DEVELOPMENTS

In 2004, Dr. Chris Mardon and Tom Mackenzie co-founded Energy Mad with the goal of reducing climate change through economical energy savings.  Less than four years later the company announced a new initiative to solve the carbon emissions problem one household at a time.  Energy Mad has created the first auction and trading system for individuals and families to go carbon neutral.

Since its founding, the company has been on the cutting edge of energy efficiency.  It patented ’the Ecobulb,’ an ultra bright, high compact bulb which lasts up to 10,000 hours (ten times longer than most energy-saving bulbs).  The bulbs are estimated to have produced NZD 350 million (approximately $239 million U.S. dollars) in consumer electricity savings and reduced CO₂ emissions by 1.06 million tons.

On Friday, Energy Mad announced that it will provide one million Ecobulbs to a (yet unknown) developing Asian country.  The initiative is part of an international commitment on behalf of developed countries to reduce carbon emission in developing countries known as the Kyoto Protocol Clean Development Mechanism. Energy Mad’s campaign puts the responsibility for solving climate change in the hands of individuals.  Only a few years ago, the international community first came together to discuss the impact that individuals had on the global environment.  International treaties prompted countries to take responsibility for their population’s actions.  Local governments provided incentives for individuals to conserve energy and reduce their impact on the environment.  Now Energy Mad’s Ecobulb and other innovations have made it possible for every New Zealander to completely offset his or her household emissions.

BACKGROUND

For the last twenty years countries have been researching and investing in technologies to cut greenhouse gases and carbon emissions.  It is now widely accepted that greenhouse gases have contributed to global warming and climate change.  In 1997, a number of countries convened the Kyoto Protocol in order to address the harmful effect of greenhouse gases in contributing to global warming. The international treaty now boasts membership of 182 countries.

But one country is notably absent from that list: the United States.  The U.S. is the only developed country that has not signed the Kyoto Protocol.  Although President Clinton gave verbal support to Kyoto, President Bush declared the Kyoto Protocol fundamentally flawed in 2001.  He then announced the launch of a “science-based response to global warming.”  The Bush administration argued that the National Academy of Sciences report, which established that the increase in greenhouse gases was in large part due to human activity, was incomplete.  Without more information on natural climate fluctuations, a reliable estimate on how fast warming could occur, or an assessment of whether human actions could reduce warming, the United States would be best served by not signing the Kyoto Protocol.  Other Kyoto-critics argued that the limits on CO₂ emissions would disproportionately hurt U.S. companies as compared to their counterparts in other developed countries.

But in response to the President’s decision to reject Kyoto, American companies, state & local governments, and individuals launched their own initiatives to combat climate change.  Ford, General Motors, DuPont, BP, Exelon and a number of other large American companies teamed up with NGOs and think-tanks to form the U.S. Climate Action Partnership (USCAP).   USCAP advocates for mandatory emission limits and has been successful in promoting a number of bills before Congress that could cut carbon emissions by 60% by 2050.

A new bill before Congress aims to reduce carbon emissions in the U.S. by implementing a cap-and-trade system.  The cap-and-trade model is controversial because it allows companies to continue releasing greenhouse gases up to a limit, provided that they have bought the right to do so with carbon credits.  In such a system, Congress would set a nationwide cap on how much greenhouse gas can be emitted, and each year the cap would be lowered.  The biggest firms would get a credit for how much they could individually emit, based on their need, and they could trade/sell these credits amongst themselves.  For example, if company X has reached the limit of how much carbon it can emit in a given year, but still needs to produce more widgets (and each widget produced causes more carbon to be released), it can buy additional carbon credits from company Y which is well under its limit for carbon emissions for that same year.   Ten mid-atlantic and northeast states have adopted their own cap-and-trade program known as the Regional Greenhouse Gas Initiative.

Proponents of the cap-and-trade model argue that this is the most realistic way to lower the overall carbon emissions in the U.S., but critics claim that letting some companies pay to pollute undermines the entire system.  Alternative policies include taxing all companies for the carbon they produce and investing the proceeds in climate change research and other environmental protection measures.

ANALYSIS

Energy Mad is not the first social entrepreneurship organization to operate in the area of climate change, but it is one of the most successful.  In 2007, Deloitte, one of the world’s leading consulting & audit companies, announced that Energy Mad was the fastest growing business in New Zealand.  In three years it increased revenue growth by 2746% (yes, you read that right).  No doubt that the profit incentive behind ‘green businesses’ will continue to inspire other entrepreneurs to address climate change.

But profit isn’t the only reason why individuals, communities, non-profits, and business leaders are tackling emissions.  Environmental stewardship grows as people learn more about the relationship between environmental degradation and rising energy and food costs.  Although the presidential candidates will try to convince us that their leadership will lead us out of the energy crisis, there is plenty of evidence to show that much of the work can be done ourselves.

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Olivier Kamanda is Editor-in-Chief of Foreign Policy Digest.

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