Measurement - Where we are

To hammer this point home: you can’t act to slow global warming effectively without measurement.

Measurement of the economic world is hard. And the best and hardest data is real time data. And how to get that data is the key to know whether you’re having success both (a) in your market, and (b) in your environmental goals. What data to have, how can you get it, how to sift and filter the data, how much does it cost in treasure, mental energy, and time to aggregate it, and the question of "will that number get on your desk in time to act prudently?"

For example, there are undoubtedly thousands, hundreds of thousands of people in the good ol USA thinking about ways to change the energy equation, with varying degrees of dedication, funding, information, and passion. And, positioning yourself as a business within that vortex is hard. As Don Rumsfeld once said: there are known knowns, unknown knowns, and unknown unknowns. In trying to seize opportunity in the carbon space, we are in the space of the third.

The role of government is to aggregate information. That’s the role of the Energy Information Administration in the Department of Energy. But government is necessarily slower than industry – its agents have less personally at stake. That’s how our government is intended to operate – cool-headed, delayed, and slower than the passions of enterprise. But where does that leave us in both making money and getting our 2050 goals done? The sum is that the DoE takes snapshots a bit behind the real world.

There are three interlocking movements here: the legislative and executive action, and the following regulatory risk, the ever-two-steps-behind reams of statistics coming from the EIA and -finally - the unknown unknown of who is working in this space, and how do all those puzzle pieces it fit together in the plan to alter our energy economy.

The first two we can know through the medium of the press and the internet. The last is unknowable, and the only way we can measure it is in bets placed on the table – that is, capital allocated to make ventures happen. And even that information is often private and limited.

A last point: imagine how hard it was to understand the credit default swap or derivatives markets. People understood these markets individually, no doubt. But it was extraordinarily hard to see the systemic risk and to act and hedge against it. The systemic risks for the financial world are the regulatory risks for carbon.