One of the biggest blind spots for climate warriors is the proportion of hand-waving and wishful thinking required to make their grand unified visions of a Net Zero world, as revealed by John Robson as he conducts the search for the fabled “Scope 3”:

Net Zero image from Jo Nova

We recently got an email from Heatmap saying “Half of companies with net-zero commitments call scope 3 their biggest barrier.” And we thought duh what? And then “Probably the other half said ‘What’s scope 3?'” It turns out to be the carbon emissions you don’t emit but get blamed for anyway. More fun from the wacky world of climate economics. Which has this regrettable feature in common with interventionist economics generally: They don’t know enough to know what they don’t know. The email also said “Most are stuck on spend-based estimates too rough to prove whether their reduction programs are working”. As in the old Soviet Union the planners basically planned to spend because unless you let consumer preferences form prices in competitive markets, you can’t tell whether you’re making something useful or just sawdust sausages and ill-fitting size 12 shoes all for left feet.

In a striking departure from modern journalistic practice, we responded by Googling “Scope 3”. And it turns out to be something very revealing in its unrevealingness. For instance, from the “Carbon Trust“:

The Greenhouse Gas Protocol – which provides the most widely recognised accounting standards for greenhouse gas emissions – categorises GHG emissions into three ‘scopes’. Scope 1 covers direct emissions from owned or controlled sources. Scope 2 covers indirect emissions from the purchase and use of electricity, steam, heating and cooling. By using the energy, an organisation is indirectly responsible for the release of these GHG emissions. Scope 3 includes all other indirect emissions that occur in the upstream and downstream activities of an organisation.

So here’s the problem. Scope 1 is reasonably easy to measure, at least in principle. It’s the GHGs you emit directly by doing whatever you’re doing, minus presumably staff breathing out CO2 while at work. Scope 2 isn’t too bad: it’s the same as Scope 1 except it’s from your power suppliers for whatever share of their output you acquire. But Scope 3 is a very different beast. It’s all the emissions from all the people you bought stuff from, plus all the emissions from all the people who bought your products. All of them. Every single one. Even your kid’s lemonade stand. And all based on pseudo-scientific “accounting and reporting standards” that sound good, make work, generate money and are no use in the real world.

Here we must again cite Leonard Read’s 1958 classic “I, Pencil“, a demonstration even from a simpler era when people used pencils not AI that tracing out all the steps involved in making things, was inherently a transcomputable and never-ending quest. Thus, the pencil tells the reader, “not a single person on the face of this earth knows how to make me”. Take any part of it: the wood, the paint, the eraser, the graphite, and you touch a global supply chain of near infinite complexity. Among a great many other things, that:

My bit of metal – the ferrule – is brass. Think of all the persons who mine zinc and copper and those who have the skills to make shiny sheet brass from these products of nature. Those black rings on my ferrule are black nickel. What is black nickel and how is it applied? The complete story of why the center of my ferrule has no black nickel on it would take pages to explain.

And to explain who made the coffee and shoes and razor blades for the miners, and who produced the fuel for the ships that carried these goods about, and who made the machine tools to create sheet brass, and on and on, would defy any central planner even before they got to the problem that all these people in turn used pencils (we said it was 1958). Which is why after an initial burst of idealism Soviet Five-Year Plans were essentially reduced to replicating last year’s plan and adding a few percent.

Now imagine trying to track all the carbon emissions. Because it’s what Scope 3 aims to do as if it were a mere detail.

Incidentally Soviet planners from the 1960s on into the 1980s actually thought that more powerful computers would overcome this problem, being unclear on the concept of “transcomputable” particularly as it applied to systems with feedback loops. Then the USSR done died. But not this hope.

Thus Heatmap insists that it can be done with their handy guide, which “lays out a four-step playbook for closing the gap between scope 3 commitments and measurable supply chain progress, using domain-specialized sustainability AI” and from whose three “What you’ll learn” gems the first is:

How to move from spend-based estimates to product-level emissions data in hours – with AI-powered material mapping and multi-agent validation

Oooh. AI-powered. Domain-specialized no less. And multi-agent validation. We suppose it beats getting it all from Agent 86. But not by much because the fantasy of measuring all the carbon outputs from all your inputs relies on the fantasy of measuring all your inputs and you can’t.

In a market economy, a real one, you don’t have to. As Read also said, as long as you know the price you must pay for the immediate inputs, how to assemble them into outputs, and the price you can get for those outputs, you can tell whether a purchase is rational. But if you have to know more than you can, you’re sunk. Especially if you don’t know you can’t.

Welcome to the wonderful world of carbon accounting. Do not mistake it for the real kind of accounting though.