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Carbon solutions

(China Daily)
Updated: 2008-05-26 11:12

Founded in 1886 in Boston, Arthur D Little (ADL), the world's first management consulting firm, is focusing on advising Chinese enterprises on maximizing the benefits from the international trade in carbon credit under the Kyoto Protocol.

To do so, the company's China operation, covering Beijing, Shanghai and Hong Kong, is expanding its consultant team from 45 to 100 professionals in 2008. In an interview with China Business Weekly reporter Tuo Yannan, Thomas Schiller, managing director of ADL China, says his single most important goal is to bring ADL's expertise and experience to the fast growing Chinese market.

Arthur D Little was established by Arthur Dehon Little, a chemist, who was credited for the discovery of acetate, and co-worker Roger Griffin, in Cambridge, Massachusetts. The company was involved in the development of the word processor and synthetic penicillin, and the founding of the NASDAQ trading system. Today the company is one of the world's leading management consulting firms, providing a broad range of services to enterprises such like GE, IBM and GM.

Q: What kind of carbon advisory services do you provide? And what benefit can your customers get by this service?

A: First of all I must explain that carbon advisory is just a very small piece of advisory we provide. Actually though we are a strategy consulting company, we provide not only strategy but also innovation. We do carbon advisory as a part of strategy, we need to identify the risks and the opportunities, and especially in the western world, carbon margin is a long-term effect. If you identify the strategy, you consider how the carbon makes a "carbon margin". Use the investment strategy as an example, you can invest in low carbon technology that has a long-term positive affect on your business.

Let's use energy sourcing for an illustration. For example, for a chemical industry company energy is its most important cost of its business, so the entire carbon margin strategy means investing for 20 years. Especially in the CO2 emissions and the downstream of the products used. We provide our customer's entire strategy including designing the value chain, investment plan, and so on. It's not a strategy from which you can make a profit in one night, but a forward-looking plan for the future especially in multinational business.

Q: Could you give some examples to illustrate the cost effectiveness of your solutions when applied in the market?

A: We have three examples from the different industry segments. First one, a Saudi telecom operator. We made a strategy in investment changes that resulted in a 14 percent energy efficiency improvement and 40 percent CO2 emissions reduction.

For a manufacturing group we had $1.5 million in savings. And the "carbon margin" we did for a national oil company had $10 million in revenues from carbon credits.

Because the carbon credits can be traded globally, and based on our strategy using the different investments, we have different services to provide. Take an example from a global oil company. It's allowed 30 carbon credits globally. If the company not consumed all the carbon pollution, it can sell the rest carbon credits to other companies. So they can get revenues from those trades.

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