Getting serious about carbon drawdown means giving up money-based snake oil cures

Before we can get serious about reducing our fossil fuel addiction, we need to start getting serious about separating money from the measuring process.

Carbon Auditing – sexier than you may think

On first hearing, ‘carbon auditing’ sounds like a double yawn, a cue for eye-rolling.

Try mentioning it the next time you meet someone. The word ‘carbon’ turns off anyone who prefers not to think about the climate if they can avoid it, which is most of us. ‘Auditor’ doesn’t rank high on most Cool Job lists.

But if you can get your new acquaintance to engage with the idea of how they might go about conducting a carbon audit on an individual, company, or country, you may be surprised that few can resist pulling on this thread once it’s pointed out to them. 

Get past the eye-rolling, and you’ll start hearing the nit-picking:

• ‘…but isn’t that double-counting?’
•  ‘I think you’ll find that should’t be counted as an asset…’
• ‘surely that cost should be allocated to the supplier, not the customer…?’

Before they know it, you’ll find people begging you to explain the difference between ISO’s project-based approach, and PAS’s lifecycle approach.

Carbon accounting – measuring carbon fooprints – turns out to be a good party trick.

It’s like whistling a hook from a classic pop song, leaving a puzzle half-finished, or a doll next to a pile of clothes – people just can’t resist playing.

The curious-minded find carbon accounting irresistible.

Money and Carbon

We find carbon accounting intriguing because it marries something familiar – financial accounting – with something we’re not used to thinking of as a unit of value – carbon.

We won’t reiterate here how odd it is for our species to have come to value something we’ve made up, above something we’re made of. 

Nor will we repeat how, three decades after humanity’s first attempt at carbon accounting, we’ve so comprehensively failed at reducing carbon (spoiler: because we value money more than carbon, systems measured in money end up prioritising the currency over the transaction).

The carbon-counting business may be about to become a trillion-dollar industry, but few of us encounter it in our daily lives.

Yet we all know all about accounting for money. Even non-bankers, accountants or financial auditors are familiar with the basics of financial auditing. It’s hard to avoid. Anyone running a business has a fiscal duty to understand the difference between an asset and a liability, or know which account to charge things to.  Every day all over the world we fill out tax forms, submit VAT returns, invoice customers, pay bills, and check our net worth.

That’s why we’re so tickled to discover the exact same principles can be applied to carbon emissions. It’s like realising you can make yourself understood in a foreign language.

Instead of dollars, euros, yen or pounds, ‘simply’ substitute the currency of carbon accounting. Carbon auditing is measured in ‘CO2e’ , shorthand for the mass of carbon dioxide equivalent greenhouse gas emissions reduced or avoided. Bingo. You can now converse in carbon.

The unit of CO2e differs. It will be kg for individual actions by individuals (e.g. walking instead of driving), tonnes for that same individual over a year (multiple international flights), Kilotonnes for big companies (changing to renewable energy), and Gigatonnes for countries (legislating to plant new forests) or sectors (shipping by sea rather than airfrieght).

But, we’re amused to learn, like dollar notes, ten-dollar notes and hundred-dollar bills, these are just different denominations of the same currency, CO2e.

What’s different about carbon auditing

Now may be the moment to point out something else that might not have been obvious to anyone rolling their eyes at the mention of carbon accounting.

Like the project v lifecycle methods, to measure the same thing, this is a matter of perspective, of relativity, different ways of viewing the same thing. But in this case, the view can be very different if you’re a human, or a molecule of carbon dioxide or planet.

Humans care a lot where money is allocated. Wars are fought over it, families split, friendships ended, businesses bankrupted.

But the same is not true of CO2 molecules or ‘The Planet’. They care not a jot where CO2e is allocated. Physics is physics. Whether the greenhouse gas is chalked up to supplier or customer, to China or Belgium, you or your neighbour, makes no difference to the CO2 molecule once it joins all the other parts-per-million of other greenhouse gas molecules in the atmosphere. It hangs around, reflecting more heat back to Earth, and raising the temperature by another micro-notch.

Were CO2 molecules conscious, and had they developed a sense of irony, they might find it amusing to observe, up there in the atmosphere, how Homo sapiens, self-styled most intelligent of all the species ever to have evolved on Earth, continues to bicker and whatabout to each other, pointing fingers as they collectively drown, burn and shrivel.

Virtually in Twitterspats, in person in pubs and council chambers, with megaphones on protests and counter-protests, sitting behind little national flags at COP meetings, humans devote a huge amount of our energy to arguing over whose account should be credited or debited with this carbon asset or liability. All the while, it’s business as usual, and we continue to pump ever-increasing quantities of CO2 into the atmosphere. 

It’s actually even more stupid than that. The numbers we’re bickering over are innaccurate  approximations generated by a woefully inadequate accounting system. We’d never allow ourselves be so lax about money.

We act as if we’re still playing out a zero-sum game in an infinite space, rather than collectively shooting off our limbs, one by one, as the walls close in. ‘Just a flesh wound’, we say, before launching into another act of mutual self-destruction. While we minutely examine our bank accounts, we’re happy to keep generating hot air when it comes to carbon, blaming this country, that race, or the other hemisphere, for what’s gone wrong, and demanding that they take action first.

• Industrialised counties need to cut carbon first.
• The super-rich are to blame.
• Poor countries, and people within those countries, emit less yet suffer greater consequences.

We squabble and point fingers without even bothering to fix a carbon accounting system that’s fit for purpose. How can countries, businesses, brands, governments and individuals claim to be serious about reducing carbon, when we’re not even measuring it properly?

How those sentient, impervious, carbon molecules, must be enjoying their new- found sense of irony. Reflecting on us, literally and figuratively up there in the atmosphere, they must be chuckling at the scale of human folly.

See how quickly things can unravel, one you start pulling at the carbon auditing thread? 

But but but…

It’s interesting how quickly our new acquantances move from eye-rolling to nit-picking, but also how quickly their nit-picking becomes so precise.

All those questions about accounting practice – should this carbon-related activity be counted as an asset or a liability, whose account should be credited/debited, and how to avoid counting the same carbon twice – are very good questions indeed, and easy to answer when accounting for money.

But we’re miles from even approaching this level of sophistication when is comes to counting carbon. You may as well ask why a wheelbarrow isn’t made of the latest space-age titanium compound. It’s not necessarilly a bad idea, but we have a long way to go before worrying about such detail.

Anyone is more than welcome to explore the deep weeds of carbon auditing verification. If it strikes you as leaving a lot of gaps for bad actors to game the system, you’re quite right. On the other hand:

• Maths: simple statistical sampling for quality control is surprisingly effective at spotting anomalies. AI is even better
• Better than nothing: however flawed a carbon accounting system for SMEs might be, it’s better than the current option, which is nothing. Something half-way good is, figuratively and mathematically, better than nothing at all. If the standard is open source and transparent, it can be improved as new data, technology, and methodologies emerge.

‘Better than nothing’ has been the fig-leaf for carbon auditing 1.0 – sure, carbon credits and offsetting aren’t perfect, but give us a chance to tweak it again and it will surely get better soon. 

At some point – and we’d suggest that point is right now and not a moment to lose – this jam-tomorrow narrative starts falling flat.

Three decades seems plenty of time to iron out any wrinkles. After thirty years, structural flaws in buildings get worse, not better. With every zero the carbon accounting market adds to its market value, its scandals, oversights, gaming and outright frauds grow by an order of magnitude, rather than diminish. 

Remove the Money Goggles, and the reason becomes obvious. We’re so seduced by money, we can’t trust ourselves to use any system that doesn’t use money as a metric. Sooner or later, the means become the end, the tail wags the dog, and we find ways to prioritise short-term financial profit over long-term species survival.

Like the scorpion who stings the frog carrying it across a river, assuring their mutual deaths, it seems to be ‘in our nature’. 

But mutual aid, and acting together to a common good is also in our nature.

It makes sense, therefore, not only to abandon carbon auditing 1.0 as a failed experiment, but for carbon auditing 2.0 to be based on the better angels of our nature: trust, collaboration, common purpose for mutual benefit.

Carbon accounting 1.0 – the opioid solution

Humans are often said to be ‘addicted’ to fossil fuels. If so, our addiction could kill us, or at least demolish the elaborate, fragile civilisation we’ve constructed for ourselves.

Open the pharmacy to treat our addiction, and carbon accounting 1.0 is the only treatment available.  It comes in many different packages – carbon offsetting, expensive carbon audit standards, ‘green’ investment funds, ESG-rated share portfolios – but they all contain the same toxin – the profit motive.

Carbon accounting 1.0 is the equivalent of prescribing methadone, fentanyl or some equally-addictive opiate substitute to heroin addicts.

Rigorously regulated, administered and enforced, the judicious use of synthetic opiates might, in principle, be a way to kick our habit. 

But give human ingenuity a couple of decades to work out how to game the system, and we get sicker, not better. The more money these ‘solutions’ generate, the easier it becomes for those who profit from it to evade, compromise or simply buy the regulators and administrators that could have protected us. 

Politicians and doctors, for all their smart suits and white coats, are just as susceptible to being corrupted by money as the rest of us.

Carbon accounting 1.0 is a Fentanyl solution. Fentanyl is a synthetic opiate, now widely available following the introduction of another opiate, Oxycontin, by Purdue Pharma in the 1990s (coincidentally around the same time carbon trading was gaining traction).

Purdue Pharma owners the Sackler family spotted a new market for pain relief. They marketed their synthetic opioid, claimed that it would reduce human misery, and suppressed evidence it was addictive.

Clever pushers like the Sacklers know how to play the system. By the time court documents proved the Sacklers couldn’t even claim to have started out sincerely believing they were acting in good faith but inflicted their drugs knowingly – but legally – on the public, it was too late.

The money had convinced regulators to approve their magic pill solutions, and as the revenue rolled in (trading addictive substances is good for business, as the British Empire well knew when their gunboat diplomacy forced China to pay them silver for opium). The Sacklers used more modern, less crude methods, but profited just as spectacularly. They used Oxycontin profits to help incentivise politicians and doctors to look the other way, and artwashed their reputation via ‘generous donations’ to galleries festooned with their name.

The result? A magic pill solution was rotten from the start. Peddlers who profited from it, blinded by profit to the misery they were abetting, evaded prosecution for decades, during which they made piles of money, much of which they’ve retained. It took years of persistent investigative reporting, standing up to legal threats, before even Big Pharma’s cash wasn’t enough to get politicians and media to look the other way. It’s a classic of tricephalous bestiology.

Unfair to pick on the carbon good guys?

Anyone involved in carbon auditing 1.0 who bristles with righteous indignation at being accused of being a drug pusher may be missing the point, so it’s worth clarifying.

Unlike the Sacklers, the people who set up the first carbon pricing and trading scheme in the late 1980s had no idea they were birthing a monster.

The point is that thirty years on, many still don’t realise that they have, and are fighting to preserve carbon accounting 1.0, with the promise that one last tinker will fix it. Whether they’re sincere or cynical about this is irrelevant. Two facts are incontrovertible:

• After 30 years, carbon emissions are still rising
• After 30 years, the industry is now worth around a trillion dollars

People who profit from the latter are of course going to find excuses for the former, but talk to the hand, ’cause the CO2 molecule don’t care.

The path from well-intentioned innocence to moral corruption is well documented in world literature, and everyday experience. For an academic demolition of carbon offsetting, there’s Dr. Joseph Romm’s very readable 50-page (inc. references) Are carbon offsets unscalable, unjust, and unfixable – and a
threat to the Paris Climate Agreement? (1-word summary: ‘Yes’). For an empathetic, devastating journalistic take-down, there’s Heidi Blake’s recent New Yorker investigative piece The Great Carbon Hustle.

Attempting to use market forces to reduce carbon was an elegant idea thirty years ago. Still arguing that it can work ‘if properly regulated’ today is delusional, and only done by people who profit from the status quo. The Sacklers never deserved the benefit of the doubt. Purveyors of carbon accounting 1.0 no longer do.

They don’t have to give up on the ‘carbon business’ altogether – their expertise is needed more than ever. They just need to apply it to consultancy, rather than lobbying for the status quo. There’s plenty of clean money to be made from advising companies that can afford carbon consultants how to decarbonise their businesses, without trying to monetise the carbon auditing standards used to measure that reduction.

Anyone still prepared to justify carbon accounting 1.0 is running out of road. They find themselves defending:

• a carbon offsetting industry whose biggest business turns out to have a product line that’s 90% junk
• carbon pricing schemes that can price the same tonne of CO2e at US$1.03 in Ukraine and US$137.30 in Uruguay
• carbon auditing standards that can’t be afforded by 70% of the world’s carbon emitters

Still unconvinced?

Consider this narrative, and identify which parts are true of the Sacklers, but not true of carbon accounting 1.0.

1. Three decades ago, a new product was launched that promised to fix a real, current problem.
2. A few decades on, far from being fixed, the problem is worse than ever.
3. The old crisis is as lethal as ever.
4. Far from fixing the old crisis, the new product created new one.
5. The new product turned out not to address the fundamental problem of addiction.
6. The business depends entirely on government regulation.
7. Governments failed to regulate the new business adequetely.
8. Profits from the new business were used to suppress critics and lobby governments.
9. Profits from the new business was used to launder reputations.

There is one difference.

• Big Pharma knowingly substituted a legal addictive substance for an illegal one to make money. 
• Big Oil didn’t create carbon accounting 1.0, but has turned it to its advantage, as it gives the illusion of effective climate action, while actually permitting them to carry on business as usual.

Is this distinction worth defending an industry for, knowing what we now know.

Talk to the hand, ’cause the CO2 don’t care.

Kicking our fossil fuel addiction

We’ve given the opiate solution long enough now to have proved not only that it hasn’t worked, but that it can’t work.

When it comes to carbon accounting 1.0, three decades have been lost by trusting ourselves not to be tempted, during which all our actions have proved we’re incapable of resisting temptation.

Religious institutions have proved themselves just as corruptible by money as politicians, bankers, doctors and lawyers. This is particularly ironic, as all the sources they cite as guiding their actions predicted this very corruption.

The love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows. 

Timothy 6:10

Allah will deprive usury of all blessing, but will give increase for deeds of charity. 

Quran 2: 276

The fool is his own enemy. Seeking wealth, he destroys himself. Seek rather the other shore.

Gautama Buddha

Maybe we should pay more attention to these experts on the human condition, all of whom made their observations in the five thousand years after humans invented money.

In different times and places, from different cultures, speaking different languages, these students of human nature all came to the same conclusions. Money corrupts.

When addressing the most urgent existential crisis our species has inflicted upon ourselves, one driven by the love of money, doesn’t it make sense for us ‘fools’ to deploy ‘deeds of charity’ rather than ‘pierce ourselves through with many sorrows’?

Instead of counting on money-based panaceas for a fossil-fuel addiction driven by our love of money, let’s start prescribing ourselves a cure that’s inoculated against money.

It has to be driven entirely by volunteers, without even a bank account, free from any entirely-justified suspicion of scamming or profiteering.

Carbon auditing 2.0 has to demonstrate it’s motivated purely by our urgent need to look our children and grandchildren in the eye when they ask what we did to save humanity from self-destruction.

See Through Carbon: carbon accounting’s 2.0 solution

This new alternative carbon calculator can’t be a regular charity, or a registered Non-Governmental Organisation. They’re inoculated against excessive profit, but not against money. They all require money to operate, and have to compromise accordingly.

See Through Carbon is a more radical solution, but one based on logic.

If carbon auditing 1.0’s problems are that its:

• Inaccurate
• Costly
• Opaque
• Proprietary

It stands to reason that its 2.0 successor should be:

• Accurate
• Free
• Open source
• Transparent

So what’s it to be: ICOP or AFOT?

See Through Carbon’s claims to be immune from influence by money are based on the fact that it doesn’t even have a bank account.

If this sounds ridiculous, idealistic, impractical, or crazy, this says more about how hard we now find it to remove our Money Goggles: 

• If you’re reassured by citing Nobel laureate economists, here’s an explanation of how See Through Carbon is based on sound Coasian Theory
• If you want practical evidence it works in ‘the real world’ (i.e. the one based on an abstraction, rather than the building block of life on Earth), here’s a menu of 5 cash-free models for contributing 
• These models include ‘real-world’ examples, such as the See Through Carbon Competition, that started with an unsolicited, no-strings-attached donation of a voucher worth half a million dollars.

The fact that See Through Carbon’s solution sounds so radical, so ‘impossible’ without a bank account, shows how tightly strapped on our Money Goggles are. So tight they can impede our hearing, as well as distort our vision.  

See Through Carbon can work, precisely because it’s based on the system we used for the 295,000 years we existed before we invented money – bartering and trust for mutual benefit. 

We somehow forget it as soon as we put on a suit, or enter an office, but still barter constantly at home:

• Eat your greens and you can have ice-cream
• You wash, I’ll dry.
• I’ll do the school run if you do the shopping.
• I’ll buy you a diamond ring, my friend, if it makes you feel alright.

It’s strange that we find this rather obvious solution strange.

Within days of soft-launching its website, See Through Carbon started receiving unsolicited enquiries from local governments, multinationals, small and mid-size SMEs. Independently, instantly, they all recognised See Through Carbon as a unique solution to their carbon reporting obligations that commercial standards haven’t, and can’t fulfil. ICOP v AFOT.

SMEs emit 70% of global emissions, but commercial standards neglect them because they can’t afford to pay for their services. Money.

After contacting See Through Carbon, these local governments, multinationals, small and mid-size SMEs all go through the same 7-step process:

1. Declare they share STC’s aims to measurably reduce as much carbon as possible as quickly as possible
2. Ask what they can do to help
3. Praise STC for coming up with the only available solution to this critical problem
4. Express amazement that the service costs nothing
5. Become suspicious about STC’s motives
6. Assert, reflexively, that STC ‘will of course need money at some point’
7. When presented with evidence, admit it won’t

At this point (which usually takes 1-2 hours), STC:

• Reminds them they, not STC, requested the meeting
• Reminds them of what they said at 1
• Answers their question at 2, which involves a no-strings-attached donation of goods or services

Even after their heads accept why STC not only can operate without a bank account, but must, in order to have the credibility that any commercial alternative can never have, the hearts hesitate. Most of these local governments, multinationals, small and mid-size SMEs, demur at the notion of ‘giving away’ something ‘for free’. 

Fortunately, while plenty of these local governments, multinationals, small and mid-size SMEs baulk at this point, when confronted by the gap between their words and the actions they’re prepared to take, there are also others who are prepared to act.

There only needs to be one in each sector to break the mould. Ideals aside, they recognise the reputational and commercial first-mover benefits that come from being the first .

They’re the ones who not only ‘get’ See Through Carbon’s strapline, but are prepared to act on it:

If you can’t buy integrity, why should you be able to sell it?: