08 SPECIAL ISSUE
WEDNESDAY, APRIL 22, 2009, DELHI ° WWW.LIVEMINT.COM
TAKING A CALL
Giving a second life
to your old phone
Nokia wants you to
understand the
importance of
responsible e­waste
management
B Y S HAUVIK G HOSH
shauvik.g@livemint.com
·························
NEW DELHI
W hen the world’s leading
handset maker Nokia
Oyj surveyed 6,500 peo-
ple in 13 countries last year, it
found that only 3% mobile phone
users recycled their phones.
Globally, half of those sur-
veyed did not even know mobile
phones could be recycled; India
was the worst offender with only
17% awareness, followed by In-
donesia at 29%. Awareness was
highest in the UK at 80%, and
66% in Finland and Sweden.
With nearly 124 million mo-
bile phones sold in India in the
last calendar year alone, around
24% more than in the previous
year, and an average phone re-
placement cycle of 24-30
months, the estimated number
Give and take: The Take Back campaign will go national in six­nine months.
TOUGH RIDE
Clean­tech firms’ cash
demands anissueforVCs
B Y D EEPTI C HAUDHARY
deepti.c@livemint.com
·························
BANGALORE
E arning greenbacks from
green firms is a popular
pursuit in venture capital hot
spots such as Silicon Valley.
Indian entrepreneurs who
dream of using smart technolo-
gies to clean up a polluted plan-
et—or at least ensure that it does
not get further despoiled—are in
for a tougher ride. Venture capi-
talists putting money into local
start-ups are less enthused with
green dreams.
The first three months of 2009
saw three deals in the clean-
technology space in India. All in-
volved private equity, or PE,
firms rather than venture capital,
or VC, firms. Jain Irrigation Sys-
tems Ltd, a provider of micro-ir-
rigation systems, raised $45 mil-
lion (Rs226.8 crore) from Inter-
national Finance Corp. Sri Bio-
tech, an agri-biotech company,
raised Rs45 crore from Rabo Eq-
uity Advisors Pvt. Ltd. Polygenta
raised an undisclosed amount
from Aloe Private Equity.
VC firms are only willing to
make small bets in an area that
requires more serious amounts
of money. And many of the
young firms that are jostling
into this space are not armed
of unused phones that were like-
ly not being recycled led handset
manufacturer Nokia India Pvt.
Ltd to launch the Take Back
campaign in the country.
“If people no longer need their
mobile devices or accessories,
they can simply drop their old
handsets into (one of the) 1,300
bins placed at Nokia care centres
and Nokia priority dealers across
the country,” says Pranshu Sing-
hal, India environmental manag-
er for Nokia India. And for every
handset deposited in the bins,
Nokia will plant a tree, adds Am-
brish Bakaya, director of corpo-
rate affairs at the company. “The
handsets can be of any make or
brand and in any condition,” he
adds.
The company’s pilot aware-
ness campaign was conducted
over 45 days, from 1 January to
15 February, in New Delhi, Gur-
gaon, Ludhiana and Bangalore.
“We have so far collected over
three tonnes of e-waste, includ-
ing 68,000 pieces of old devices
and accessories. This includes
10,000 phones, 10,000 batteries,
32,000 chargers and 16,000 head-
sets, body covers and other ac-
with game-changing technolog-
ical innovations that will flower
into a Google or Amazon of
green business, say investors.
“We have firms making solar
panels approaching us. What’s
new in this? With the kind of
money they need, they are
more suitable for PE players,”
said Rajesh Srivathsa, manag-
ing partner, Ojas Venture Part-
ners. Even if a VC firm invests
$2-3 million in a green start-up
in the first round of funding, in
18 months it would need an-
HEMANT MISHRA/MINT
cessories,” says Bakaya. “Materi-
al is still coming in as the bins
will remain a permanent fixture.”
To plant trees, the company
has tied up with Kancheepuram,
Tamil Nadu-based non-govern-
mental organi-
zation Ahimsa.
“So far...1,000
trees have al-
ready
planted,” says
been THE BUSINESS
Singhal.
According to the survey, 44%
of unused handsets are simply
stored in homes and never used.
Others give their mobiles anoth-
er life in different ways, say, by
BUSINESS
passing on their old phones to
friends or family, or by selling
their used devices. Nokia plans
to make this campaign national
other $8-10 million to scale up.
Besides, the global down-
turn has hammered overall
deal flow in India: local com-
panies raised $277 million in
14 disclosed rounds, down 20%
from 2007, according to Clean-
tech Group Llc, which provides
global market research and
other services for the clean-
technology ecosystem.
The threat posed by climate
HEMANT MISHRA/MINT
Greenbacks: (L) Ojas Venture
Partners’ MD Rajesh Srivathsa.
(above) Harish Gandhi, executive
director of Canaan Partners.
in the next six-nine months.
Every week, the material de-
posited in these bins is collected
and dropped off at material cen-
tres where it is sorted. The mate-
rial to be recycled is then sent to
globally authorized recycling
centres, where they are turned
into useful objects such as park
benches and utensils, explains
Bakaya. The facilities are also au-
dited to make sure there is no
leakage and that everything sent
to the centre is recycled, he adds.
The mobile phone company
has also started an SMS-based
application with a short code.
Singhal explains that a consumer
just has to SMS “Green” to the
short code, and
ING
he or she gets
access to data
such as where
the nearest care
centre or priori-
ty dealer with a
collection bin is located and how
to get there.
ING
Nokia also has a software-
based service, called Eco Zone,
which gives Nokia users access
to information about environ-
mental organizations, communi-
ties, applications and move-
ments on Nokia mobile phones.
At present, the service offers
wildlife wallpapers and videos
from the World Wide Fund for
Nature as well as links to green
tips and eco communities.
The Eco Zone service also
gives users access to the We:off-
set application. This application
allows mobile phone users to
identify their carbon emissions
and offset them. By purchasing
the so-called carbon offsets, peo-
ple can take responsibility for the
carbon emissions their activities
generate and also contribute
funds towards projects that help
reduce the amount of carbon di-
oxide in the atmosphere. These
projects typically focus on re-
search and development of ener-
gy-efficient appliances as well as
alternative fuels that in turn help
absorb, reduce or avoid an equiv-
alent amount of greenhouse gas-
es being released elsewhere.
“For example, We:offset allows
a mobile user to identify their
carbon emissions on an aero-
plane trip from one place to an-
other and then act on it,” Singhal
says. So far, the service is avail-
able in 46 languages, he adds.
change and fears about shortag-
es of water, fuel and energy have
resulted in a growing interest in
investment opportunities in
clean-technology companies all
over the world. In developed
economies, clean-tech invest-
ments are mostly in solar ener-
gy, biofuels, advanced batteries
and electric vehicles. In India,
investments are mostly in agri-
culture-based businesses, irri-
gation, equipment making and
power projects. “We believe
there should be opportunities in
the area of energy efficiency in
devices/machines, energy stor-
age, energy production and dis-
tribution,” said Harish Gandhi,
executive director, at VC firm
Canaan Partners.
VC firms complain that most
Indian firms merely apply tech-
nologies developed elsewhere.
“In green and clean-tech invest-
ments, most of the IP (intellectu-
al property) work is being done
outside India. For example, in
biofuels, there is no such inno-
vation here. I feel its more of an
application and execution play
in India than an IP or innovation
play,” said Bejul Somaia, man-
aging director, Lightspeed Advi-
sory Services India Pvt. Ltd.
Entrepreneurs complain that
most VCs are reluctant to fund
firms in this space. Rajesh Nair,
managing director of Lords Au-
tomotives, an Ahmedabad-
based fuel-saving kit maker,
says he has maintained a per-
sonal directory of venture capi-
talists who have turned him
down. “When it comes to in-
vesting in energy conserving kit
makers like us, they question
whether it is worth risking their
millions of dollars,” he said.
mint
RAM BABU
Managing director, Asia,
CantorCO2e
WHEN THE CARBON
MARKET SWINGS
C ome December, every bureaucrat of consequence from
pretty much every country will converge on
Copenhagen, Denmark, to thrash out a new climate change
agreement. These discussions have important consequences
on carbon markets and how countries trade and sell their
emissions.
At the heart of carbon markets is the Kyoto Protocol, an
international agreement that aims to limit emissions of
greenhouse gas, or GHGs (mainly carbon dioxide emitted
during electric power generation, and methane, produced
when bio-matter degrades in conditions with insufficient
oxygen), to prevent global warming and climate change.
This requires developed nations to bring down their
emissions by around 5% from their 1990 levels and report
the same to the United Nations (UN), during 2008-12. The
nations—and these are largely developed European
countries—that have committed to reduce GHG emissions
till 2012 have expressed their intent to continue the same
beyond 2012 also, but how and in what manner will be
discussed at the December global meet in Copenhagen.
Developed countries that have committed to reduce
emissions of GHGs can achieve reductions in their own
countries, or invest in projects in developing countries that
can ensure such emission reductions. They are allowed to
procure these emission reductions from developing
countries to meet their targets under a mechanism called
the Clean Development Mechanism, or CDM.
There is a wide disparity in the costs of reducing
emissions across nations and sectors. It is this price
difference that needs to be harnessed through carbon
market mechanisms to achieve targeted emission reductions
at the lowest possible costs. While it could cost only $1
(around Rs50) to reduce 1 tonne of carbon dioxide in
Indonesia or Mexico or India, it would cost at least $50 in
Japan or the UK.
The Kyoto Protocol has been in effect since 2006 and the
European Union (EU) has
taken significant initiatives
The Kyoto Protocol, to meet Kyoto commitments
that aims to limit that have, subsequently,
catalyzed trade in emission
greenhouse gas reductions under a scheme
emissions, requires called the EU Emission
Trading Scheme, or EU-ETS.
developed nations This scheme allocates EU
emission allowances (EUA)
to bring down their to local companies based on
emissions by their history and
technology.
around 5% from At the end of each year
their 1990 levels during 2008-12, all
companies covered under
the EU-ETS have to submit
audited emission inventories of their facilities and offset
them with their EUAs or Certified Emission Reductions, or
CERs, which are generated from CDM projects undertaken
in developing countries.
If the annual emissions exceed the allotted EUAs, then
they have to buy EUAs from companies that have excess
credits, or pay a penalty of €100 (around Rs6,500) per tonne
of emission reduction. This mechanism, and its operation
since 2005, has created a liquid market for carbon credits
(EUAs, CERs, etc.) and the associated infrastructure of
exchanges, broking houses, traders, investors and project
developers.
Though a lot is talked and written about this innovative
and “highly romantic” market, it is actually quite inefficient
and highly volatile. The demand and supply (both in the
short and the long run) are quite uncertain.
Moreover, the demand and supply is fundamentally
politically determined and regulatory bottlenecks may
potentially destroy both. Worse, the supply and its marginal
costs are also not known.
The first few years of the market surprised everybody, by
bringing to the table very low-cost emission reductions from
incineration of HFC 23 (hydrofluorocarbons) gases—a
greenhouse gas several times more threatening than carbon
dioxide—in the refrigerant industry.
The experiences of the last five years have brought out
many hidden, unanticipated opportunities of emission
reductions, raising the hope that developed countries can
take deeper and wider commitments and, more importantly,
do so at reasonable costs.
Apart from being supported by better research and
information, this rapidly evolving market needs improved
coordination from politicians and from different
organizational processes that certify commodity and
compliance requirements.
And there’s an unexpected recession to deal with. Point
Carbon, a leading analyst organization, says, “The economic
downturn is hitting carbon project investments and credit
purchases. Falling emissions in the EU-ETS produce more
companies with surplus, fewer with deficits—price
expectations are down for 2010, but remain strong for 2020.”
Similarly, Deutsche Bank’s market update of January this
year revises its earlier estimates of credit prices from €30 to
less than €10 for this year.
Ram Babu is managing director, Asia, CantorCO2e, an
advisory firm for environment and energy services. Respond
to this column at feedback@livemint.com