Kyoto Plus

My last activity in Europe was the KyotoPlus meeting in the renovated Energie Forum in the eastern part of Berlin (nee East Berlin).

It was a great conference in a great space. berlin.jpg There were lots of different types of people ("strange bedfellows" as one speaker put it), including big business, finance, NGOs, governments, etc. The talk by Jerome Ringo, President of the Apollo Alliance was amazing, and I thought that the argument put forth by Sky Trust was compelling. I ran into State Rep Jim Marzilli from Massachusetts as he was part of a very interesting panel on the role of "sub-national" governments in acting on climate change.

But what I really found fascinating was the discussion of Germany's cap and trade system for CO2. In order to make sure they met their Kyoto Treaty commitments, Germany was the first country to put in place a cap and trade system around CO2, the most prevalent of the green house gas (GHG) emissions. Cap and trade systems work by giving each company or organization a certain amount of credits, where each credit allows the holder to emit a fixed amount of green house gas in a given year. If the org can't meet their allotted amount, they need to go to an exchange and buy more credits. If they don't need all of their allotted amount, they can sell the excess on an exchange. The price of the credits then wavers with the market demand. Although this sounds like an odd way to deal with GHG emissions, this method has historically been very successful in dealing with other types of pollution and has been a major tool in addressing such environmental problems as acid rain in the US.

So what happened in this first year? Everyone is easily meeting the first year's reductions easily and the price of CO2 credits at the exchange plummeted because there were far more sellers than buyers. One speaker from a large oil company said "It was like there was money laying all over the floor, and we finally told employees that it was OK to reach down and pick it up". So at least among the folks at this, the consensus was that companies have been so wasteful for so long, that at least the first 10% of energy savings/GHG reduction is trivial to get -- all you have to do is pay attention.

So if your company hasn't started on energy saving yet, there's so very low hanging fruit. You'll save some money, and you can help the environment as well.

Beyond the first 10%, I think its going to be interesting to see if the "easy picking" continues to 20%, 30% or where. I know that here at Sun we're getting new ideas every day, and the green energy options and other innovations continue to roll in at a fast clip.