we have a reason to upgrade capitalism.

Now once we measure it, we can manage it. Carbon needs to go on the balance sheet as a new column. Next will be biodiversity credits.

When Kevin 07 signed the Kyoto protocol, then the people who came to see us changed. The CEO, CFOs…people who wanted to understand the risks of carbon. It has become a finance issue. It has become such a radical change. It has become a board issue.

The world is becoming a better place everyday. Being at the forefront, I see more optimism than pessimism.

03:45 PM – Afternoon Tea

04:08 PM – Session 4

Chair: Judith Bradsen, Partner, Minter Elison

04: 12PM – Andrew Peterson, Head Climate Change Services Division, Pricewaterhouse Coppers

The Carbon Neutral Challenge.

Improve, Invest and Offset.

Case Study: Org. wih 5000 staff, revenue of $1.2B. International business and Adelaide based. It operates in a challenging environment. Across a variety of products and services. The business is PWC. It would become Carbon Neutral by 2012.

Why did they address climate change?

One, employees and partners of PwC. This has been one of the single biggest concern of the company. The average of the employees were 29 yrs. The issue of war for talent is an important one.

PwC saw opportunity in energy efficiency by undertaking a study in May 2006. Concerns were raised to actual building use including water. Focussed on lighting, motion sensor in offices (in Sydney, 19 floors), working on air-conditioning. Stand by Hot Water.

How will PwC achieve carbon neutrality? A 3 step mantra.

  1. Improve through energy efficiency.
  2. Invest in renewable energy sources.
  3. Then, offset the rest.

Every single partner in PwC has a KPI to reduce their travel. Ingrained in parner personal plans. Paper is not the default option. Setting up double sided printing was tough. Reduced paper usage by a quarter.

Carbon Neutral by 1st July 2008.

Looking at stationary, purchases, water use, waste.

Sam DiPiazza, CEO of PwC Global

“Our obligation as business leaders is to leave the world better than we found it.”

04:22 PM – Jeff Tate, CEO of City of Onkaparinga

Onkaparinga is a home of 10% of Adelaide’s population, asset base of $1B.

Carbon Neutrality in the council. Looking at energy reduction. A energy revolving fund to improve energy efficiency. Carbon park, a major development activity to attract low-carbon organizations. Mapping future flooding patterns.

4 key elements in the strategy.

  1. Follow the science – science panel to suggest the implication of climate science on the local level.
  2. Staying focussed – clear role statements.
  3. Integration – Climate change strategy and water strategy developed at the same time.
  4. Showing commitment to the long haul – created a sustainability unit reporting to the CEO, a climate change response fund.

Opportunities for the local govt. sector

  • Bulk purchase
  • Green power, PVs, renewables
  • Offsets, working as a sector to maximise opportunities through tree planting
  • Ability to lead by example

Issues

  • Climate change will increase our advocacy role. Ex: Increase the rail transport before development.
  • Better understanding of ETS for councils

04:32 PM – Fraser Bell, Partner, Thomson Playford

Carbon and Brand in a Carbon Constrained World.

Fraser is concerned that we may move fast into this trying to solve the problem. There may be knee jerk reactions to the opportunities presented.

How is the market responding to carbon?

Branding of products and services.

  • Performance of a product, carbon is generally not about performance
  • It is about reliability, again not carbon
  • Status, carbon can become a status
  • Pedigree – lifecycle of a product, carbon is integral to that

Green Wash

The act of misleading consumers regarding the environmental practices ofa company.

It focusses on the pedigree of the product. Ex: Fair Trade Coffee. Consumers are ready to pay for that. Food Miles in the UK is big. Wine, Cars are in this area. The ACCC has an interest. Carbon will make things more expensive. Litigation is already there without the ETS.

Branding with Carbon

  • Carbon impact equivalent to Dolphin Impact
  • Consumer knowledge is the key
  • Carbon cost will be liked the GST – Noted
  • Verification will be the key
  • Similar to “quality assured”
  • Carbon Logo’s will be everywhere
  • ACCC will be interested
  • Competitors will be players – product differentiation

04:43 PM – James Young, State Chief Executive, Colliers International

Colliers’s experience in this carbon world. Goal to become one of the world’s biggest real estate services provider.

Dealing around

  • Green Psychology
  • Regulatory
  • Carbonomics

Green is now standard in buildings. Regulatory compliance is important. Carbonomics can be a $25 trillion dollar industry.

Most of the positive return opportunities are in improvements in buildings and appliances.

Reach of Colliers products.

  • Investment Sales
  • Office Leasing
  • Retail Agents
  • Realestate management
  • Healthcare & retirement living
  • Rural & Agribusiness
  • Industrial
  • Valuations

Colliers have

  • 265 million sq.m under management
  • Adelaide CBD – 1.17 million
  • Most work in making current buildings green

Industry leadership. Green real estate guide. Pre commitment of leasing green building. Getting this to Asia. A tool to improve sustainability planning.

Where are you in the product adopters curve?

They have $1.5 B projects in Adelaide. Each are looking at the a minimum Australian sustainability development best practice.

Colliers is in CSR and is the only property group listed in the CSR Index.

05:00 PM – End of the program.

This has been a great experience for me. Thanks to John I had the opportunity to listen to some many top advocates of sustainability in Australia. I have also had the opportunity to meet some of these speakers. Learnings from the conference and some highlights will come this week.

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2 thoughts on “Live Blogging Beyond Carbon 2008

  1. Pingback: Investment or Insurance perspective « World is Green

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