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Brian Alderman, IvyCo Founder/CEO

July 27, 2021

This article is a longer, more detailed version of the post available here.

The promise of “personal climate apps” to help you fight climate change is a recent trend. Given the ways climate change is shaping our world, the interest has never been higher. Figuring out how to participate in taking climate action can be challenging, and these apps offer a tantalizing way to get involved. As more personal climate apps (or websites - I’ll use the term apps for consistency) emerge, how should you think about picking the right one? What is the real potential these apps offer in helping to combat climate change?

I believe three aspects are important in these apps: contextualization of climate impacts in your life, effectiveness of the actions the app promotes, and the intentions behind those actions. All three of these areas must be designed well in order to maximize your effectiveness at fighting climate change. We’re going to explore these three important areas, and why getting them right is so important. Of course, as the creator of one of these apps ( I'm biased. But maybe I'll convince you to think more deeply about your role fighting climate change and the apps available to do so.

Is Your Carbon Footprint Important?

First, we have to talk about the terms Carbon Footprint and Carbon Accounting. Carbon Footprints are "the total greenhouse gas (GHG) emissions caused by an individual, event, organization, service, place or product, expressed as carbon dioxide equivalent", where carbon dioxide equivalents are the underlying cause of human created climate change. You've probably encountered Carbon Footprints in the media or elsewhere in your life, and you might know that the average American’s Carbon Footprint is 16.6 Tons, or that the total US Carbon Footprint in 2017 was 5.28 Billion Metric Tons.

Carbon Accounting is the process to determine a Carbon Footprint. Just like financial accounting, Carbon Accounting follows certain methodologies to ensure consistency and trust in the resulting Carbon Footprint. Robust Carbon Accounting methodologies help ensure trust in the commitment countries make under the Paris Climate Agreement.  Companies can be held accountable to their climate pledges in part due to quality Carbon Accounting rules.

But are Carbon Accounting and Carbon Footprints useful for you and I? With few exceptions (like filing taxes) our non-work lives don’t involve processes that are robust and auditable like “accounting”. However, that hasn't stopped the development of technologies that try to help you implement Carbon Accounting (sometimes called Carbon Tracking) for your life, with varying degrees of success. There are online calculators that have been available for decades to help you estimate your carbon footprint - but those are estimation tools not Carbon Accounting tools. These calculators are also hard to use (with some exceptions, like Kilma, tend to cover long time periods, and require significant data entry.

Recently, a new breed of app has emerged to help you engage in climate action. These apps are powered by Open Banking technology. This technology lets you share your spending data to enable automatic analysis in near-real-time with minimal data entry required. Open Banking data is information about how you spend money with your credit and debit cards, but is limited to high-level information like the amount you spent on plane tickets or at the grocery store. While this type of data can enable more automated analysis, the high-level nature of the data misses details that have major impacts in your Carbon Footprint. For instance, Open Banking data doesn't know the details of your flights, or the contents of your shopping cart - both examples of areas that can drive significant differences in your resulting Carbon Footprint.

These new apps, like Joro, Cogo, and an offering from Mastercard powered by Doconomy, are primarily trying to provide you a Carbon Accounting methodology to determine your Carbon Footprint. Compared with Carbon Accounting standards for companies and governments, however, these apps fall short in three crucial ways:

  1. Open Banking data is limited in the accuracy it can provide. Take, for example, a vegetarian vs. a meat eater's grocery store spending - the vegetarian's footprint from the same spending is likely significantly less than the meat eater's. However, the Open Banking data looks at both as just a grocery shopping trip and can’t tell what you bought.
  2. While all Carbon Accounting methodologies are to some extent an estimate of emissions, the accuracy (distance from the true emission footprint) of the methodology matters. Companies and governments typically produce highly accurate assessments (often based on high quality Life Cycle Assessments) of their footprints using extensive data and teams of experts, whereas these apps are far less accurate due to the data limitations described above.
  3. These apps are using black box or sometimes self-described "machine learning" models that are not subject to the rigorous audits that create accountability and trust. These limitations in the data collected, oversimplification of complicated calculations, and opaque methodologies cast doubt on the usefulness of Open Banking data for Carbon Accounting to determine your Carbon Footprint.
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Even if these apps provided a true Carbon Accounting methodology, does your personal carbon footprint actually matter? Sure, it is useful to know which parts of your spending have the largest impact on the climate. The most likely culprits are the plane trips you take, the meat and highly processed foods you eat, the car you drive, and the building you live in. Beyond that insight, what can you actually do to fight climate change when you know your absolute, justifiable Carbon Footprint? The answer is not much. One key reason why is that your individual Carbon Footprint is roughly 0.0000000003% of the global annual greenhouse gas emissions. Eliminating it would be like picking up a single grain of sand from a 10 foot by 10 foot by 1 foot deep sandbox. Fossil fuel companies have long attempted to convince us of the importance of reducing your carbon footprint, but given the scale of the challenge it quickly becomes clear that this "choice" to change your behavior and reduce your footprint is folly given the scope of the problem.

However, the consumption choices you make still have a major impact  - just not directly. The objective is not to reduce your own personal footprint or reduce your own guilt - it’s about sending a signal for your expectations of the world. Companies and governments respond to the behavior of their customers and citizens. Your most powerful tool in fighting climate change is the power you have as a consumer when used in concert with the power of your fellow consumers. By recognizing the areas of spending where you have the greatest climate impact, then hesitating just a bit before consuming more in those areas, you demonstrate your priorities. Repeated over and over, this pattern becomes a trend which will drive change.

The objective is not to reduce your own personal footprint or reduce your own guilt - it’s about sending a signal for your expectations of the world.

Time for the shameless self-promotion part of this post: is trying to be a different type of Open Banking-powered personal climate app. While we use the same underlying technology as other personal climate apps, we’ve designed a solution that’s tailored to an individual's role in combating the climate crisis. One way we’re achieving this is through IvyCo’s Carbon Intensity Metric. Carbon Intensity is explicitly not a Footprint - you won't find the term Carbon Footprint anywhere when using IvyCo. Instead, Carbon Intensity is just a number - it’s higher for the most climate-impactful spending, and lower for the more sustainable purchases. Carbon Intensity is designed to focus you on your own life and impact, not on comparing your “Footprint” to others because each of our lives and needs are different. By comparing your impact to yourself, the problems of accuracy and transparency are reduced in surprisingly simple ways. For instance, instead of trying to compare vegetarians to meat eaters, we compare your personal diet to itself over time. Instead of comparing the spending of a family of four to an average American’s footprint, you track your own deviations and highest impact areas on their own merits. This makes it easy to identify and track the most relevant, climate-impactful changes you make in your life and focus on impacts that make sense for you. This also equips you with powerful data about how to use your spending to drive decarbonization from the companies and governments that make up our economic system. You’ll see which companies you buy from are associated with the largest climate impact. The focus is on you and what you can do, not on how you’re doing compared to some average person.

Doing Better Than Offsetting

We've explored how personal climate apps that use Carbon Accounting to track your Carbon Footprint fall short, and what a better approach to understanding your impact through your spending can look like. Now, we need to dig into the action that these apps encourage, specifically the fraught practice of buying carbon offsets.

At their core, carbon offsets are a financial mechanism to pay someone else to prevent or eliminate their emissions. The first step in offsetting is to quantify your emissions, which is why the personal climate apps focus on Carbon Accounting. Paying money for the convenience of eliminating your emissions to do your part in the climate fight is compelling. We've been trained to think this way, again largely by fossil fuel and other large emitting companies. However, the challenge of climate change is wider than that. Offsetting your own individual footprint does not make a meaningful impact in combating climate change - it is a solution designed to discourage and distract from engaging in the fight on a wider scale.

Offsetting your own individual footprint does not make a meaningful impact in combating climate change - it is a solution designed to discourage and distract from engaging in the fight on a wider scale.

The problems of carbon offsets have been broadly covered, so I won't spend time reiterating those points. Despite their problems, offsets convincingly serve an important role for corporations, especially as they transition away from traditional high-emitting practices. The key word in that sentence is “transition” - offsets help companies take action now while they are working to decarbonize. For instance, manufacturing steel is currently a high-emitting sector and implementing the technologies to clean it up requires re-tooling the entire steel production value chain - a daunting but doable prospect. Offsets can help companies mitigate the harm they are doing now while working to change their supply chain. Offsets can also create a further incentive to accelerate the company’s transition since offsets increase the cost of business as usual.

You and I are not embarking on a similar transition. Yes, we’ll need to change some aspects of our lives like using public transit more frequently or making more sustainable food choices. But the changes we can make in our lives are constrained by the existing systems. We can’t choose to only use public transit if our local public transit agency is inadequate. If our only affordable food options are factory farmed and processed products there’s not a more sustainable choice to make. Behavior change is important, but the International Energy Agency (IEA) says individual behavior changes will only account for around 4% of cumulative emissions reductions. The takeaway is that we all still have to eat and live somewhere, and until the supply chains that provide our food and shelter decarbonize, our own emissions won't reduce. This makes offsets a poor solution for individuals, since our power in fighting climate change is not in directly reducing our impact but in influencing the emissions practices of the system around us.

Despite these challenges, contributing funds towards projects with the right intent can have a meaningful impact! As renowned climate scientist Jonathan Foley has said, "If your bathtub is overflowing, you really need to turn off the faucet -- not just look for a bigger mop." The primary goal right now is eliminating emissions as quickly as possible. With some rare and small scale exceptions, carbon offsets do not eliminate emissions so they do not help achieve this goal. A secondary goal is to protect the important carbon sinks that already eliminate and retain existing emissions. We have to make sure that the bathtub doesn’t shrink while we work to shut off the faucet. The projects that generate offsets can play an important role in achieving this goal, but the effectiveness depends on the specific project. For example, investing in projects that ensure existing forests around the world remain protected or that promote climate-improved farming practices are good investments for the climate regardless of the tons of carbon they "produce". The verification of climate impact is less important than the trust you place in the project developer to take actions that truly protect carbon sinks. If you remove the Carbon Accounting part of the equation and instead look at offsets as a mechanism to protect critical carbon sinks, they can indeed be a worthwhile investment in the fight against climate change.

Again, we can look at how IvyCo works as an example. IvyCo’s collaboration with the Family Forest Carbon Program is intended to be an action that goes beyond offsetting. The Family Forest Carbon Program is a collaboration between The American Forest Foundation and The Nature Conservancy to create climate benefits by helping family forest owners better manage their lands. Forests are one of the critical climate solutions we have to protect - they are already responsible for eliminating 15% of US emissions. Family owned forests in particular are critically important due to their size - 36% of US forests are owned by families, the largest share of US forest ownership. Currently, many family forest owners have neither the expertise nor the resources to implement an effective plan for managing their land. By helping implement improved forest management plans in partnership with these forest owners, a climate benefit is generated. You can measure this benefit in tons of carbon offset, or you can think of it as an action that protects a key carbon resource.  You'll notice that IvyCo measures impact in acres - every $11 helps protect an acre of our American forests. The acres protected is the key metric, even though underlying those acres is also a verified carbon offset project (and one of high quality and cost). When you use IvyCo, the goal is the acres, not the offsets, and that intent makes all the difference.

When you use IvyCo, the goal is the acres, not the offsets, and that intent makes all the difference.

There's one last concept that occasionally comes up in conversations about offsets: Carbon Removal. The idea of Carbon Removal is to actively pull carbon dioxide from the atmosphere and store it back where it came from (i.e. underground). Most of the commonly accepted "pathways" to decarbonizing the economy assume some amount of Carbon Removal, especially as we get closer to 2050. While the technology is alluring and generates a lot of  buzz, it remains speculative at scale and presents a distraction from the urgent actions to reduce emissions quickly. If we’re not able to reduce emissions quickly, the impact of Carbon Removal is even further lessened. In the long term, it is important to keep investing in Carbon Removal approaches, but there's already significant money from venture capital and corporations doing so. For now, as an individual, this space is not near-term critical enough to warrant your attention.

The Makings of a Good Personal Climate App

Given all of these complex, interlinked concepts (Carbon Footprints, Carbon Accounting, and Carbon Offsets) and the place each of us holds in the economic system, what does a good app-based solution for fighting climate change look like? After all, 70% of the US economy is driven by consumer spending and 60% of greenhouse gas emissions are attributable to households. As consumers, we clearly hold significant power and significant responsibility for taking climate action - but our choices are constrained by the systems around us.

I'd suggest there are three key things to look for in a personal climate app:

  1. The app helps you understand your behavior choices relative to your own life to improve accuracy, highlighting the most impactful areas.
  2. The app focuses on making behavior changes that expose your preferences in order to change the system, not on actions that eliminate your footprint.
  3. The app uses your dollars to protect carbon sinks instead of offsetting your emissions. The mechanism may be the same, but the intent matters.

I'm not a neutral party in any of this. As a climate fintech entrepreneur, I believe technology and our financial system have a critical role to play in combating climate change. I believe deeply that we can send signals about the future we want for the world through the decisions we make about how we spend our money. That's why the IvyCo team has thought deeply about this problem, and has developed IvyCo as a solution that we believe provides the power to individuals in the fight against climate change.

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