| Interview with James McCullum Carbon Ethics |
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| Harmonious Living | |
| Wednesday, 02 April 2008 | |
  Carbon Ethics helps South African companies to reduce their carbon footprint, and then helps them publicise their efforts. Managing director, James McCullum talks to Harmonious Living about why planting trees isn’t all that beneficial, and why South Africa is poised to take advantage of solar energy.HL: Can you tell us what your company Carbon Ethics does? James McCullum: In short, Carbon Ethics assists organisations in coming to terms with their greenhouse gas emissions or their carbon footprint. We measure it for them, we help them understand it, and then we offer them a reduction strategy, which ultimately would lead to our icon Carbon Clear, which makes a statement allowing them to differentiate themselves in the market. For example, Avis Rent a Car, whose Carbon Clear might be to the public a more attractive choice over Eurocar or Budget car, based on the fact that the one company takes its profits and uses them for an environmental or a moral high ground, and another company, who are using lots of cars with lots of petrol, doesn’t. And I think that's a sexy position for a company to be in. In other words, instead of competing on pricing, competing on branding, or competing on after-sales service, which are fairly manageable result-driven outcomes, they are Carbon Clear, they’ve measured their green house gas emissions, they know that as a result of their corporate activity they are contributing to climate change, on one level or another, and they want to clear that. James McCullum: Sure, big companies always talk about how ethical they are. CO2 emissions are a reality, and we ask them if they'd like to join alcoholics anonymous [laughs], put their hands up and admit to alcoholism, and then we take them through the programme. HL: What is your Carbon Clear trademark, and how does a company goes through that process, in being signed Carbon Clear? James McCullum: First thing we do is the audit. We analyse the company's carbon footprint, not just as a result of direct activity, but also in their value chain. In other words, if someone's a retailer of clothes we measure the carbon footprint of the individual who also provides them with the plastic coat hangers. It gets fairly complex; sometimes a company wants to measure its footprint or its value chain’s footprint, depending on how powerful they are. A bit like how Woolworths can force its value to chain to analyse their footprint, but a smaller player may not be able to force its supplier or its customer to join them in their pursuit of a Carbon Clear icon. So the next thing we do is we ask them if they want to reduce that carbon footprint, which falls in line with Eskom's energy efficiency and energy reduction strategies that are emerging, and that may include in their building thermal insulation, an installation of a solar geyser, it may include reinterpreting some of the employees’ habits, such as switching computers off, pulling out their cell phone chargers, simple arbitrary things that people need to be retrained to do. HL: And are those things which would need to be put into a company's protocol, so everyone would be trained? James McCullum: We would train them. We have the rights to show An Inconvenient Truth from UIP (United International Pictures), so generally we get everyone in a boardroom, or into their canteen and show them An Inconvenient Truth. We get them to buy into it, we then look for ways to reduce their carbon footprint, reduce their reliance on the Eskom grid. And it maybe something as simple as encouraging directors not to fly down to Cape Town but to video conference, it can be very simple things. It could be re-engaging in their manufacturing process, helping them understand where they can make it more efficient. At that point if the company wishes to engage the Carbon Clear logo, from the point of view of a publicity engine, we then help them choose certified Kyoto Accord approved offsets, which may be aforestation (which is protecting existing forests), we don't really like reforestation (which is planting lots of trees) too much. HL: For what reason? James McCullum: Because a tree is carbon neutral, it sequesters carbon but when it dies it releases that carbon back into the environment. A tree will take about 70 years to sequester 3.7 tonnes, and in that time there's also the management, the water resources, land to be bought, there's a lot involved there, it’s not an ideal solution. We offer them a reduction strategy, an offset mechanism, at about R100/tonne, and if we do an audit and a company has 200 tonnes annually of CO2 emissions, we can reduce that to about 170 tonnes. From there we take the 170 tonnes and we trade it for them, we broker that for them to carbon offset mechanisms around the world that we feel we can get the company and the employees behind. We show them, and we find out “which one of these projects excites you the most”, almost like a charity. So the company has a deeper meaning, so there’s more meaning to their jobs, so an accountant, a booker keeper, or a driver – they understand there’s a bigger picture that their company’s a part of. Offsetting for example that 170 tonnes of CO2 emissions, would cost the company R1 700 per year – it’s negligible and it’s also a pre-tax deduction for them. But there’s no way you’re going to get a company down to a zero emission – you’ve got to drive a car to work, you’ve got to have reps on the road, you’ve got to have computers – so we offset the balance, and once they’ve offset the balance we provide them a Carbon Clear logo, the icon, and then we assist them in rebranding their organisation as a company, that, yes, makes plastic tables and chairs, or, yes, hires out vehicles to holiday makers, but we help them become a company that is taking an ethical and moral responsibility towards their CO2 emissions and their contribution to climate change. HL: So you’re doing a bit of PR for them James McCullum: That’s what we are; Carbon Ethics is a public relations organisation. We help companies go from being volatile in the market, whereby their greenhouse gases emissions are an unknown factor, to understanding them, to realising them, to getting them excited about the solution, and then providing them with a simple process where we handle that for them, and that we believe will give them a huge advantage from a public image point of view in the market, and thus allow them to reach a public who have a greater understanding, or a collective consciousness, of what it means to go green. And we insist on doing this voluntarily before it becomes mandatory. Like Ken Livingston in London has just told everyone, “You going green… if you drive your SUV into London you’re going to pay £45 a day”. And he’s just told every building in Westminster and Greater London that they’ve got to become 20% more energy efficient, or else. So I believe, we’re a first world country, we’ve got a great intellect here, I believe that we should be embracing this because it’s fairly simple for us because our infrastructure isn’t as old as it is in the UK. HL: So it’s much easier for us to say “We can be green, let’s just do it ourselves” James McCullum: Yes, it’s much easier. And I think that South Africans have proven time and time again that we’re a nation full of different cultures, we’re a melting pot, and I think that right now people are looking for more meaning. I think that if you were putting your house on the market, and there are 500 real estate companies that you could use, but the one who makes the first statement, “We pay for our emissions, we donate for every house sold one acre of arable land in Mozambique, and contribute to reduction of green house gases”. I think people are going to go, “Well they all charge 7% commission, they’re all good at what they do, but this company’s green, they’re looking after the environment for my children.” HL: You mentioned that there are various offsetting mechanisms around the world. What are some of the other schemes, apart from the aforestation, that people can buy into? James McCullum: There was a great scheme called Planktos which I believed in. Planktos have had some issues in America and are currently not trading but I believe that was the most effective way to sequester greenhouse gases. They would use iron dust, or iron fillings, they would take a boat out in to the ocean, offload a tonne of iron fillings, which would turn into phytoplankton, plant plankton, which would then through photosynthesis extract CO2, and they would encourage zooplankton, which would encourage the whole ecosystem. Once it had sequestered the carbon it would die and it fall to the bottom of the ocean. So you’ve got no real estate, no need for planting trees, it’s like a growing forest of algae. Now we felt that that was an awesome idea, but for whatever reason there’s a lot of negative publicity around offsetting. What companies are saying is that if you offset, you’re not changing your ways, you’re just simply paying for them. So that’s why Carbon Ethics reduce first, educate, reduce, and then offset the balance. Because it is something we can do right now. A great offset project right now is the SolarTech project. SolarTech installs solar geysers. HL: Tell us about SolarTech. Is it a part of Carbon Ethics? James McCullum: Yes, we are launching SolarTech as an offset project in the UK. In the UK a company is encouraged to reduce its carbon but sometimes they don’t know where to start. So what they can do, or what looks nice on their annual report, is they can invest in a little company called SolarTech in South Africa. We’ve got the sun, we’ve got the space, we’ve got the demographics, we’ve got the culture, we’ve got legislation, we’ve got all the things coming together. We install a solar geyser we reduce carbon emissions by 3.7 tonnes per annum overnight. An electric geyser requires one tonne of coal per year to keep your geyser at 57°C – that’s 3.7 tonnes of CO2. Now for every solar geyser I install I reduce CO2 emissions by 3.7 tonnes. Now we have a project on our new website which we’re just launched called ‘Project 2015’. By 2015 SolarTech will have 60 licenses countrywide, each installing an average of 50 solar geysers per month, which ultimately is 133 000 tonnes of CO2 reduction per annum, which makes it the most exciting CO2 offset mechanism in the world. You don’t have to wait 70 years for a tree to grow to do it, you simply take your electric geyser out, reinstall a solar geyser, and then we reduce the amount electricity that’s required to your home, taking you off the grid by 50% and thus reducing the amount of coal that needs to be burnt to provide that electricity. HL: Are UK companies that would buy into this essentially going to pay to for me to take out my electric geyser and put in a solar one? James McCullum: They would pay £117… [the current price per tonne of CO2 on the carbpon trading markets] So for a company like Nestle in the UK that is required to reduce its carbon emissions, it’s very, very difficult because their value chain includes things like plastics and road freight and air freight and travel and a thousand people arriving at the factory. So instead of reducing their carbon emissions they’ve asked the British Government, “can we invest in companies that are? Because we can’t right now,” and they said “yes of course you can”. So they look around the world and they have £1, South Africa is an awesome country to invest in because £1 is R14, I’m a company that is reducing CO2 emissions by 3.7 tonnes per solar geyser installed, we share one sky, I become an offset project for them to pepper their annual report with. HL: How does that translate to the people who are installing the geysers here? James McCullum: There's lots of legal parameters that haven't been worked out yet but I'm excited about the opportunities for customers here in South Africa to take the moral high ground with regards to climate change. And once I've been effective at selling the offsets to companies in the UK then I'll look at passing on an additional rebate to customer, over and above Eskom's subsidy. HL: How much is that? James McCullum: It's currently R2 500. HL: And how much will a solar geyser cost if installed by SolarTech? James McCullum: It's about R11 000, and with electricity prices expected to increase by 200% by February 2009 you're looking at a payback period of just 18 months. HL: So is it cheaper for the household consumer to install their solar geyser here in South Africa than elsewhere in the world? James McCullum: Much cheaper. We have the solar radiation here; you can’t install a solar geyser in the northern hemisphere. HL: Really, there’s not enough sun? Shame… [laughs all round] James McCullum: Here we have about 320 days of good sunshine and Europe, which is 70% of the world’s landmass they have somewhere in the region of 200 days. So economically the buyback period is too long. So solar’s not as attractive a proposition in the northern hemisphere as it is in the southern hemisphere. But neither can Australia or Brazil embrace solar energy like we can here. Because in Brazil its not economically viable, because in most respects other than Rio de Janeiro its fairly third world, and Australia demographically the towns are too far apart to create one vision, one voice, one system, one collective consciousness, there are 16 million people in Australia. So South Africa has got the ideal environment to create a company like SolarTech that can install 3 000 geysers a month, reduce the CO2 emissions, solve the energy crisis that we apparently have, and at the same time become a very, very attractive business for evolved economies to invest in, so we become a carbon offset mechanism. |
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