Mr Vinod Kesava's nickname sums up his dedication to his job. His firm CRX, which helps companies create carbon credits to trade, has already secured contracts worth $6.8m
Jessica Cheam, Straits Times 7 May 08;
MR VINOD Kesava has a nickname that says it all.
'My friends call me 'carbon man', he says with a smile. 'My life is all about carbon now.'
The epithet sums up the way the fledgling industry of carbon trading - a major weapon in the fight against climate change - has come to dominate Mr Vinod's life.
His friends might only be joking, but this is a serious business. It takes guts to set up a firm in uncharted territory where success is uncertain.
And the philosophy of Mr Vinod, 33, and his business partner and father Kesava Shotam, 67, is bold: It is better to try and fail than never to have tried at all.
Still, they relish the process and are determined to have fun along the way.
In a nutshell, carbon trading involves getting polluting firms - which are increasingly required to offset their greenhouse gas emissions - to buy and trade 'carbon credits' on a carbon market.
These credits can be generated by a firm cutting emissions below its quota or planting trees, for instance.
The pair set up Climate Resources Exchange (CRX) in July last year, but began operations just four months ago as the latest start-up to offer carbon industry-related services.
The firm could help Singapore in its push to become Asia's environmental and carbon trading hub.
In its short life, CRX has already created a service that is the first of its kind in Asia, and which promises to revolutionise the way firms approach carbon emissions.
The climate compensation accounting system, as it is called, helps firms calculate their total carbon footprint based on rigorous statistics collected from various sectors in different countries.
CRX acts almost like a problem checker and solver - the problem being carbon emissions. It identifies where and how a firm can cut emissions or create carbon credits for itself, using CRX's market knowledge.
'In a future carbon-constrained economy, we are talking about turning a company's liabilities into assets,' said Mr Vinod, CRX's managing director.
The firm is in talks with several multinational corporations, and has already secured US$5 million (S$6.8 million) worth of contracts from the United States and the region, he said.
That is fairly quick success, considering it started operations only in January after raising $2 million in capital.
But these visionaries behind CRX are no strangers to the carbon game.
In 2003, when carbon emissions and trading was still a new concept, especially in Asia, the father-and-son team fought against all odds to raise about $2 million from investors to start Asia Carbon Group with two other co-founders.
They had to set up its headquarters in the Netherlands for technical reasons, as Singapore ratified the Kyoto Protocol only later in 2006, said Mr Kesava.
The team was a pioneer in the trading of carbon credits from Clean Development Mechanism (CDM) projects through the Asia Carbon Exchange, the world's first CDM-focused exchange and auction platform, in 2005.
The CDM is a United Nations-regulated scheme that allows carbon credits to be generated from validated projects and traded.
Asia Carbon went on to develop about 100 projects in Asia that will create about 23 million carbon credits until 2012, which could be worth about $585 million.
Unfortunately, a difference of opinion in the direction of the firm led the father-and-son team to sell their stake and leave - to set up shop all over again. On this, both admitted it was a 'difficult time' since the company was partly their brainchild.
'We had different visions for the business, new innovative ideas that we felt needed to be expanded, but not everyone agreed. It was difficult, but we are all still friends,' said Mr Vinod.
As Mr Kesava puts it, there is no looking back.
Today, carbon trading is a US$60 billion global market that is still growing.
'This is where we can innovate to get ahead of the game. The possibilities are endless,' said Mr Vinod.
One example of how CRX innovates to set itself apart is by taking knowledge of the carbon market to the development and humanitarian aid industry.
CRX's chief policy officer, Mr Federico Graciano, 35, has 10 years' experience in the non-governmental organisation (NGO) sector.
'So much of the development work in Asia involves infrastructure and energy-related projects that could reap carbon credits. The NGOs just don't have that knowledge and experience to tap that. Here's where we come in,' he said.
This role has taken CRX to Aceh and Nias island, which were hit by the tsunami on Dec 26, 2004. The company is assessing the environmental impact of the work done by NGOs' in these places.
'The main thing is to provide the NGOs with an understanding of where they can improve in their projects' sustainable development and, where possible, harvest carbon credits as extra revenue. This can be channelled back into humanitarian aid efforts. It's a win-win situation,' said Mr Graciano.
CRX has a staff strength of four that is growing. It has almost firmed up a tie-up with a US-based global NGO - a milestone - though details can be disclosed only later, said Mr Vinod.
The company also offers a whole host of other services such as carbon finance and asset management, including developing CDM projects, trading carbon credits and management consulting.
'There's some uncertainty in the market about the post-Kyoto agreement, but we are confident that the carbon economy is here to stay,' Mr Vinod added.
