Q: What do you mean when you speak about the post-carbon economy?
A: The post-carbon economy refers to the economy once the carbon has been priced and once business strategies and decisions are being impacted positively or adversely by environmental metrics … Natural resources have never been managed as a trade-off in business decisions. The era of “the world is flat” is coming to a close. Labor arbitrage strategies worked for a time because you were focusing on one dimension, which was the highest variable cost you had, and you simply moved that to another region. Today, the natural resource part is the differentiator. The companies that had really great success in “the world is flat” era need to be cognizant of the post-carbon economy metrics, which include how well you manage access to natural resources, how well you drive the evolution of your involvement in natural resources, and how capital-efficient you are going forward.
Q: Do you see legislation such as cap-and-trade as the game-changing event to bring about the post-carbon economy?
A: Cap and trade is a portion of the opportunity, but there is also an SEC ruling where they will require carbon reporting. And third is the Wal-Mart standard that was recently issued. Companies will have to ask, “Where in the manufacturing process am I going to be most vulnerable to fluctuations in energy pricing, carbon pricing, regulatory shifts?” A lot of manufacturers are looking at this in their distributed value chains.