Carbon For Good+

Lately it seems that open source decision making keeps popping up in conversation in the circles I hang out in.  Often called ‘Wisdom of the Crowds’, collective decision making by groups - exercised by hundreds of decisions at the individual level - is becoming more and more attractive an option is almost every aspect of the work that I do.

There is a certain leap of faith that one must make before the wisdom of the crowds (WOC) can be trusted as a decision making process.  I read with incredulity the case studies within James Surowiecki’s book The Wisdom of the Crowds (Amazon listing), which illustrate that seemingly disparate individual decisions lead to better group decisions overall.  Again, and again, and again.  It’s quite unsettling, as I think most people have trouble trusting that other individuals can make smart decisions so often (and the point is that they don’t, but overall the average is a positive result).

So how does this all apply to carbon credits and offsets, especially at the level of the individual conscious consumer/offsetter?

Well, it’s actually pretty simple: rather than worry so much about in depth measuring, tracking, verification and the like, which is consistently a barrier to providing high-value, high impact boutique carbon (because of the problem of economies of scale), we should just trust people’s judgment.  That’s right - rather than peg the cost of carbon at some number, which is invariably linked to the costs associated with measuring, tracking and verifying the ‘quality’ and ‘value’ of the particular offset, we should put all of the decision making power in the hands of the consumer.

Let me explain.  This doesn’t mean that we let any old carbon project get listed and sell offsets (though hardcore marketplace believers will argue for this route, since it has a built in quality control/self-adjustment component - however, it’s far from failsafe).  Rather, why not stick to what’s easier, and what we’re already doing: development (and its link to philanthropy).  This means piggybacking existing philanthropic and microfinance schemes, since the measurement, tracking, and verification costs associated with these business models are substantially lower.  Think Kiva, GlobalGiving, Prosper, MicroPlace, etc., etc., etc.

Slap a ‘Carbon Offset’ icon next to the already existing “Give/Donate/Invest Now” tab, and let people bid the price of it as high - or low - as the group sees fit.

And why stop there?  Give people the chance to evaluate how impactful they think a given project is along various guidelines (such as social, environmental, other impacts) and tack the extra value on to the original gift/donation/investment.   Set a minimum price - sort of like “Reserve Price” on eBay - to cover baseline costs, and then let the group do its group magic thing.

There’s a certain elegance to this model, because it creates an incentive structure that didn’t exist before: people get to use their own judgment in pricing a given project (and thus have ownership in the process, something everyone likes), and almost more importantly, project sourcers (ie: MFIs) have an incentive to find high quality projects to appeal to conscious consumers, and project developers are pushed to ensure quality standards - as defined by the group.

Of course, some will argue that this puts projects (and the people behind them) at the mercy of market fluctuations and consumer whim, which is certainly true, but…

…remember WOC, and how it almost always trumps individual judgments?

Yeah. There you go. 

Appeals to the higher goal of development impact, lifting out of poverty

This weekend the VCS finally revealed what it has been working on for the last few months, its master plan for revolutionizing the voluntary carbon market.

So what does the VCS have for us? At first blush, something refreshingly different from other carbon schemes: a collection of four registries to identify, verify, trace and authenticate carbon credits from A-to-Z.  This represents a step in the right direction since most standards (such as the Gold Standard) pair with a single registry when rolling out credit schemes.  The reasons for this are pretty obvious, since pairing with a single registry means fewer moving parts and the lower costs associated with managing a contained partnership. Managing and tracking carbon credits across registries is purportedly too difficult, and thus remains a barrier to more comprehensive, cross-registry standards.

What a load of bull.

Sure, linking up multiple registries - even four - is certainly more difficult than a one-on-one relationship, but the VCS’s move leaves me wanting more.  Here’s a running tally for how the VCS has consistently let me down:

1. I was initially hopeful that the VCS would be a truly collaborative, open system.  I was sick of closed, private standards (like the Gold Standard) that pretended to set the bar above all others while simultaneously solving the market’s problems, when in reality the result was almost always the opposite: an expensive, bloated, insulated standard that ignored many of the constituents within the voluntary system.

2. I was also hopeful that the VCS would open up the discussion to all interested parties, both within and without of the voluntary markets, the typical (corporate) and the atypical (individual) customers.  Alas, this was not to be, as the VCS ‘collaborated’ with a mere 50 non-profit and carbon credit-related organizations to come up with the fundamentals of the standard.  I’m not sure what they did for all those months, but I’m sure it took them ages to post the link to the CDM website on the VCS ‘Methodology’ section.  Well done.

Why not open it to a global forum, and get everyone to weigh in, from the unhappy corporates who buy high volume (but want higher quality), to the wary individuals who want low volume and are sick of buying ‘plant a tree’ credits.  There was an immense opportunity to both educate and dive deeper into the future of the voluntary market that was missed, and it’s a damn shame.

3.  Finally, I was all excited about the potential to create a truly cross-registry standard.  I had envisioned an online market place that tagged credits once they were listed, and gave them a unique VCS ID number that each member registry then used to keep everything kosher.  However, the VCS spokesperson claims that this is the “difficult next step that the organization must figure out” (I’m paraphrasing), making it sound like it’s going to be akin to finding the cure for cancer in terms of difficulty.

Puh-lease.  Sure, it’ll require a bulletproof backend with basic tracking requirements, but it’s hardly rocketscience, and it’s not as if it hasn’t been done before (as the spokesperson rightly points out, banks have been doing it for years).

I’m simply worried that the four registry ‘collaboration’ is the end of it.  There’s no word that the group will expand, and it’s worrisome that the VCS didn’t think through the tracking system - it hints that they probably haven’t thought through registry expansion plans.

In any case, not to be too critical, but it’s very disheartening to see how the supposedly ‘open’ and more creative factions (and they are a faction), such as the VCS, are finding it all but impossible to think outside the box.

::sigh::