- What does "carbon neutral" mean?
- How do we become carbon neutral?
- What is the Social Cost of Carbon (SCC)?
- What is CNI's vision, mission, values?
- Why is the offset step before the reduce step?
- How do we our offset our emissions?
- Will this expand beyond Indiana?
- Where does the money go when I purchase a carbon offset?
- How can I support carbon offset projects from Indiana forests?
- What does it mean to retire carbon offsets?
- Is purchasing carbon offsets tax deductible?
- How does CNI fit Into the larger climate action movement?
- Why does carbon neutrality matter?
Carbon neutral means removing the same amount of greenhouse gases you put into the atmosphere.
It means taking responsibility for causing your share of the climate crisis and paying for your share of the solutions. When you’re carbon neutral, you’ll probably still emit some greenhouse gasses, but you’ll be helping to remove an equal amount of them from the atmosphere somewhere else. On balance you’ll be net zero.
You become carbon neutral in three steps:
1. Measure your carbon footprint. Schedule a thirty minute phone call with CNI today.
2. Offset all of it today. This is a financial investment in projects that soak up greenhouse gas emissions. It's similar in cost to Netflix per person, or a water bill for an entire family.
3. Reduce it as you go. CNI will help you reduce your emissions. In six months we speak by phone again and remeasure your carbon emissions. As you reduce your emissions, you need to offset less to remain carbon neutral.
The social cost of carbon is a unit of measure. It measures the economic damage caused by a ton of carbon dioxide emissions.
"A recent U.S. government study concluded, based on the results of three widely used economic impact models, that an additional ton of carbon dioxide emitted in 2015 would cause $37 worth of economic damages. These damages are expected to take various forms, including decreased agricultural yields, harm to human health and lower worker productivity, all related to climate change.
But according to a new study, published... in the journal Nature Climate Change, the actual cost could be much higher. 'We estimate that the social cost of carbon is not $37 per ton, as previously estimated, but $220 per ton,' said study coauthor Frances Moore, a PhD candidate in the Emmett Interdisciplinary Program in Environment and Resources in Stanford's School of Earth Sciences."
SCC is a critically important concept. We're in this problem because many of us are internalizing the benefits of carbon while externalizing the costs of carbon.
It's one thing to become carbon neutral (the sooner the better obviously), but it's even more powerful to stop externalizing costs to the most vulnerable.
That's what the SCC helps us to do. It forces us to acknowledge that if we wait to become carbon neutral we are, in effect, choosing to continue damaging the most vulnerable.
If the average American household emits 40 mtCO2e annually, that means the average American household shifts $8,800 in social costs onto others -- often the most vulnerable.
Our vision is a world where everyone's unique genius is recognized, nurtured, and set loose to create better futures without end. The movie Tomorrowland is a great example.
Our mission is for Indiana to become carbon neutral as soon as possible. We're starting by focusing on households, businesses, and academic institutions. Along the way, we're reinvigorating public service through fun and effective climate action.
Our values are fun, friendship, and effective climate action.
There are at least two reasons:
1. Putting a price on carbon changes how we act
See this passage from Second Nature, the non-profit that organizes 650+ colleges commitments to carbon neutrality.
Neutrality First Approach
Some institutions reverse the usual carbon management hierarchy and achieve carbon neutrality through offsetting before beginning other mitigation efforts. These institutions feel that the threat of climate change is so pressing that it is their moral responsibility to become immediately carbon neutral. Typically, such institutions have a manageable carbon footprint and also commit to reduce the number of offsets they purchase each year through on-campus mitigation efforts.
On that point, it is important to keep in mind that the very act of offsetting puts a price on GHG emissions. This price signal can drive internal emission reductions, because every ton of carbon that is not emitted represents one less offset that needs to be purchased. The short-term purchase of offsets can be an effective way to drive real reductions in global GHG emissions; internalizing the immediate costs of GHG emissions while accelerating the longer-term innovation in direct GHG emissions reduction techniques.
Here’s a more fun way to explain the same concept...
Imagine a person who swears like a sailor:
His wife says, “Ed, could you please stop dropping the F bomb? We have kids!”
“F* you Sharon! I’m a grown man! I can F’in use whatever F’in language I please! For F sake!”
“Uh, not if you want me to continue being your wife you won’t. You need to ship up or shape out big boy. If you don’t stop I’m leaving.”
Okay, now imagine he agrees with her. He wants to change his ways.
“You know what honey, I promise to change. Dagnabit, I’m going to try my darndest to leave my old swearing behind. I promise to change. Golly, please don’t leave me!”
The days and weeks and months pass… No matter how hard poor old Ed tries to reform his ways he slipps back into old patterns. His wife tried to remind him but she got exhausted.
This story could have been different:
“Ed, we’ve talked about this before. Why would this time be any different? I want you to put $10 cash into this jar every time you swear.”
“$10 dollars now.”
At first, it’s painful for Ed. Every time he pulls out a nice, crisp $10 bill it hurts. He thinks of the beer he could have had with his friends. The money makes it real for him though.
And wouldn’t you know it! Pretty quickly he’s changed his ways.
Now, Sharon and Ed are happy. They’ve rediscovered the intense passion they had for each other in younger days. Ed even trimmed up his hair and learned how to play cello.
2. It helps people get traction psychologically
Dave Ramsey wrote the bestselling book Total Money Makeover. The book helps people get out of debt and build financial wealth.
Imagine a common example of his audience -- a clerk at something like a gas station who makes $8.50/hour. Somehow they’ve accumulated $25,000 of credit card debt. They see no way out of the hole, and they sink into depression. This is the kind of situation that causes people to turn to drugs and kill themselves either slowly or quickly. It’s heart wrenching.
Along comes Dave Ramsey. His main technique for helping people get out of debt is called the “debt snowball.” He tells people to list their debts from smallest to largest -- regardless of interest rate.
So, maybe you owe grandma $75. You owe a friend $250. You own $750 on one credit card and $1250 on another. Then maybe you own $5,200 on your car loan. And $20,000 for your college loans.
You list these debts in order and put them on your refrigerator. You make minimum payments on all of them, and whatever extra money you have you put towards the smallest.
Quickly the small ones get paid off.
Then you take the money you were paying towards the small ones and apply it to the larger ones.
As you cross off the debts with your Sharpie marker you feel a sense of accomplishment and momentum. That’s why he calls it a “debt snowball.” You roll the snowball down the hill, and it gets bigger and bigger and bigger.
A lot of people call into his radio program and say, “Dave, that’s dumb. Why wouldn’t I pay off my high interest loans first? Yeah I owe grandma $75 but she doesn’t charge interest. Neither does my friend. The $750 I own on one credit card charges 8% interest! Doesn’t it make sense mathematically to pay off high interest loans first?”
Dave gets this question a lot, because it’s a reasonable question.
Yes, paying off the high interest loans first makes sense mathematically, but for most people it doesn’t make sense psychologically.
That is, most of us won’t feel the same sense of momentum we would if we had ordered the debts small to large.
Instead, people try to pay off the big high interest debts first -- month after month after year after year. It feels like shooting spitballs at a dragon. They feel like they are stuck and sinking deeper. Sadly, a lot of these people just give up.
Instead, list those debts small to large. Knock out the little ones. Feel progress and momentum. Roll the snowball. Increase confidence. And take back your life from the creditors.
A similar thing applies to the climate crisis. Like debt that’s gotten out of control, it feels overwhelming. We don’t know where to start. When we do start we aren’t consistent. We try some things then give up when we don’t feel momentum. In fact, we become depressed when we see the opposite of momentum -- we ride our bike everywhere but see more and more people buying SUVs.
You get the picture.
Instead, for a reasonable investment you can be carbon neutral. It’s solid ground! Something you can stand on. Something to never lose. A point from which you can only progress.
And then you see the momentum. It’s not like the current confusing situation -- where some friends swear off meat, others don’t use plastic bags, others ride their bike, others give up flying.
Instead, you see a house go carbon neutral. Then another. Then another. Then another. Once they are technically neutral (i.e. they pay in cold hard cash to offset the damage they are doing to the Earth) then they can reduce emissions in whatever way their heart pleases.
In fact, reducing is a critical component of all of this and can’t be forgotten. Measure. Offset. Reduce.
When someone sees the full scope of the damage, and they can also see how they can make it right today, that’s when they decide to become carbon neutral now and forever. Not simply to stop using plastic bags, or whatever, here and there… but to be completely carbon neutral now and forever.
Yes! Carbon Neutral Indiana is focused on Indiana, but it's a demonstration project we can replicate throughout the United States and around the world.
If you live outside Indiana here's how you can participate:
1. Become carbon neutral today.
Most of the people on our homepage are from Indiana. Some are from elsewhere -- Colorado, Maryland, etc. Even if you live outside of Indiana, we can still help you become carbon neutral. We can measure your carbon footprint and you can invest in projects that soak up your emissions.
2. Be (one of?) the first neutral households in your state.
We purchased domains for all of fifty states -- like CarbonNeutralOhio.org. We have a team of volunteers who are creating these websites. They'll be live soon. When you become carbon neutral, we'll list you as (one of) the first neutral households in your state. You don't have to carry the torch for your whole state. Just taking that first step will get the snowball rolling downhill. Eventually, you'll be immortalized as (one of) the first!
3. Plant a seed for local, verified, carbon projects in your state.
Over time, more and more households and businesses will become carbon neutral in your state. If your state already has some verified projects, and we determine they are of high quality, we can direct your investment to those projects. Otherwise, eventually, once there's enough purchasing power, we can help facilitate verified carbon projects in your state.
Currently, we support the Afognak Forest Carbon Project.
Our all volunteer team sells carbon offsets as a fundraiser. That means, when you purchase through Carbon Neutral Indiana you are not only getting the carbon benefits of the verified offsets but you're also enabling:
- Future verified, carbon projects in Indiana. We are working with both state legislators and large corporate buyers (more to come soon) to make this happen. Your support hastens the day. When this happens, we'll be able to take local Indiana leaders on field trips to explain how carbon neutrality and carbon offsets work. Imagine doing such a field trip with a mayor, superintendent of schools, president of the Chamber of Commerce, etc.
- Future part-time and full-time staff positions with wages similar to high school teachers. These staff will help households and businesses measure, offset, and reduce their footprints.
- Other projects like our summer internship program. Most of the 15 college students had environmental internships lined up but were canceled because of covid.
- Support our deeply entrepreneurial approach to climate action. Be sure to see these inspiring videos of what our network achieved in just our first 82 days as well as what we achieved in Q3, all with no grant funding and in the middle of a pandemic.
- Support CNI's long term vision. Offsets aren't it. They are a stepping stone. Our long term vision is to ignite a leadership movement and reinvigorate public service. Along the way, we're going to help all of Indiana become carbon neutral ASAP. No other organization has this vision or goal.
We modeled this fundraiser after Girl Scouts selling Girl Scout cookies. They purchase cookies wholesale for about $1-2 per box and sell them for $5. That means the margins for their fundraiser are 60-80%. It depends on the industry, but a good rule of thumb for retail is a margin of 50%. Our margins are about 40%. Because our non-profit hasn't received grant funding yet, this fundraiser is our main source of financial support.
The concept of retail margin should not be confused with the concept of non-profit overhead.
For additional context about fundraisers and markup, see what is normal in the healthcare industry!
This was one of the questions that led to forming Carbon Neutral Indiana.
On June 25, 2019, CNI's Founder asked this question to the Indiana Forest Alliance:
After several months of presentations and conversations, Indiana Forest Alliance's Board of Directors voted to make Carbon Neutral Indiana a project.
Currently, there are not forest carbon offset projects in Indiana. For now, we support a the Afognak Forest Carbon Project in Alaska. Once enough Indiana households and businesses become carbon neutral, however, we'll be able to set up a forest project here that generates verified offsets.
Retiring an offset means it's claimed against an individual or organization's carbon footprint, and it has been taken out of circulation to ensure it can only be claimed once.
Here's the lifecyle of a carbon offsets:
First, a "project developer" works with a "project owner" to develop a carbon offset project. They must bring in scientists / consultants to verify their plans, and they submit 100+ page project description document to a "registry" (e.g. Verified Carbon Standard). Here is the project description document of the Afognak project we support.
The registry analyzes the project to see if it passes certain criteria (e.g. it's additional, reasonably permanent, etc.) then they give the thumbs up.
The project developer develops the project (e.g. plants the trees, gives the cows a methane abatement supplement, change a landfill to capture the methane, etc.).
Usually a third party comes out to verify everything is legitimate.
Then, a year after commencing, the registry may "issue" carbon offsets. Each represents one ton of CO2e either sequestered or prevented from being emitted in the first place. Each of these offsets has a unique serial number and is tracked in a public database. Once it's issued, it can be bought/sold like any other commodity.
Let's say the project developer is acting like a wholesaler. They sell them to someone like Carbon Neutral Indiana. Then we retail them to the end consumer.
Finally, when any of our clients (a household, a business, etc.) wants to claim those offsets against their carbon footprints, we "retire" the offsets on their behalf. This means they are taken out of circulation and can't be bought / sold by anyone else. Here's an example of what the retirement record looks like.
An analogy for all of this is a coupon for a haircut. You could pass the coupon around, but eventually someone is going to get a haircut. At that point, the coupon is torn up so nobody else can use it. In the case of an offset it isn't torn up by "retired."
No. Purchasing carbon offsets is not a donation but a purchase. As such, purchasing carbon offsets is not tax deductible. Neither is the margin we charge as a fundraiser.
A great analogy is how Girl Scouts sell Girl Scout cookies. When we purchase those cookies, it's a purchase not a donation.
Carbon Neutral Indiana is a project of the Indiana Forest Alliance, a 501c3, so donation are tax deductible.
Climate solutions fall into two categories: (1) specific projects that reduce emissions and (2) carbon pricing that transforms how economic actors make decisions. Specific projects have an immediate payoff in terms of reducing emissions. Carbon pricing, on the other hand, changes our economic paradigm and increases investment to projects that reduce emissions. It has a multiplier effect.
1. Specific projects that reduce emissions.
These are climate solutions you know like solar and wind electricity, electric buildings, public transportation, plant rich diets, etc.
Several frameworks group and rank these solutions. The third Accelerating America’s Pledge report by Bloomberg Philanthropies’ groups them by three principles: renewable electricity, electrifying end uses like buildings and cars, and investing in natural carbon sinks like forests. McKinsey & Company’s famous GHG Abatement Cost Curve sorted them by highest potential per dollar invested (see their 2020 report for an updated analysis). Project Drawdown sorted these solutions as well. CNI's founder analyzed these solutions in Indiana's context as part of Indiana Drawdown. And finally, researchers at Princeton University’s Carbon Mitigation Initiative created The Net-Zero America Project (NZAP). This research informs, “a new National Academies of Science, Engineering and Medicine Committee…”
2. Pricing carbon.
A boring accounting problem created our ecological crisis. It’s simply that we’ve been internalizing profits and externalizing costs. In other words, we've taken short term gains from exploiting the environment, but pushed off the environmental damages to others elsewhere in the world as well as in the future. As is relates to carbon, each ton of CO2e we emit causes $220 in social costs. Pricing carbon enlarges our circle of responsibility and changes the way we make decisions.
Many of the reports cited above encourage not only specific projects that reduce emissions but also carbon pricing and associated carbon markets.
For example, Bloomberg’s Accelerating America’s Pledge report:
"While this chapter highlights critical climate policies within each of the three principles, certain actions transcend these categories and have more cross-cutting implications. The most obvious of these are state efforts to price carbon emissions or set a formal cap on economy-wide emissions...
Carbon pricing has been studied in-depth and is widely seen as a particularly efficient way of reducing emissions in some sectors if not all."
"All of the 1.5°C scenarios would require major business, economic, and societal shifts—each enormous in its own right, and with intricate interdependencies. We identified five critical shifts and determined what it would take for them to occur… [The fifth is ramp] up carbon management and markets… Currently, it is impossible to chart a 1.5-degree pathway that does not remove CO2 to offset ongoing emissions. The math simply does not work."
Carbon pricing is supported by international experts and will become more common. The Financial Times published the following in Jan 2019:
"Four former chairs of the Federal Reserve have joined with leading economists from both major political parties to issue an unprecedented call for a carbon tax in the US, saying 'immediate' action is needed to address the risks of climate change.
Janet Yellen, Ben Bernanke, Alan Greenspan and Paul Volcker proposed an emissions tax that would be used to pay lump-sum cash rebates to US citizens.
The statement signed by 27 Nobel laureates and 15 former chairs of the Council of Economic Advisers described the mechanism as a 'cost-effective lever to reduce carbon emissions' that would correct 'a well-known market failure'."
And Elon Musk, the Leonardo DaVinci of our day, said:
"If you ask any economist they will tell you that is the obvious thing to do, put the correct price on carbon because we currently have an error in the economy which misprices carbon at zero or something closer to zero. It is a fundamental economic error.
To make it neither a left or right issue, we should make it a revenue-neutral carbon tax… If countries agree to an appropriately priced and targeted carbon tax, we could see a transition [to clean energy] that has a 15- to 20-year timeframe as opposed to a 40- or 50-year timeframe.”
2A. Pricing carbon with regulation
Various groups advocate a mandatory carbon price, enforced by the government. Citizens Climate Lobby at the federal level, for example, and Climate Xchange at the state level. Regional experiments like RGGI show it can reduce emissions while also spurring the economy.
2B. Pricing carbon by shifting social norms
CNI — along with the rest of the carbon neutral movement — is changing social norms and making it commonplace to pay a voluntary carbon price. First we are making it normal to be carbon neutral. Once enough people are — i.e taking responsibility for and cleaning up their “carbon trash” — it will be expected of every decent person and business. The reputational costs will be too high, and businesses would lose their social license to operate if they don’t.
In this way, CNI’s approach complements the mandatory approach. One is top down, enforced by legislation. The other is bottom up, enforced by a new social norm. In other words, we don’t need to wait for legislators to start shifting social norms.
CNI increases awareness of social costs of carbon, early adopters take responsibility and show leadership by becoming carbon neutral, and finally we have enough momentum to enact a society wide carbon price. How? We’ll connect the early adopters with politicians willing to lead and achieve what the World Resource Institute calls an “ambition loop.” This is a virtuous cycle in which early adopters provide political cover for politicians to take a risk. Then, those politicians enact legislation that empowers those early adopters.