Javons Transparency Paradox

Jevons Paradox is the observation that when the efficiency of coal use went up, coal consumption went up even faster — so despite needing less consumption increased. The paradox has as simple solution: The good was never the coal but the useful energy. By increasing the efficiency, coal became a more attractive form of energy over all, leading to a more widespread use.

But how does that relate to transparency?

Transparency is usually considered a critical component of climate action. At the same time, traditional business price negotiation logic is build on a competition over the ability to keep trade secrets, or in other words, minimize transparency.

This structure combined with the historic injustices lead to a situation where transparency is a unilateral requirements that is only demanded from the sellers of the emission reductions, not from the buyers. So the system will track and react by reducing the carbon credits when a cook does not use their stove for every meal, but not track or react when a carbon company didn’t share the profit they made from selling said carbon with the cook.

Yes, yes, but how does Transparency relate to Jevons?

Ah, yes. Transparency is all about information transmission, and the last time we designed a market mechanism for climate was in the 1990ies… So the technological basis has slightly changed. Specifically: The cost of gathering, transmitting and processing information has fallen by several orders of magnitude. In other words, Transparency is several orders of magnitude cheaper than it used to be when people thought it was a good idea to define the protocol for information exchange on climate projects as a “Methodology” that a several hundred page long printable .pdf file half filled with math spelled out in word-art.

According to Jevons Paradox, this fall of the price of information processing should lead to an increase in the total spending on Transparency. And it has indeed. By demanding digital technology to surveil the carbon sellers, the standard makers are pushing hard for an even more expensive approach to transparency:

It is trivially easy to provide a comparable level of information as the 1990ies approaches of the CDM with given 2020ies technology.

However, new requirements are written now — and they tend to max out on the currently best available commercial surveillance technologies including satellites, IoT sensors and phone apps. This cutting edge technology approach, combined with the requirement for auditability, verifiability and security, can make carbon software development either reckless or very expensive, driving up the upfront cost of project development (or the risk) as well as draw out the lead times. Accordingly, we see plenty of Digital MRV studies and tests and very few large scale deployments.

And that is Jevons Transparency Paradox: No matter how cheap transparency technology becomes, the demand for more information continues to increase even faster.