UK's Carbon Trust has visions of a green China

The Carbon Trust is funded by British taxpayers but its mandate -- to accelerate the move to a low-carbon economy -- has brought it all the way to China. After all, the UK is responsible for just 2% of the world's carbon emissions, so if you want to make a difference on a global scale, China is a good place to start.

In 2008, after a series of visits from the China Energy Conservation Investment Corporation (Cecic), the Carbon Trust set up a small office in Beijing to work on a joint venture with its Chinese partner and to explore the options for developing its international mission. The approach is necessarily different to what it has done in the UK, where it has two principal activities: first, working with organisations to help them reduce carbon emissions and, second, developing new carbon technologies by financing research and development, incubating small technology companies and other early-stage investments.

At first, the Chinese were simply interested in importing some of the technology that the Carbon Trust had helped to develop, but as the two sides talked it became clear there could be a much broader role for the British organisation in China. Since arriving one year ago, Tim Lancaster has been working to define what exactly the Carbon Trust's role should be in the world's fastest-growing economy. Here, Lancaster talks about his goals:

How did a taxpayer-funded organisation in the UK end up in China?
One of the things we had to consider quite carefully when we came out here was whether it was reasonable to use UK taxpayers' money in that way and we discussed that a lot with the relevant government departments and it was felt that there was an increasing desire in the UK government to try to export what they saw as UK expertise on low-carbon technology. There was a feeling that this is an area where we have a time advantage and where we're able to offer something.

What are your goals in China?
If you look at our agreement with Cecic, there are three activities. The first of those is clearly technology transfer -- bringing good low-carbon technologies that we've incubated or invested in over to China and then developing manufacturing for them in China, with a view to both exploiting a Chinese market and potentially exporting back to the UK and US.

The second bit is taking our success at incubating companies in the UK and transferring that to China. We've had about 80 companies through our incubator in the UK and our experience is that a lot of businesses fail because they don't recognise that there's a company journey, as well as a technology journey. There's quite a lot of coaching and mentoring that needs to be done to make sure that a guy with a successful idea actually becomes a company with a successful product. And we want to do that in China.

The third stage of that is bigger scale deployment -- once you've got an established technology how do you really scale that up? That's where Cecic do a lot of their investment at the moment and where we're interested in doing more.

What progress have you made since arriving?
Coming out here there was clearly about wanting to see what we can develop with Cecic, but we also want to understand what else is around and try to see where China's needs fit with the Carbon Trust's expertise. Two of the other projects we're doing are Foreign Office-funded, which are about helping businesses to use existing technology to save carbon, which were giveaways of our UK experience to try and assist the case in China, but also good ways of meeting other organisations and establishing a reputation here so that we can start to find out how else we can be useful.

Has the success of clean development mechanism [CDM] projects in China made your job easier?
In a sense, China's success at CDM has been quite interesting. It has clearly been successful, on the one hand, with those projects, but on the other hand, those projects are very large scale and there's probably been a tendency for them to obscure the importance of energy efficiency in its own right. Companies have tended to say, 'Can I get CDM credits for this? If I can't, there's no point doing it.'

How does that differ from the UK, where there's no CDM?
What we've found in the UK is that it makes good business sense to invest in low-carbon technology and, typically, the thousands of businesses we've worked with in the UK find they can make 20% energy savings with projects that pay for themselves in less than two years. So there is a sound business case for this.

You can have your cake and eat it...
Yes, you can be green and you can save costs and make more profit at the same time. It's also a great message to have for your company.

Will you introduce your carbon footprint labelling in China?
We're trialling that in China, but we've agreed with the Chinese government that we won't label until they've got the results of our trial and have had a chance to think about it. A couple of years ago in the UK we created a means of analysing supply chains for carbon emissions, so you could get to a defined number of carbon emissions per phone or pen or whatever, and then we created a label -- a small black footprint -- that made sense to the consumer. That footprint says the number of grams of carbon typically used in the manufacturing, distribution, usage and disposal of a product, so the whole lifecycle, and it includes a commitment to reduce that over two years.

So you're enabling consumers to make informed decisions...?
It's clear that if you want to get companies to cut the amount of carbon used to make a product, you have to use the power of the consumer, but consumers typically don't know which products are green are which aren't -- and they don't trust companies to tell them.