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SBTi’s announcement could be a win for optimism, pragmatism, and action

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By Matt Trudeau

· 5 min read

Last week, the SBTI announced it would allow the use of carbon credits to abate Scope 3 emissions. The reaction was swift, strong, and predictable across faction lines. Unfortunately, it also offers plenty of fodder for industry critics. 

Considering the stated and generally agreed goals of climate action proponents - namely to prevent the worst outcomes of climate change - one could be forgiven for being off-put by the degree of factionalism within the industry. It is counterproductive and self-defeating. It paralyzes motivated actors, undermines the credibility of the domain, and deters newcomers. 

Headlines like the ones below are not a good look for reassuring business people, policymakers, and the general public about the credibility of the climate industry: 

“Climate target group in turmoil over carbon offsetting plan.” - Reuters 

Inside the Controversy that’s Divided the Carbon Offsets Market.” - Bloomberg

Climate target organization faces staff revolt over carbon offsetting plan.” - Guardian 

On one side of the divide, the announcement that carbon credits would be allowed to compensate for Scope 3 emissions was celebrated as a boon for the voluntary carbon market — it would catalyze corporate demand for removal credits and action from project developers to supply them. On the other side, the announcement was met with visceral hostility as a sop to commercial interests — it would lead to poor quality credits being used as unproductive window dressing. 

Instead of arguing the shortcomings or merits of either side (and there are versions of each we would oppose), we want to frame the various factions to orient how their positions are rooted. This can hopefully help people reason about the degree to which these factions, and their positions, are likely to achieve positive progress toward the industry’s overarching goals, or to create impediments to reaching those goals. Through this lens we hope that valid points and concerns from each faction can be acknowledged, but also appropriately weighted, and managed where necessary. 

To state our own bias up front, Nori is a vertically integrated issuer + registry + market for carbon removal credits operating in the voluntary carbon market. We stand to benefit from SBTi’s announcement, once the details are clarified. Nori also places itself in the camp of the Optimistic Pragmatists, tempered by Pessimistic Pragmatism. This mostly reflects the internal composition of our team. Our Pessimistic Pragmatists help ground us and create a check against our optimism becoming rose-colored glasses. Intellectual diversity in this way can be extremely powerful. (We invite a diverse range of guests with a broad spectrum of perspectives onto our Reversing Climate Change and Carbon Removal Newsroom podcasts for respectful discussion and debate, which helps round out our own views). 

The below matrix seeks to create a framework to orient the various factions and their generalized characteristics. 

The climate carbon faction matrix

Screenshot 2024 04 30 024849

Pessimistic Idealists view the world in terms of black and white. To them, corporations are villains that will do anything to profit and avoid accountability. Anything short of an exclusive focus on reducing emissions and eliminating fossil fuels is unacceptable. They may favor draconian government regulations. When others disagree with them, they turn to criticism against other points of view and their commentary tends to be very negative. 

Optimistic Idealists view the world in terms of the ideal, and believe it is achievable. They put a lot of faith in technocratic policy solutions with an emphasis on international cooperation, diplomacy, goal and target setting. They believe that if they can show a path sufficiently well laid out and carefully planned, the world will follow to the promised land. Their commentary tends to be inspirational and aspirational. 

Pessimistic Pragmatists view the world in terms of its messy realities. They are more jaded, but their utilitarianism lets them accept that progress can be made if one doesn’t set goals too unrealistically. Their skepticism helps to root out bad actors and test assumptions. Their commentary tends to be qualified and cautious, requiring the support of evidence and data. 

Optimistic Pragmatists view the world in terms of what is possible based on human ingenuity. They put a lot of faith in technology and entrepreneurship with a bias toward action, iteration, and distributed solutions. Better to get started and learn and improve by doing than to agonize over perfection or everything that could go wrong. Their commentary tends to be positive and motivational with an emphasis on potential solutions. 

There is one additional category not captured in the matrix: Opportunists. These are the self-centered actors who seek to take advantage of any or all of these factions for their own personal/commercial benefit. They view the world in terms of how they can gain prestige or profit. Their actions and words can be insincere at best, or fraudulent and criminal at worst. 

This framing is, admittedly, a bit of an oversimplification, generalization, even a caricaturization. But that doesn’t make it any less useful. 

Nori’s position is that the challenges are massive, no one has a monopoly on good ideas, and human history presents a wealth of examples of the value in distributed innovation. We need to be vigilant to avoid being taken advantage of by the Opportunists. But our collective efforts and energy are much better spent on taking positive action, and letting everyone contribute based on their interests and expertise, than criticizing those we disagree with or those who want to take a different approach than our own. Everyone has something to offer, even the pessimists and ideologues. At Nori, we want to ensure that while we consider all arguments, we weigh them appropriately, and address concerns when they are sound.

We view the announcement from the SBTi CEO and Board of Trustees, pending further details and specifics, as a break in the stalemate paralyzing motivated actors from taking more, and more immediate, action. It is a win for the Optimistic Pragmatists, and will prompt more investment, innovation, entrepreneurship, and action.

illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

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About the author

Matt Trudeau is CEO of Nori, a carbon removal marketplace. A serial exchange founder, Matt has two decades of experience in financial markets and has led or assisted in 12 market launches for equities, commodities, derivates, and cryptocurrencies.

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