#279 - Carbon Accounting and Climate Change: A Dialogue with Kristian Rönn
Nov 16, 2023
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Kristian Rönn, expert in carbon accounting, discusses net zero vs. carbon neutral, scopes 1,2,3 emissions, global regulations, cap and trade, greenwashing, impact of AI on carbon accounting. They explore existential risks, rethinking incentives, redefining success in business accounting, navigating complexities of carbon emissions, and AI's role in climate change.
Net zero involves internal emission reductions and high-quality carbon removals, while carbon neutrality often inaccurately relies on offsetting activities like tree planting.
Normative ensures accurate carbon emissions measurement to avoid misleading claims and assesses tonne-year accounting for selecting high-quality offsetting activities.
The EU's Green Claims Directive aims to standardize environmental product claims, emphasizing transparency and informing consumers for sustainable purchasing decisions.
Deep dives
Accounting for Carbon Emissions and Net Zero vs. Carbon Neutral
Carbon neutrality is achieved through offsetting emissions with activities like tree planting, often inaccurately accounted for. Net zero, on the other hand, requires companies to reduce emissions internally and throughout the value chain, using high-quality carbon removals for residual emissions. Normative focuses on accurately measuring carbon emissions as part of its carbon accounting services.
Ensuring Accuracy in Carbon Offsetting and Tonne-Year Accounting
Normative's approach helps companies accurately quantify their carbon emissions, avoiding inaccurate claims and ensuring integrity in carbon offsetting practices. Tonne-year accounting is crucial for assessing the permanence and effectiveness of carbon removals, guiding decisions on selecting high-quality offsetting activities.
Regulation and Standardization in Green Claims and Product Labeling
The European Union's Green Claims Directive aims to standardize and substantiate environmental claims on products, ensuring transparency for consumers. Improved labeling and nutrition-style facts on products contribute to informed choices. Setting global standards can enhance transparency and accountability in product sustainability claims.
Incentivizing Sustainable Practices in Corporations and Consumer Choice
Shifting towards sustainable practices requires government intervention to incentivize emission reductions and invest in green technologies. Companies play a critical role by offering carbon-neutral products, but must ensure accuracy in claims and prioritize emission reduction over offsetting. Enhanced consumer choice and reliable product information can drive sustainable purchasing decisions.
Understanding Carbon Emissions Accounting: Scopes 1, 2, and 3
Carbon emissions accounting follows a protocol called the greenhouse gas protocol, dividing emissions into three scopes. Scope 1 refers to emissions directly from internal operations like vehicles or on-site combustion. Scope 2 includes emissions from consumed utilities with a clear causal chain, such as electricity consumption. Scope 3 covers value chain emissions like purchased goods or services, highlighting upstream and downstream impacts.
Addressing Greenwashing and Unintentional Misrepresentation in Carbon Accounting
Differentiating between voluntary and involuntary greenwashing in carbon accounting is crucial. Involuntary greenwashing often stems from a lack of knowledge within enterprises leading to unintentional misrepresentation of carbon emissions. On the other hand, voluntary greenwashing involves deliberate actions to mislead through eco labels or false narratives, showcasing intent over ignorance in portraying environmental responsibility.
In this episode, Xavier Bonilla has a dialogue with Kristian Rönn about carbon accounting and climate change. They talk about his work with Future for Humanity and how he created Normative. They discuss the landscape of climate change at the moment, his company Normative, and the differences between net zero and carbon neutral. They discuss carbon offsets, carbon accounting, and ton-year accounting. They talk about scopes 1, 2, & 3, global regulations, cap and trade, greenwashing, impact of AI on carbon accounting, and many more topics.
Kristian Rönn is the CEO and Co-founder of Normative. He has previously worked at the University of Oxford’s Future for Humanity analyzing global catastrophic risks. His background is in mathematics, philosophy, computer science, and artificial intelligence.