Largest Cleantech Industry is…Carbon Credits at $63 Billion
Emerging out of thin air, it has already surpassed solar and wind as the largest cleantech industry. Carbon credits were worth a staggering $63 billion in 2007 and $59 billion in the first half of 2008 alone.
Europe has dominating the carbon market since its creation less than five years ago. EU’s Emissions Trading Scheme (EU ETS) was responsible for 70% of the trading in the first half of this year, totaling $47 billion. This dollar amount is likely to increase as the cost of carbon credits soars and with the inclusion of aviation emissions in 2012.
Obviously an industry of this amount of rapid growth opens many business opportunities. Companies are needed to provide verified emissions offsets, energy efficiency audits, greenhouse gas emission audits, and to design carbon software. This industry has gained considerable interest from venture capitalists.
Carbonetworks of Victoria, British Columbia provides software to evaluate carbon footprints and reduction options for businesses, governments, project developers, and consultants. They are located in one of the few areas in North America with a carbon tax. They recently announced the first close of a $5 million Series A round from NGEN Partners.
CarbonFlow of San Francisco is developing software to lower the time and cost of creating carbon credits. They raised $2.9 million in the first round of funding from OVP Venture Partners, Meridian Energy, and Clean Pacific Ventures. CarbonFlow partnered with Det Norske Veritas of Norway for developing and marketing their system.
The infrastructure isn’t fully in place to support such a large industry and business opportunities are plentiful. If the U.S. and China create large-scale carbon trading systems, the sky is the limit for growth in the carbon trading industry.
Although it is great to see action being taken to reduce greenhouse gas emissions, carbon credits can be a way for an organization to throw money at a problem instead of taking action to reduce their own carbon footprint of their operations. The effectiveness of carbon markets has been questioned, yet this industry doesn’t seem to be going anywhere any time soon. Both McCain and Obama support a cap and trade system for the U.S.
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With all of the financial interest in the trading schemes, how much carbon dioxide is actually being prevented from entering the atmosphere?
Will the auditors and analysts do anything to make the world a greener place or will they just move green - or whatever color Euros are - from one pocket to another, taking a few points in each direction?
It is in the financial best interest of an organization to reduce their emissions rather than buy credits. Keep in mind too that many carbon credits are from actual emission reductions initiatives rather than offsets.
It’s all about the money. Al invented the crisis & now he is the single biggest finacial benifactor. Sure hasn’t made him change his investments in Oxidental nor his overconsumptive life style. Remember, do as I say, not as I do.
What a joke!
[...] 31, 2008 in Mr Green Archive Written by Sarah Lozanova Published on July 30th, 2008 2 Comments Posted in business, carbon emissions, energy [...]
A complete sham industry, 21st Century equivalent of the dot.com mania of the 1990’s. It really sounds like make-work for unemployed accountants and scientists who gather data and that’s about all. Bring on global warming…I’m all for a clothing optional world.
Wow all that money and for what? The right to say you are throwing money away?
-=fred=-
Check out last weeks episode of Penn & Tellers they tackle this VERY issue. People are so guilt ridden by this ‘green’ movement they are willing to give money to a complete stranger for their “Carbon Credits”.
At LEAST the snake oil salesmen of the west gave you a bottle filled with some sort of liquid… you don’t even get that for a “Carbon Credit”.
Environmental confession is big business.
I understand people’s skepticism about voluntary carbon credits. Keep in mind that of the $63 billion in carbon credits from 2007, voluntary carbon credits were worth only $331 million. A majority of the carbon trading is mandatory and not guilt driven.
It can be a great tool to limit emissions. But like all other businesses it has attracted questionable entities trying to make a buck one way or the other. Check this article -
http://blogs.wsj.com/environmentalcapital/2008/04/14/carbon-credits-un-raises-questions/
Real size of this market is difficult to predict amid the hype that is going on right now. Carbon trading is still just a fancy tool that traders and investors have invented. It has a long way to go before it can make any meaningful impact.