Just about every business has an electricity meter and a water meter. But what about a greenhouse gas meter?
In the years ahead, a growing number of companies will need one. A national U.S. greenhouse gas cap is all but inevitable and global warming-driven limits on greenhouse gas emissions already imposed by Europe and California require certain industries to calculate and report their emissions. Emerging carbon trading markets, meanwhile, offer the opportunity to profit from cutting CO2. Even companies unlikely to fall under the purview of the carbon regulators — such as Google (GOOG) and Sun Microsystems (JAVA) — are measuring their carbon footprints as an act of good corporate citizenship to show customers employees their green bona fides.
As Green Wombat has written previously, IBM (IBM) sees a big business in carbon consulting. Now Big Blue has collaborated with Evergreen Energy (EEE) to create what they call the GreenCert greenhouse gas meter. Rather than a hunk of hardware, it’s an Internet-based software program designed to collect real-time emissions data from sensors and other sources. It calculates the volume of greenhouse gases being released into the atmosphere by a company and certifies any reductions as credits that can be traded on carbon markets. GreenCert’s engine was developed by C-Lock Technology, a subsidiary of Evergreen, a “clean coal” technology company. IBM is providing the database and Internet software to allow GreenCert to be rolled out across across industries and be accessible to regulators and other parties.
The project was born out of Evergreen’s efforts to quantify emissions reductions from its technology that transforms the dirtiest coal into a cleaner-burning fuel.
The GreenCert gas meter is an attempt to standardize what is now largely a one-off customized task. Companies that want to calculate their carbon footprint face myriad choices, according to Larry Vertal, senior strategist at chipmaker Advanced Micro Devices (AMD), which annually tabulates and discloses its greenhouse emissions as part of its global climate protection plan. Among them: what to measure, how to measure and what scientific protocols to use. If those protocols change or new legislation or regulations alter the way emissions are calculated, a company must go back and tweak its customized carbon footprint program.
GreenCert, on the other hand, automatically incorporates such changes, according to C-Lock chief technology officer Patrick Zimmerman, who led the team that developed the greenhouse gas meter. “The system was designed to very efficiently and accurately quantify greenhouse gas emissions in a way that is transparent, reproducible and easily automated,” he says.
The program starts with a database profiling a particular industry then collects emissions data from a specific company. Evergreen is first focusing on agriculture and the utility industry.
GreenCert allows farmers to quantify and document changes in agricultural practices that result in more carbon being stored in the soil and then sell those carbon credits, theoretically, on carbon trading markets to companies that fail to meet their greenhouse gas emission quotas.
“For agriculture, there is a geographic information system that stores high-resolution relevant geographic information that affects and controls carbon sequestration in the soil,” says Zimmerman. “Then we have provided an Internet portal where farmer can go online and sign up their land.”
“We have algorithms built into the system that guarantee data quality,” he adds. “If a farmer says, `I grew 80 bushes of corn an acre’ and GreenCert knows that the historical average is 60, it’ll flag it. And then we’ll go to the warehouse and do an audit. We have four levels of verification and make sure models are regionally calibrated. We only certify carbon that is there at a very high level of confidence level.”
For utilities, GreenCert installs sensors and conducts an audit to establish an emissions baseline and then delivers software over the Internet so power plant managers can document changes in, say, boiler efficiency.
Evergreen spokesman Paul Jacobson said GreenCert is in its pilot project phase and it has yet to be decided whether the company will license GreenCert to customers or provide the greenhouse gas meter in exchange for a percentage of the revenue from trading carbon credits.
The carrot for installing greenhouse gas meters — besides complying with any global warming legislation — is the prospect of selling certified carbon emission reduction credits on carbon trading markets. Some analysts claim that will be a trillion-dollar opportunity in the coming years, but currently there’s only a few voluntary markets, such as the Chicago Climate Exchange and various informal purchases by companies wishing to offset their greenhouse gas emissions
Evergreen has its eye on government-regulated carbon markets, like the European market and the one being considered by California. In such cap-and-trade markets, companies’ emissions are limited; if they exceed their caps they must buy emission credits from those that have reduced their carbon output.
That said, there’s no guarantee at this point that such markets will accept credits generated by GreenCert.
“Our goal is that no carbon offset will be generated that doesn’t make a difference in atmosphere,” says Zimmerman. “For a cap and trade program to really work, carbon offsets have to be valuable. Rather than churn out cheap credits for the voluntary market, we wanted it stringent enough for regulated markets.”
For its part, IBM sees GreenCert as the type of greenware with a significant potential payoff.
“Right now there’s a lot of legislation going on around the world and there’s a need to be open and nimble so that as changes occur and new legislation is put into place, carbon offsets reflect those changes,” says Tim Kounadis, IBM’s director of worldwide channel marketing for Lotus software. “The whole greenhouse gas market is one we’re looking at seriously. We see a big business opportunity because it matters to business.”