Carbon accounts need to start somewhere, and the first versions will rely heavily on the broad shoulders of those who have gone before. We’ll lay out a general roadmap here, and increase it’s precision, ubiquity, and value over time.
Accounting
“Credits” and “Debits” are the key accounting concepts we will follow. Unfortunately, a handful of terms are sometimes substituted.
For example, the term “Credit” might be replaced with “revenue”, “inflow”, “top line”, “income” (the most misleading of these), or more specific environmental terms like “carbon sink” or “carbon offsets”. These usually refer to the good side of the account, with the more the better.
The term “Debit” might be replaced with “expense”, “outflow”, “cost”, or more specific to environmental terms like “carbon footprint.”
Like your bank account, the term “Balance” is the difference between Credits and Debits. Balance might be replaced with “net income” (again imprecisely), or might be called a “net footprint.” A negative balance might be called “in the red”, referring to the badness of “red ink”, and a positive balance might be called “in the black”, referring to the goodness of “black ink”.
Credit Accounting
From the beginning LOT will control credit accounting. Possible Credit sources will include:
- Two thousand pounds automatically credited when an account is created, granted by LOT. LOT will directly add these grants to it’s own carbon deficit, to be overcome in future.
- Credits generated through LOT-sponsored, hands-on carbon sink projects.
- Credits generated in partnership with authorized third party carbon offset projects.
Debit Accounting
Debit accounting will work by default under LOT control, but will rapidly evolve to the control of carbon account holders. For the foreseeable future, LOT carbon debits will run on the honor system.
Debit accounting methodology will depend on measurement depth or “M-Depth”, described below. The deeper the M-Depth, the more precise the measurement and the more effective the behavioral change. Part of LOT’s mission is to radically increase the ease of increasing M-Depth.
M-Depth Levels
Users can manage their debit accounting at various M-Depth levels, with increasing specificity and actionability. It is assumed that consumers will increase their level of depth as they increase their desire to improve their carbon balance increases, and as LOT improves tools available for precise measurement. The levels include the following:
- National Averages: Individual carbon footprints (debits) have been calculated by national averages, and are available for use in the
- Econometric Models: Organizations like coolclimate.org have estimated individual carbon footprints using econometric models. By providing slightly more information, individuals can get a “pretty good” estimate of their carbon footprint.
- Inputted Values: These can take the form of systems inputs or manual inputs, and provided at varying levels of precision. This is one place a carbon account shines!
- Systems inputs are designed to interact via Application Programming Interface (“API”) at varying levels of precision. For example, at the initiative of a carbon account owner, an API could collect information about the user’s monthly electricity consumption, including the carbon footprint of the energy generated.
- Manual inputs might include the same electricity consumption data, but input manually by the consumer.
- By category, users can choose to increase M-Depth, or stay at the previous level. They can also choose whether categories should be input manually or systematically.
Further Reading:
https://www.footprintnetwork.org/our-work/ecologoical-footprint/
https://coolclimate.org/
