Rob Fowler

28 June 2012 – Rob Fowler’s career in carbon trading mechanisms and emissions reductions closely traces Australia’s journey to a carbon price on Sunday and has also made him one of the world’s “go to” experts on the subjects.  When he spoke to an audience at the Napier & Blakeley offices in Melbourne earlier this year he stirred interest from a property audience that was clearly still seeking answers. In this feature interview he reveals some of these to Denise McNabb.

With the introduction of a carbon tax in Australia just days away it will come as no surprise to those who know Rob Fowler to learn that his company Essential Change Advisory Services has one of its websites under construction.

For a man who has rapidly carved himself a global reputation in the last decade as a master educator and creator of market-based mechanisms for buying and selling carbon credits, having a website up to scratch ahead of the July 1introduction is an imperative.

Fowler’s expertise is sought at both the state and federal government levels in Australia and in numerous advisory roles overseas.

Last November the Geneva-based non-profit global trade organisation The International Emissions Trading Association appointed him as its representative in Australia and New Zealand, triggered by Australia’s passing of the Clean Energy package through parliament.

Created in Geneva in 1999 after the signing of the Kyoto Protocol, IETA represents more than 155 companies, corporations and associations from OECD and non-OECD countries. Only a few members are owner/operator companies in Australia and New Zealand.

IETA’s aim is to develop an emissions trading regime using carbon pricing, emissions trading and market mechanisms to combat climate change cost-effectively “while balancing economic efficiency with environmental integrity and social equity”.  It has several partnerships, including the World Bank and the World Business Council for Sustainable Development.

Fowler says IETA takes up a quarter of his working week, except when it sends him on trips overseas to speak at conferences and seminars.

A passionate crusader for anything that stems greenhouse gas emissions, he spends long hours offering advice on trading mechanisms through his own business, on boards, government panels and organisations that further the cause.

Becoming a “go to” expert on all things carbon started, he says, when he was living in Shanghai 11 years ago.

As a corporate strategy consultant, he was sent there by his firm, international consultancy LEK, to help establish a local office. While doing a 20-year forecast for China’s energy sector he says “my eyes were really opened to climate change and sustainable energy.

“Actually it was more like a stark wake-up call.”

He quit LEK and headed back to Australia, where he had graduated in 1993 with a degree in mechanical engineering before becoming a corporate strategy consultant.

“I wanted to study the science and challenge of climate change. I’d done a lot of work in the energy sector around technical issues so this was a chance to bring together my skills and experiences.”

He funded himself to Johannesburg in 2002 to attend the United Nations’ Rio+10 Earth Summit.

“It was during that conference I realised I could have quite an impact and felt a pertinent need to get involved,” he says, mulling over the fact that his present high workload precluded him from attending the Rio+20 Conference in Brazil this month.

Fowler spends a substantial part of the year living out of suitcases, educating, advising and championing the cause of carbon reduction.

He says a lot of his work at the start of his career had been around helping companies make better decisions about value creation, so he knows what adjusts their decision-making around carbon emissions and trading opportunities.

At LEK he did corporate strategy in many sectors, from energy, mining, and rail to air transport, building materials, property development, forestry and commercialisation of hi-tech products and property. This work took him to Borneo, Thailand, Indonesia, China, Singapore, Australia, New Zealand and the United States.

In mid-2003 Fowler joined the Independent Pricing and Regulatory Tribunal, helping set up the New South Wales Greenhouse Gas Abatement Scheme, one of the world’s first mandatory carbon markets.

During this time between August 2003 and June 2006 he spearheaded many of the scheme’s abatement frameworks, including making coal-fired power generation more efficient, sequestration of carbon in forests, and the distribution of millions of energy efficient light bulbs.  He also trained auditors, developed workflow tools, and conduction education programmes for participants.

Australia would not ratify the Kyoto Protocol until 2007 but this did not deter Fowler, who joined the international chorus for lowering greenhouse gas emissions well before this.

In 2004 he added to his rapidly expanding resume, starting work as a methodology expert within the United Nations Framework Convention on Climate Change, advising the Clean Development Mechanism methodology panel on new methodologies, registration of projects and accreditation of auditors. Along the way he also found time to help people understand the UN’s language, from its positioning to its technical framework.

“In the negotiating environment, sometimes you have to dance around issues and depending on the culture of people, speak in different ways, he says.

Fowler admits to frustrations then and now about Australia not being part of the Kyoto Protocol, and dragging the chain over its responsibility for greenhouse emissions. His frustrations, however, were frequently diverted by his overseas work.

“For a few years I would take annual leave, buy air tickets out of my own pocket and go to these conferences and workshops,” he laughs.

After GGAS he set up his consultancy, Essential Change Advisory Services, helping with the design of a national carbon market for Australia for the State Governments, and then as part of the taskforce for Prime Minister John Howard’s election campaign in 2007.

“During that time I did a lot of work overseas, including carbon broking in China.

Environmental mission
Fowler is clearly on a mission to see a clean environment. He has seen so much environmental destruction in his career that he is particularly passionate about driving that change.

“Australia is generally very clean so any time I am in China I have a very tangible awareness of the pollution, which the Chinese live with every day.”

He was headhunted into Booz & Company’s Sydney office in 2008 to head up its new low carbon and sustainability division.

“We did some great projects,” he says, recalling an international climate change group that he set up for the United Arab Emirates government in 2009-10.

When Booz exited climate change early in 2011, driven, he says, by the United States corporate world, Fowler returned to his international consultancy.

“There will be a ripple effect of carbon pricing
but there is already a very strong push for energy efficiency and a sustainable environment”

If you are talking about corporates in the property sector, for instance, there will be a ripple effect of carbon pricing but there is already a very strong push for energy efficiency and a sustainable environment with building materials, designs, standards and star ratings,” he says.

Star ratings are good

“I really like the requirements for star ratings.

“It does take time to convert to them but operators who upgrade to energy efficient alternatives will really benefit. New business models are making the big difference. They provide a solid, tangible catalyst for the transformations we need to see.”

A lot of Fowler’s work involves telling companies what sort of operating models and technology, staff numbers, board structure and decision making processes they will need.

In 2010 he was on the federal government‘s Domestic Offsets Integrity Committee panel, assessing methods for measuring, verifying and issuing carbon credits to farmers and land managers. The first step under the Carbon Farming Initiative was to provide an income stream for farmers, foresters and landholders through converting farm activities into saleable and marketable units.

“Australia is wonderful lab
and test bed for a carbon market”

“Australia is wonderful lab and test bed for a carbon market,” he says.

“We have all kinds of mechanisms either in place already or being ramped up.”

European pricing

One of the biggest bones of contentions with the introduction in Australia of carbon tax is the fixed price of $23 a tonne on emissions, increasing each year, before shifting to a market-based system in 2015.

In Europe the price per tonne is around €3.77 (A$4.71) after a dramatic slump in pricing since 2010 in the wake of the global financial crisis. Fowler puts a positive spin on the differing rates, citing the unexpected consequences of the GFC greatly reducing carbon emissions in Europe and the US.

“The environment doesn’t mind why emissions are reduced, just that they are”.

Though there is fixed supply and dwindling demand in Europe, he says the scheme has stimulated the CDM a lot more than expected.

In the new Australian regime, during the fixed period a liable entity can surrender carbon farming credits up to 5 per cent of their obligation but any international units bought cannot be used for compliance during this period.

“I think there is some merit in adjusting the carbon price mechanism in the run up to the next [Australian] election and allowing the surrender of some international credits during that first phase of the scheme.

“The reason we have three years at a fixed price is not necessarily based on commercial imperatives or economical logically decisions. It is simply because the people negotiating arrangements could not agree on a target so they had to agree a price. One year is generally enough for corporates to bed down their compliance processes.

“From a UN perspective if companies started buying some international units it would stimulate activity in a soft CDM market and this would assist in getting Australian companies to really engage with the international carbon market – something they will need to get much better at over the years ahead.

“And Australia’s CFOs do want to get hold of these units. They realise that the prices right now don’t reflect the cost of credit creation, so someone somewhere along the trading chain is taking heavy losses.

“A lot of these carbon projects have a fantastic environmental and sustainable development value.”

Fowler says Australians need to think of their place on the planet.

“We have choice, freedom, cleanliness and wealth – every metric is right up there for Australians. From a human perspective we have to ask what our obligation is to the rest of the world. Certain things do resonate with the community.”