1. Global Thermostat
and the
Carbon Market
Key Note Presentation
Graciela Chichilnisky
Climate Change Economics & Energy Finance
Fordham University
New York March 1 2012

2. Human Dominated World
Human Beings are the largest geological force in
the planet
We are changing the planet’s atmosphere, its
body of waters, and the complex web of species
that makes life on earth
Climate Change

3. Global Risks
• Climate Change
• Biodiversity Extinction
• Clean Water scarcity
• Life in the Seas going extinct
Avoiding Extinction

4. URGENCY
Why are we being called to respond to
The Climate Question

5. Catastrophic Risks
• Global sea level raise threatens the survival of 43 island
nations
• Polar Caps melt - accelerating warming trend
• Record breaking tornadoes, floods, droughts and
devastating fires
• 30 million climate migration in 2011
• National Security at Risk US Pentagon 2009
Oceans - the origin of life – going extinct

6. Are Humans Next?
• Need Action Now
• Waited too long
• Industrial economies 20% of world population
cause most of world’s C02 emissions
Energy from fossil fuels
is the issue - 45% of global emissions
Clean Energy is the Only Solution

7. Why Economics?
• Why Finance?
• Why the Carbon Market?
We need to change economic
values – the Oscar Wilde
moment

8. The Anthropocene
The change we are producing will be read in rock formations
for thousands of years
A new geological era - the ‘Anthropocene’ – follows the
Holocene –it started in 1945
The Bretton Woods Institutions after
WWII led to
Globalization of Resource Intensive
Industrialization and
Western Economics

9. Western Market Economics based on
– Competitive Markets - individualistic consumers and
private goods: no connection between people
– Optimal Growth Theory -- exponential growth of
population and resource use – a frontier society without
limits: no connection between the economy and ecological
systems
– Cost Benefit Analysis and Financial Models
Discount the Future – a short term vision: no connection
between the present and the future
Dictatorship of the Present

10. So far Western economics
• Lacks connections between people
• Lacks connections between economy and
environment
• Lacks connections across generations
Sustainable Development
requires building connections
WHY?

11. Because humans
dominate the planet
• For the first time in recorded history
• Following an era of rapid globalization
Humans dominate Planet Earth
• We are connecting and changing the
planet’s atmosphere, its bodies of water, and the
complex web of species that makes life on Earth

12. This means natural resource limits
• As we reach natural resource and environmental limits
The survival of humankind is at stake
• Need connections with the ecology, between people
and with the future of our species
Can Western Economics adjust?
Can Markets become Sustainable?

13. Sustainable Economics
How to do it

14. Changes Articulated by the
United Nations
Kyoto Protocol

15. The Missing Signal
• If we destroy all trees & make toilet paper our economy improves – why?
• Because Toilet Paper has Market Value & Trees do not.
We lack Market Prices
New Market prices = New Values
New costs and New benefits
The Carbon Market
Provides the Missing Signal
• 1996: KP Placed Limits on industrial emissions
• 2005: KP Carbon Market International Law

16. December 2011:
Kyoto Protocol extended 3 years
in Durban COP 17
• Existing KP limits extended to 2015
• New limits pledged for 2015

17. The Carbon Market
• What is it?
• What it is not

18. Emission Limits
are the basis of Carbon Market
How does it Work
Carbon Makes
Clean Energy CARBON CHANGES THE
Dirty pays
profitable PRICES ARE $25/TON ENTIRE
clean – ZERO
Dirty Energy THE Missing EMITTED GLOBAL
overall costs
expensive and Signal ECONOMY
Undesirable

19. The Carbon Market
• Trades $200 Bn/year
• Reduced 30% EU emissions
• CDM transferred $50 Bn clean energy
projects in poor nations
• EU ETS

20. Carbon Market
Links to Global Economy
Everything is made with energy
Economic growth = Energy Use
Link to Energy
Carbon Market provides Missing Signal
New Market Prices = New Values

21. FOCUS of Carbon Market
• Capping Emissions
• We can’t get there without emissions
reductions
Markets for trading a Global Public Good:
Using the planet’s Atmosphere
Creating Equity and Efficiency

22. Where are We?
What comes Next?

23. Green Capitalism in the 21st Century
• The basis exists: international law and
economics
• Theoretically and in practice
• New markets for the global commons, new
growth theory, new cost benefit analysis and
new GDP measures, new international law

24. The Global Commons
New Economics
From maximizing profits to
economic progress
that ensures survival of our species

25. The Word needs Energy
Clean energy for industrial & developing nations
How to do it?
Technology Urgently Needed
• To Reduce Carbon from the Atmosphere
• In a Profitable Way

26. Global Thermostat Pilot Plant, SRI International - Menlo Park California
February 2011

27. Why a Carbon Negative Solution
Carbon Neutral is not enough Reducing CO2 Concentrations in
• Neutralizing emissions does not prevent
the Atmosphere
CO2 Parts per Million (PPM)
800
further increases in atmospheric CO2
700
• Even the most aggressive efficiency Business as Usual
improvements and renewables adoption 600
are unlikely to keep CO2 concentration at 500 Constant Growth
the generally agreed 450ppm to avoid 400
catastrophic climate risk Wedges
300 Approach /
Negative Carbon is the solution1 200
Stabilization
Global
• Air capture enables direct and rapid 100
Thermostat
reduction of CO2 concentration 0 Hazardous Level
• GT allows for the capture of even more CO2 450 ppm
than we are loading into the atmosphere or
that the earth’s systems can absorb –
Negative Carbon
GT’s technology directly reduces
1 United Nations Headquarters, New York, November 12, 2009. Presentation by G.
Chichilnisky on"The Rising Tide at Copenhagen:
carbon concentration in the
A Win-Win Solution for Industrialized and Developing Nations"
air, making carbon negative possible
Global Thermostat Company Confidential Page 27

28. Closing the Carbon Cycle
• GT Technology Captures Carbon from Air
• Inexpensive: Uses Low Process Heat
• Cogenerates Power Production withCarbon
Capture
• The More Power is Produced – the More Carbon
is reduced
• Makes Coal Plants Carbon Negative
• Makes Solar Power Plants even more Carbon
Negative

29. GT’s Air Capture Technology
Three-Step Process Produces Concentrated CO 2 Stream
Step 1 Step 2 Step 3
Air Input CO 2 Capture CO 2
Regeneration
Key to GT’s
technology is
cogeneration using Transport and Compression Other
low temperature Injection Applications
process heat to
capture CO 2 Subsequent steps are shared by all CO 2 capture methods
though pipelining costs can be reduced by co-locating
where CO 2 is stored or used

30. UP
Absorbing CO2
Pipes to oil well or algae

31. DOWN
Releasing CO2
Pipes to oil well or algae ponds

32. Applications & Markets for Captured CO2
Storage Enhanced Oil Algae-Based
Recovery* Biofuels*
*EOR and Algae-based
biofuels represent most
significant opportunities
for commercial applications
of CO2 captured using
GT’s technology
Hydrogen- Products
Based Fuels cement, fertilizer, plastic
s, greenhouses
Global Thermostat Company Confidential Page 32

33. Unique Advantages of GT’s Technology
Measurable advantages over other forms of carbon
capture
Carbon Negative Solution
Low-Cost Provider •An energy or industrial plant can
•Powered by low cost & widely capture even more CO2 than is
available process heat emitted – a carbon negative
solution
Flexible Integration
Scalable Design • Fossil, renewable, nuclear
•Modular design adapts to plants, industrial
different sized applications plants, (cement, steel) –
anywhere heat is available

34. GT Pilot Plant at SRI - October 1, 2010
Global Thermostat Company Confidential Page 34

35. Strategic Partners

36. GT - Small Island States
GT developing fully-integrated biorefinery in Hawaii
• Produces carbon negative transportation fuels
• Treats municipal wastewater and produces drinking water
• Generates green electricity and biochar fertilizers
CO2
Fuels,
Algae Fuel
Solar Dewatering Electricity &
Production Production
Energy Biochar
Waste
water Treated Drinking
Desalination
Wastewater Water
Provides critical municipal services while producing energy
Global Thermostat
As Green As It Gets
Company Confidential Page 36

37. Economics & Energy Finance
• CDM of KP Carbon Market – now trades $200
Bn/year
• Provide funding for a Green Energy Fund
investing in private projects that are carbon
negative – eg Global Thermostat
• Build Carbon Negative Power plants in
Developing Nations + small island states
• Increase energy where needed + clean the
atmosphere

38. Global Finance + Energy
• $200 Bn/year profitable Green Power Fund
• Can renovate $55 trillion global power
infrastructure in 15-20 years
• Build Carbon Negative Power Plants
• Resolve Climate Change
• Provide energy for industrial & developing
nations
• Enhance industrial exports & create jobs
• Foster a safer climate

39. Global Thermostat
and the
Carbon Market