[CAnet - news] The next big eCommerce opportunity for Google, Amazon, eBay - carbon trading

For more information on this item please visit my blog at 
http://green-broadband.blogspot.com/ or http://billstarnaud.blogspot.com
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 [Google, Amazon and eBay are classic examples of the best of what America
is good at-  ingenuity and entrepreneurial capitalism.  They dominate the
global eCommerce marketplace.  

Although the ecommerce economy has grown leaps and bounds over the past
decade the eCommerce activities of these companies is still a relatively
small part of the overall economy.

While click advertising, etrading and selling merchandise over the Internet
has done wonders for the bottom line of these companies in the past decade,
these markets are now maturing.  The entire global advertising market is
still very small compared to other economic activities. As well large
portions of society still do not use eBay or Amazon for a variety of reasons
including security, cross border shipping issues and so on.  It is unlikely
that these companies will be able to continue their spectacular growth of
the past decade without some fundamental new business paradigm shift.
Mobile eCommerce may provide some incremental revenues but I think its
contribution to the bottom line will be miniscule at best.

The big challenge for these companies and many others like them is to move
to the next wave of eCommerce which I believe will be carbon trading in
exchange for bits and bandwidth.

There is a growing consensus that global warming is one of the greatest
threats facing humanity.  Increasingly governments and citizens are becoming
aware of the severity of this threat and are clamouring for solutions.

To date the most obvious approaches to mitigate against global warming is to
impose carbon taxes or implement various forms of carbon trading such as cap
and trade or carbon offsetting.

Carbon taxes however, even if revenue neutral, are going to meet with stiff
political resistance.  Rather than imposing taxes can we instead provide
carbon "rewards" where consumers and businesses are rewarded for reducing
their carbon footprint, rather than being penalized if they don't?

To date carbon trading has been associated with various government mandated
cap and trade systems or unregulated carbon offset trading.  In cap and
trade systems large carbon emitters are allocated  carbon emission targets
and can only exceed these targets by purchasing carbon permits from
organizations who produce far less carbon. In offset trading there are a
number of independent companies that audit and trade carbon offsets of
individuals and businesses for high carbon emission activities such as air
travel offset against telecommuting and other energy saving practices.

However these markets are very immature and relatively small.

Instead of trading carbon emission for carbon reduction, perhaps a better
scheme would be to trade bits and bandwidth which have an extremely small
footprint against activities that have a heavy carbon footprint.

A couple of simple examples come to mind which have been mentioned before on
this blog:

(a) Amazon could work with public transportation systems and offer free
eBooks with its new Kindle eReader to people who buy public bus and subway
passes.  Amazon would get a small percentage of every bus pass to pay for
its ebooks and consumers would have a new incentive in which to take the bus
or subway.   Even if consumers still drive their SUV to work they would be
helping out by providing a new revenue source to public transportation

(b) Free broadband Internet could be offered to consumers who are willing to
pay a carbon premium on their gas and/or electric bill.  See
http://green-broadband.blogspot.com

(c) University students could be awarded with free cell phone, music and or
videos if they agree to pay a carbon premium on their parking passes.

Etc

To my mind the trading and exchange of bits and bandwidth for carbon
represents an entire new eCommerce business model with significant revenue
potentials. Companies that are first movers in this space will quickly
dominate this new market.

Carbon credit trading does not need to be limited to simple bilateral
transactions, but like money can it can create multiplier effects, where
consumers of bits and bandwidth can purchase other products and services
with their carbon credits.

For example, universities could offer voluntary programs where students pay
a premium on anything that creates a carbon footprint such as parking fees
or residence power consumption etc. In exchange the students would be
granted free access to the music and film industry libraries.  

The "bits for carbon" fee would encourage students to reduce use of their
automobiles and/or reduce their energy consumption within their residences
or other activities.  The university could also undertake energy audits on
the students activities to earn additional valuable carbon credits, in the
same businesses now earn carbon credits for promoting tele-working,
tele-presence etc

But instead of paying the record and music industry actual money for the
designated authorized music and video services, they instead would be paid
in equivalent value of carbon credits, or the university would only purchase
"originating" credits that were produced by the music/video industry through
their own carbon reduction activities.  The music and motion picture could
then possibly double down their money by instituting their own carbon
reduction schemes and trade in these credits or they could sell them to a
variety of carbon trading brokers.

As one start to think about these concepts it becomes apparent there could
be a whole range of business opportunities in trading bits and bandwidth for
carbon.

--BSA]



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These news items and comments are mine alone and do not necessarily reflect
those  of the CANARIE board or management.


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