Episode 139: Jeremy Freeman and Danny Cullenward, CarbonPlan

Jeremy Freeman

Today's guests are Jeremy Freeman, Founder & Executive Director, and Danny Cullenward, Policy Director, at CarbonPlan.

CarbonPlan is a new non-profit that focuses on improving the transparency and scientific integrity of carbon removal and climate solutions through open data and tools. Their work involves analyzing carbon removal opportunities based on the best available science and data, and helping organizations make specific decisions towards their carbon removal goals. They also work collaboratively to build open tools and resources for the evaluation and deployment of carbon removal and other climate solutions.

Jeremy, a Ph.D. in neuroscience, spent four years as a group leader at Howard Hughes Medical Institute and three years as the computational biology director at Chan-Zuckerberg Initiative. He became increasingly worried about the climate crisis and thought biotech open science principles could have interesting applications in the fight to address climate change. Meanwhile Danny, a JD and a Ph.D. in environment & resources, felt frustrated after a bruising experience in climate politics and had started to work on a book about applied policy in climate markets. When they met, they realized practical climate policy paired with radical open science and transparency could revolutionize the carbon offset and removal market, and CarbonPlan was born.

We have a great discussion in this episode about carbon markets, why they matter, what is broken about them, the best ways to fix it, and how CarbonPlan is setting out to help. They have a unique perch in the market, and this is a must listen for anyone with carbon markets on your mind!

Enjoy the show.

You can find me on Twitter @jjacobs22 (me), @mcjpod (podcast) or @mcjcollective (company). You can reach us via email at info@mcjcollective.com, where we encourage you to share your feedback on episodes and suggestions for future topics or guests.

Episode recorded December 18th, 2020.

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In Today's episode, we cover:

• CarbonPlan’s mission and how they started

• A snapshot of the current carbon market 

• What drives companies to make carbon-neutral pledges, and why there has been a recent influx of these commitments 

• The history of carbon offsets and why they get a bad rap

• The certification and verification processes for various types of carbon removal solutions

• Regulations within the offset market and how effective they are

• How the carbon credits tracking systems work and where they are falling short

• Difference between carbon removal and avoided carbon emissions 

• The various conflicts of interest around carbon offset solutions

• CarbonPlan's place in the market and how others perceive them

• How to make the offsets market more effective

• Best practices for when CFOs and heads of sustainability make carbon-neutral commitments

• Which carbon removal projects are the most successful, and why

• What role the government should play in the carbon offset market

• What Jeremy and Danny think President-Elect Biden should focus on in his first 100 days in office

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• Episode Transcript

  Jason Jacobs: Hey everyone, Jason here. Before we get going, I just wanted to take a moment to give a quick shout out to the new paid membership option that we recently rolled out. This option is meant for people that have been getting value from the podcast and want to enable us to keep producing it in a more sustained way.

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  Hello everyone. This is Jason Jacobs and welcome to My Climate Journey. This show follows my journey to interview a wide range of guests to better understand and make sense of the formidable problem of climate change and try to figure out how people like you and I can help. Today's guests are Jeremy Freeman, founder and executive director and Danny Cullenward policy director at CarbonPlan. CarbonPlan is a non-profit whose mission is improving the transparency and scientific integrity of carbon removal and climate solutions through open data and tools. They have an interesting origin story in that, Jeremy has his PhD in neuroscience and after spending almost four years as group leader at Howard Hughes Medical Institute, and then three years as the computational biology director at Chan-Zuckerberg Initiative, he was becoming increasingly concerned about climate change and thought that open science had applications that could be applied to the climate world.

  And around that time, met Danny and Danny was thinking specifically about the carbon markets and carbon removal. So CarbonPlan was really the intersection of those two where they aren't a verification body, they don't have their own projects, they're not investing in these companies. What they're doing is essentially they are doing part research, part advocacy, they are coming in objectively and just kind of trying to get to the root of what is happening with these projects, which ones are the highest caliber, which solutions have the biggest potential, which verification bodies are doing the best work, et cetera.

  So this episode was really informative, uh, one part is all about CarbonPlan and their important work. Another part is just about carbon markets in general and where we are, what's broken, what's the best way to fix it, and how do we get there? I learned a lot in this one and I hope you do as well. Danny, Jeremy, welcome to the show.

  Jeremy Freeman: Thanks, Jason.

  Danny Cullenward: Really nice to be here.

  Jason Jacobs: Well, I'm psyched to have this discussion, I, I feel like I've been tackling these carbon markets from different angles as I've been trying to get myself up the learning curve and every conversation helps me get a little further but I have to admit I'm still not where I want to be and you guys are kinda right in the thick of the action. So I've been waiting to have this discussion for a while ever since I met Jeremy at some, where did we meet? Was it like at First Round Capital event or...?

  Jeremy Freeman: It might've been the First Round Capital event, something in San Francisco back in the before times.

  Jason Jacobs: Exactly. Yeah. BC, before COVID. [laughs] But yeah, no, thanks so much for making the time out of your busy schedules, but without further ado, why don't we jump into it? So maybe we'll start with you, Jeremy, what is CarbonPlan?

  Jeremy Freeman: Great. It's great to be here, Jason, I'm really excited. CarbonPlan is a non-profit organization started about eight months ago and we're focused on the scientific integrity and transparency of climate solutions. We work on that in, in really three different ways. One is research, we do kind of deep dive analysis and synthesis into different areas of climate solutions quite broadly. Um, though in the last few months we have been quite focused on carbon removal specifically. We do communication, I'm really focused on communicating complex technical concepts to a broad audience and really thinking about the public broadly there.

  And then the third piece of what we do is engagements, where we work with organizations and the public and private sector that are trying to make decisions around programs or policies or projects and we help evaluate and guide some of that work. We often refer to that piece of our work as activist consulting, because we want to get in there and help organizations do what they want, but we want to make sure it's done in a way that also respects the science and the integrity and the accountability, um, that we think is needed around these problems.

  Non-profit those are the things we work on. We're radically transparent and totally committed to doing everything in the open. So all of our code is on GitHub, all the data that underlies all of our research is publicly available online, all the source code for all of our websites is online. We, we do everything in the open it's really core, core value for us and the key part of what we think is needed in this space.

  Danny Cullenward: Ah, that's about that.

  Jeremy Freeman: Great. [laughs]

  Jason Jacobs: And how did all this come about? Because correct me if I'm wrong, Jeremy, but I don't recall that you had climate change anywhere in your historical background. There was some biotech and some health and... but was this kind of a, an epiphany, you hit your head in the shower or had you been thinking about it for a long time? Like where did this come from? How did this happen and why?

  Jeremy Freeman: Yeah, great question. So I will, I will always say I'm the actually only one on our team now, currently we're five of us that has no climate background. And I always really try to be clear about knowing what I don't know. So yeah, my background is not at all in climate, I did a PhD in neuroscience, I'm a biological scientist, computational scientist by training and spent about a 10, about 10 years in the world of biology, biomedical research, part of that was doing research but a lot of it was kind of learning about and figuring out how to make research systems work as a whole, thinking about things like funding and how we fund research programs and sort of design and structure, large scientific projects that involve lots of groups working together, needing to share data and needing to coordinate efforts, working across science and philanthropy and government, and in some cases companies.

  And after spending all that time in that world, I guess I came to feel, I really wasn't just doing the research I was kind of learning about how to make these kinds of systems work. And then really over the last several years, as I got increasingly passionate about the climate problem as, as many of us have, I really started looking at ways that those ideas and some of those principles of kind of open science and transparency and collaboration could be leveraged or sort of be relevant to the climate problem.

  And that led me to meet a lot of people and talk to a lot of people and try to learn as much as I can. And I was really lucky over that process to, uh, meet and then also made team up with Danny here, um, another, uh, other colleague Joe, who I think we all found real resonance around the idea that some of those principles of open science could have interesting applications in this area.

  Jason Jacobs: Why don't we segue to Danny for a minute? So Danny, be great to understand a bit about your backstory and both kind of how you and, and Jeremy came together, but also why you came together and, and a bit about your journey that led up to that moment.

  Danny Cullenward: Yeah. So, I mean, I don't know if you really realize that today's a weird kind of work anniversary for us. I'll explain that in just a second. So, so my background is, um, in climate, I started my undergraduate studies doing earth science. So basically thinking about the climate science and environmental science aspects of the climate problem very quickly realized I wanted to work on the mitigation side of it, how to fix it.

  So I moved into energy engineering and then ended up doing eventually an interdisciplinary PhD at Stanford, mostly focused on energy modeling. And then I went to law school I was there, so I ended up becoming this like fully weaponized climate policy researcher. And to make a very long story short, got deeply involved in a number of policy processes, in- including in California and in Europe and East Asia doing a lot of applied policy work in this space.

  And th- the work anniversary is actually it's, it's kind of a weird moment. I have a book that's literally coming out today in the United States, uh, the day of this recording and Jeremy and I met as Jeremy mentioned, as he was sort of trying to figure out how we wanted to get engaged in this space.

  There's some mutual friends and we met up at a coffee shop in San Francisco the day I submitted the full draft of my book to my publisher and I just walked in and said, "You want to talk about carbon markets. You want to talk about carbon offsets." Boy, I've been doing some thinking and we sat down over what might've been one or two cups of coffee, I don't remember-

  Jeremy Freeman: We have free hour.

  Danny Cullenward: ... and put our heads together. Yeah. And it was raining, it was raining really hard I remember that. And you know, a big part of this was I was just coming off of a pretty bruising experience in climate politics where financial conflicts of interest, the lack of clear and accurate and reproducible analysis that's available to the public. Just a huge barrier to getting things done in the under-resourced public interest community, and I am not somebody who comes from an open science background or who has great technical skills in terms of open web programming.

  But I knew there was something about those values that fit the problem I kept slamming my head into as a climate policy researcher. And that is a big part of the combination here and then again, Jeremy mentioned our third colleague, Joe Hamman, very much a leader in the earth sciences movement and thinking about open science in the context of earth sciences. And it's really this kind of weird synthesis of practical climate policy experience with radical open science and transparency that led to this idea.

  Jason Jacobs: So if I'm hearing right and correct me if I'm, I'm wrong, but it sounds like Jeremy, from your work in biotech and your increasing concern about climate, that you thought that some of the open science principles from the biotech world could be applied in addressing climate change in compelling ways. And then Danny, you were coming from the other place where you were looking specifically at things like carbon markets and offsets and credits and that world. And so you guys talked and then those two pieces came together. Is that right?

  Jeremy Freeman: Yeah, I remember very distinctly, you know, I've been doing a lot of thinking around at that particular time grant programs and science, let's say we want to solve the big science problem, how do we decide, how to put a lot of money towards research and what do we measure and what do we look at to figure out what's working and what's not working. And I remember all kinds of light bulbs going off when I read it, then a section of Danny's a draft of Danny's book at the time and where he was literally describing that concept in the context of a better way to do funding and procurement of, and in this case, carbon removal like strategies and framing them as expenditure programs.

  And how we need to track, what's going on, and have public available data on what's working. And just a lot of bells were going off in terms of how that connected to ways I had seen those kinds of values, be really critical for solving big research problems.

  Jason Jacobs: So as you guys came together and started swapping notes, if you took a point in time snapshot of what you saw in the carbon markets at that time, what did you see? What was the, so there was a state of the state, is it is, it is what I'm asking.

  Danny Cullenward: So we were in a really interesting moment right now and this was, I mean, this was almost so something like a year ago and we really first started sitting down to talk maybe a little bit longer. And you know, I think the big thing that your listeners need to be aware of is, is all this excitement around carbon offsets that you hear today. A lot of it's wrapped up in this idea that companies are going to pledge to go carbon neutral, there's a lot of private sector motivation on the buyer's side and enthusiasm for developing markets that are oriented around companies and individuals making decisions but...

  Jason Jacobs: And why by the way and, and then come back to the thought you were just going to make, but what's driving that motivation?

  Danny Cullenward: Well, it's a much broader story, but there's increasing political and popular pressure for people to claim they're doing something about climate, and we've seen a lot of major corporations step up over the last particularly year, year and a half is a really important window. We're seeing a lot of companies, whether it's big oil companies or major tech companies or a variety of companies across radically different sectors of the economy say, "I want to make a claim that I'm gonna do something not just on the margins about climate, but I'm gonna eliminate my historical emissions or I'm gonna get to carbon neutral in my ongoing operations," big, bold claims.

  And they're relying primarily on these private offsets markets to get the job done. But where I was coming from is, again, somebody who's been working in the public policy system and most folks, I think, working in the private offsets markets don't always appreciate this. The offsets industry was really came to fruition in maturity in two major phases. One in the global experience following the Kyoto protocol, and Europe and Japan and other countries buying a lot of carbon offsets credits under that sort of first-generation public policy system.

  And then more recently in places like California, which have a slightly different approach to these things and have scaled up a multi-billion dollar public compliance market. Now, today and over the last year, almost all the actions on the private side, but it's intimately connected to the history of the public policy systems. And that's sort of where I was coming from. To ask what do we see part of the issue is there's a lot of continuity but there's almost no memory of that continuity.

  Jason Jacobs: What do you mean by that?

  Danny Cullenward: So a lot of these systems are old, we've seen a lot of these issues before, a lot of these approaches, and a lot of the excitement I think people talk about today is confronting issues that people have been debating for 20 years in the policy world.

  And so that's what I mean about there being a ton of history and yet a lot of the sort of new interest and enthusiasm I think is coming with a blank slate, not understandably for people who are moving into the sector and learning about it for the first time.

  Jason Jacobs: So if there was longer institutional memory, what are the key elements of the past that you think it would be important for us to understand as we stand today?

  Danny Cullenward: So my two cents and, and Jeremy I'd love your take on this, but a lot of the public policy offsets programs have been extraordinarily challenging and some downright failures, and there's been extraordinary problems with political conflicts of interests, as we see often a race to the bottom on quality, as these programs are largely set up to provide lower cost compliance strategies at very, very high volumes and very, very low prices.

  Those are the conditions when buyers just demand as many credits as possible at as low a price as possible, where you rarely get a search for quality. And the people whose job it is to maintain standards of quality, whether that's public regulators or non-profit organizations who work with them, at least in my opinion haven't been doing a particularly good job. And that's a huge challenge if you want to think about this kind of mechanism as a way to drive and scale.

  The much more challenging and innovative solutions we know we're going to need as part of a serious long-term decarbonization effort and also a carbon removal effort, if you think we're going to need large-scale carbon removal to help address the fact that we probably won't ever get agricultural emissions down to zero. So we're going to stabilize the climate, we're gonna have to deal with that problem too. Those are tough problems, but when you're competing for high volumes of low cost offsets, those markets really aren't supporting those tough solutions.

  Jason Jacobs: So if I may, I think what I'm hearing is that you've got companies who increasingly through some smorgasbord of, of reasons are getting more motivated to start being able to make these bold claims about net zero and eliminating historical emissions and so on. And then you've got the product developers who are maybe saying, "Oh, with these companies looking to spend like there's money out there and there's a market. So I'm gonna go get these projects off the ground and because I have people that want to buy them," and then you've got the governments and the non-profits who are supposed to be making sure that there's consistency and quality that are maybe lacks through some combination of reasons.

  And this is an issue because over time there's gonna be more marketing speak, and it- it's an empty promise without consistency of quality and that's the problem that as CarbonPlan were going to set out and solve? Is that right?

  Jeremy Freeman: We are currently trying to look at how all of that is working and we're trying to find ways where we can help make it work better or reveal ways that it's not working. And it's really a key part of our, our theory of changes. You gotta, you know, if you want the good stuff to work, you have to simultaneously figure out what's working and elevate it and you have to figure out what's not working and make clear why it's not working.

  So we want to attack and solve this problem broadly in the area of carbon removal and carbon markets. Yeah, I think we said this right, we were looking at everything, we're trying to figure out what's working and what's not, and we're trying to put out as much transparent information as possible to help us all understand that.

  Jason Jacobs: Now, for starters, just so I get the lingo right. And I asked some of this, this question to the Stripe climate team, but I find that as I socialize these questions I get different answers. So I'm gonna ask you guys as well, but I heard carbon removal there and I heard offsets there. Is carbon removal just a subset of offsets or is carbon removal separate and distinct?

  Danny Cullenward: How long do you have?

  Jason Jacobs: I mean, I- I [laughs] don't wear a watch for a reason, Danny.

  Jeremy Freeman: So I would say, and, and Danny jump in, I would say, they're not really, they're just not the same kind of thing. So let's just be really clear about what we're talking about. When we talk about carbon removal, we are talking about doing different things that remove atmospheric CO2, and ideally turn it into something that can be stored on effectively permanent geological timescales.

  So there's a lot of discussion about permanence, we should come back to that's really important. But in general, we're talking about approaches that takes you to out of the atmosphere, put it into trees, put it into soil, maybe for some duration, ideally put into rocks, put in a geological storage, that's carbon removal. We often distinguish carbon removal from avoided emissions and that's a really important distinction. And that is about, are you removing atmospheric CO2 or are you preventing some emission that is currently happening? I know you're avoiding that.

  So that's a distinction, that's a really important distinction, wrote of article explaining it. Offsets, that refers to particular mechanism for crediting or paying for a variety of activities. Some of which might include carbon removal, some of which might include avoided emissions, some of which might include other things too.

  And it's a particular mechanism whereby someone effectively pays someone else to go do something that maybe has some climate benefit, and that can be in a voluntary regime where I, as an individual or as a company, pays someone to go do something that has that climate benefit or in a compliance regime, which Danny should definitely explain in a lot more detail, I'm doing it in exchange for compliance with some regulation or cap on my own emissions.

  So basically I'm getting away with a minion because I've paid someone else to do something elsewhere in exchange.

  Danny Cullenward: The other thing to add is that offsetting is also a verb and it's, it's a really important concept people talk about when they think about climate stabilization.

  Jason Jacobs: It's also a wrapper right?

  Danny Cullenward: There you go. I mean, it's, it's everything you want it to be.

  Jason Jacobs: [laughs]

  Danny Cullenward: I think this is where a lot of the confusion comes from. So an offset credit and the policy mechanism of offsetting is a particular way that people compensate and structure markets to deliver certain kinds of climate outcomes. The traditional current offsets market doesn't really focus on carbon removal, it's mostly focused on avoided emissions and things in forests that have complications around permanence.

  The big insight is that a ton is not a ton, all tons are different, whether you're avoiding emissions, removing them, whether you remove them for short duration or a long duration, everything's all messed up. And the offsets market basically doesn't distinguish between any of that stuff.

  Offsetting is a verb, it's also really important because again, imagine a global scenario where we've completely replaced the energy sector, everything's a zero emissions, energy sector and electricity, transportation industry, everything, but we still have methane coming from rice patties because we're gonna grow a lot of rice to feed billions of people, that's not gonna stop.

  So if we have anthropogenic emissions and we need to do something about that to stabilize the climate, we may want some carbon removal, and just invent a magical silver bullet carbon removal technology, you might call that offsetting those gross emissions from the agricultural system, that's a totally fair inappropriate use, that's a very different sort of concept than the mechanism of compensating and structuring markets, where again, we think a lot of the confusion around this stuff lies in the way those markets are structured right now because traditional offsets are generally not focusing on carbon removal, they're focusing on something else.

  And when people talk about those deep climate stabilization scenarios, and they talk about how to clean up that last 10% of emissions, they're talking about offsetting as a verb and not necessarily offsets as a policy mechanism.

  Jason Jacobs: So I'm gonna make a bold proclamation that you guys can agree or disagree with, and that is that the whole language that we speak about carbon markets needs a refresh.

  Jeremy Freeman: Not just the language, but maybe part of it.

  Jason Jacobs: I see. So you're like, "Well, you think that's both? Like I'll show you both." Right?

  Danny Cullenward: Oh, you want both, you want both? Carbon offset is a policy mechanism, there isn't even a verb tense to talk about them, it's a discussion of counterfactual scenarios and relationships between what happens and what might've happened without an incentive. You won't find even a verb tense that functions particularly well for that, it's like talking about time travel, and then I'm not making this up.

  Jason Jacobs: Now, for offsets the noun, it seems from what I can gather that there are some categories where the certification bodies and processes and measurements and things like that are maybe more mature. And then there's other categories where either they're less mature or in some cases don't even exist yet, true or false?

  Jeremy Freeman: I think, yeah, true, and it's a little worse. The situation on the low end is I'd say a little worse than the way you put it, maybe a lot worse, but yes, generally true.

  Jason Jacobs: Well, can you expand on that point?

  Jeremy Freeman: So there are a lot of different categories of projects and Danny really hit the nail on the head when you pointed out how thinking about, and isn't it about some of this stuff and whether it's working, it really feels like time travel. And that's because the vast majority of projects currently in as offsets all involve people making changes to things they were already doing in sort of complicated and nuanced ways, and then trying to track what the effect of that change is.

  And just to sort of show you my surprise when I started learning about this stuff, you know, when I heard about forest offsets and the idea of sort of forest as a way to do carbon removal, I had this image that I think a lot of your, uh, a lot of your listeners probably have where forest projects are, you know, folks out there, planting trees, wonderful kind of restoration of habitats.

  The vast majority of forest projects used an offset systems at least very specifically we know this in the case of the California cap and trade program, you know, 80% of the forest projects are these things called IFM or Improved Forest Management projects. And the way these work is that you've got someone who is on landowner, some timber harvester is in the practice of regularly cutting down their trees and an exchange for some money, maybe.

  They say, instead of cutting down my trees every 30 years, I'm gonna cut them down every 40 years, I'm gonna make some small change to my land management practice that will result in more carbon, maybe being accrued in land or in the trees. And the thing that makes that so hard, it's not just a quantification problem, it's not just about counting the trees though that is part of it.

  But you're fundamentally crediting someone in exchange for doing something that's different than, than, than what they were going to do otherwise. And how do you know what they were going to do otherwise? Well, you can't because you can never observe it. It's a world that never happened. And that basic requirement or that basic comparison is what underlies a lot of these systems.

  So, you know, you said as the quantification hard, quantification is hard, it's also just hard even hard/impossible to know what was going to happen under a different regime. And that's true for a lot of these projects, it's not true for every single form of carbon removal that you might try to credit. If you want to look at something like direct air capture and you pay client work $700 a ton to do direct air capture and then permanent mineralization and storage. If you don't pay them, they're not doing it. And if you pay them, they are doing it because the only reason to do it is because it's accomplishing carbon removal.

  But for the vast majority of things, that's not the case and it makes it really hard to know what's real and what's going on. And part of it's kind of about measurement and quantification, but that's not the only problem.

  Jason Jacobs: Now, it seems like it's set up today where if you go through different categories, the certification bodies are all different as well and the verification processes.

  Danny Cullenward: So the reason is that it's extraordinarily complex to do this, so just back to this verb question, so Jason, let's pretend you're an offset developer and I'm a standard setting body. The question I need to ask you is, what were you going to have done if Jeremy didn't pay you to change your behavior? Which is an unobservable question, you will give me an answer, that's the way these systems work.

  The key insight is that the standard setting that's out there, it's basically a private sector structure at this point, there are a couple of public sector approaches, but these largely have adopted private sector standard setting bodies rules. So we essentially have an industry that's self-regulating. And if by the way, if you're interested in like the history of this, there's a wonderful woman called Jess Green, who's now at the University of Toronto, whose early work on a 2014 book called Rethinking Private Governance, documented how the private standard setting bodies essentially drove what the governments do.

  This is all a self-regulating industry, there is no public regulatory standards or commonalities. And so what you basically see is different subsections of the industry and different actors from the bottom up creating standard setting bodies, that if you think they're going well, this is industry evolving its standards and telling its buyers what they're gonna get. If you think it's going poorly, it looks like people sockpuppeting third-party entities, you know, putting a sticker on what they're doing and saying, "Don't look under the hood, don't ask the verb tense question." What were you going to have done? The sticker says, somebody looked into that.

  And I think that's kind of the major challenges that no one can actually observe that counterfactual scenario. So it's very, very difficult to get clear and comprehensive data on how well things are working.

  Jason Jacobs: So out of the landscape that we've been talking about, is that all part of the purview of, of carbon plan or is there some specific subset that you're focused on?

  Jeremy Freeman: All and bigger than that. I mean, I think this is, I'd say this is a sweet spot for us right now, and it- it's kind of a niche, partly because for all the reasons we're talking about, you can hopefully start to see how transparency and more kind of publicly available information about all of this stuff is gonna be critical to just making sense of it, let alone trying to figure out how to make the system work better.

  If you don't know what people are doing and if we're not tracking any of this and measuring any of it in a publicly accountable way, then we can't hope to make it work. So I'd say this is an where that value in that aspect of our approach is super important right now, we think that idea, those ideas are gonna be relevant to other areas as well.

  Jason Jacobs: Well, given that you have a five person team, then how do you go about prioritizing in terms of your objectives and then a follow-up to that is how does that translate into what you're actually doing tactically, day-to-day, week to week, month to month, quarter to quarter?

  Danny Cullenward: Let's just say we're really busy. That's, um, maybe the first thing to say.

  Jeremy Freeman: Totally, yeah.

  Danny Cullenward: And it's a really important question, how do you know where to best spend your time? You know, I've been doing this for a long time, so I have some instincts, but part of what's so fun about this group is we're all bringing very different perspectives, both on like the history and the politics and the industrial structure, and then on what open science can and should be. And I think those different perspectives and instincts help guide us and it's very much an art. What I'll say is, you know, I think there's so much low hanging fruit out there when it comes to transparency in these programs.

  So just to give you a simple example right now, a lot of the credits that come from the private offsetting market relate to forests. And as Jeremy mentioned, many of those credits, the majority really come from improved forest management projects where people say, "I'm gonna change the way I manage my harvesting cycles."

  And if you're really serious about this, that means there's a component of the carbon credits that come out of those projects that are avoided emissions, where people say, "I was going to cut these trees down, but I didn't." And there's a component that's carbon removal is the trees in the forest grow and sequester CO2 from the atmosphere.

  Now, a lot of buyers today are interested in carbon removal, but it turns out no one is actually tracking in these crediting systems. The difference between removal and avoided emissions, there isn't a standardized reporting structure, there aren't standardized ledgers. And these are just little examples of minor transparency issues that I think are incredibly frustrating for the big picture story of using these kinds of approaches to drive.

  For example, if you wanted to do carbon removal as many of today's buyers say they do, how do you know you're getting that, and, and how do you make sure you're getting exactly what you want? There are no standards, these are private bodies, they weren't set up to answer that question, there's a lot we can do to surface and ideally solve some of these issues, but there is a long list of stuff to be done. And the prioritization has got to match where the action is. So far that hasn't been a challenge, but it is very much a question going forward.

  Jeremy Freeman: I'd say, we're, you know, we're an unusual organization where there aspects of what we do that kind of look tackish and that we do, do a lot of pretty serious data work, we do a lot of good science. We do a lot of, uh, interactive web visualization, but you know, we definitely, if we don't have a product we're not obviously selling anything.

  And what we really do is try to focus on our values and on ways that we think are kind of cross-cutting team with that skillset can be pointed towards problems. We focus on that and then we're super nimble and flexible in terms of where we're pointing that skillset. So having, as Danny said, the history, having the context around the policy and the system broader systems that lets us see opportunities, and we basically try to structure a team that can really quickly swoop in and do something, whether it's around putting out data or putting out reports to kind of help shape and frame a narrative or help everyone understand how to think about something.

  We do comprehensive analysis where we look at in the case of stuff like forests, analyzing existing systems or building tools that can be a little more prescriptive, things are a lot of work on fire right now. So fire risk is an example of something that is a real threat to forest carbon and porous carbon doesn't last and it only lasts as long as the trees remain and things like fire and drought insects are effects of that.

  So that's a case where there's actually real opportunity to use data and data science to build tools that can help us maybe better predict which porous carbon projects are under threat of fire and maybe build crediting systems that at least take that into account better than ones do now. So that's an example where we go really deep on the data and the science, but we're not just doing research for its own sake, we're doing that because we see the system right now that both needs this information or is not using this information to function. So we look for those opportunities and then we figure out how our skillset and kind of point to them.

  Jason Jacobs: So you've got the project developers, you've got the certification bodies, you've got the big companies that are, you know, in their net zero commitments. You've got the advisors like the Carbon Directs who are helping those big companies make decisions. You've got the marketplaces emerging, like Pachama and otherwise, what does the ecosystem think of you guys? Do people like you?

  Danny Cullenward: We're nice people.

  Jeremy Freeman: Yeah, people like us, I know people like us, I hope people like us.

  Jason Jacobs: Are you like a vigilante police force or like the vigilante IRS but for carbon accounting?

  Jeremy Freeman: Uh, I liked vigilante IRS. [laughs] Um, look, I mean, I think we, we are deeply optimistic and positive about all of our work and we are often in the position of looking at everything and we put numbers on everything and we're super objective. So if stuff's working, it'll look good and if stuff's not working, it won't look good. So I think it's certainly the case that if people are doing stuff that's not working, they might not love us, but we think it's important to put that out and we are just public about everything.

  So we're, we really, it's really important that we maintain that, [inaudible 00:31:52] stuff about anyone it's always just based on what we measure, what we observe, what we can get publicly. And if we're wrong, we fix it, we're always open to feedback. So I think for that reason, I hope that people like us and people trust us.

  I think we are able to compare to, I think every single organization you just mentioned and nothing against any of them, but we are actually able to be totally transparent and open and we avoid all conflicts of interests. So Danny said a huge part of this space has been conflicts of interest. And you know, you mentioned some of these marketplaces, those are companies, they have a financial incentive or these systems to work.

  So when they get involved in things like verification and they get involved in the protocols around crediting, like we have to ask questions about what their financial incentives are. And I think we would have good reason to think they do not act as or cannot act as independent bodies. There was something over the summer where Indigo Ag committees come on the show at some point.

  Jason Jacobs: They have.

  Jeremy Freeman: They have. Great. [laughs] Uh, so they basically paid for the development of a soil carbon protocol chain for a non-profit to develop it and a large number of Indigo Ag staff were in the group that developed the protocol and Indigo is trying to set up a market around this. So they have a financial incentive in that program and how it operates and they effectively paid for and/or wrote a large portion of protocol.

  So, you know, we look at that, we analyze the protocol and we say, "This part doesn't work, or this part doesn't work, or this part has challenges purely based on the science and the way these systems work." And we're going to call that stuff out, we're also going to call stuff out is good. And if stuff is really working and we're excited about it and we think there's, you know, we think the data hold up then that's awesome.

  Danny Cullenward: So just to get back to your question, Jason, you asked to people like us. So I want to be really clear, there's a lot of self-dealing in this industry and people who are self-dealing are not gonna like us and that is the way it is. But I want to highlight a group or I think we've actually gotten some important positive feedback.

  And it goes back to what I was saying earlier about a race to the bottom on price and quality. If you are a company that is trying to do something serious and better, that is a problem for you and we've actually heard from a lot of groups that are working on really tough and important things because they can't get a toehold in markets if everybody says you're rigorous permanent ton of carbon mobile with an innovative, expensive pathbreaking, potentially totally transformative technology is exactly the same as a sockpuppet and standard credits, a questionable behavioral change that can't be verified at a place that hasn't been making those changes over the last several decades and you can see that if you look at the data.

  If you compare those things and you force those two things to compete on price, the innovator's going to lose. I think it's really important to say part of what we are doing is oriented around a theory that we need a lot of this innovation, we need the good things to succeed, and they are struggling mightily in an environment where you see this kind of self-dealing and financial conflicts of interest dragging quality standards down. You cannot have a market for quality if you don't have a market for quality in the first place. And if you have a serious, serious effort, that's expensive and difficult, you can't compete against people who are cheating.

  Jason Jacobs: Great. So I'd like to put CarbonPlan aside for a minute. And if you just kind of step outside of your work and look at the state of the carbon markets holistically, we've spent a lot of this last 35 minutes or so talking about some of the issues with how things are. Do you guys have a clear vision of how you think they should be looking forwards?

  Jeremy Freeman: So one starting point for that, and we're excited that we're seeing some hints of that. Again, you know, even separate from CarbonPlan, excited to see hints of that. One initial thought is a focus on the amount of money that we could potentially spend on this stuff, and then spending that money on stuff that's real and good and using that as a frame.

  So right now, as we talked about earlier, you know, a lot of folks, a lot of companies are making pledges around neutrality, a very different way to think about that is just to say, "We have a certain amount of money. We want to spend that money on stuff that's real and that's our top priority, and we're going to prioritize quality." There's not a lot of that happening, you know, we'd probably say there are aspects of Stripe's program that really go in this direction of basically saying, "You know, we don't care about tons, we don't care about costs, we have a certain budget and we want to spend it on stuff this real."

  And we think that's exciting, we think that everybody was doing that, and maybe it's not just corporate but some of that is through government expenditure programs. What's exciting is that there are things we can start doing in the area of carbon removal. Again, be really clear, we also more important to be focusing on de-carbonization but in the space of carbon rule, there ar- are exciting things to do. There are technologies that are starting to emerge that we might be able to bring costs down on.

  If we all just said, "Let's look at what the options are and focus on some research, focus on paying for some things, it seems to be working and focus on quality," there's a real opportunity to get a lot of people together that would agree that's a good idea and to focus on that. I think it's a real shift in, in framing and the shift in how you think about it. It's not about paying for a certain number of times, it's about paying money to things that are working and things that are real.

  Jason Jacobs: So I get what you're saying that that'd be great if we shifted our mindset and that that's a vision of how you hope that things will be, how might we get there?

  Danny Cullenward: I think it's a tough road, uh, I think it's part of the sort of trap everybody's a little bit stuck in right now, which is that everybody wants to claim they can go carbon neutral and rock bottom prices right away, and that's a, an understandable response to the scale of the climate crisis and the interest in having optimistic solutions.

  But I think that's just an unrealistic way of thinking about the scale of the transformation that's required. So my answer to you is two-fold. One, we all have to have kind of a reckoning that getting this job done, it's gonna be a heavy lift, it's gonna be a worthwhile heavy lift, and it's not gonna come through cutting corners and cheap quick fixes and you know, click here on the internet for the one special trick to cut your belly fat.

  None of that stuff is gonna work when you apply it to the scale of the climate problem. And I do think there's a bit of like reckoning folks are gonna have to do around this. It also means a lot of the ways people have been relying on fictions that they can accomplish that need to be, those bubbles need to be burst. But the flip side, I think the really optimistic side is when you get serious about this, you actually need to tackle really tough questions and you need quick rapid research and you need clear actionable insights on spending programs, on the feasibility of different technologies.

  And I'm, I'm really excited about what a world looks like when people start asking those questions. We're interested in participating in both of those conversations and I do see momentum starting to pick up where people are saying, "Okay, maybe some of the older stuff isn't working the way we hoped it would and maybe we need to start asking these really tough questions," because again, imagine you're running a big procurement program for a large corporation, you basically are encountering this legacy system, which I've suggested you is, is not working very well.

  What do you do? You basically have to invent an entire ecosystem of opportunities and solutions that don't exist right now. That's scary. It's also a really exciting thing to be involved in. And I think that's where I hope the conversation is gonna go. As again, people sort of look in the mirror and say, "Can I cut my emissions in the next five years on paper with cheap, again, credits that might or might not reflect something?"

  And th- the more we lean into, what does it gonna take for me to reduce my emissions and for the things I absolutely cannot reduce to do very serious incredible things. It's a very different conversation.

  Jason Jacobs: I've hea-, I mean, we've talked about some of the challenges with the state of offsets today, I've heard a pretty healthy chorus of people that say that we should abolish offsets and they do more harm than good. And I've heard others that have said, "Well, actually there are some things that are broken about offsets, but we shouldn't abolish them, we should fix them and we can fix them in these ways." Where do you guys net out on that and, and what concrete steps do you hope that we take in either scenario?

  Danny Cullenward: So I think there's an important distinction to draw here between offsets and the context of public policy systems like cap and trade programs or carbon taxes and offsets in the private markets. And I'll just say for myself, I just wrote this book that basically says, get rid of them in public markets. And one of the reasons is because the only demand for those public offsets comes from the major polluting industries who generally don't care about quality, they just want quantity and low price.

  And that's a race to the bottom you lose every time, whereas if you make them pay the government rather than pay the offset developer and you channel those revenues into expenditure programs, the politics are slightly better. They're not perfect, but they're structurally superior and you can get race to the top on quality, you can get better outcomes, you can compensate the people you want to compensate, you can keep prices where you want to keep them in those compliance markets.

  But offsets are really, I think, a very poor way to do that in the public markets, not in the private markets. I think there's a different conversation to be had if a group of buyers emerge who say, "I want to do better than that," I'm actually optimistic that there is a path forward for reform there but you're gonna need to see some really serious buyers step up and say, "I see that there are problems. I see the status quo isn't working. I demand better. I'm going to make better and require better."

  And I think those political forces are capable of generating improvement that is real and potentially gets us somewhere really important. That's really different for people who just want to say, "I want carbon neutral. I bought all the offsets. Everything's fine." And you do see that and you see this pronounced right now in a lot of debates around the difference between say what tech companies and fossil fuel companies are doing, and with their offsetting their corporate sustainability and offsetting programs.

  And I do think there are gonna be really different buyers and if really serious buyers emerge and demand better, I'm optimistic. If we don't see that, the system isn't gonna get you better.

  Jason Jacobs: So let's say I'm the head of sustainability for a company that has a net zero commitment, and I want to do the right thing but I don't necessarily know what the right thing is. What's your counsel for me? Where should I look? What should I do? How should I go about figuring that out?

  Jeremy Freeman: Step one is how much money-

  Jason Jacobs: Or I could be the CFO for that matter, maybe, maybe that's a better role to be having this discussion with.

  Jeremy Freeman: So yeah, I mean, step number one is to figure out how much money you're going to spend and, and start the conversation there. So don't, you know, let's hope you haven't already made a claim about neutrality, um, I guess when you have that's more complicated PR question, but the starting point is how much money can you spend and given how much money you're able to spend, let's have a conversation about the best ways to spend it. And once you choose what to spend it on, how are we going to track of what you spent, what's working and what's not.

  Jason Jacobs: And when you look at the landscape of what my choices might be to spend that money, how should I go about evaluating one choice from the next? And are there particular places where I can allocate that spend either specific projects or types of technologies or marketplaces, for example, that you think might be good places to look and are doing it well?

  Danny Cullenward: So I think a lot of the legacy opportunities that are out there have pretty significant challenges, and when you look at the volumes that are on offer, if you run an RFP, if you go out and look at the existing registries, there's a lot of stuff that's out there. That's a very questionable quality and I don't think you're going to find a ton of tons, a lot of tons at a low price point that have, you know, obvious quality benefits.

  And Jeremy mentioned the direct air capture is a really easy sort of pocket case where the quality concerns I don't think are at all problematic, that you can be really confident with expensive cutting edge stuff that it's new and it's different but it's expensive. And that means your budget doesn't go very far.

  So I think the challenge everybody faces is if they have a budget particularly if you're talking to like a CFO type person, like ultimately there's gonna be a budget. And the question is, is the organizations, the buyer organization saying, "How do I maximize the value of my expenditures?" Which is a conversation I think can lead to many productive ends, that's very different than how do I stretch this fixed budget to cover a current or historical scope of emissions and make a public relations claim.

  I think that's a much more challenging issue because you start searching for those low costs and we believe often low quality offsets. So that's a huge part of the problem.

  Jason Jacobs: So but I wanna get really tactical here. So let's say I'm in the camp that I want to put the organization's capital towards the highest caliber, carbon removal that I can or maybe not, it's not even carbon removal to say offsets or reductions or... But just, I want my spend to go the furthest towards helping address and combat climate change. How do I figure out where to put it?

  Jeremy Freeman: Yeah, it's hard. So I, you know, I don't want to say, we can tell you what to do. I think we certainly want to help provide the kinds of public information that can help guide that decision. Um, and part of the problem is that when you go you're in that position, you got to start looking at options. It's very hard to find stuff that is clean from the perspective of kind of financial conflict of interest. It's hard to get honest information because a lot of the people that are gonna try to tell you what to do are financially interested in sort of making money off of your purchase.

  So I think the first step is we need more public information about what's out there and what works and what doesn't and we do provide and build a public database that reports on projects and different things that they are capable of or things that they are claiming and we try to validate some of that information. That's just a starting point. Um, there's a lot more that needs to be done to be clear, but we think it's that kind of sort of public information and ultimately kind of public regulatory agencies that need to be tracking all this stuff to help folks in that position make a good decision.

  We know there are companies and marketplaces that are trying to be the place that you go to. And I think, you know, one thing that we're a little concerned about is some of those seem to be basically repackaging stuff that kind of comes from that earlier generation and we sort of already know has a lot of problems.

  And then it gets repackaged in a fancy website with fancy APIs and fancy machine learning. And we'll always be, wants to be excited about that stuff from a tech perspective. But if you take something that's not real and you put a nice website on it, it's still not real. So yeah.

  Danny Cullenward: Just let me, let me be really blunt, you asked the question, like, what do you do in that situation? The answer is there isn't an answer, right, there isn't a turnkey solution right now. And I think that's the problem that we're trying to chip away at is there's a lot of sort of easy paths out where you buy tons, if you don't ask a lot of questions about quality. But the search to manually look at this is extremely labor-intensive.

  There's really nothing that's out there. It's one of the reasons we're trying to do this in public is so that every time we put cycles into this, if you like what we do, you can see it because right now what people do is they go out and they hire really talented people to do this for them. And that means everybody's repeating the same search exercise without sharing the benefits of that learning. And there are some really, you know, great people who are out there doing this. You've talked to the folks at Carbon Direct who we know well.

  There are people who are thinking really carefully about this stuff, but we're the ones trying to do it in the open precisely because we don't think there is a complete answer to your question. So we're not trying to dodge that, we're trying to confront that very directly.

  Jason Jacobs: So in the interim, if I'm that head of sustainability or the CFO, should I not even bother and just focus on other things? You know, reducing my footprint and stuff like that and just punt on this until it's in a place where it's not so filled with crap?

  Jeremy Freeman: Any company looking at this should always be looking at its own footprint full stop before probably thinking about any of these other things. But often if, especially if they want to claim neutrality, that's kept them maybe far enough especially for tech companies. So I wouldn't say don't look and well, you can certainly, we can tell your listeners, you can definitely talk to us, we love having those conversations and we are in this to try to help again, folks do the right thing by the climate.

  So I do think there are things to do and what our hope is that the more folks in the position like you're describing, try to do something. If we can start getting a sort of rolling public record of what's working, then it's gonna make it easier for the next ones. So when Stripe ran this RFP, they were basically in this position and they ran a public request for proposals. Tell us what you can do in terms of carbon removal and we don't care about tons, we just wanna pay for some stuff. That's good.

  And they ran that program and what was really cool about it is that they, uh, required that all the proposals be made public afterwards, which then created this public record, we then analyze all of those materials and use that to start our database of projects. That's really cool because now it's all out in the open and we know what people are proposing, some of it might look good, some of them might not, we can learn.

  So let's now imagine a few more companies do that kind of thing and we got a whole bunch of examples out there. Well, now we can start to look at kind of across the board what's out there, what are companies claiming? We don't have any of that in a kind of standardized way form in any location anywhere. And if we can, you know, watch that process happen multiple times, maybe Stripe does a lot of it, maybe other companies do a lot of it, we get a lot more RFPs, other kinds of programs, not just RFPs.

  We can start putting that information together and I think that could become a Corpus that would then be very helpful and be the basis for someone in that position, making a more informed decision.

  Jason Jacobs: Well, I heard you guys mentioned direct air capture earlier in this discussion. Other than direct air capture, what else are you excited about from a project standpoint that is high quality?

  Jeremy Freeman: Wow. If we're in the narrow world of carbon removal, again, don't, you know, don't ever want to forget about de-carbonization more broadly because it's probably much more important. In carbon removal, we think rocks are cool, um, mineralization, I think there's things to do there. There are reasons it might ultimately be, uh, from a cost effective in this standpoint, more appealing than direct air capture. There's people exploring some interesting things in the ocean well I think with macro algae, I think anytime you can leverage the natural, not natural, but um, biological processes and efficiencies of photosynthesis, that's a big win.

  The problem with a lot of biological stuff is the permanence and the fact that doesn't last very long. So, you know, we're excited about things that are permanent. If you can find ways to leverage biology and also result in permanent carbon removal, that's cool. I think there's exciting stuff to be done at the interface of chemistry, biology, and, and geology. People thinking about combining rocks with biological engineered enzymes, I don't know, it's really out there, but I think it's worth exploring we should have people researching this stuff.

  Danny Cullenward: I think the hard part is that cutting-edge stuff is, you know, not easy to turn into projects that are sold on a crediting basis and one-off annual RFP cycles, and a lot of the most interesting and promising stuff isn't quite at the point where that makes sense. The ones that are close probably need long-term off taking agreements which is not amenable for small companies or individuals, it's really much more a question of large consortia that might commit to that.

  I'll just say in my sort of like other life is like an energy law nerd. The entire electricity system is transforming faster than we've ever seen it in the history of human, like basically since the beginning of the electricity industry. And that is a profound change that is rippling everywhere with just massive impacts. And the technologies to both electrify and otherwise turn into zero emissions, the transportation sector are just, there's really exciting stuff going on there and I can't say enough about what a change it will be.

  When we electrified buses, what that's gonna do to air pollution? And when we start getting trucks off of diesel and onto other sources of energy that don't pollute local communities, particularly low-income communities who are experiencing the worst trucking impacts, that's a profound shift for human health and for the climate that's happening. And it's, it's at a much more advanced stage, it's also not the sort of thing where crediting makes a ton of sense because the technologies are reaching this point of maturity where the markets are taking over there.

  And I think this just goes back to this question of like, "If you are a CFO, if you are a corporate sustainability officer, what do you do?" The perils of offsetting are that the better something gets the more it becomes real and tractable the less it needs an offset credit or anything like that to push it over the edge."

  So it's actually not a great place to put money and claim an additional benefit because it's happening already. Conversely, the stuff that you know is really high quality and new and challenging is expensive and there aren't many tons, and all the stuff in between is really hard to deal with.

  Jeremy Freeman: I get extra challenge, Jason is the, and I want to make sure we, we say this when it comes to those new technologies that need to be developed, that's a, that's a research problem. And, but there, I think there are great folks out there thinking about these new areas that need research funding, I would love to see more of that coming from the federal government.

  And there are great federal agencies that are starting to think about new research programs and things like carbon removal, incredibly supportive of that, there needs to be a lot of it. I think there's a hard question about how that co-exists with corporate. Corporate funded research is complicated, um, philanthropically funded research is complicated. I think there are ways for it to co-exist with government funded research. And the scale here makes it such that a, a few small companies could effectively fund research at a scale that's comparable to what the government is doing now.

  And I think that's a really interesting aspect of this, but ultimately the research side of it in particular needs federal funding, it needs government funding and that's really important and that's helpful.

  Jason Jacobs: So do you guys think that capitalism is fundamentally odds with fixing this problem?

  Jeremy Freeman: Which problem?

  Jason Jacobs: Well, I mean, you, you talk about, I mean, what... a lot of what I'm hearing here is about incentives and how there's not incentive alignment and there's economic interests that are going this way and economic interests that are going that way and that those economic interests and incentives are preventing doing the right thing.

  So I guess what I'm asking is that there's more and more people that are capitalist, for example, that are becoming awakened to the scope and the magnitude and the kind of existential nature of this challenge that want to dive in and help and what they know how to do is they know how to build businesses.

  And I guess what I'm asking is, are there any aspects of this where there's actually alignment between building businesses and addressing the problem, or does that just continue to facilitate more of the same in terms of misaligned incentives?

  Danny Cullenward: This is something that I spent a lot of time on in my new book, so I dunno like a carbon plan as an official position on this. But my personal view is that when you look at the sort of most extreme market oriented pathways for transformation, they don't work and they don't work because the political economy of those systems turns into problems every single time and offsets I think our traditional offsets are a great example of that.

  That is not an argument that says, you know, you can't have capitalism. And obviously there's a lot of people making those arguments and there was a lot of renewed discussion about the failure of basically unregulated capitalism or the last 20, 30, 40 years. There's a lot that obviously needs to be fixed. What are my clients and I argue in the book is the only way you're going to get serious transformation both for deep decarbonization and, and equally valid for carbon removal is that the state plays a significant role in setting quality standards, coordinating the investment and setting requirements.

  And I think this is, this just go back to your question like, imagine not that you're in the shoes of a sustainability officer at a large corporation, but imagine you're the upstart CEO of a new technology that's gonna make a dent in emissions or carbon removal. How do you get your stuff to market? It turns out that almost never is the answer selling an offset credit or participating in a carbon pricing system.

  The incentives are so marginal and weak in those structures that it never makes enough of a difference for the cash strap startup that's trying to do something real. What happens is typically there's a government procurement mandate that applies to a private sector entity or a direct procurement mandate or a regulatory standard that says, people have got to beat this mark and they got to pay the people who beat it by a lot extra money when they do.

  The role of government to coordinate and structure these marketplaces has been totally overlooked in the climate discussion for about 30 years. And whenever you're gonna answer to like, should we have capitalism? I think the answer of completely unregulated laissez-faire markets hasn't worked and all of the major transformations we see in the energy sector in particular where things are moving have come from government supported R&D and state policy structures, and often national policy structures that push and pull these new technologies to market.

  And now Wind, I mean, I remember in the early 2000s, the Wind Industry Association was hippies and ponytails and now it's suits and briefcases. It is a fully mature multi-billion dollar global industry and it got there in no small part due to direct government intervention and coordination in the markets. And it's now at a point where you can say, "Ah, markets are working for the wind sector," but the path from the guy in his garage or whatever, the sort of story you want to tell about a startup or a new technology to that commercial maturation is a path that involves really significant government coordination and intervention.

  So again, I don't think that's like a pro or anticapitalist position so much as just the way technologies come to market.

  Jason Jacobs: Okay. So if completely unregulated capitalism is not the answer and the government needs to play a role, what role should the government play? And then how does that manifest with specific policies or initiatives or programs? Again, just kind of trying to get tactical here in terms of, you know, I understand the spirit of what you're saying, but what should we actually do?

  Danny Cullenward: So on carbon removal, just to take an example, you're gonna need to up R&D spending, you're gonna need to pump new money into the frontiers of things that look like they're gonna deliver permanent removal and could scale that looks like things like ARPA-E. You're gonna need market support structures where you think about loan guarantees and procurement programs, so that those are government or private. You need to take the technologies that have left the laboratory bench and are now at the small sort of private startups scale and give them entry niche points that can be through corporate procurement, that could be a company saying, "I'm gonna spend X dollars on climate solutions," and one of the things in my portfolio is gonna be searching like a venture capitalist for those great new ideas giving early money to them.

  It could be the government doing that directly, it could be the government setting performance standards that encourage companies not through their sustainability arms, but through their regulatory compliance arms to say, "Okay, I've got to pony up for the incentives that go to this broader structure of moving these projects forward."

  I think that's the kind of tangible stuff I hope you were looking for, but that's, I mean, when you look at the history of climate solutions coming to market, there's always been that role, both for government to sort of push ideas out the door and then to help pull either directly or through mandates that apply to the private sector to give the entry niche markets that allow these ideas to scale.

  Jason Jacobs: Now that was a long list, I don't... I might've missed it, but I don't think I heard you mentioned a price on carbon. Was that an intentional omission?

  Danny Cullenward: So this is, and, and Jeremy, forgive me for going on here but this is the subject of the, the book that just came out today. So it's called Making Climate Policy Work. And it, it's basically an argument that the political economy of carbon pricing keeps those prices really low, almost everywhere they've been tried. And there's very few places where you see high carbon prices and we try and explain why we think that is, oh, my co-author David, Victor and I.

  And it's not that, that wouldn't work if you could make it happen. Our argument is that in practice, nobody has the politics to get that done, where they do have the politics to get done a lot of these procurement mandates, these regulatory structures, what people call industrial policy.

  So I don't want to suggest if you can give me a high carbon price. So for example, the Canadian government has just proposed like a massive carbon price by 2030. If they can get that done, that's gonna be a big lift, it's gonna do a lot of the things that we just talked about. I think their track record is pretty weak on this stuff so far, and to the extent that isn't gonna work and that's certainly my view, you're gonna need this other stuff. And that's, again, it's not an argument against it. In theory, it's an argument in practice that we never see the politics supporting that, but we do see positive political feedbacks between jobs and investment and engagement that support these other policy strategies.

  Jason Jacobs: So, uh, given that we presumably have a new incoming president in January, if president elect Biden's new climate team, that he's been busy appointing called you guys up and said, "Danny, Jeremy, you know, we, we love your work at CarbonPlan and, and we're, we're trying to figure out, you know, to unclog the arteries of the system and get the carbon markets working as they should, what we should be doing, what counsel do you have for us that we should be thinking about and executing against in the first hundred days of the new administration?" What would you tell them?

  Danny Cullenward: Jeremy, why don't you go ahead?

  Jeremy Freeman: [laughs] I was gonna give it to you. Uh, [laughs] I think for starters standards around all aspects of this from a kind of regulatory perspective, there's almost nothing. So we don't have, and we've been talking about it, the whole show but we don't have standards around how we measure and quantify any aspects of any carbon removal projects and we don't have... And when I say standards, I mean, something that is sufficiently general across the different categories of projects that we're looking at right now, that's impossible.

  Things that where, you know, compliance with that standard becomes the norm and it's kind of regulated, establishing those standards and starting to put them into practice across this total Wild West right now across all the different project categories, in terms of things like life cycle analysis, differentiating carbon removal and avoided emissions, like setting up a regulatory apparatus for this stuff and then making sure that things can't fall under the radar.

  And there have been issues with this initiative that should explain it more detail, um, around 45Q, which is a credit policy around direct air capture, where there have been issues with compliance with the even attempt in regulation to that contact. So I'd say setting up serious regulatory apparatus that, you know, maybe it looks a little bit like at least from the world, I came from, something like the FDA where there's just clear standards around performance, around what data has to be shared as, you know, a project that is doing any of these things. What do they have to share to show compliance with the standard to show compliance with the regulation? Like setting up that apparatus would be really important if any of this gonna work.

  Danny Cullenward: I think realistically, there are way too many ideas right now for what this administration should be doing in the first hundred days, I don't want to pollute that water necessarily any more than it's already the case. What I'll say is that, you know, you're looking at an environment where a legislative-

  Jason Jacobs: By not polluting it, you can actually, I mean, that's probably an offset in some capacity, right?

  Danny Cullenward: There you go, monetize the show, good. You can take credit for it. We promise not to double count. Nope, but in all seriousness, I mean, I think what folks need to know about this is legislative action is not likely gonna be a major vehicle except perhaps on the spending side as we think about economic recovery and public expenditures there.

  So there's a lot of detailed regulatory work that needs to be done, somebody's just boring as watching paint dry and it's what thrills me to my core because it's where a lot of the action is. The other big thing folks are gonna need to think about is, you know, how to make the states more resilient sources of durable policy structure and change. And I think one of the biggest challenges facing the incoming Biden Administration as we rejoin the international climate conversation is that they don't have many tools they can use to buy into their successor and an environment with the divided Congress and whatever happens in the Georgia elections, the Senate is not going to be a productive place for large scale climate legislation, maybe some interesting deals on the side.

  And so the problem they're gonna face is both how to start to set up this incredible apparatus, to- to move us in the direction of climate, which is gonna require a thousand different things that it does in different agencies, but how to make sure that that is seen by the outside world as a credible and durable operation, when if an election gets lost, a lot of that can just be on wound by a different president. So I think that's a huge challenge and I think folks need to be really appreciative of the constraints that puts on a really serious effort and be mindful of the fact that in that environment detail is really, really matter and sexy talking points are can often be a distraction.

  As much as I demand like massive climate progress, I also want to be really thoughtful about what a tough environment folks are inheriting with a massive economic crisis and a public health crisis like none of us have ever lived through.

  Jeremy Freeman: All right, and Jason, can I add one more. This is the request that will take some time for all the reasons Danny just said, but I think [Joe 01:03:25] also our colleague Joe if he was here, and this came up, I think for you on Twitter recently. We're seeing some progress on this front but government agencies taking really seriously the importance of open data and open software around kind of climate broadly, um, not even just carb- carbon removal, really important.

  It ha- it's a public data has enabled an enormous amount of research in this space and it will continue to enable a lot of research in this space. And, you know, I think especially when it comes to climate data broadly thinking about climate models, getting more and more complicated, the data is larger and larger.

  We have tools to make this stuff publicly available but what we're seeing a lot of now is that it's starting to get sort of sucked up by private companies that are then selling access to that data. Whether you're talking about satellite images, whether you're talking about climate models, and are deeply fundamentally public resources, um, they should remain public resources and we need to modernize the technology stack around them. I think NSF, NASA, that- that we're seeing progress. We've got to double down on that and, you know, there needs to be a lot of support, public support for doing that kind of work well and, and making it accessible as opposed to having private companies basically own access to the web and own access to climate data.

  Danny Cullenward: So one last thought, Jason, and feel free to cut this, but I- I want to reflect on this. I'm 36 years old, I sort of came out of early grad school at a time when the recovery act, the American Recovery Act in 2009, the big stimulus package that the Obama Administration shepherded through after the- the disastrous of financial crisis. And I mentioned this because a huge number of my peers in my age group got into clean energy and climate because of a massive government investment in, you know, they re-up science fellowships to go to grad school, they re-up post-doctoral fellowships.

  There was all this funding for laboratory to markets work, and a whole cohort of people got engaged and lit up. And I think there's a very interesting possibility that we see very similar outcomes in a generational cohort sense. People really have knocked onto the bottom of how important that funding was to launch a huge panel of people who might've gone into finance or something else, and to say, "Okay, how about clean energy? How about climate now?"

  And I'm really excited about both where the politics are at the moment and the possibility that I think a lot of folks in upper echelons of leadership are aware of and thinking about that dynamic from a little over 10 years ago.

  Jeremy Freeman: You mentioned Jason, Jason, before you said you have, you know, all these people and I know them because they're hanging out in your Slack, people that are entrepreneurial that want to start businesses. We would generally say, it's not that there can be no businesses in this space. But what I would say is that's narrow-minded, if you're entrepreneurial, if you think you can make a huge difference in this space, starting a venture back company is not your only option and there's a lot of different things you can do, there's a lot of different ways to...

  And that sounds a little trite, but I do think people, especially maybe from the tech world get into this trap where the skills they know involves starting companies. So they're like, you know, anything I do must involve starting a company. It's not true. And there are a lot of things you can do. Maybe it's government, maybe it's non-profit, maybe it's the variety of things that are sort of at the interface that I think we're gonna see more and more of, independent research centers, which is independent research.

  I think there's all kinds of organizations that can play a role in this and starting a company is not the only option.

  Jason Jacobs: Awesome. Well guys, I know that we're way over here, but this was a fascinating discussion. I know that I learned a lot, which typically means that the listener is well as well, and I can't thank you both enough for coming on the show and wishing you guys and the whole CarbonPlan team best of luck.

  Jeremy Freeman: Thanks, Jason. Really appreciate it, it's really fun.

  Danny Cullenward: Really nice talking with you, Jason.

  Jason Jacobs: Hey everyone, Jason here. Thanks again for joining me on My Climate Journey. If you'd like to learn more about the journey, you can visit us at myclimatejourney.co. Note that is dot co, not dot com. Someday we'll get the dot com, but right now dot co.

  You can also find me on Twitter @jjacobs22, where I would encourage you to share your feedback on the episode or suggestions for future guests you'd like to hear. And before I let you go, if you enjoyed the show, please share an episode with a friend or consider leaving a review on iTunes. The lawyers made me say that. Thank you.