Copenhagen & Transparency: Carbon Software Makers Watching Closely

The issue of “transparency” has taken over the Copenhagen climate negotiations. If and how countries will provide verifiable measurements of their emissions reductions is the sticking point of the $100 billion annual fund that US Secretary of State Hillary Clinton announced today, and a major fissure between the U.S. and China at the negotiations.

But while transparency has come onto the world stage this week, it’s something at the very core of the business models of the dozens of companies that develop software that can measure greenhouse gas emissions. These companies have been watching the Copenhagen climate negotiations closely to see if decisions from world leaders and countries will deliver insights into what is expected to be a rapidly growing market for carbon management software.

I know of three CEOs of carbon software companies that flew to Copenhagen to follow the talks, including Amit Chatterjee, CEO of Hara, Michael Meehan CEO of Carbonetworks, and Ron Dembo, CEO of Zerofootprint. In a phone conversation with Hara CEO Amit Chatterjee before he left for the event last week, he said he would be closely watching developed countries’ proposals to help fund efforts to mitigate emissions in developing countries. Chatterjee predicted that carbon software would serve as a key tool for managing and measuring the emissions reductions attached to billions of dollars of funding.

The underlying premise of the Copenhagen negotiations — that countries will agree to reduce their emissions by a certain percentage by a certain date — will only help to expand the market for software that helps monitor and manage greenhouse gas emissions. While it’s looking less likely that we’ll be getting a ground-breaking agreement from the summit, any decisions on long term financing and emissions targets made there will indicate to carbon software makers how fast or slow their industry will grow.

Emissions management software will be used for a vast array of activities by governments, NGOs and companies. Last week during a presentation from The World Bank, which I attended, the Bank said that it was looking to streamline oversight of clean energy projects it funds in developing nations through the Clean Development Mechanism. Easy-to-use and low cost emissions management software could also play a role there.

The carbon software industry has seen an emergence of dozens of players in recent years — here’s a list of 22 carbon management companies. Companies are still getting funding, and this week Carbon Hub announced that it has raised €1 million. Big software firms like SAP and Oracle are also moving aggressively into the space.

Likely there were other carbon software makers in attendance at Copenhagen, beyond these three startups, given the large impact the international decisions will have on their industry. In fact the IT industry, including software companies, communication network providers and computing firms made a shockingly vocal showing at Copenhagen this week. That’s because IT has been predicted to be able to reduce carbon emissions by 15 percent below business as usual levels across industries by 2020.

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