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    0 Replies Latest reply on Jul 25, 2008 4:38 PM by snipperred

    Positioning your small business within the global economy.

    snipperred Scout
      From Scientific American- September 24, 2007
      Making Carbon Markets Work by David G. Victor and Danny Cullenward

      - Clean Development Mechanism

      Without any practical way to force developing nations to control their emissions, the Kyoto signers instead reached a compromise known as the clean development mechanism. Under this scheme, investors could earn credits for projects that cut emissions in developing nations even though the host country faced no binding restriction on its output of these gases. A British firm that faces strict (and thus costly) limits on its emissions at home, for example, might invest to build wind turbines in China. The company would then accrue credits for the difference between the "baseline" emissions that would have been released had the Chinese burned coal to generate electricity and the essentially zero emissions discharged by the wind farm. China would gain foreign investment and energy infrastructure, while the british firm could meet its environmental obligations at lower cost because credits earned overseas are often less expensive than reducing emissions at home.

      I invite any comments on the above. At the time of this article, I think the conclusion was steps needed to be taken on an international and national government level to influence corporate investment in energy technology across different countries. The problem being each country has a self- serving interest- especially the U.S. Part of the solution was this artifical mechanism of credits that should influence the reduction of global emissions as a whole while corporations managed to serve their own interests. The trouble with this being an added complexity and uncertainty for the respective investment markets. It is hard to pin down a baseline of emissions, a fair incentive based on margin of improvement, and a fair ROI value applicable to the home market- whose credit dollars may be unstable or otherwise inflated with respect to that of the other markets across the globe.

      I am noticing major movements in solar and alternative energy investment in the U.S. However, I don't see this limitted to a handful of major corporations. I bet there are more small and medium sized businesses taking off to capitalize on their respective local geographic markets. This is a dynamic consistent with the globalizing economy. If you accept the rules have changed and will continue to change along this direction, the systems for how businesses are going to succeed and compete in the modern environment are uncertain at best, and that uncertainty is causing the usual major movers to hesitate- I think this represents an opportunity for small businesses to move in, dictate the outcome on their own terms, and capitalize by positioning themselves globally.

      I will be following this particular situation over the next ten years to test my intuitive theory and perhaps set myself up to be in the right position to capitalize at the right time- even as a small business. If you have relevent news on this specific subject, please share. However, in general, I wonder who here is poking their head up out of the small business masses to consider the bigger picture, how that pertains to their business over the next ten years, and what that implies they should be doing to position themselves for success in the emerging dynamics of modern business.

      I'll just throw this out there I bet the opportunities are there to develop the necessary relationships in advance of a shift that is going to occur maybe in the next five years. Once the smoke clears for technology development and infrastructure in the U.S., the "scaffolding" of the development infrastructure is going to be "heavy weight in a sink or swim competition to keep heads over water" and shifted overseas between businesses of like size and industry. The channels for these relationships are not likely to be intelligently developed by governments and the corporation level markets will likely aim at consolodating their interests through smaller channels reaching out through the world markets. However, they may be too slow to capture the margins that might be openning up. The smaller companies may simply enjoy their own ROI "self-serving" and be unwilling to sell. When that time comes, the margin might actually spill in the other direction of scale to small business, home-based business, and internet based-businesses who have extended across borders to develop close relations; thereby representing a brokerage market for "jobs" on the good old fashioned principle of "who you know".

      So what have you done with your business lately in consideration of your international neighbors?