To watch companies like Chevron tout their commitment to “carbon neutrality” while continuing to make massive investments in fossil fuel extraction is to realize that the words we use to describe our path to decarbonization lack meaning. Last week, Bloomberg continued its excellent reporting on the woeful state of ESG standards. Their conclusion? For all intents and purposes, third-party ESG reporting has been designed primarily to protect the corporate bottom line. For all of the hand-wringing that featured prominently in Glasgow last month, it’s business as usual for the energy-industrial complex.
When I first started working on WattCarbon, I assumed that it would be relatively straightforward to determine the carbon emissions associated with electricity use and also relatively straightforward to calculate carbon savings. But like most things, complexity lurked just under the surface.
For example, some companies count emissions from electricity sourced from the grid while other companies count emissions associated with electricity purchased through a third-party agreement. Most companies use average grid emissions values rather than acknowledging the time of day in which electricity is consumed (or produced). More confusion arises from the term “marginal emissions” which is a construct derived from wholesale power market bidding and represents the emissions from a hypothetical additional unit of production as a result of an additional unit of consumption.
Whether it’s Chevron promoting carbon neutrality or Nest telling me that by turning down my thermostat I am cutting emissions, one common thread underlies all of these claims: existing carbon methodologies are mostly designed to burnish the public image of the organization being measured rather than as a standard for measuring actual carbon emissions. While there may be good faith principles behind any given approach, when methods are proprietary, if datasets are kept hidden, and if results cannot be compared, there is simply no way to trust that any claims are actually leading to lower carbon emissions.
The raft of self-serving ESG reporting would be merely problematic if the stakes were lower. But given the urgency of the need to actually decarbonize it’s absolutely unacceptable that “proprietary methodologies” or self-reported data are allowed to define impact. If we want to be serious, we have to stop playing fast and loose with terminology to score cheap marketing wins and instead start taking the need for carbon reductions seriously.
That’s why even before incorporating WattCarbon, I called Shuli Goodman, the Executive Director of LF Energy, to find out if what we had done to open-source the CalTRACK methods could be replicated for developing more transparent carbon emissions calculations. We started working on assembling a group of stakeholders who might be in a position to contribute to the development of open-source standards for data, methodologies, and real-world applications related to carbon accounting.
We’ll have more to say about this work in the coming weeks, but suffice it to say, I have been extremely encouraged by the response from a wide variety of stakeholders. There is a level of recognition and awareness that what passes for carbon accounting today is entirely inadequate. Over the next year or so, we will be working to define terms, create consistent data frameworks, develop open and transparent methodologies, and standardize across the industry what it means to lower carbon emissions.
For all of these reasons, WattCarbon has now become an official member of the Linux Foundation. We believe that the future of energy decarbonization lies in the democratization of solutions. Everybody should be held accountable to the same set of metrics. A net-zero goal means nothing if net-zero means nothing. LF Energy has demonstrated its capacity to pull together global stakeholders behind exciting projects that will prepare our grid for a decarbonized, resilient future. We feel fortunate to be able to contribute alongside these organizations to a set of standards that will help us achieve that vision.