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This article was originally published at "Outlawing the Carbon Alchemists".

“Oh ye seekers after perpetual motion, how many vain chimeras have you pursued? Go and take your place with the alchemists.” – Leonardo da Vinci, 1494


In 1618, Robert Fludd, an English physician, proposed a machine that would drive a mill without any external power source. Water would fall from a reservoir to turn a water wheel, which would turn a millstone to power the mill and a water screw to transport the water back up to the reservoir, starting the process again. To the disappointment of the Victorian engineers who patented these ideas in search of an unlimited source of energy, such a system would never work; the energy of the water wheel would soon be used up as it is transferred to the millstone, and the system would grind to a halt, like a moving car without an accelerator or a spinning top on a table.

Today’s grand visions of achieving carbon neutrality as isolated businesses, countries or individuals are as flawed as Dr. Fludd’s device. A developed country may be completely powered by renewable energy, yet still burns up carbon by importing most of its products from overseas. A business may be operationally carbon neutral, but its supply chain may spew the stuff. An individual may shop at a zero-waste market, but the salt they purchase from that market may have been transported halfway across the world.

Just as the water wheel could not function in isolation, nor can efforts to achieve carbon neutrality. Indeed, unless an operator or individual extends their responsibility across their supply chain as a facilitator of carbon emissions, the concept of carbon neutrality will simply remain a game of ‘pass-the-buck’.

An ecosystem of emissions

Infrastructure offers a clear and striking example of the important role played by the supply chain in achieving decarbonization. Network Rail in the UK, for example, has outlined its vision to decarbonize the railway by 2050, largely through line electrification and the increased use of renewable energy sources.

While this is certainly good news, the reality is that the direct operations of Network Rail account for less than 1 percent of the UK’s total annual greenhouse gas emissions1 . The real issue is the carbon that is embedded in the thousands of miles of railway track which required material to be mined, transported, constructed and assembled through vast global supply chains. Just building the network created an enormous legacy carbon deficit. It is no wonder that most estimates suggest infrastructure is directly or indirectly responsible for 70 percent of the world’s carbon emissions.

In today’s global environment, where the carbon footprint for most products spans the entire globe and accumulates towards end products like biomass up a food chain, the concept of net zero does not make sense in isolation.

If we want to be serious about achieving net zero, therefore, the world needs to move from the current state of carbon alchemy, where bold visions and goals of carbon neutrality are self-defined, towards a form of carbon science, where reporting metrics grounded in physical laws are used to comprehensively measure the carbon footprint, not only as stand-alone entities, but as an interconnected whole.

Comprehensive framework required

The good news is that initial steps towards the goal of effective sustainability measurement have been made by the World Economic Forum (WEF). The group is also working on strategies to improve sustainability through the supply chain. In 2020, the WEF proposed a set of common Environment, Social and Governance (ESG) metrics to standardize reporting on greenhouse gas emissions, nature loss, freshwater availability and disclosure of climate target compliance.2 In 2021, they published a report that identified eight supply chains which, together, account for over half of all global emissions, and encourages end user companies to engage suppliers and to push their business ecosystems for change.3

These two goals of standardized measurement and supply chain sustainability are a great start. But, over time, they will need to evolve into a comprehensive accountancy framework, thereby enabling any business to understand its stake in the overall carbon economy, both as an operator and a facilitator. Indeed, future carbon reporting systems and metrics could be akin to finance and accounting, which not only measure the internal sustainability effects of the company but are designed to measure the interaction with other companies too.

Legacy carbon deficits could be depreciated over time through carbon offset. Debts akin to carbon credits could allow upfront investment in carbon emitting projects to be recouped later. A form of carbon ‘cashflow’ could be used to measure whether a company is increasing or decreasing its carbon footprint. At its end state, a form of carbon auditing could measure the sustainability of companies, perhaps even triggering a form of carbon bankruptcy when a business is deemed irretrievably unsustainable and requires restructuring.

Alchemy or science?

A comprehensive carbon accounting system, embedded as an integrated part of the economy, will allow individuals, businesses and nations to gain a true understanding of our collective effect on the environment which, in turn, will enable us to tangibly control carbon through the economy itself, rather than simply focusing on overarching targets.

Governments could address a country’s sustainability as a consumer as well as a producer, businesses would be able to fully understand their individual and facilitated impact, and consumers would have the sustainability information necessary to make informed choices about products and investment.

We have a choice about how we approach our green industrial revolution: Experiment blindfolded in isolation, doing what we think will yield results; or design systems rooted in science to accurately and transparently measure our impact, and act accordingly.

Nobody remembers the perpetual motion inventors of the first industrial revolution. But they do remember the engineers who created the steam engine; they were the ones that understood the underlying concepts of heat transfer, thermodynamics, and the conservation of energy which underpin our world today.

Do we, like them, take a scientific, outward looking view of the whole system? Or, like Dr. Fludd, do we go and take our place with the alchemists?

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Footnotes

1 Traction decarbonisation network strategy (PDF 5.72 MB)

2 Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation, WEF, 2020

3 Supply Chain Opportunities, WEF, 2021