a full view of the project, you are able to speak to the seller, and get all the information you might need to feel confident or to release a press statement.
X: And you earn money on all of this by charging a commission on each sale, right? What percentage do you usually charge?
KI: They are between 2 and 3 percent—usually 2.5 percent right now. Anyone who goes out and uses a broker is probably going to pay double that, and through a more hidden process. We think our value is clear, but we have put our fees down to what we think is an extremely reasonable level, and so far, from what our clientele are saying, that fee structure is not even remotely an issue for them.
X: You’ve designed your system so that carbon credit buyers can find out a lot about the sellers, but do you do anything yourselves to vet sellers before they can list their projects on the exchange?
KI: When people come to us they go through a due-diligence process. We have folks who have been in the carbon space for 10 years, which in the carbon world is essentially since the dawn of time, and when we have a new seller come on board, they know exactly what documentation should be available, and we spend quite a lot of time making sure we get it organized and put into a central location.
X: What are the barriers to entry in this field? Wouldn’t it be fairly easy for another company to come along and open its own online carbon credit exchange?
KI: The ability to go to the Internet is there equally for everyone, but the ability to understand the market is where we excel. This isn’t just a technology sell. There’s a technology base, but behind that there’s all of our knowledge about carbon trading and energy procurement. That’s the piece that isn’t replicable. There’s a big difference between having the idea and having the ability to execute it.
X: The U.S. Congress may be moving, gradually, toward imposing some kind of national cap-and-trade system for greenhouse gas emissions. How are you positioned for that?
KI: We definitely feel good about the prospects of cap-and-trade in the U.S., because we are very comfortable in compliance situations. Our first-mover experience from supporting the RGGI program is huge. And just as the RGGI auctions provide a model for cap-and-trade, I think the World Green Exchange is showing some of the best practices, and helping companies properly value these commodities. I think we can provide a guidepost of sorts for the U.S. government as it moves toward trying to assess which kinds of commodities could fit into the offsets portion of a cap-and-trade system.
And as a national system gets put in place, the only difference from how we work today is that it should be much simpler. When you have a Connecticut market and a New Jersey market and a New York market, you have to understand exactly what paperwork is involved and make sure everything is posted. As we move toward combining regional markets or forming one huge national market, we are well set up. We feel very comfortable with how this is going to progress; we are not a startup.
