[ramraj07]

I’m not an economist by profession but I suspect (and at some point want to try and model) that one’s carbon footprint is just a linear function of three variables: the amount of money spent, the fraction of all money that’s in active circulation in the economy, and the fraction of clean energy in the total economy.

If you pay google 100 bucks, and See how google spends that money: it saves some, pays off its employees, it spends on infra and then finally on actual energy. Saved money is never accessed if parked. What it gives to other companies and people will spawn the same split we created when we paid google ad infinitum. Money spent on infra can have an outsized environmental impact (plastic, concrete) but I’m hoping we can ignore it, and the Final expenditure is pure energy.

I feel like if you keep breaking down every Avenue parts of your 100 bucks goes into, it’ll eventually go to creating energy more or less. Even if you choose google because they use green energy, the employees who are paid by google will use amazon powered Netflix so it might not matter any more than what’s the fraction of green energy in the total economy.

Thus the only solution to reduce your carbon footprint is to pretty much just spend less money! But no one wants that do they? They just want to have their cake and also eat it so we are just doomed.

Been outlining this for an article for a while, comments , prior research and criticism appreciated! https://www.ramrajv.com/blog/how-to-truly-reduce-your-carbon...

[thomasmost]

I like the way you're thinkin'! That's a very "Bend-onomics" mindset, if I can be so presumptive.

That calculation is not dissimilar from what we do on a merchant-level, and I think it's a good, macro-comparison! For your three variables, we just substitute 1) transaction amount, 2) vendor revenue, and 3) vendor emissions, if that makes sense.

There are many reasons why it's important to do this at the merchant level, but one of the most exciting (from an economics perspective) is to amplify market pressure on high-emitters. In the future, you can imagine a green marketplace powered by Bend, where you can instantly comparison shop for providers with lower "carbon intensities" than those you're currently using.

[tedpower]

Ya totally! Another way to think about it — in climate lingo, there are 3 types of emissions: First there are Scope 1 emissions, which are the emissions from burning fossil fuels directly (gas in your car, natural gas for your stove, etc.). Then there are Scope 2 emissions, which are from energy (you buy electricity from utilities, and those utilities use some percentage of non-renewable generation, like coal or natural gas). And finally Scope 3 is everything else — all the goods and services you buy, upstream and downstream.

But I think the point you guys are making, is that actually everything is Scope 1 emissions plus some number of hops. So if you buy gas, that's 0 hops. If you buy energy from your utility, and they use natural gas, that's 1 hop. If you buy an ice cream that was made in a factory powered by natural gas, that's 2 hops. And if you buy that ice cream with a cone, purchased by the ice cream shop, that was manufactured in a factory ... etc.

The problem is, consumers are often the ones who apply the pressure to address climate (don't wait for the fossil fuel companies to take this on themselves). And so we need to trace back all those upstream emissions, all the way back to those Scope 1 emissions, to really size the impact, and align incentives to decarbonize.

Historically, climate programs only focused on Scope 1 and Scope 2 emissions. But that only addresses maybe 20% of emissions for most companies. This is why it's critical to consider the impact of all the goods and services your company purchases.

[robertlagrant]

> consumers are often the ones who apply the pressure to address climate (don't wait for the fossil fuel companies to take this on themselves)

Possibly, but equally consumers have not cried out for nuclear power for the last 40 years in most countries, which would've annihilated so much coal use. Consumers can more recently be won over by nice packaging and messages if they can afford a product that has green PR, which is great, but that's really minimal.

[ramraj07]

At least my suggestion is that the more effective way to reduce emissions (given we are not gonna go fully green for 80 years probably) is to just spend less. Park more of the money you make. Make Even more money and park it more.

Economically that might be the worst but environmentally that might be the best. The pandemic lockdowns kinda proved that as well.

Having said that your approach isn’t mutually exclusive. Even this dimensional balance method still suggests if more of our economy goes green then it’s better. So if your endeavor can shame more orgs to go green then great.

[tedpower]

Unfortunately 'spend less' is not by itself a viable strategy for most growing companies. Companies need to invest in their growth. But companies can instead shift their spend from higher 'carbon intensity' goods and services to lower carbon intensity goods and services. E.g. if you need to buy a vehicle, buy an electric vehicle. Or if you need to rent office space, rent well-insulated efficient office space. Or if you need cloud hosting, select the greenest cloud and the greenest region. Or if you need to meet with a prospective customer, maybe do it over Zoom vs. getting on a plane. We try to help you prioritize that list of lower-carbon options.

[dragonwriter]

> I’m not an economist by profession but I suspect (and at some point want to try and model) that one’s carbon footprint is just a linear function of three variables: the amount of money spent, the fraction of all money that’s in active circulation in the economy, and the fraction of clean energy in the total economy.

On average, it is true by definition (at least, if one holds that all activity in some way supports personal consumption) that carbon footprint from consumption is (global carbon output) × (personal consumption) / (global consumption).

It sounds like your proposed hypotheses essentially rephrases this.

> Thus the only solution to reduce your carbon footprint is to pretty much just spend less money!

In the short-term, sure. What spending a premium on things that reduce carbon footprint in normal narrow analysis (but which force the reductions in the short term to be someone else's increases who aren't paying the premium) does isn't actually reducing the near term footprint of the whole economy, it increases the economic incentive for production models which reduce the footprint per unit output.

[danuker]

As a non-economist also, I am quite sure moving $1 of your yearly expenses away from CO2 heavy suppliers will encourage the market to find other solutions.

What you spend your money on matters, even more than voting.

[ZeroGravitas]

I agree with your general premise.

10% of companies advertising that they use 100% green energy, while the other 90% of society uses 0% is no better than the government forcing 10% of all energy to be zero carbon.

Economist agree that carbon taxes work, but they work at every level not just the first time it's spent which amplifies the effect.

However, I think I disagree on two important things:

a) fixing climate change is the cheaper option. We're "doomed" only to the extent that system incentives drive us to do the wrong, more expensive thing

b) more info can only help that case, even at the margin.

Voting is the most powerful way for most people to act. Voting with your wallet helps too.

[Xixi]

Fossil fuels are responsible for about 60% of greenhouse gases emissions (in CO2 equivalent), the remaining 40% being split between: deforestation, farming and various chemical processes (to make concrete, to reduce iron ore, to make fertilizer from natural gas, etc.). Your equation seems to solely focus on these 60%, so it's quite incomplete, given that we also need to get rid of the remaining 40%.

For example methane and nitrous oxide, two extremely potent greenhouse gases, are mostly by-product of agriculture/cattle rearing: methane from cows and rice fields, nitrous oxide from the usage of fertilizers (from memory, I might be wrong).

Another example: the chemical process behind concrete production (CaCO3 -> CaO + CO2) emits more CO2 (about 4% of global emissions) than the world airplane fleet (about 2% of global emissions). That's without accounting for the energy necessary to trigger the chemical process, usually coming from fossil fuel...

[rcMgD2BwE72F]

>Thus the only solution to reduce your carbon footprint is to pretty much just spend less money! But no one wants that do they? They just want to have their cake and also eat it so we are just doomed.

I do. I've never been more frugal in my life (almost an hermit now) and yet I'm earning >€200K/y and have over $4M in $TSLA at ~35 y-o. I don't spend because I know any spending would end up adding pollution more than satisfy me.

I could give all the assets now though but I'm not sure which organization would best use it to speed up the transition to sustainable energy and prevent biodiversity collapse (to many players in clean energy don't care about the latter and even would work to worsen the situation).

[danuker]

The fact that YOUR suppliers are reducing CO2 emissions matters.

If enough people did that, every supplier would eventually reduce CO2.

Energy can be produced with very little CO2 emissions, like solar, wind, hydro, and nuclear.