Additionality is typically considered a major marker of quality in carbon removal. But what do we do when carbon removal suppliers are producing other types of products and services that make them less dependent upon voluntary carbon market revenue?
Perhaps even more importantly, how do we have a productive disagreement on this topic? Bringing up some concerns can open one to criticism. But we also depend upon people thinking differently in order to advance our understanding of the world and the types of value we create. How do we make sure we aren't encouraging crackpot analysis while also not hewing so closely to orthodoxy that we might be missing important insights? How can we set the stage to understand the true landscape of disagreement so that we can come to better decisions and not be driven by ideology in improper ways?
Today's podcast features Reversing Climate Change alumnus, Grant Faber, returning to the show. Grant is sui generis in our sector for his deep involvement in life-cycle and techno-economic assessment. He is the Direct Air Capture Hubs Program Manager at the U.S. Department of Energy. Prior to DOE, he ran a consultancy focused on life cycle and techno-economic assessment where he worked with many different startups, accelerators, and investors working on carbon removal and carbon conversion. Before that, he worked with Twelve, Heirloom, and the Global CO2 Initiative.
Importantly, we invite you to engage with this material and come to your own conclusions. Part of what makes carbon removal such an intellectual adventure is just how much room there is for creativity and deep thought!
Resources
Grant's previous RCC appearance
Grant's article, "Carbon removal, co-products, and system boundaries"
Eric Matzner from Metalplant's RCC appearance
"Crediting challenges when carbon removal comes with avoided emissions" by CarbonPlan
A few Robert Höglund pieces on temporary carbon removal: #1, #2, and #3
Here's the quote from Gandalf from J.R.R. Tolkien's The Return of the King:
"It is not our part to master all the tides of the world, but to do what is in us for the succour of those years wherein we are set, uprooting the evil in the fields that we know, so that those who live after may have clean earth to till. What weather they shall have is not ours to rule."
Full Transcript
Ross Kenyon: Hey everyone. This is Ross Kenyon. I am the host of the Reversing Climate Change podcast, and today I have someone returning to the show. It’s Grant Faber. Grant is the Direct Air Capture Hubs Program Manager at the US Department of Energy. Prior to the DOE, he ran a consultancy focused on life cycle and techno-economic assessment, where he worked with many different startups, accelerators, and investors working on carbon removal and carbon conversion. Before that he worked with Twelve, Heirloom, and the Global CO2 Initiative. Grant is extremely well versed in CDR policy and a lot else. He’s one of my favorite people to chat with, and much of the reason why is how he approaches problems. You’ll see it in the show, but just how he interacts with people in having discussions that are as complex as this one is.
This conversation with Grant grew out of the episode that I did with Eric Matzner for Metalplant, the link to which is in the show notes. You should go check it out too if you, if you want the full context here. It’s a good show that will get you up to speed with a lot else regarding co-production and the shape of the carbon removal industry moving forward. What you need to know to make sense of this episode is that Metalplant spreads ultramafic rock on degraded farmland in Albania, and they also have a special brassica plant that can uptake nickel into the plant’s tissue, and then that plant tissue is processed. The nickel is pulled out through a process called phytomining.
I had Eric on to discuss his various go-to-market options here and, and how exactly he aims to, to sell his products and how he should structure them, because he has several options. Perhaps the two most obvious is, should he sell his carbon removal credits and regular nickel without the carbon content being discussed, or should he embed the carbon negativity into the nickel to some extent, whether that’s a carbon negative or carbon neutral nickel. Normally a business would make this decision through determining what is most profitable, what is the least operationally complex, has lower OpEx cost, some combination of all of these financial attributes. But Eric can’t approach this in a typical business sense, where more revenue streams would be an unalloyed good, because of something called financial additionality.
One of the main attributes of perceived quality in carbon markets is called additionality. This specific type of additionality is called financial additionality. And the way that it works is that a credit is deemed financially additional if the carbon activity would not have occurred without this payment. And the payment in this case is the carbon removal credit. So if Metalplant were in a non-voluntary carbon market world, Metalplant would sell their carbon removal at full price and their nickel at full price, and with both of those revenue streams they would likely be quite profitable. But in this VCM world here, does Metalplant need the carbon removal credit being sold in order to make Metalplant profitable?
If nickel sales were already profitable before the carbon removal credit, Metalplant may not be able to issue carbon removal credits and sell them and have access to the revenue stream from voluntary carbon market revenue. One alternative is to embed that carbon negativity into the nickel itself and then charge a premium for that product. It’s all some sort of carbon negative nickel, but it may not be as profitable for Metalplant, and that could mean slower company growth. Not everyone who buys nickel cares about the carbon negativity, and not everyone who cares about carbon negativity needs tons of metal at their doorstep. And that means that that might have slower company growth for Metalplant, fewer emulators nipping at their heels trying to do something similar.
And so what Grant and I were debating is what is better for carbon removal. Because if we let Metalplant have access to VCM revenue and don’t block them through additionality, some of the business that is likely to go to them would have otherwise gone to companies that do not have a co-product that they can sell, and that could stunt their growth. And their growth might be the more imperiled one relative to, to Metalplant. Metalplant has two revenue streams. Some carbon removal companies only have the ability to sell carbon removal credits and that’s all that they do. And so if we put them into the same market class and each can market credits.
So right now there’s the beginnings of a possible trade war with China. Nickel, important component of so many things in the world, including batteries. What if the price of nickel goes up so much that Metalplant is able to earn enough from nickel to functionally subsidize their carbon removal credit? So rather than charging a price commensurate with their rivals in the carbon removal market, they decide to sell it for $1.00 per ton. Let’s just imagine a world in which that’s possible. That would be, depending on the scale, market obliterating for those non-co-producing carbon removal companies. It might allow for a state of affairs where all those companies, or several of them, go out of business because they just cannot compete on cost.
What’s funny about economics is no matter how far into world history we go, we never get that far away from debates over mercantilism and free trade and how macroeconomic policy should actually look. It turns out it’s everywhere. I think what’s important about this discussion is it’s actually an invitation to you, the listener, to make up your own mind. I’m not actually trying to convince you of anything. I’m, I’m very comfortable with the idea that I might be wrong. I’ve been wrong about a lot. I expect it’s not the last time, and that’s OK. I think what’s important is, are you thinking thoughts that you haven’t thought before? Are you considering new combinations of ideas? I think that’s where a lot of the, the goodness and beauty and ferment of the world comes from.
That should be enough to make sense of the show. But before we cut into it, I want to read a brief quote from Return of the King near the end of the show. Grant and I are talking about potential failures of trying to solve problems from first principles, and I was enjoying a reread of Lord of the Rings recently, and this line from Gandalf really stood out to me while I was planning this show. “It is not our part to master all the tides of the world, but to do what is in us for the succour of those years wherein we are set, uprooting the evil in the fields that we know, so that those who live after may have clean earth to till. What weather they shall have is not ours to rule.”
One of the reasons why I have historically been uncomfortable with policy, and I’m more comfortable with it now, is that I had a desire to solve things permanently and from first principles. And as I work through this more and more, I am not sure that is always the smart and obvious approach I once thought it was. The solutions to today’s problems will often become the problems of tomorrow, and some of our solutions will have unpredictable monkey paw revanchism to reckon with.
And I was reading that sentence. It was a, it’s a little bit extra, as the kids say. But yeah, things come back to us in ways that we do not expect. And that’s sort of that, the monkey paw dynamic, genre of horror that we often see. So that isn’t to say that we shouldn’t try to solve problems at a deep level, but we also run risks of, of making things worse when we do. This is something that I’ve only recently started to think through. But thanks for the nudge, Gandalf. It’s a good thought. OK, here’s your show. Thanks Grant for being on, and hope you enjoy it.
Grant, you are literally synonymous in carbon removal with techno-economic assessment and life cycle assessment. How did you corner the market on that? I almost never hear these terms mentioned without you getting name checked. Which publicist do you use that clearly work such magic?
Grant Faber: Oh, it’s myself and just my brain, I guess. But no. It’s a, I guess, a diligent effort in business planning when I was starting my consultancy, you know, prior to my current role at DOE. You know, I, when I was crafting that business plan, putting it together, I put a fair bit of effort in thinking about the, the marketing aspect of things. And yeah, I had been working on techno-economic and life cycle assessment for a number of years. And I guess part of it was, was luck as well, just kind of being in the right place at, at the right time. I got my start working at the Global CO2 Initiative at the University of Michigan on these topics. And there were a lot of efforts there in really communicating about the value of LCA and TEA for the carbon management space.
And so we had at the time were working on guidelines to provide a degree of harmonization across assessment efforts. And yeah, it was just super important. So I think both the, the direct work we did on developing those kinds of guidelines, but also communicating their importance across the space, was, was definitely a huge part in, in, in getting people aware of them and, and, and their importance. So, yeah. And then it turned out to be the case that, you know, a lot of different investors, Frontier and XPRIZE and these other entities, began asking for LCA and, and TEA. And, you know, many of them would probably have, have done that anyway. But certainly there, there was a self-reinforcing property from, from our, you know, efforts there.
Ross Kenyon: So if you’re listening and you skipped the introduction that I gave, go back and listen to it, because the show’s going to make way more sense if you do listen to it. I’m just going to wait. Right here, I’m going to put the music on. Go listen to that, because otherwise this is not going to make a lot of sense and it has all the info that you need. And so I should let the music play so you can easily find your way back here, take a quick look at the timestamp and come on right back. Actually, wait, I’m going to stop. Grant, what is my argument? Do you know what, what was I arguing for? Are you prepared to lay that out?
Grant Faber: Yeah, I think what, what you were saying was that maybe that doesn’t matter, or that it is the case that we could actually create a, a world where there is more carbon dioxide removal if we support processes that do have financially viable co-products. And that by giving these processes even more revenue from both the co-product, whether it’s, you know, nickel or low carbon hydrogen or whatever it might be, as well as the, as well as the revenue from the carbon credit, that you would actually be able to underwrite those processes even more, generate more, even more investor excitement about them, and then have those, you know, scale up even more. So we would end up with, with an end state where there is actually more CDR taking place, which would be contrary to the traditional defence of financial additionality.
Ross Kenyon: Dang, when you do that, Grant, I can’t even accuse you of being unfair and misunderstanding it. I think you actually understand me pretty well. So do I understand you, by the way? Do I understand what you’re trying to, to argue?
Grant Faber: In a sense, I mean, I actually think I, I’m a little bit open minded about this topic. I, more with, with the article in our discussion, I probably lean on the side of, of financial and regulatory additionality for the reasons that, that you laid out. If we truly believe that these processes would move forward anyway, and that it’s kind of a binary thing, and, you know, if they have IRRs that are above their, you know, weighted average cost of capital, that these projects will just move forward. It’s like, then I, I think the argument that, oh, supporting these processes even more would accelerate them more, maybe breaks down just, just a bit.
But I do think, yeah, that’s where we could dig into the, into the premise there. So I guess I’m open minded. But what I was hoping to do, yeah, a little bit with that article that I had published and with our discussion, was just elucidating these issues for, for all of us to, to think more, more deeply about.
Ross Kenyon: Insofar as this is a meta discussion, we’re using the topic at hand to explore how to productively disagree about these topics that are complex and that I think people of good faith can come down on different sides of various debates. Then carbon removal or climate tech or carbon markets. I think there’s a lot of room for non-canonical thinking, one might say. I think it’s OK to do that. One thing I liked about it that you just said is that there are places that you will acknowledge that you are willing to hold this theory of how the world is or should be up to a certain point. And that you have cases where you can declare, if this were to be true, it negates some of what I previously believed.
I think it’s actually a fairly uncommon approach and it’s one that I value a lot. And it makes me think that you’re engaging in good faith. And most people, when they’re debating things, I don’t feel like they have that mapped in their head. I think it becomes more of a, they might not even realize it, but it’s a bit more of a fight than that. It doesn’t strike me as a fight for you when you declare that your ideas only hold to a certain point. Is this as important as I’m singling out, or no?
Grant Faber: I would think so, yeah. I mean, I, I think that’s just a core part of rational debate and, and pursuing truth, is being willing to, to be wrong, because you have to think about what’s the likelihood that we are right about 100% of our current set of beliefs. And it’s like, probably rather, rather low. And so it’s like, OK, there’s something in my whole portfolio of beliefs about the world that’s not true. And so I, you know, obviously don’t know what those things are, because if I knew what they are, then I would change my, my thinking on them. And so because of that, I think it demands a humble approach. And yet intellectual humility is, is certainly very valuable, but there are certainly good reasons why we can’t all exercise that all of the time.
Ross Kenyon: When approaching this on my end, I think what unlocked this for me was that I care about getting to the greatest reduction of PPM, parts per million, of greenhouse gases in the atmosphere on as quick of a time scale as possible. So in approaching this additionality requirement, it’s like, does this serve that goal? I think if there was some way to test which of these pathways and which assumptions will we hold to make sure that the greatest reduction of PPM is actually happening. Because it’s possible that the projects that would not go funded in my preferred state of affairs, those projects might actually in the long run become the ones that will generate a lot of carbon removal.
Or it’s possible that we’re hamstringing what otherwise would be very successful companies that I would like to support, through not taking away voluntary carbon market revenue from co-producing carbon removal suppliers. What a sentence that is, that that actually would slow us down from that PPM goal. So I think one way that we started pointing towards figuring out which of these pathways make sense is, I think we, I think we agree on that goal. And if we do agree on that goal, it becomes way easier to decide, how do we quantify this and figure out which pathway actually gets us to that goal. Do you agree with that framework?
Grant Faber: Yeah, I do. And it actually reminds me of an interesting framework that I learned in a meta-ethics course in, in college from, I think, a philosopher named Charles Stevenson, where the idea was, you know, when we were debating, when, when people are debating about ethical topics, the, I, one way to, to approach that is to see, OK, where do we disagree? But then you keep going up, or I guess you could say back, different levels in the argument and say, OK, so we disagree here, but let’s go back to the premises that underlie both of the arguments and statements that we’re making and see, OK, do we disagree on those premises?
Then if you do disagree on those premises, you go back and step even further and say, what are the premises to those premises? And basically you work your way all the way back to what are, like, the fundamental beliefs we have about reality, fundamental premises we have about the way the world works. And you look for areas of, of compromise, or areas [unclear] compromise, but, but of, of agreement. And then if you can, then once you find those areas, begin to work forward again and say, OK, I differ from you very specifically in this, like, very early or original premise. Why is that? And then, is there a way one of us can change if we’re not correct? Is there a way that we can find compromise?
Or is this truly just intractable and we just completely disagree about, you know, different premises? And then it, then it becomes more of a political fight about, you know, whoever can bash the other one’s head, and, and more quickly becomes the one who, OK, my premises are, you know, the ones that, that will survive in the world. So hopefully it doesn’t have to, have to get down to that. But, but yeah, you know, I think what we just described, it’s like we, I think, agree here on the goal, like rapid PPM reduction. You know, that is our, like, shared premise. And then we work forward from there and say, OK, what is the best way to, to accomplish this?
Ross Kenyon: How do we move forward from there? I think I agree that that is probably the most fundamental agreement, at least on this specific topic that we share. So where do we go from here to have a good disagreement? Is there even a disagreement? Might not even, that might even be pejorative framing that might be unhelpful. Maybe just a productive conversation is maybe a better way to say it.
Grant Faber: Yeah, I, I think that that is good. I do think it gets difficult once you start actually setting standards. And the ones who in this case would be determining the, the standard here are, say, MRV protocol developers, when they are determining whether to mint a CDR credit for a particular process and they need to insert into that protocol or methodology. Oh, if this thing isn’t, you know, financially additional, do we mint a credit? Do, do we, yeah, say that this thing can, can sell credit, it can go on our registry, it can be transacted? Or do we say, no, we are not going to, to tolerate this? So, yeah.
And it’s already showing up in several protocols and, you know, shows up in, in Isometric’s general standard, which they used to inform some of their, their protocols, where they talk about the need for financial additionality. And some of it also is, is out of people’s hands to a certain extent, because additionality is one of the core carbon principles from the ICVCM. And so sometimes if you want to comply with their, like, meta standard, you might have to put additionality in your standard even if you don’t particularly agree with it. And then it would maybe take a more concerted effort across the space to get an exception to that, or, or try to overturn that.
And I think this is where it gets into saying, OK, additionality is the current standard, for better or for worse. And if there are a number of people who believe that it is an unhelpful requirement for these credits, then the burden kind of becomes on them, again, for, for better or worse, this is just kind of how it is, to, to put forward arguments, modeling, justifications, etcetera, for perhaps why we shouldn’t use additionality. And then maybe, you know, the whole space will move in a different direction.
Ross Kenyon: I think project based additionality in some cases might be worse than the disease it’s trying to cure. Causality doesn’t only happen at the project level. I think causality often takes place at a higher level. For instance, as I was introducing the debate here, it’s possible that if you make these co-producing carbon removal suppliers that much more profitable, other companies will emulate them. Companies that are designed to have multiple revenue streams will be very successful and receive more funding, and even if the actual credit at that project level is not additional, encouraging other people to emulate this sort of very profitable business model might lead to new carbon removal businesses and new carbon removal credits entering the marketplace at a rate faster than the more protecting of non-co-producing entity approaches.
But I am alone in that. I think almost no one agrees with me. And so as a business person, I think you are faced with a discussion of, does it matter even if I’m right? Does it matter that I’m right, because I might be right and bankrupt. And that’s a hard decision to make. But also, I think people, in some cases for additionality, have taken it for granted and are no longer approaching it critically. They’re approaching it in, this is a fact of the landscape, it’s a fact of the ecosystem. And we actually don’t need to be interrogating it in any way. And I wish there was a little bit more creativity or gumption with regard to it.
Then again, though, I’ve been hoisted on my own petard on this one. So I’m also OK. Just whatever I do next, I’m like, fine, it’s additional. OK, I’ll just make something additional. I don’t necessarily think it’s the best way to go, but I got to sell. I need product market fit, dang it. And this is what I’m going to do.
Grant Faber: Yeah, it’s a, it is a tricky situation, and it, it maybe also partially comes down to, you know, choosing our battles. And like, there are literally only so many weeks and days and hours before 2050 or whatever other target we set. There’s only so many, you know, weeks, days and hours before we hit 1.5 degrees and two degrees, you know, warming and so forth. And so, you know, we are kind of really limited and there’s so much stuff to be done. And so then it becomes this matter of, OK, which, which battles, like which areas are the most catalytic for us all to focus on.
And so the additionality thing, you know, could be super worthwhile in terms of fighting if, if, you know, one really disagrees with it. But it could also be that there are just other pressing matters. And then, like you said, it’s just, it just is how it is and we just need to comply with it. But what I would say, you know, potentially in, in response to the first part of, of what you shared about, you know, other companies emulating, one might argue that if, if a process with co-products is not financially additional and it’s already profitable in some sense, that process kind of has an inherent advantage already.
One is that, you know, it’s, it’s profitable, which is just, you know, without carbon finance and given the uncertainties in voluntary carbon markets, compliance carbon markets, that actually already is a massive advantage. And companies like Metalplant that, you know, produce the nickel, or Equatic that produce a low carbon hydrogen and, and so forth. I mean, these companies already actually have quite, quite an advantage in that sense. Like, they’re already, you could argue, is a baked in incentive to have a process that could financially stand on its own that doesn’t depend on these, these carbon credits. And that itself is, is quite powerful. And then one could also, yeah. And, and so there’s, there’s other, you know, responses that, that I could share to that. But, but yeah, some of that incentive might be, might be baked in already.
Ross Kenyon: You might not encounter this as much given where you sit, or maybe you’ve seen a lot of this as well. Investors want businesses that have multiple revenue streams available to them, or pathways to get there in the future. And it’s also puzzling to, to them also, be like, oh, but actually this might hamstring us for VCM revenue. So like, in seeking out multiple business lines, you might end up making your situation worse or taking back a step in some way. It’s a, it’s a bizarre, you, you’re being pulled in two different directions.
I think as a business person with regards to additionality in that way, I don’t even know how to make sense of it. You just basically need to run the numbers and think, which pathway here gets me with the social proof I need to actually run a business successfully and have buy in from industry players. And you just need to choose on that, which is kind of a shame, but maybe that’s true in a lot of different industries. Maybe that’s just the decisions of how, I don’t know, go to market is decided.
Grant Faber: Perhaps, yeah. It’s also tricky because it could result in absurd outcomes too, where you could have a business and say they, you know, produce hydrogen and carbon removal and they make their process on purpose, like they intentionally make it less efficient and cost more. You know, they use more expensive equipment, they do less efficient unit operations and so forth, so that the process is then more expensive so that they need the carbon finance, you know, so they can then, yeah, so then they need that. But that’s clearly just contrary to what our goal is, which is both, yeah, of course, achieving net zero, net, net negative at the lowest cost possible. But yeah, also just creating cheaper products for all of society to, to use and not, not being so inefficient.
And so, yeah, when we start thinking about incentivizing that, it’s, it’s tricky. And I do think this gets into a very interesting area of how we’re defining carbon dioxide removal. And, and that’s actually where it gets into the, the system boundaries part of, of that article that I wrote. Because there’s a lot of discussion going on right now about cases where CDR processes are integrated with existing industrial processes that emit more than what the, you know, CDR sub-process is removing. And, and then there’s a question of whether those processes should be allowed to, you know, sell credits externally.
So if you do CCS on an ethanol plant, you know, yeah, you’re taking biogenic CO2 and putting in the long term storage. The ethanol plant, yeah, from its natural gas fired dryers is going to likely, and from the upstream, you know, corn production, these things emit more CO2 than what you’re removing. And then there’s this question of, well, do you have to apply the carbon removal as a reduction against the ethanol that’s being produced from that facility, or can you carve it out? You allocate the, you know, upstream corn or sugar cane growth as well as the natural gas combustion to the ethanol product. And then the CDR just gets assigned, it’s, you know, the incremental emissions that are associated with that.
And this is not an isolated case either. I mean, it, it could exist for a DAC facility that is using waste heat. It exists in some sense for enhanced rock weathering, that where you’re applying minerals to a, you know, crop that might, that, you know, the, the process of growing the biomass on that crop, I mean that just from operating the farm upstream, the, the fertilizers, the pesticides, downstream, etcetera, could emit more than, you know, what the enhanced rock weathering is facilitating. And so, and there’s, you know, even, there’s many more examples of this.
And I think it gets into this really weird territory where, you know, we sort of know what carbon removal is, or I like to think we do. It’s like, OK, kind of moving carbon from the short carbon cycle into the long carbon cycle, or at least a more durable form in the short carbon cycle. And that’s that. And so you’re taking CO2 from the atmosphere, from biogenic sources, perhaps from the ocean to induce further atmospheric uptake. And you’re putting in some kind of, you know, long term store. And then that’s kind of, in my mind, what carbon removal is.
And then all this other stuff about, you know, additionality and is it integrated with some other process and on and on, you know, oh, does it use annual versus hourly clean energy matching and this kind of stuff? All of those things are, like, separate life cycle assessment and MRV and, and policy questions. But we can maybe agree that, OK, these process, these are affecting carbon removal, they are affecting some, you know, drawdown of atmospheric CO2 into longer lived stores. But then the question of, OK, does this kind of match with the incentive systems we want to set up and the long term scalability of, of this industry? That’s where we start to get into all these very interesting and important and perhaps nitpicky arguments.
Ross Kenyon: I don’t think it’s nitpicky at all. I think this is the meat of this, if you care about the details of what you’re doing being meaningful. If you get this wrong, it’s not only embarrassing to the industry as a whole, it might prevent it from doing anything meaningful. You might not actually, you might actually be making things worse because you’re intentionally greenwashing some other process. Did you read that Tyler Kukla CarbonPlan piece that came out like a week or two ago?
Grant Faber: I don’t think so.
Ross Kenyon: It’s on this topic too, but he sketches out various ways in which enhanced rock weathering or other processes can be avoidances or removals depending on where you draw system boundaries. And if that’s not enough to give you an ulcer, I don’t know what is. Like, working in carbon removal and trying to do the right thing here, you’re like, wow, do we really not even have a sense of the basic science for some of this? Is it still so up for grabs still?
Grant Faber: Oh, yeah. And these, these areas, whether it is the additionality piece, the, the strictness with which we need to approach clean energy procurement, drawing the system boundaries, I mean, these are some fundamental and largely kind of unsolved questions that people are duking out in various ways. You know, the, the energy question. Oh, [unclear], should we require annual match, the hourly, geographic, in what way? The legacy exemptions, this, that and the other thing. I mean, there’s people doing very serious modelling on these topics, trying to determine, OK, what will best facilitate the scale up of this technology? How do we not let the perfect be the enemy of the good here while also preserving environmental integrity and reducing risk?
Ross Kenyon: Then there’s a political element as well, and we start to have vested interests arguing that they might not be arguing in good faith. You know, if you have a company and they’ve been working on a particular process for a very long time, they’ve sunk tens of millions of dollars of investor money, their own careers, reputations, into something, and years of, of effort. I mean, you’re going to be pretty motivated in that situation to have the system boundaries or the energy procurement rules or additionality rules or whatever made in your favour. And you might not be arguing from a place of, of good faith. You might be just, you know, doing that in a self-serving way.
And now, of course, it can be difficult to disentangle, because if one works on something, presumably they believe in that thing pretty deeply. So it can be difficult to disentangle. Oh, is this person making this argument in good faith or not? Maybe that gets back to the first part of our conversation where, like, signalling a willingness to change one’s mind is maybe a piece of evidence that one is approaching something in better faith or with a degree of intellectual humility. But it’s tricky. It’s, it’s really, really hard.
I had to do that with Nori too. Obviously, Nori took some of these positions on additionality and I was a part of that process, and I thought a lot about it and agreed with the company consensus there. But you do have to stare into your own heart, be like, would I feel this way were my company not oriented in this way? I had another conversation with someone who’s working on a different CDR pathway, and I even asked this person, what was the directionality here? Did you start this company because of this belief, or do you not have this belief held very strongly because you have the company? And this person alleged it was the former.
But then there’s also that weird reflexivity question here too. Like, are you actually deluding yourself at this point in the conversation too? Like, do you need to go back further steps here? Like, how far back do we regress here to figure out, like, the people? The human brain is pretty protective of itself. I think it’s important for anyone working on something to make sure that one’s ego is not overly tied up in that, and that one is holding a belief for good reasons.
And one, one way that I tested that is that once Nori was no more, like, well, I don’t actually have to think this way about additionality anymore. Not that I ever had to. I could have disagreed and would have been fine, but I don’t have a business interest in this anymore. How do I feel about it? I still, still left with thoughts of wondering, is this more harmful than it is helpful? And how do I know? And I think that means that there are good intellectual reasons for still engaging in this material in that way. But I think I’m kind of a weirdo like that. I don’t think a lot of people think like that, are involved in chronic self checking in the way that I am, or maybe you are as well.
Grant Faber: Yeah, maybe it, yeah, maybe it derives from too much, too much self criticism. Maybe we’ve, we’re criticized as children and it embedded itself in our brains that we always need to, you know. It’s like a super-egoic force that just has ruined our lives and turned us into ultra nerds in this way. It could, it could be, but yeah, I, I think it’s, it’s so important. But yeah, like you’re saying, I mean, the brain is just so geared toward engaging and motivated reasoning. And it’s also just so complicated when your paycheck from your, like, livelihood maybe directly derives from this thing. Like, it’s just going to be so, so difficult to wake up and just one day and say, ah, no, I don’t believe in...
Ross Kenyon: It’s also tricky to, you know, there’s, there is an inherent desire for, or I guess an inherent appreciation of, those who can commit and who are consistent. And it’s something that in politicians, for example, we very much dislike. Oh, he’s, he’s a flip flopper. And I think in those cases it might actually, like, it’s difficult ’cause I want people in charge who are willing to change their minds in light of new evidence.
But at the same time, we have put a tremendous degree of trust in politicians to do what we think they’re going to do, or they say they’re going to do behind closed doors, because we don’t see every part of the process. We’re not in touch with it. There’s so many, you know, secret and private conversations, votes and deliberations that go on. You want people you can trust. And generally, we trust people who tend to be consistent to the same thing.
Grant Faber: You know, it’s also challenging too in, in terms of, we don’t want to, like, be constantly blowing up our lives. Like, we work in carbon removal and then let’s say two weeks from now, we’re like, wait, carbon removal is actually just greenwashing for the fossil fuel industry, will never be successful. I’m going to quit and go do something else. Then we go work in solar, and then two weeks after that, wait, I was wrong about carbon removal. I need to go back and work on that. And then, oh, you quit your own job. Then you get back into, and like, you know, you want to engage in these things a little bit slowly and, like, thoughtfully, I guess, versus just, like, being so overly eager to change one’s mind that you just can literally never settle on anything and literally never get anything done.
But at the same time, yeah, you don’t want to just entrench yourself and hang your hat on some belief that, oh, I’m just going to believe this every day until I die just because it’s what I said I was going to do. And so there’s probably some, you know, reasonable and, and rational middle ground between these things that demonstrates a proper responsiveness to evidence, new evidence.
Ross Kenyon: Could it be stating the limits to one’s belief? I think if you were able to prove to me in some quantitative way that, well, one, not having weird meta conversations about additionality, that slows us down overall. That could cause six to 18 months of intra-industry wrangling to figure out what to do with that and how to rewrite standards. And that time might be more valuably spent just deploying stuff according to the standards that we already have. That’s an argument that could persuade me.
They could also persuade me that those non-co-producing carbon removal suppliers actually need the support. If we don’t, if they don’t get this kind of support and protection, they might not actually be able to scale. And that’s where a lot of the scale is going to come from. And therefore, according to my own stated values, I should prioritize that. And I think merely by saying that out loud, I’m saying, all right, that’s, I’m willing to change my mind if those conditions are met. And that way I am receptive. Like, an empirical case could be made to me, and if it was satisfactory...
Alternatively, you could say this and no quantification could ever be truly satisfactory, and that would create a burden of proof that would be impossible for you. I would just demand increasing evidence, increasing, run the numbers for me in 1,200 different ways, Grant, and prove to me that this is the case. But I think maybe something like that is a way where stating your beliefs in that, this is what would need to happen for me to change my mind. I don’t know, I feel a little bit liberated even saying that. It’s nice to not even have to hold on to something so tightly that you can’t change your mind.
Grant Faber: I think that makes sense. I think it’s, yeah, one can sit down and say, these are the beliefs I hold now, for these reasons. And I would be willing to change my mind if I were confronted with these, this evidence, or if these questions were answered definitively in a certain way. And then as long as you’re approaching that process itself in good faith and not setting super unreasonable standards, or just questions that are just, like, impossible to answer or would require ridiculous degree of resources to answer or something like that. Like, OK, there’s, there’s pretty reasonable conditions under, under which one is willing to, to change their mind, and maybe being transparent with yourself and others about that process.
That seems to be a decent, a decent approach to, to doing that. And then, you know, you can just keep your eyes peeled for new evidence. And if there are actors that, say, are very interested in getting you to change your mind about something, then they kind of know what, what the standard is to, to make that happen. So I don’t know, that, that seems reasonable.
Ross Kenyon: What are some other either biases or things that you’ve noticed and thought patterns within our industry that are less helpful than you might otherwise wish to see? Or alternatively, what are some cases of mind changing that you’ve seen that have earned your respect or made you think that that would be a great thing for others to emulate?
Grant Faber: I had a feeling you would ask something like this and I tried to think of good examples.
Ross Kenyon: [unclear], I think. Yeah, mind changing. Höglund has changed his mind on things a couple of times too. And I’m like, oh, temporary removals are back in now. Like, what? Like, and that was sort of a jarring fun one, but I can’t think of that many.
Grant Faber: Yeah, I think we had chatted about Noya changing from the cooling tower, like, reliance on cooling towers, to maybe more traditional DAC process, you know. So there, there was a pivot there. Yeah. But I don’t know if pivot, like, as a company pivot, I guess it is changing, changing one’s mind, but it’s, it’s somewhat to be expected for, for a start up, because you’re, yeah, exploring a lot of different options. And yeah, some, you go down a path and sometimes you realize, hey, this, this material, this design, this isn’t really going to work, or this business model, you know, we tried it out, talked to people, but we thought it was going to work. But now, now, in fact...
I think that’s, that’s the driver behind some of these sayings out there. Oh, I would always invest in a, you know, an A team and a C business over a, you know, an A business and a C team, or whatever, because you’re sort of betting that they’re going to have to pivot. So that, yeah, that’s maybe just somewhat to be expected. There’s different direct air capture designs, and over time, you know, some researchers have looked into, and it’s like, you know, not totally going to go down this, this path, or things that maybe you’re proposing literature, and then the industry just goes in one direction just after a bunch of companies investigating certain pathways.
Then it’s almost like an emergent property where everybody says, oh, we’re going to, you know, move away from a membrane approach more to a solid sorbent, like a packed bed laminate sheet or monolith type, type approach. It’s just, you know, you just kind of in the beginning take a blue sky approach, then the industry kind of settles on, on something over time, which is, I guess, in a way sort of changing your mind, or at least making a decision about something.
Ross Kenyon: Not to put you on the spot with those that have failed to do this, or there’s plenty of bad faith arguments that I see where I’m like, oof, that is not what that person said. That is not arguing in good faith.
Grant Faber: Yeah, I’m sure you’ll need to come up with, with specific examples. I mean, I think the area where I’m seeing a lot of debate right now are in these topics that we’ve touched on a bit today. So I’ll say the additionality piece, because there are, you know, many new CDR companies that are looking at co-products and they just inherently have co-products. So that’s big. Energy procurement is, is a fascinating area where there’s been a ton of discussion, just given the, the now shortcomings in the unbundled renewable energy certificate market.
And so how do we, yeah, before we get to a world where either the grids are entirely clean on the margin and/or you can rely on clean behind the meter power for a given facility. If you have to plug into the grid, what do you have to do to ensure that whatever power you’re drawing is, is clean? And there’s, there’s tons of debates about, OK, do we, you know, kind of track some of the EU’s low carbon hydrogen requirements, where we say, oh, we’re going to have these three different pillars of incrementality slash additionality of that power, temporal matching and, and geographic matching, and with the temporal matching on an hourly basis.
Or can we do this whole other paradigm of something called emissions matching, where you just draw whatever power you want from the grid where you are, you calculate the emissions associated with it, and then you underwrite an amount of low carbon power in, in your same or a different grid region that just offsets or mitigates the amount of emissions that you’re creating from your additional power draw. And they’re kind of these two camps of, like, the hourly matching and the more flexible emissions matching. And they’re kind of doing battle with, with one another, you know, modelling and arguing about, this is the incentive this would create, that’s what this would create. How would we track this data? What about the changing baselines and so on and so forth.
So that’s definitely a big area. And then this final system boundaries piece as well, like, how close can a CDR process be to a net, so-called net emitting process in a way that doesn’t create bad incentives and, like, entrench net emitting systems, when in fact what we’re trying to do is, is be net negative. So how do we balance that with the need to, to scale up and to integrate where we can with existing industrial resources. And so these are kind of three very active areas I think where we’re going to see some interesting discussions and decision making over the next few years.
Ross Kenyon: Assuming that one does want to engage in discussions on any of those topics or any of the other myriad problems facing carbon removal and adjacent industries, are there any techniques that you do to, I don’t know, run heuristics on yourself to make sure that you are approaching this in a way that you believe becoming of one sincerely interested in the climate?
Grant Faber: Well, I think that in terms of direct things, I wrote a couple of these Substack articles on these topics, it in, in part to actually think through these topics for myself. So yeah, I’d, I’d written one a while back on navigating clean energy procurement, and then another one on, yeah, as you mentioned, on the co-products and system boundaries. And, and for me, writing these things out and being forced to be really, like, I don’t know, you could say diligent in researching these because they’re being communicated on a, on a public forum, has, has really helped me expand my thinking here. So yeah, I think that’s, like, just writing through and being really sort of taking a super blue sky approach to that is valuable.
Engaging with people, engaging in dialogues, discussions, and especially with people with whom you don’t agree, is fundamental toward changing one’s mind. And, you know, especially in this, in our, in our era of echo chambers and this kind of business. So, like, yeah, intentionally engaging with people who have different beliefs than you do is probably key to keeping an open mind. And then for CDR specifically, engaging with MRV protocol developers who do a lot of thinking about these, and definitely, if they’re doing their jobs, like, stress test the, the expected outcomes of different decisions they might make for different parts of their protocol. I mean, I think that is a fantastic way to really level up, assuming, you know, they’re willing to speak with you. It’s a fantastic way to level up on some of these topics.
Ross Kenyon: I associate you strongly with being a master of the edge case. Even when we were talking about co-production, being willing to name edge cases that would obliterate what you would want to see happen. Mostly about a supplier intentionally making their process less efficient to have access to VCM carbon credits. Like, OK, that is a possibility under what I’m proposing. Here’s either what I plan to do about it, or, I think even more trust building, as I said, I don’t actually know what to do about this yet. Like, someone, someone could engage the process in bad faith and do this, and it is a problem for my way of thinking and we need to deal with it.
I think admitting that, I think people think it looks weak, but I actually think it makes you look very strong. If you don’t know where your ideas no longer hold, you probably don’t either understand them that well, or you’re using motivated reasoning in some way and being self protective in a way that is not allowing you to truly engage. Because all ideas have downsides to them too. Like, basically any political philosophy you can think of, someone very smart has been like, what about this case? This challenges your sense of justice by your own terms, doesn’t it?
You either have to bite the bullet and say yes, but it’s worth it for these reasons, or just say, that is true, that is the downside here and it’s a problem. And I can’t be expected to cover lifeboat ethics in addition to everyday morality and everything else. I think just being able to do that, well, I don’t know, maybe for the, like, an average person, maybe it does look weak, I don’t know. But for someone like me reading, I’m like, OK, wow, that’s a confident, serious person that’s willing to say, yeah, that I don’t have a good answer for that yet.
Grant Faber: OK. And well, yeah, my masculinity likes being strong, so let’s, let’s spread this narrative to all that. Yeah, people look strong when they, yeah, pose the edge cases, but 100%. And, you know, I’ve been in, in situations before where I’m, like, writing guidance or standards or rules for some, you know, competition or funding or whatever it might be. And sometimes there will be, like, an edge case that I, I think of as I’m writing this. And sometimes there’s this little temptation, like, maybe I just shouldn’t address this edge case here and it’ll just work itself out. And then any time that I’ve ever done that, literally the edge case, like, immediately comes up.
It’s like immediately posed and it’s like, ah, great. I, I wish I would have, you know, considered this when writing this, this guidance or whatever. So yeah, I think it’s, it’s, it’s so important to, to think through all those possible edge cases. And then that’s what helps us arrive at a more defensible framework.
I mean, it’s sort of true. And it’s almost like a, a software engineering mindset too. If you’ve ever, you know, coding, you have to write all these test cases. You know, if you just write the basic test cases that you sort of already know a priori that your code is going to be able to handle, but it’s not that interesting. But it’s, it’s the edge cases, you know, where you can really reveal, like, structural bugs in, in your code. And then the idea is if you have a, a very comprehensive suite of those, like, you know, edge cases in your testing set, then yeah, you, you can really reveal areas of weakness, or, and, and hopefully eventually work toward a very robust, just, just worked, a very robust code. So yeah, I think it’s, it’s not dissimilar.
Ross Kenyon: Well, you said a priori, so we have to talk about philosophy. It sounds like you did this to yourself, Grant. But do you feel, I think, your philosophy training helps you in this way? Because you also seem very quantitatively oriented as well. Like, you’re, you’re a mix of skills.
Grant Faber: Oh, thank you, thank you. Yeah, I, I do think that that was very helpful. And it really, I only took, like, a few philosophy courses in, in undergrad, but I think even just those were, were just fantastic for really pushing me to, I, I think, be, be more rational and open minded and just have better tools and, and frameworks for thinking about the world. Yeah. I mean, one of the earlier examples, one of the major examples for me when I changed my mind about something, was when I went vegan about seven years ago.
And I was actually, there were multiple factors, but one of the big ones was I was arguing with some person on an online forum about, well, you know, what if plants can feel, like, we’re eating a bunch of plants and that could, you know, cause suffering or whatever. And then the person was like, yeah, but if you eat the animals, then, you know, those animals would eat even more plants, and then some of the, you know, energy from them would be wasted. So in fact, if you eat, you know, animals, animal products... So it’s kind of a weird, you know, argument.
But reading that made me think, wow, if I personally am really, you know, dedicated to my stated view of minimizing suffering of sentient life, and I can pretty easily just change my diet to, to help facilitate, you know, increased compliance with my stated worldview, then I kind of have to do that. And so then I approached my, you know, now wife and, and very good friend and told them about this whole situation. We talked through every aspect, and we all collectively, we were actually at a Mediterranean restaurant, like, eating some, some chicken dish or something, and then at that time we were like, yeah, we basically just need to go vegan if we want to be, you know, consistent with ourselves.
And so then all three of us went vegan right then and there. And then, yeah, now it’s seven years later, we’re all, we’re all still like that. And yeah, that was just a huge example for me of, like, realizing, wow, I’m, like, wrong about this thing. And if I want to be consistent with my personal values, I need to make a pretty substantial change in my behavior. And so, yeah.
Ross Kenyon: Pretty deep answer, Grant. Didn’t know we were going to go that direction.
Grant Faber: Yeah, no, I, I think it’s, yeah, it’s, and it sounds a little silly, I guess, with, with the forum, for, like, I’m arguing with this person on a forum. But, but you know, that kind of opened my eyes a little bit to, to the flaws in, in my arguments. And that was the, just one argument. We argue about other things as well. But yeah, I, I want to be that kind of person. And I think going back to what we were saying before about, you know, liking when people share edge cases, even if it’s contrary to their own position, that, like, we, we should try to create a culture that rewards this, because our brains are just so wired to operate in the opposite direction.
And so another short story I can share is that during college, I had actually several classes, and so did some of my roommates, where we learned about cognitive biases and motivated reasoning, of these things. And so we actually made it a game to, when any one of us would, you know, was having a, some kind of personal problem or for something, to point out when the other ones were, you know, hey man, that’s sunk costs. It’s motivated reasoning, it’s straw man, whatever. And we literally made it like, like, we totally gamified pointing out each other’s bullshit. And it was just fantastic because it, like, it really just helped. It sounds a little silly, but, like, it helped us all be more rational in our decision making rather than just reinforcing each other all of the time.
And it can be a little bit cognitively tiring, and to, to live like that, which is another reason probably why many people don’t do it, because it is a big cognitive load to bear when you’re constantly evaluating and re-evaluating all of your positions and, and you’re surrounded by people who might call you out if you say something that’s inconsistent or something. So there’s probably a way to do it a little bit more, you know, nicely or, or, or comfortably. But yeah, it’s, if, if we can create that culture that rewards intellectual humility and changing one’s mind in light of, of new, like, real evidence, I mean that just seems like one of the, the main and best ways that we have to counter our brains’ wiring.
Ross Kenyon: I think that’s absolutely true. I mean, you’ve operationalized pedantry there. Sounds, sounds like a tough crew to roll with. I had a friend recently asked me, they said that they were very interested in history but didn’t know where to start. And obviously that’s an enormous question and it depends so much on personal interest. But one thing I tried to, tried to do was to bring historians of different schools to bear, be like, this person is, like, really good at this one way of, of seeing things, and this other person, it’s totally different. They, they would disagree. They probably wouldn’t, like, enjoy a beer together. But hopefully between the two, you get a parallax view where you can start to make sense of different ways of...
Because obviously history is not, you know, George Washington crossing the Delaware. And that’s, like, that happened on Christmas Day. We’re like, who cares about that? Everything important in history is up for grabs and is being debated constantly, and as long as you can understand the debate. I sort of hate that the phrase “teach the controversy” is held in such bad esteem now because of intelligent design debates. But I think actually for history and various other philosophies like this too, teaching the debate is the entire thing. Like, you need to be able to think through, well, this person’s really smart. I might disagree with them, but wow, they posed a challenge here. I don’t know how to do this.
Are there any belief systems out there that you do not have to bite the bullet for? I think basically all of them have some edge case where someone will go, actually, well, what have you thought about this? And you’re like, that’s terrible, I got to live with that now, or I need to change my beliefs. But the, any belief that you would change to, there’s no Pareto optimal belief system that results in always improvement. You just trade off one bad consequence for one other one. Is there some sort of pure thing that I, we, can drive to anywhere?
Grant Faber: If you’re familiar with longtermism at all, and yeah, maximizing utility not just for those alive today, but for those who will be alive into the far future. And if we believe that humanity will continue and there will be trillions upon trillions of, of people and, and other forms of sentient life going, you know, into the far, far future, then you could argue that, well, we should actually reorient all of society today, even if it’s incredibly painful, to ensure, one, the continuation of society into the far future, but two, the maximum utility for these people going forward. But then that could have some very negative consequences for what society needs to look like today.
And so, yeah, what I’m driving at there is, like, it may be seen as basic to say, oh, we should try to aim for the best for all people alive today and, and in the future. But I think that itself could end in some gnarly consequences if you really take it to its extremes. Or there could be certain edge cases or framings where even, even such a thing that seems so, so basic like that, like more good for humans, you know, could, could be construed and, and, and in a, in a difficult way and, and problematized. So I don’t know, all beliefs might, might feature some kind of trade off by virtue of being beliefs.
Ross Kenyon: I’m somewhat suspicious of first principles based thinking, or aprioristic deductive systems in general, at this point. I think I used to be much more sympathetic to them and I think I’m, I’m much more empirical and willing to change at this point, and also just want things to broadly work. I used to... So one of the reasons why I stopped working in philosophy was I thought I was getting closer to a foundational system of ethics that had sort of self-evident axioms that could be built upon to create a system that would be universalizable in some way. I know many philosophers have died upon these rocks in the past, dreaming the impossible dream of ethical philosophy.
The department I was doing PhD course work in was a post-Rawlsian department, and they had gotten into the idea that Rawls’s earlier work had specified that from the original position, behind the veil of ignorance, not knowing who you would be in society, people would choose an egalitarian distribution of resources. And then post-Rawls came around, and later Rawls too, but came around and said people of good faith can choose a less equal civilization, but one that produced more wealth overall. Someone could choose that they’re not only going to be so conservative that they’re only going to choose strict egalitarianism.
And then once there’s multiple legitimate answers to the original position, all bets are off for Rawlsian political philosophy. I’ve never been able to figure out how anything is supposed to work after that point. Many smart people have, I’m told, but I’ve never really figured it out. And then that plus postmodernism really blew me apart. And questioning language and power and all the other things that go along with that.
I think no longer having access to a single source, a foundational truth, like a one right answer to that, has led to me having more comfort with democracy, more comfort with disagreement, more comfort with the slow, uncomfortable march of policy backwards and forwards, of this triangulation between interest groups. I used to just find it all unphilosophical and painful. And I’m, I think as I’m getting older, I’m understanding the value of that a bit more. I don’t know if you’ve had a parallel experience in your life or you came out a different way, but that’s where I’m at right now.
Grant Faber: Yeah, I think that was very beautifully put. And I would say, yeah, I’m in agreement. I also had a sort of similar evolution with Rawls, because in the beginning I was very captivated by, you know, maximin. But then I, as I thought about it, it’s like, wait a second, wouldn’t the utilitarian just approach that and say, I would actually be willing to structure a society behind the veil of ignorance that has, like, you know, 1% of people have pretty bad lives, but the other 99% have, like, these fantastic lives. And then, well, if you’re a gambler, well then, yeah, I’ll, I’ll take the risk of being the 1% person with the bad life so I can be in this 99%, you know. And since, like, well, yeah, it just completely breaks down.
And yeah, I read a book on Foucault as well. And yeah, that kind of opens one’s mind a little bit. So I think that, yeah, it’s, it is difficult, but I think there is, you know, I don’t want to be like, oh, there’s, there’s not realities and truths. I mean, we work in a very scientific field, and yeah, but maybe there’s a difference between, yeah, hard science. And I know there’s other people who know way more about this. And I think, yeah, you’ve spoken about this before a little bit as well.
But just either the difference between, like, oh, gravity’s a thing, and this amine has a, you know, 1.5 millimoles per gram sorption capacity. There’s maybe a difference between that and, like, yeah, morality very large, so. But anyway, yeah, I think maybe it’s in terms of that, it, it could provide us a bit of an opportunity. A way I’ve thought about it sometimes is that because the mind and, and social systems are malleable, that that does provide us somewhat of an opportunity to change things for, for the better and to structure a better world.
Now of course that, that can go the other way. But if we’re fairly, you know, confident in, in some of our goals and ends, whether it’s something as specific as, oh, I want, you know, this form of carbon removal to operate at scale, but even as, as broad as, I want, you know, human society to live in a regenerative and harmonious way with nature. Maybe if, if there is more flexibility and less rigidity to our social systems, we might be, the, the chances of us effecting those, these changes, might be a little higher. So maybe that’s, that’s positive.
Ross Kenyon: I think the turn towards very practical operational style thinking here of, OK, policy is almost inherently going to be imperfect. Even if you write it perfectly, administering it seemingly will result in some weird things happening down the line. A lot of policy actually changes at the point of deployment and administration. Anyways, thanks for being here, Grant. I’m so happy we got to do this. Thanks for just making me think. I appreciate that almost more than anything else in, in my work. So thanks for being that person for me, and thanks for coming on the show.
Grant Faber: Yeah. Thank you, Ross. It’s a very, very cool conversation. Very much enjoyed it. Thank you.
