Climate religion
Carbon trading profit plan
New form of tithing
Carbon trading profit plan
New form of tithing
Showing posts with label carbon credits. Show all posts
Showing posts with label carbon credits. Show all posts
Monday, July 07, 2014
Wednesday, July 10, 2013
Pricing Carbon Costs Into Retail Products
Some of my recent research is leading me into unexplored territory. I blogged about how businesses can learn about Sustainable ROI and I've been hunting for data that will make such a calculation viable. Calculating returns means adjusting gross revenues and eventually earnings for the true price of things like carbon use. Energy producers can use carbon credits to price their emissions but pricing consumer goods is probably more difficult. The EPA even has a Social Cost of Carbon (SCC) that finance professionals can use as a discount rate for carbon's contribution to a project's NPV. That covers the whole enterprise. The individual retail product is another matter.
The UK's Carbon Trust has confirmed through research that consumer demand exists for low-carbon products. On the other hand, the Economist notes that pricing retail products for carbon is difficult. I believe Big Data can close the gap between an unmet consumer demand and the inability of business to quantify that demand.
The Consumer Goods Forum members have the ability to identify the input cost of every factor in the consumer goods value chain through its Sustainability Pillar. The National Retail Federation is the Big Data aggregator for finished goods sales and demand trends. Put the two together and I bet something magical will happen. More specifically, the carbon price of finished retail goods will be within reach of marketers who can mine retail data through several lenses. The final touch will be an app shoppers can download while they browse store aisles that will help them search for goods with low carbon prices.
Come on, retailers. This golden opportunity awaits the first consumer products maker that can dig into its supply chain and leverage the data mining of the two organizations I mentioned above.
The UK's Carbon Trust has confirmed through research that consumer demand exists for low-carbon products. On the other hand, the Economist notes that pricing retail products for carbon is difficult. I believe Big Data can close the gap between an unmet consumer demand and the inability of business to quantify that demand.
The Consumer Goods Forum members have the ability to identify the input cost of every factor in the consumer goods value chain through its Sustainability Pillar. The National Retail Federation is the Big Data aggregator for finished goods sales and demand trends. Put the two together and I bet something magical will happen. More specifically, the carbon price of finished retail goods will be within reach of marketers who can mine retail data through several lenses. The final touch will be an app shoppers can download while they browse store aisles that will help them search for goods with low carbon prices.
Come on, retailers. This golden opportunity awaits the first consumer products maker that can dig into its supply chain and leverage the data mining of the two organizations I mentioned above.
Friday, February 22, 2013
Harmonic Energy (ASUV) Burns Tires And Investors
The Simpsons cartoon show has a long-running gag about some tire pile that's been burning for years. If only Homer Simpson could figure out how to harness that pile's energy, he could present a business plan to Montgomery Burns that would make the old man some extra money. There are such tire-burning businesses in the real world and Harmonic Energy (ASUV) is one of them. I got a pumper mailer from John Myers' operation touting this one. Here we go again.
I shouldn't have bothered looking at the key execs' bios. I can't find the CEO's previous venture, ProSource International, on the Web. Their chairman claims to be a fairly accomplished dude. Where's this Woolton Group that he runs as CEO? I can't find it either except on CorporationWiki. I wonder how much he got paid to sit on the Harmonic Energy board and give the company credibility. I wish someone would pay me to sit on a board all day and do nothing but impress gullible people with my sarcasm.
Harmonic Energy has a YouTube channel. They've got a video of equipment at some plant they don't own, but the phrase "Tire Remanufacturing Plant" at the beginning under Harmonic's logo gives uninformed viewers the impression they own the plant. Their press release says they're investigating someone else's technology. Come on already!
Their 10-Q for December 14, 2012 shows that they have no revenue, no operating plants, and a couple of agreements which they have no money to fund. I feel sorry for the investors who were stupid enough to give this company $500K in 2012.
A brilliant analyst at Seeking Alpha did some background digging on this company's administrative history and control changes. Another analyst notes its lack of financial success and negligible operational capability. The stock trades under a buck and any investor who bought in since last December has lost money. There isn't much I can add to this litany other than wondering whether Homer Simpson does in fact have a role with this company. D'oh!
I shouldn't have bothered looking at the key execs' bios. I can't find the CEO's previous venture, ProSource International, on the Web. Their chairman claims to be a fairly accomplished dude. Where's this Woolton Group that he runs as CEO? I can't find it either except on CorporationWiki. I wonder how much he got paid to sit on the Harmonic Energy board and give the company credibility. I wish someone would pay me to sit on a board all day and do nothing but impress gullible people with my sarcasm.
Harmonic Energy has a YouTube channel. They've got a video of equipment at some plant they don't own, but the phrase "Tire Remanufacturing Plant" at the beginning under Harmonic's logo gives uninformed viewers the impression they own the plant. Their press release says they're investigating someone else's technology. Come on already!
Their 10-Q for December 14, 2012 shows that they have no revenue, no operating plants, and a couple of agreements which they have no money to fund. I feel sorry for the investors who were stupid enough to give this company $500K in 2012.
A brilliant analyst at Seeking Alpha did some background digging on this company's administrative history and control changes. Another analyst notes its lack of financial success and negligible operational capability. The stock trades under a buck and any investor who bought in since last December has lost money. There isn't much I can add to this litany other than wondering whether Homer Simpson does in fact have a role with this company. D'oh!
Sunday, February 17, 2013
The Haiku of Finance for 02/17/13
Your carbon footprint
Made up of how you spend cash
Must adjust to less
Made up of how you spend cash
Must adjust to less
Clothing Carbon Footprints and the Future of Capitalism
I recently got to hear firsthand from clothing manufacturers about how they have reduced the carbon footprints of their signature products. They didn't reveal the secret sauce behind their methods, but I didn't expect them to reveal any trade secrets and I certainly wouldn't reveal such things myself. The common approaches to reducing the carbon footprint of clothing involve more natural dyes, less artificial fibers, simpler patterns, and fewer choices. One of the clothing honchos did ask a very interesting rhetorical question: "What does capitalism look like without growth?" I think I know the answer.
Capitalism requires three basic inputs: labor, natural resources, and capital goods. Those capital goods are a fairly broad term and can include intellectual capital, i.e. the know-how to make a process work. Intellectual capital is potentially unlimited because it springs from human imagination. Labor and natural resources are ultimately limited by the carrying capacity of this planet's biosphere and its existing stock of energy and minerals.
A perpetual growth model runs out of steam when populations cease to grow and the quality of natural resources hits a peak. The Club of Rome's most dire predictions haven't come true yet because technological advances in the use of materials continue to extend the peak of this planet's various production curves. The mining sector is well aware that ore grades of new discoveries continue to decline. Some kind of downward adjustment to lifestyles is probably inevitable but the timing is unknowable.
The Western world already has experience with an economic model that could produce a steady-state economy: feudalism. This model was sustainable partly because it was coupled to environmental conditions that suppressed population growth: high infant mortality and short adult life expectancies. Its natural resource base was less clear (to me, anyway, as I'm not a medieval historian) but the relevance for our time is that a wide array of environmentally invasive activity wasn't needed to meet a population's basic material needs.
I'm not endorsing a switch from capitalism to feudalism as a solution to the impossibility of perpetual growth on a finite planet. I do advocate a deeper look at what drives the satisfaction of material demand. Imposing carbon constraints on manufacturing is one way to gradually habituate a population into accepting the impossibility of unlimited growth. Another method is to incentivize hot-looking women to wear skimpier clothing in warmer weather. I'm all in favor of that transition.
Capitalism requires three basic inputs: labor, natural resources, and capital goods. Those capital goods are a fairly broad term and can include intellectual capital, i.e. the know-how to make a process work. Intellectual capital is potentially unlimited because it springs from human imagination. Labor and natural resources are ultimately limited by the carrying capacity of this planet's biosphere and its existing stock of energy and minerals.
A perpetual growth model runs out of steam when populations cease to grow and the quality of natural resources hits a peak. The Club of Rome's most dire predictions haven't come true yet because technological advances in the use of materials continue to extend the peak of this planet's various production curves. The mining sector is well aware that ore grades of new discoveries continue to decline. Some kind of downward adjustment to lifestyles is probably inevitable but the timing is unknowable.
The Western world already has experience with an economic model that could produce a steady-state economy: feudalism. This model was sustainable partly because it was coupled to environmental conditions that suppressed population growth: high infant mortality and short adult life expectancies. Its natural resource base was less clear (to me, anyway, as I'm not a medieval historian) but the relevance for our time is that a wide array of environmentally invasive activity wasn't needed to meet a population's basic material needs.
I'm not endorsing a switch from capitalism to feudalism as a solution to the impossibility of perpetual growth on a finite planet. I do advocate a deeper look at what drives the satisfaction of material demand. Imposing carbon constraints on manufacturing is one way to gradually habituate a population into accepting the impossibility of unlimited growth. Another method is to incentivize hot-looking women to wear skimpier clothing in warmer weather. I'm all in favor of that transition.
Tuesday, January 03, 2012
Blue Sphere (BLSP) Converts Farm Waste Into Nothing So Far
Prepare yourselves for another penny stock. Trinity Investment Research sent me a mailer touting Blue Sphere (BLSP), some Israeli company that claims to be doing something in carbon credits and bio-waste. Claims of launching projects all over the world mean nothing without operational results to back up those claims.
They haven't filed their 10-K for 2011 so it's impossible to tell how well they're doing now. If the previous three years are any indication, there is plenty of reason to be pessimistic. Blue Sphere has earned zero revenue since 2008. Their massive increase in negative retained earnings came entirely from their SGA expenses. It is unusual for a company with a claimed orientation in a high-tech sector to have such high SGA expenses while spending nothing on R&D.
It makes no sense for a bio-waste conversion startup to pursue small-scale waste sources on farms and landfills in emerging markets. That's why Blue Sphere's approach isn't scalable. Large-scale thermal depolymerization plants at big agribusiness installations would work. This small-scale stuff Blue Sphere is doing is uneconomical. They announce "discussions" with major farms in the U.S. but have no announcements of firm contracts to operate waste conversion plants.
This turkey traded at a whopping high of $0.90/share on Jan. 21, 2011 and is now at a nickel. People who bought this stock then have seen their investment destroyed. This is fitting for a company focused on biological waste. I could make a joke here but Google probably wouldn't like it. I watch out for my brand. That's the difference between Alfidi Capital and Trinity Investment Research.
Full disclosure: No position in BLSP, ever.
They haven't filed their 10-K for 2011 so it's impossible to tell how well they're doing now. If the previous three years are any indication, there is plenty of reason to be pessimistic. Blue Sphere has earned zero revenue since 2008. Their massive increase in negative retained earnings came entirely from their SGA expenses. It is unusual for a company with a claimed orientation in a high-tech sector to have such high SGA expenses while spending nothing on R&D.
It makes no sense for a bio-waste conversion startup to pursue small-scale waste sources on farms and landfills in emerging markets. That's why Blue Sphere's approach isn't scalable. Large-scale thermal depolymerization plants at big agribusiness installations would work. This small-scale stuff Blue Sphere is doing is uneconomical. They announce "discussions" with major farms in the U.S. but have no announcements of firm contracts to operate waste conversion plants.
This turkey traded at a whopping high of $0.90/share on Jan. 21, 2011 and is now at a nickel. People who bought this stock then have seen their investment destroyed. This is fitting for a company focused on biological waste. I could make a joke here but Google probably wouldn't like it. I watch out for my brand. That's the difference between Alfidi Capital and Trinity Investment Research.
Full disclosure: No position in BLSP, ever.
Tuesday, November 23, 2010
Ceres' Hidden Agendas
Everything in high finance happens for a reason. Ceres, an alliance of institutional investors and environmental interest groups, recently released a ringing endorsement of investments in low-carbon technologies:
Institutional investors don't line up behind public policy changes unless there's money to be made. There are probably several hidden agendas at work here. Carbon credit trading is a potentially a huge new market in derivatives for global investment banks. Any expansion of the physical market for carbon capture and carbon control technologies will mean more market participants in the bid-ask spread on carbon credits.
Don't forget the importance of infrastructure investing to market makers. The more national governments spend on infrastructure to lower national carbon production, the more creative financing they'll need. Pushing $100mm blocks of Build America Bonds would make any underwriters' day. Ceres should be careful what it wishes for, as some low-carbon investments can easily become boondoggles. Take this U.S. Department of Energy loan to an unproven company that purports to develop a natural gas powered van for wheelchair users. Only Uncle Sam would be dumb enough to give a loan to a startup and not ask for a convertible feature that turns it into equity.
Go green. Collect the green (money). Nice business model.
Citing potential climate-related GDP losses of up to 20 percent by 2050 and the economic benefits of shifting to low-carbon and resource-efficient economies, investors released a major statement today calling for national and international policies that will spur private investment into low-carbon technologies.
The statement was signed by 259 investors from North America, Europe, Asia, Australia, Latin America and Africa with collective assets totaling more than $15 trillion—more than one-quarter of global capitalization. Signatories included Allianz, HSBC, APG and a dozen U.S. public pension funds and state treasurers. It is the largest-ever group of investors to call for government action on climate change.
Institutional investors don't line up behind public policy changes unless there's money to be made. There are probably several hidden agendas at work here. Carbon credit trading is a potentially a huge new market in derivatives for global investment banks. Any expansion of the physical market for carbon capture and carbon control technologies will mean more market participants in the bid-ask spread on carbon credits.
Don't forget the importance of infrastructure investing to market makers. The more national governments spend on infrastructure to lower national carbon production, the more creative financing they'll need. Pushing $100mm blocks of Build America Bonds would make any underwriters' day. Ceres should be careful what it wishes for, as some low-carbon investments can easily become boondoggles. Take this U.S. Department of Energy loan to an unproven company that purports to develop a natural gas powered van for wheelchair users. Only Uncle Sam would be dumb enough to give a loan to a startup and not ask for a convertible feature that turns it into equity.
Go green. Collect the green (money). Nice business model.
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