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Trading Carbon : November 2011
25 CARBON ENTREPRENEURS am pursuing my own investments in renewable energy, including a new coating for solar panels and batteries for electric cars that are much smaller than those c urrently used by the automotive industry. JB: I am actively engaging. While I have plenty of respect for those who find the carbon market too risky in a situation with limited funds available, now is the time to enter for those who are prepared to take the calc ulated risks necessary to profit. Q: Other than the sectors that you are investing in, which new technologies offer good opportunities for investors and could make big cuts to GHGs? PMC: One of the most neglected approaches to reduce GHG emissions is energy efficiency in the built environment. Overhauling existing (carbon intensive) infrastr ucture, and introducing improved building specifications have enormous potential to reducing emissions in most countries. MM: Thorium-power nuclear reactors offer the opportunity to generate nuclear power on a huge scale, but with much lower capital cost. This is because the design would not require the vast amounts of concrete cage that c urrent types of atomic plants use, while there would be very little or no spent fuel, meaning costs would be much less compared with how the industry works at the moment. The idea of using thorium to generate power was originally conceived to be used in long-range bombers in the cold war, but policymakers lost interest in developing the technology further because the spent fuel couldn't be used to make weapons. Other technologies that will be cr ucial to c utting emissions on a large scale include energy storage, so that any excess renewable generation can be saved and fed back into the grid. I am also excited about biochar. Using this type of charcoal in topsoil around the world could lower the level of carbon dioxide in the atmosphere by 100 parts per million, so the rewards are huge. SD: Besides all the other benefits of thorium reactors, they could be calibrated with other forms of energy supply much easier than in traditional nuclear plants, meaning they increase or decrease generation in concert with variable output from renewable sources. We'll need smart grids that can deal with multiple new energy sources that can manage demand and supply more effectively. Solar thermal, liquid fuels and biocoal could also be big growth sectors. JB: With the cost reductions we are seeing in key renewable energy technologies now, they could compete with conventional sources of energy within only a few years. The falls in prices for photovoltaic panels we have seen over the last year or so is a revolution. Q: Where have carbon markets most obviously failed? PMC: International policy makers haven't shown any commitment and wasted the enthusiasm of investors and markets in helping this environmental challenge -- it may take a while to create market confidence again. MS: For a (global) carbon market to work you need a political agreement to agree a number (of emissions c uts) and that's looking less and less likely. MM: Global emissions c uts have been almost negotiated to death and the level of ambition is now so low as to render carbon markets almost irrelevant. The demand just isn't enough to make it worthwhile. SD: Carbon markets have been attacked from all sides. Green groups foc ussed on the 20 per cent that was wrong with it, rather than the 80 per cent where it worked well. Vested interests in the fossil fuel industries have lobbied for concessions and it's now shrouded in too much complexity. JB: In most cases it is too early to draw conclusions, but it's clear that the CDM (Clean Development Mechanism) has also brought numerous non-additional projects. Carbon sinks have huge potential under CDM and JI (Joint Implementation), but have been almost completely left out, so far, due to a combination of rigid r ules and demand side restrictions. This, in turn, has left most developing countries without existing dirty industries out of CDM. For a global carbon market to work, you need a political agreement and that's looking less and less likely Marc Stuart, Allotrope Ventures November 2011
December - January 2011