by Martin LaMonica, CNET

Will money start to flow to carbon software?

CarbonFlow has raised $2.9 million in its first round of venture funding from Clean Pacific Ventures, OVP Venture Partners, and Meridian Energy Limited, a New Zealand renewable energy supplier, which is a strategic partner.

The San Francisco-based company's founders are carbon emissions trading expert Karla Bell and Neal Dikeman, founder of merchant bank Jane Capital Partner and a contributor to CNET's Green Tech blog.

CarbonFlow's software, which is still under development, is being designed for managers of carbon emissions-reduction projects that want to monetize their carbon credits.

For example, a developer could install a solar energy project that replaces the use of kerosene lamps. The reduction in carbon dioxide emissions from that solar array can be sold on carbon trading exchanges.

The credits are bought and sold by heavy polluters in Europe that are mandated to reduce emissions as well as organizations that make voluntary reductions.

CarbonFlow's hosted software service will give project managers a way to manage projects and provide the audit documentation required to comply with the Kyoto Protocol and other state or regional climate change regimes, said Dikeman.

A schematic diagram of what CarbonFlow's carbon emission project management software does.

(Credit: CarbonFlow)

"Think Web 2.0 multi-tenant (software as a service) version of a 'classic' supply chain portal, with document management capabilities underneath, laid on top of UN environmental guidelines in order to hammer the transaction costs and lost productivity caused by the global nature of carbon projects," he said via e-mail.

Dikeman said that he's leaving Jane Capital to focus on the venture. Meridian Energy will use CarbonFlow's software to manage its carbon business, he said.

Also on Monday, another carbon-tracking software vendor, Carbonetworks, is expected to announce its series A round of $5 million.

Carbonetworks' hosted application is aimed at corporations that are doing their own carbon emissions programs, rather than renewable energy project developers. It's designed to give companies a way to create an inventory of their carbon footprint and manage different options for reducing it, which could be energy efficiency programs, purchasing offsets, or carbon trading.

Original article.