Clear Standards Bags $4M for Carbon Management

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Some green software companies set out to track emissions. Others to manage energy-use efficiently. Clear Standards, which just raised $4 million for a Series A funding, is doing both.

The Sterling, Va.-based startup has developed a software suite for businesses to calculate their carbon footprint throughout their operations, from energy and water use to waste recycling.

The software can also determine the best energy-efficiency projects to deploy to cut emissions, such as installing better lighting and solar panels, said Richard Mendis, chief marketing officer and co-founder of Clear Standards.

President-elect Barack Obama’s plan to deploy anti-climate change policies will make carbon emissions management a big business in the U.S. Many entrepreneurs and investors, however, aren’t waiting for the incoming Commander in Chief before jumping into the carbon market.

Clear Standards, founded in 2007, joins a growing number of software developers targeting the carbon management market. The company has received the funding from Novak Biddle Venture Partners and Kinetic Ventures

Earlier this month, San Francisco-based Planet Metrics said it had raised $2.3 million in Series A for its carbon management and visualization software.

Canada-based Carbonetworks also raised its Series A earlier this year, snagging $5 million.

Unlike Planet Metrics, which focuses on providing detailed assessment and modeling of carbon emissions, Clear Standards said its software goes further to figure out ideal energy efficiency projects to deploy.

Clear Standards could also be competing with software developers targeting the electric-grid management market, such as Gridpoint. Its software helps utilities and consumers track and manage energy usage while providing emission-reduction data for deployment energy-efficiency measures.

Clear Standards has lined up customers, some of them are already using the software, said Mendis, who declined to disclose names. The company charges its customers a quarterly or annual subscription fee for its Web-based software and services.

Tracking and managing carbon footprints has become a must for many companies in Europe and North America, largely to comply with laws that require them to reduce greenhouse gas emissions.

Europe deployed a program in 2003 to allow companies that can’t meet emissions requirements to buy credits from those who can. Many countries see such carbon cap-and-trade programs as a good way to force polluters to use new technologies or other means to cut emissions.

There is no national carbon cap-and-trade program in the United States. States impatient with a federal cap-and-trade program have gone ahead to create their own. The Regional Greenhouse Gas Initiative, which is made up of 10 northeastern states, is the first government-regulated program in the country. The RGGI held its first carbon permits auction in September.

Another regional effort, called the Western Climate Initiative, is under development by seven western states and four Canadian provinces. The initiative is devising a cap-and-trade program that aims to reduce greenhouse gas emissions to 15 percent below the 2005 levels by 2020.

Private, voluntary programs have popped up, such as the Chicago Climate Exchange and American Carbon Registry.

Last week, Obama reiterated his interest in creating a national cap-and-trade program, which will fund some of his renewable energy and job creation initiatives by auctioning carbon credits.

But putting one into place will take several years. Even if legislation for the program is there, it could take a few years before all the rules for carrying out the cap-and-trade program are created through public hearings and other administrative steps. Meaning: The first auction might not take place until 2012.

Carbon management software developers say they are counting on corporations to actively reduce their emissions voluntarily. By figuring out their energy use and carbon footprint, companies can find ways to reduce costs while polishing their environmental credentials.

Clear Standards recently added James Sullivan to its management team. Sullivan is the former director of the U.S. Environmental Protection Agency’s Climate Leaders Program, which works with businesses on carbon-reduction strategies.

By Ucilia Wang