It's a jarring phrase. There's an even more jarring version of it in this episode. You've been warned.
Economists are well-known for gnomic sentences that can sound cruel. For some, that's one of the job's many perks. But that doesn't mean that there isn't some truth in representing decisions as trade-offs.
Today is a bonus monologue episode where I am going to unpack this phrase (and its nastier cousin) and explain what it has to teach the carbon removal industry as it grapples with the tension between scale and quality.
This Episode's Sponsors
Listen to the RCC episode with Lisett Luik from Arbonics
Resources
Become a paid subscriber of Reversing Climate Change
"There ain't no such thing as a free lunch" Wikipedia page
Follow the Reversing Climate Change podcast on LinkedIn
Full Transcript
Ross Kenyon: Hello, this is your host, Ross Kenyon. I’m doing something that I have not done before. I feel like I did a long time ago, but it’s been a while. But in trying to make this show financially sustainable, I was able to pick up a couple of sponsors. It would do me a great favor if you could please listen and learn more about each of them, since they offer something to different parts of our audience that I think you will care about. These two sponsors — and thank you from the bottom of my heart for becoming sponsors — are Offstream and Arbonics.
Arbonics is a project developer. They’re the ones that are actually pulling carbon dioxide out of the atmosphere and storing it, and they are doing it through trees. You know, trees have had a difficult time within carbon removal. You should go listen to the show that I did with Lisett Luik from Arbonics. We did a show probably about six weeks or eight weeks ago, and we talked about how the trajectory of trees, afforestation, reforestation within carbon removal has played out, how that impacts whether we are storing biological material in anoxic environments for carbon removal purposes alone.
Arbonics is doing something a little bit differently. Europe has over 14 million hectares of underused land, which, you know, abandoned farmland. It’s low-quality pasture. Not a lot is happening there. A lot of it once was forest. It was cleared a long time ago for farming, but the global food supply and better yields elsewhere has meant that a lot of this land is just underutilized and we haven’t quite figured out what to do with it yet. So Arbonics uses technology to help landowners find this land and then restore it back into carbon-removing, biodiverse forest.
And that last point is really important, because a lot of forestry that takes place is a monoculture, which is maybe solving one problem, but it’s not solving the overall polycrisis, ecological crisis. So Arbonics pursues that way of going to market in order to offer corporates high-quality, data-backed European carbon removal credits, helping companies reach their sustainability goals with maximum trust. So go listen to that conversation with Lisett. I’ll put a link in the show notes if you want some more.
And if you’re thinking about this in terms of a cycle here, Offstream would be a service provider to Arbonics. Offstream is there to make carbon compliance simple for project developers. If you’re listening, if you work at a carbon removal company or company producing other types of carbon assets, the data portion of this is super challenging. If you’re listening and you haven’t had to read through a methodology or any registry documentation, you’ll probably live longer than the rest of us who have. It’s non-trivial. It’s difficult, and that’s not to say that it shouldn’t be difficult. Much of this should be, so we make sure that quality is actually taking place when carbon is removed or avoided or anything like that.
And Offstream exists to make it easier for project developers to not get stuck on the level of data. Varsha Ramesh Walsh, Offstream CEO, she likens their platform to being a GPS for your carbon credit and your MRV plans. It’s guiding you through the jungle of certifications and compliance. Oh, I love that. That’s such a fun, visual way of putting it. This is a world where you can develop and iterate on your project LCAs in minutes, not weeks, where you can focus on doing the important work of growing your business, scaling carbon removal, generating more credits, without having to necessarily hire more employees.
This is really an important time in carbon removal where minimizing headcount may be necessary for a number of companies to stay alive and keep going. And Offstream is here to help you do that. They’re here to help you with your LCA needs. If you’re listening, you’re a project developer, you know one, and they are having persistent migraines from paperwork, like, go over to useoffstream.com. Tell them that Offstream can help them handle the quote-unquote boring bits while they can focus on saving the planet. Offstream, because paperwork shouldn’t be a full-time job. Cracks me up.
Thank you, Offstream and Arbonics, for sponsoring Reversing Climate Change. I’m really appreciative that you’re able to help me do this. It means a lot. If you’re listening to this and you’d like to sponsor Reversing Climate Change, feel free to send me an email. I’ll put the email in the show notes too. And let’s talk. And OK, now I’m going into the show proper, the intro. Here it is. And thank you again for listening.
Today I have what I expect to be a somewhat unlikable and provocative statement. I’d like to read it out, poke at it, and understand what it has to teach us. My name is Ross Kenyon. I’m a climate tech entrepreneur. I’ve worked in carbon removal the better part of a decade, and I’m the host of the Reversing Climate Change podcast. So what is this very mysterious statement? Well, I have a friend who’s an economist, and there’s a certain type of economist that very much likes to push buttons. They are the ones who famously receive criticism like they know the price of everything but the value of nothing. Those kinds of economists — and they are very good at offering hardcore trade-off thought experiments.
Ones that make you think, ones that keep you up at night, ones that really should be torturing, ones that invoke tragedy and grief. Ones that stay with you, you might say. So this friend of mine one time told me that the optimal number of traffic deaths is non-zero. The optimal number of traffic deaths is non-zero. You think about that and you wonder, what does it mean for us? It means that we have accepted the trade-off that moving around efficiently in cars is better than driving at a safe speed for all of us.
We could be driving at five miles an hour everywhere. It would take a very long time to get places, but the mortality rate would drop wildly. And last time I checked, I believe there’s tens of thousands of people a year in the United States alone who die from traffic-related fatalities. And those could be dealt with by us either not driving or driving very slow. And this line — I don’t know, he told me this like a decade ago — and it comes up fairly often in my brain because it’s so provocative. And I often think about it in the context of carbon removal when we obsess over quality.
There’s long been a — calling it a shibboleth sounds a little pejorative. Gosh, what a — what a $100 sentence that is. But there’s a thing people say — wow, that’s a way to dumb it down. There’s something that people say in carbon removal, and it’s that the problem is trust, and we move at the speed of trust. And that’s true to an extent, though, because sometimes we get so focused on upping the quality of carbon removal that we start to trade off against other attributes of that carbon removal that would otherwise be available to us.
For instance, we could get quality to 100% and create carbon credits for removals that were 100% durable, 100% additional, 100% just. If we wanted to create a perfect carbon removal credit that was 100% durable — you know, if you put it somewhere, you know it was going to stay there — 100% additional, you know that this activity would not have happened without the buyer putting money out for it, 100% just, you can know that no one even had a bad feeling about the project at all, and in fact everyone who knows about it and should know about it did know about it and heartily endorsed it.
But once you maximize to that level for quality, how many credits start to exist that could possibly meet the standard? We know what every atom, subatomic particle — I don’t know that you need to, I don’t think you need to go into quantum physics here, but let’s just say you did. You know the superposition and the position of every subatomic particle affiliated with this carbon removal process. You have it all measured. We know that last one’s a little farcical, so that one probably wouldn’t happen anyways.
But if you did want to optimize for quality in this way, how many carbon credits do you think we could generate? And my supposition is that it’d be very few and they would be extremely expensive. How could they not be? It would take a massive amount of effort to guarantee all of these things and be so sure about it. And that’s bad, because quality is not something that we need to maximize above everything else. It faces trade-offs, and at some point quality is actually more harmful than good.
So our goal, I think, should be to aim for just enough quality to trade off against scale in a way that’s meaningful — by which I mean the goal of carbon removal, and in fact all carbon management, including mitigation, avoidance, adaptation, all of these things. The goal is to decrease the amount of carbon we’re adding to the atmosphere as quickly as possible, barring some other trade-offs. For instance, we can’t just turn off industrial civilization. Well, some people think you can. I am not one of those people, but they are sometimes fun to read and listen to. But I do not think that’s a good idea, because if we did just turn off all fossil fuel emissions right now, it would cause horrible calamity.
The goal of all carbon management is to have an impact on the climate that results in less human suffering and less disruption to ecosystems and the natural world. That’s the goal. And if you make perfect carbon removal credits, but there’s only a couple of them because they’re very expensive to produce and to sell, it doesn’t really matter. You need to get over the line of having more tons removed, even if more of those tons are impaired at some point later on, if they’re imperfect in some way, or they’re not really of perfect quality like I suspect for some.
There’s some types of carbon removal that is really — let’s just imagine that there’s a type of carbon removal that has great scale, but it would help us avoid an integer’s worth of global average temperature change, which would be a massive deal, but it was really hard to measure. I don’t know that we should avoid doing it because of that. I think there we might say, well, that’s really impressive that we can do that much good. It’s a shame we can’t do more to measure it, and we should try to measure it more, but I think the fact that this is going to have this level of impact makes it worth the trade-off to do.
Or if we could have, you know, 10 or 100X the amount of 100-year removals versus thousand-year removals, I think there’s a good reason to do that, even though it will just push the problem down the line a little bit. I see various papers and math that shows that this is not a good idea. I’ve read these things and I’ve never really understood why it would be the case that removing these tons at greater volumes for 100 years wouldn’t be better than an insignificant amount of tons for 1,000 years. I can’t say I really get it.
My guess is that a lot of opposition to that takes place at the level of political economy, and people who support the thousand-year permanence standard are very concerned that should they relax it, corporations would buy carbon credits for 100 years of permanence, claim that it negates fossil emissions that will last for, you know, thousands of years, [unclear] half-life out and call it good. And I’m not — I don’t want to get into that level of it. Arguments like that I think are confusing.
And they also end up in noble lie territory, which is an idea from Plato’s Republic that for much of the population, we need to manipulate them in certain ways where the truth is not easy for them to grapple with. So therefore we manage them by lying, but it’s a lie that serves their interest. I don’t really like that. I feel like that line of argument doesn’t really work that well in 2025, because oftentimes you’ll have it be the case where people will get angry.
Like the example that comes to mind is — I’m hesitant to dig into this one because the details of it might be a little more complicated, but let’s just take for granted this is how it happened, because it is how the story gets recounted to me by people who care about this a lot. But for instance, when COVID started, there were a lot of people who were saying that it looks like COVID was a lab leak in Wuhan. And some of these people were just called horrible names for even suggesting this. They were called sort of conspiracy theorists, or they were racist in some way.
And then, you know, years later, I even saw a news article the other day from, you know, mainstream source saying that the FBI and the CIA, like both at this point, have acknowledged that that is a plausible and, in fact, a likely theory of how that happened. And so the people who were just excoriated as lunatics for believing this, they remember that they were dealt with in this manner. And I think there is a desire by the people who manage crises like this to have a noble lie framework where they’re trying to protect people, or they don’t want to encourage geopolitical friction by pointing at China in this way. But it really adds up. And the people on the internet, like, find out about stuff and then they talk about it and then they’re very upset in this way.
So anyways, I don’t really like this political economy angle for it. Another thing economists like to point to — they love the line from Robert Heinlein, The Moon Is a Harsh Mistress: “There ain’t no such thing as a free lunch.” TANSTAAFL — I don’t even know how you even say that. Actually, I hardly ever say that one out loud. But quality doesn’t come for free. Quality requires increased measurement. It requires stricter standards that make fewer projects eligible to generate credits. So we have less supply. The supply that does exist ends up being more expensive, and we need to balance that off of scale.
Because if we do not generate enough carbon removal and avoidance, we’re headed towards a world of — it’s not going to be good. We’re not headed towards a good place. So we cannot overly fetishize quality. It is only good up to a point, and the point at which it tips is whether or not we are making an impact on climate change in a way that is meaningful to the entire world. If we are not doing that and we designed the most perfect credits, we could all pat ourselves on the back as being so pure and so honorable and having such high integrity.
But there’s going to be some bad credits in there, without a doubt. And the point of trading this off is at the point where there are credits that get made that ultimately turn out to be failures, and that’s OK. I feel like carbon removal is so scared of being accused of greenwashing or having credits become impaired that we are willing to settle on many fewer credits being generated and consumed so that we never face a crisis like this. But I think optimizing so far on the side of quality like that almost guarantees that we will not produce the numbers necessary that we need to reverse climate change.
There’s a worse version of this economist line that a friend of mine likes too. And this one’s grosser and it’s worse, but it applies to cereal production and agriculture, where the optimal amount of rat poop in cereal is non-zero. There are always going to be rodents involved, I guess, in the production of cereal grain. And then going to the factory and having large amounts of grain co-located, you’re going to have rodent activity. And we could optimize for never having an amount of rat poop in cereal, and I would like to not eat that, for sure, but the amount of work it would take to guarantee that it was not present and keeping all of that safe would raise the price. I don’t know how much, but I imagine it’s a lot.
And there’s a lot of times like this where it’s like, OK, it’s not great, obviously it’s not ideal, but optimizing so far on the side of quality, it really harms us. One related idea here that helps me make sense of this, even though it’s disgusting, is the idea of the Pareto principle. You’ve probably heard this put as 80/20, and it’s that 20% of the work gets 80% of the results, which is a way of saying you often get pretty close to the way there by a first attempt.
Much of the outcome is done with the first 20% of the work, and that could be the rough draft. You could, you know, write 100 pages, and you could spend probably more time editing it and fine-tuning it by the time it’s done than you did just composing that enormous amount of text. And that’s how it is here too, where, OK, if it costs 20% to get you to 80, every additional unit of doneness just costs you more units above that 20 to get there. The price just goes up with every additional integer of quality, of doneness, that you get to. I think carbon removal would do well to keep that in mind, that getting to 80/20 is a way of ensuring that there’s scale.
Good counterarguments to this is that we will never scale if there are frequent crises that occur as a result of low-quality issuances, impairments, things of that nature that will so badly harm the reputation of the carbon removal industry that it is in fact imperative that we never have one of those. It’s empirical — how many of these incidents there are, how harmful to carbon removal. Like, if we look at the major crises that have happened within the broader offset market, you know, I think people like to point to Guardian articles. The John Oliver exposé was a big one. The New Yorker one about the Kariba project was another. They were bad, but I don’t think they tell us very much that we didn’t already know.
I think the people who think that there needs to be financial mechanisms for carbon management saw those as, yeah, like, at this volume, you’re going to have some rat poop in the cereal. And it’s our job to make sure that it gets dealt with and it’s insured and we minimize it, but some of that is going to happen. The people who were most critical and supportive of the John Oliver thing — were they ever going to like voluntary carbon market mechanisms for addressing climate change? I doubt it.
I think everyone has heard the same exact criticisms of carbon removal and VCM activity for a very long time. I think we’ve all heard about indulgences as the most common one, that they’re just greenwashing and they don’t even do anything. That’s fine, I hear that one a lot. But I think anyone in the know at all knows that there’s actually a lot of nuance in here. There are avoidance projects that are meaningful. There are carbon removal projects that are also meaningful. There are some that are potentially less meaningful and deserving of a different price.
There are some that are maybe rated more like junk bonds, or maybe they will be able to perform and we discount them because they might fail before the coupon arrives, you know, before they reach maturity, and that’s why they’re discounted. And that’s fine. We expect — we don’t expect all bonds to make it. We don’t expect all bonds to be solvent by the time they reach maturity. And we don’t do that for carbon credits either. We shouldn’t. But I think we end up second-guessing ourselves in a way that makes us lose track of the Pareto principle. It makes us lose track of the ultimate goal here, which is to produce enough carbon removals and avoidance to not face the worst consequences of climate change.
And if we do not reach that goal, but we get to pat ourselves on the back the entire way because we prioritize quality and we have such high integrity as an industry, it doesn’t matter. Maybe it matters in a moral sense that we didn’t cut any corners, and that’s a really beautiful thing. But if we didn’t achieve the outcome that this whole edifice was built to service, it’s unclear to me what exactly we’re doing.
I don’t even know that I have anyone specifically that I’m pointing towards here. I didn’t write this and riff on it in order to counteract something that I see that is actively harmful. I think in all of us, this is an impulse that exists in our souls. We’re here because we care about the climate, we care about carbon removal. We think market mechanisms have a role to play in reversing climate change. And we don’t want to be a part of an industry that lets the world down and is part of the corporate environment that we see and find very disappointing. I understand the impulse.
I think probably everyone in this space has — inside you there are two wolves, and one of them is wanting to make sure we do enough, even if it’s of crappier quality, but gets us over the hump to reverse climate change. And the other one wants to make sure that we never cut any corners and everything is done just so. And there’s a little bit of the perfectionist in there. How could there not be? We’re talking about some serious stakes here about human lives and animal lives and the planet as a whole that are very important. But also we need to move quickly, and moving slowly is the same as dying in this case, in terms of our industry and the impact that we would like to make.
So I encourage you to think about that. Sorry for putting the idea into your head. Horrible, horrible economist. The optimal number of traffic deaths is non-zero. It’s true. The optimal amount of rat poop in cereal is non-zero. To the person listening — I know you’re listening — who told this to me: thank you. That sentence now lives in my brain rent-free. I’m sad that it does, but think about this in the future. Think about how much we overemphasize quality and make sure we’re not doing it in a way that loses sight of other variables. We cannot optimize for that one variable in the system. I think that would cause us to not hit the scale that we need for carbon removal.
And I am also very open to empirical arguments here swaying this opinion. All I care about is getting the PPM down — parts per million of greenhouse gases in the atmosphere — down to a pre-industrial level as quickly as possible, as ethically as possible. And if obsessing over quality above all else is the way that we can do that, I will gladly change my mind on it. I’m not committed to this position at all. I just think that this is an impulse that I’ve seen, or a stress on quality or trust in a way that — and because it doesn’t keep track of other variables, it makes it sound like it doesn’t cost anything, or the costs are negligible, which I do not believe is the truth of the matter.
So thanks so much for listening. I hope you liked it. If you like it, as I say on YouTube, smash that like button. Give me a thumbs up, you know, five stars on Apple Podcasts, Spotify. Write a review. If you’re using Apple Podcasts, please tell people that this is a cool show that you learned something from, that you like. I have a subscriber program if you’d like ad-free listening. If you want to get bonus content, please join the community of subscribers. It means a lot to me. It helps the show grow. Thanks so much for listening. I’m Ross Kenyon, this is Reversing Climate Change, and sorry for putting some of those ideas in your head. So thanks for listening. Bye for now.
