Integrity at the core
Market shaping as the path to CDR verification arrangements and avoiding a bad-movie sequel to today's offset market quagmire
Thought I’d try something new this time, sorry in advance if this turns out to be a failed experiment!
I recently gave a talk on market shaping and carbon removal verification (or MRV, in wonk-speak). The driving question behind the talk was “how do we avoid the durable CDR market just becoming another shitshow with deeply mixed-bag impact like today’s voluntary offset market?”
The talk’s thesis was basically two-fold:
Market shaping is the best answer we have to that question (giving a broad-brush-strokes overview of what that might mean in practice).
The epicenter of that market shaping revolves around market arrangements for CDR verification, and winning the two MRV-related “races” I described in an earlier post.
The presentation got a really encouraging reaction, and a handful of folks asked me if I’d be willing to share it. But the slides on their own don’t tell the story, so I decided to experiment with self-recording a version of the talk.
Here’s the video link. Trick is, the recording is almost 50 minutes long, and if you’re like me, you may not have the time to sit through the whole thing. It’s more palatable at 1.5x speed and just over 30 minutes, but in case you don’t have time even for that, below is a quick outline with tags to the relevant moments in the talk in case particular pieces interest you.
One nice thing about prepping the talk was that it pushed me to define what I mean by “market shaping” more carefully than I have in my earlier posts. The first section of the talk covers that in some depth.
Even more rewarding, the positive reactions people shared revolved around some version of “the talk made me feel much more hopeful.” And I do think there are reasons to be hopeful. Market shaping efforts have pulled off minor miracles before, like the HIV treatment scale-up I covered in an earlier post and again at the outset of this talk. Meanwhile, reflect on just how far we’ve come with the durable CDR ecosystem in just the last 2-3 years, due in no small part to market shaping efforts from Stripe/Frontier and Shopify and CarbonPlan and others. It’s really quite astonishing.
If we can kick into an even higher gear, and get even bolder and more creative with our market shaping arsenal, we have every opportunity to pull off another miracle in scaling up durable carbon removal.
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Overview of talk
Section 1: WTF do we mean by market shaping?
How market shaping for antiretroviral drugs enabled the HIV treatment scale up
Defining market shaping with more precision and nuance
Section 2: Quality assurance in healthcare / global health: relevant trends and lessons (12:33 into the talk)
Brief history of drug regulation and quality assurance in the U.S.
How we got from wild west of “nostrums and quackery” / snake oil salesmen in the 19th and early 20th century to modern-day FDA + clinical trials etc.
Private market-shaping by the American Medical Association’s Council on Pharmacy and Chemistry as the lynchpin in the middle of that evolution
Broader trend of governments piggybacking on pre-existing private standards and arrangements rather than creating government regulations from scratch
Development of a decentralized institutional architecture for quality assurance in global health over the last twenty years … one illustrative example of how a “single source of truth” verify-the-verifiers approach can work in a complex international market
Section 3: Conceptualizing the market-shaping challenge for durable CDR MRV (22:45 into talk)
The voluntary offsets market quagmire we’re in as a backdrop
Offering a four-stage framework for thinking about the evolution of the durable CDR market — infancy, toddler-dom, adolescence, maturity
The two “MRV races” we’re in to develop optimal verification arrangements as fast or faster than the durable CDR market shifts from niche to mainstream, and merges into the broader offsets/removals market
Unpacking the differences between the ‘toddler’ stage we’re just entering and the crux ‘adolescence’ stage coming later this decade
Related: shifting from a market where we’re buying and selling “private tons” to one where we’re buying and selling “public tons”
Section 4: Two key themes in MRV-related market shaping (29:08 into talk)
Theme 1: Transparency and open access
Unpacking just how rich, nuanced, and high-stakes the issues around transparency and access-to-intellectual-property are for the durable CDR market
The spectrum from a “closed” paradigm to an “open” paradigm — and making the case for pushing as far toward an open paradigm as possible
Why IP protection itself isn’t the problem — and how patent pools and/or (semi-)voluntary licensing can help solve for access to IP and innovation piggybacking
Theme 2: Turning uncertainty from a liability into an asset
Reviewing the importance of Frontier & CarbonPlan’s recent published work on CDR uncertainty and discounting
How we can seize the silver lining of a discounting paradigm that requires non-binary crediting and tethers uncertainty to cost/price … creating a path to ensuring rigor while accommodating ongoing innovation, learning, and faster market entry
Section 5: What does market shaping for MRV look like in practice (38:54 into talk)
Sources of soft power and financial power to deploy toward shaping a market
Who does the market shaping
What kinds of market shaping will need to happen for CDR MRV
How (tactically) do you go about influencing behaviors & decisions by all the various market actors
Concluding thoughts: why MRV is the epicenter of durable CDR market shaping
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