Can the Bay Area become a Carbon Valley?

Karla Bell

At the San Francisco Carbon Collaborative hosted by law firm Morrison & Foerster in February 2009, David Pascal, clean technology and green business advocate for the city of San Francisco, thanked all participants for “their enthusiasm and willingness to explore the possibility of anchoring the U.S. environmental markets here in San Francisco.”

Pascal pointed to San Francisco’s numerous advantages, including the city’s legacy as a financial and IT center, its position as an environmental leader and its economic ties to China and the rest of the Pacific Rim.

The Carbon Collaborative is a true case of “thinking globally and acting locally.” San Francisco is well-positioned to host carbon market players throughout the entire chain of carbon credits—from creating credits to facilitating the trade of credits within California, the United States and the rest of the world. Many, including Bill Joy, partner at Kleiner Perkins Caufield & Byers and former chief scientist of Sun Microsystems (Nasdaq: JAVA), are advocating that the skills of Silicon Valley be put at the disposal of Carbon Valley. Additionally, local businessman Barry Hoffner of HFS wants to create a San Francisco Carbon Exchange.

More than 60 companies attended the first San Francisco Carbon Collaborative meeting. Among those in attendance: global carbon credit auditor DNV; global carbon brokers CantorCO2e and Evolution Markets; global carbon project developers EcoSecurities and First Climate; California green building companies; attorneys; U.S and California policymakers; carbon registries; software providers; U.S. carbon and cleantech investors; technology companies; and the media.

During the first meeting of the Carbon Collaborative, Pascal noted the impact of the U.S. government’s policy position around climate change legislation as well as California’s response to it. Furthermore, he said San Francisco must develop a consensus opinion on AB32, the California emissions trading scheme passed by the state legislature in 2006.

The most important item facing the group is the policy position ultimately taken by the city of San Francisco, and how that decision fits into a national U.S cap-and-trade system, California’s AB32 legislation and, finally, the revised Kyoto Protocol to be decided in Copenhagen in December 2009. The policy position will make or break the notion of San Francisco as an anchor for the carbon markets. This is the nexus between policy and innovation.