Trading hot-air for dollars
COMMENTARY : Giles Parkinson
The Tony Abbott-led federal coalition is almost certain to dig its heels in over the government’s ETS when it appears in parliament for a third time next month, a position based at least in part on the premise that we don’t know for sure how, and if, an American ETS will operate.
But while Republican Senators vow to prevent any cap-and-trade carbon scheme, it seems that some of their powerful conservative colleagues are anticipating a different outcome, and are setting themselves up, at least commercially, to benefit from it.
Several key Bush Administration executives, including former Secretary of State Condoleezza Rice, a one-time director of oil giant Chevron, and former Republican Senator and Energy Secretary Spencer Abraham, have joined the board of a start-up company called C3, which is developing software tools to manage carbon cap-and-trade systems for corporations.
C3 is the brainchild of Thomas Siebel, who sold his epynomous software company to Oracle for $US5.7 billion in 2005. C3 executives include Siebel co-founder Patricia House, ex-Oracle CTO Ed Abbo and several other former Oracle and Siebel senior executives.
The irony of the involvement of Siebel, Rice and Abraham in a company that aims to profit from an industry that elected Republicans oppose so vociferously has not been lost in either Washington or in venture capital circles. Rice and Abraham are senior Republicans and are both members of a prominent conservative think tank, the Exxon-funded Hoover Institute, and Siebel is a vocal supporter of Sarah Palin.
C3 (apparently it stands for ‘Carbon Conscious Consumers’) is raising $US26 million in a second round of funding and joins an already crowded carbon management market.
At least two dozen firms are emerging in the US to try and grab a share of the voluntary and international markets that currently exist, although the main game for them must be a massive domestic compliance market, which could be worth billions to such companies if it gets through Congress.
Other board members of C3 include Shankar Sastry, the dean of engineering at Berkeley University, Michael McCaffery, the former CEO of investment bank Robertson Stephen, and Jay Dweck, the global head of strategies and technology for the institutional securities group at Morgan Stanley.
Volte-face
Rice and Abraham are not the only former Bush cabinet members to join green start-ups. Former Treasury Secretary Henry Paulson has joined Coda Automotive, which is looking to develop an electric-powered family sedan to compete with the likes of other independents such as Tesla. Coda proposes to build the car in China and import vehicles into the US. It last week raised $US26 million, taking total raisings for the past 6 months to $US74 million.
This comes just as GM opens its first battery-pack assembly plant in Michigan in anticipation of the imminent release of the Chevy Volt plug-in hybrid.
The Volt is seen as a core part of attempts to revive the fortunes of GM, and the plant will enable it to rehire at least some of the workers laid off on its ill-fated bet on fuel hungry SUVs and the like.
At least Paulson had expressed some interest in the issue of climate change during his incumbency. Abraham’s time as a Republican Senator included voting for proposals to open Alaska for petroleum exploration and opposing tighter fuel efficiency standards for vehicles. Now though, his focus is very much on clean energy. Abraham is also on the board of an offshore wind farm developer and a firm specialising in carbon capture. He also has a seat on Occidental Petroleum and chairs the US subsidiary of French nuclear group Areva.
The spectacle of politicians embracing an industry that they had fought so hard to oppose is not so unusual. As Business Spectator noted in December, sometimes politicians don’t really mean what they say, only what they invest in. This was former National Party leader Mark Vaile’s explanation after being appointed chairman of renewable energy company CBD Energy, after spending so much political capital arguing against the idea of global warming. “I never really was a climate skeptic,” he said (see Australia is losing the new-energy race, December 1, 2009).