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There's a lot of well known issues with carbon credits (many are not actually additional, there's double counting, accountability issues, etc). But is there an

There's a lot of well known issues with carbon credits (many are not actually additional, there's double counting, accountability issues, etc). But is there an alternative solution for companies to do? Let's say Meta builds a new data center. Inherently there is a climate cost for this (even in some crazy hypothetical world where it's mass timber, etc) and so there needs to be some sort of offset to be carbon neutral. Is the recommendation that every company has their own individual technology efforts doing their own carbon offset? That feels less effective than contracting out to other companies, which can pool resources and efforts. What is an actionable step that a company can take?

igor47 3y ago
IMHO, companies should work directly to limit their scope-1 and most of their scope-2 emissions. they should buy carbon credits to offset their scope-3 (and maybe some of their scope-2) emissions. the scope-3 emissions of one company are the scope-1 emissions of another company, so the hope is that, as everyone tackles their own scope-1, we reduce emissions to 0 (which is the goal). more on emission scopes: https://www.forbes.com/sites/gauravsharma/2023/06/11/understanding-scope-1-2-and-3-emissions-and-the-need-for-such-categorization/?sh=20172f4b1ff9 https://www.forbes.com/sites/gauravsharma/2023/06/11/underst... quick summary: * scope 1 -- direct emissions, for meta this might be nothing * scope 2 -- carbon emissions made indirectly by a company to facilitate its daily operations via energy and utility purchases, the most obvious examples of which being power, heating and cooling. for meta this is probably most of their emissions. meta should be involved in PPA (power purchasing agreements) to directly fund renewable energy to run their operations. buying credits to offset powering their datacenters by burning coal would probably qualify as "pointless greenwashing" * scope 3 -- indirect emissions, excluding those included in scope 2, both up and down the value chain. for meta, this would be stuff like flights they buy for their employees to travel to meetings. this is the kind of thing that should be covered with carbon credits, meta should not be, like, building electric airplanes.
- leipert 3y ago
  Huh. I would argue companies should also work to reduce their “scope 3” emissions by reducing unnecessary travel and maybe even reducing commutes of their employees.
  - igor47 3y ago
    absolutely. i think the problem with this whole space is, it's entirely voluntary, or sometimes we have carrots like tax incentives for building renewable energy infrastructure. i think that instead, for scopes 1 and 2, we should have regulation that phases out dirty technologies. in my industry (refrigerants) the montreal protocol is a great example of how to force the phase-out of polluting technology. we know this can work (i wrote a blog post about this at https://www.recoolit.com/post/refrigerants-what-are-they https://www.recoolit.com/post/refrigerants-what-are-they). for scope 3, i think it's hard to regulate "buy fewer flights". or, like, "buy flights only if it's really important to have an in-person meeting". this is where carbon pricing comes in -- then we can use market incentives to force companies to only buy the important flights.
- dado3212 3y ago
  For the record, I think this is primarily targeting scope 3, at least based on their most recent Sustainability Report. But I agree that focus on driving 1 and 2 to 0 and shrink 3 as much as possible is the best approach.
adrianN 3y ago
Build a datacenter, also build X wind turbines. Carbon credits allow for a lot of diffusion of responsibility. Investing in concrete projects with easy to calculate effects seems much better.
kqr 3y ago
Be more clear about what, specifically, they think they are doing to compensate. Not "we are offsetting our carbon" but "we know this is bad for the environment so we are trying to contribute to a better world by also investing in X".
kisamoto 3y ago
Carbon credits can be a reasonable way to help richer nations help poorer, more polluting nations transition to greener alternatives. However more often than not they are indeed "a scam". Credits have been around since the 70's and have had questionable impact on the growing climate crisis. If I were a benevolent dictator of a nation, I would take the following approach: - Start with the legal requirement for every business to understand their Scope-1 and Scope-2 emissions. Scope-3 will need to also be understood in the future to ensure no loopholes but that's much easier when the supply chain understands their scopes 1&2; - Set a net-zero target for all businesses that requires overall emissions reductions and leverages carbon removal for any avoidable emissions; - Treat emissions accounting the same way as financial accounting, requiring annual submission to the state and penalizing fraud/mis-representation; - Offer tax incentives for carbon credits however set stricter standards (credits must have a certain amount additionality and/or be demonstrating help to reduce emissions of other businesses within this imginary nation); - Carbon credits cannot be used to reach the net-zero targets set above; - Future goals/incentives can encourage businesses to The overall aim is to highlight the hidden costs of unsustainable practices, effecitvely eliminating the green premium that currently exists for more sustainable products/services. Companies should then prefer cleaner practices and suppliers to keep their own costs down which accelerates the fly wheel towards a sustainable future. Now of course there are issues (e.g. the supply of CDR is small and expensive or the availability of clean energy) with this approach, however nations can help encourage development here (e.g. with the IRA) as well as private investors. Then of course there is the consumer society to contend with who wants lots of cheap produce but that's why the "dictator" part...

igor47 3y ago

IMHO, companies should work directly to limit their scope-1 and most of their scope-2 emissions. they should buy carbon credits to offset their scope-3 (and maybe some of their scope-2) emissions. the scope-3 emissions of one company are the scope-1 emissions of another company, so the hope is that, as everyone tackles their own scope-1, we reduce emissions to 0 (which is the goal). more on emission scopes: https://www.forbes.com/sites/gauravsharma/2023/06/11/understanding-scope-1-2-and-3-emissions-and-the-need-for-such-categorization/?sh=20172f4b1ff9 https://www.forbes.com/sites/gauravsharma/2023/06/11/underst... quick summary: * scope 1 -- direct emissions, for meta this might be nothing * scope 2 -- carbon emissions made indirectly by a company to facilitate its daily operations via energy and utility purchases, the most obvious examples of which being power, heating and cooling. for meta this is probably most of their emissions. meta should be involved in PPA (power purchasing agreements) to directly fund renewable energy to run their operations. buying credits to offset powering their datacenters by burning coal would probably qualify as "pointless greenwashing" * scope 3 -- indirect emissions, excluding those included in scope 2, both up and down the value chain. for meta, this would be stuff like flights they buy for their employees to travel to meetings. this is the kind of thing that should be covered with carbon credits, meta should not be, like, building electric airplanes.

leipert 3y ago
Huh. I would argue companies should also work to reduce their “scope 3” emissions by reducing unnecessary travel and maybe even reducing commutes of their employees.
- igor47 3y ago
  absolutely. i think the problem with this whole space is, it's entirely voluntary, or sometimes we have carrots like tax incentives for building renewable energy infrastructure. i think that instead, for scopes 1 and 2, we should have regulation that phases out dirty technologies. in my industry (refrigerants) the montreal protocol is a great example of how to force the phase-out of polluting technology. we know this can work (i wrote a blog post about this at https://www.recoolit.com/post/refrigerants-what-are-they https://www.recoolit.com/post/refrigerants-what-are-they). for scope 3, i think it's hard to regulate "buy fewer flights". or, like, "buy flights only if it's really important to have an in-person meeting". this is where carbon pricing comes in -- then we can use market incentives to force companies to only buy the important flights.
dado3212 3y ago
For the record, I think this is primarily targeting scope 3, at least based on their most recent Sustainability Report. But I agree that focus on driving 1 and 2 to 0 and shrink 3 as much as possible is the best approach.

adrianN 3y ago

Build a datacenter, also build X wind turbines. Carbon credits allow for a lot of diffusion of responsibility. Investing in concrete projects with easy to calculate effects seems much better.

kqr 3y ago

Be more clear about what, specifically, they think they are doing to compensate. Not "we are offsetting our carbon" but "we know this is bad for the environment so we are trying to contribute to a better world by also investing in X".

kisamoto 3y ago

Carbon credits can be a reasonable way to help richer nations help poorer, more polluting nations transition to greener alternatives. However more often than not they are indeed "a scam". Credits have been around since the 70's and have had questionable impact on the growing climate crisis. If I were a benevolent dictator of a nation, I would take the following approach: - Start with the legal requirement for every business to understand their Scope-1 and Scope-2 emissions. Scope-3 will need to also be understood in the future to ensure no loopholes but that's much easier when the supply chain understands their scopes 1&2; - Set a net-zero target for all businesses that requires overall emissions reductions and leverages carbon removal for any avoidable emissions; - Treat emissions accounting the same way as financial accounting, requiring annual submission to the state and penalizing fraud/mis-representation; - Offer tax incentives for carbon credits however set stricter standards (credits must have a certain amount additionality and/or be demonstrating help to reduce emissions of other businesses within this imginary nation); - Carbon credits cannot be used to reach the net-zero targets set above; - Future goals/incentives can encourage businesses to The overall aim is to highlight the hidden costs of unsustainable practices, effecitvely eliminating the green premium that currently exists for more sustainable products/services. Companies should then prefer cleaner practices and suppliers to keep their own costs down which accelerates the fly wheel towards a sustainable future. Now of course there are issues (e.g. the supply of CDR is small and expensive or the availability of clean energy) with this approach, however nations can help encourage development here (e.g. with the IRA) as well as private investors. Then of course there is the consumer society to contend with who wants lots of cheap produce but that's why the "dictator" part...