About 10 years ago, my wife and I realised that our finances weren’t crash hot. It was just after I finished post-graduate study and got a job, so a good time to revisit our budget. We stumbled across this great app/process/cultish-support-group that we still use today. It’s called You Need A Budget (YNAB)1https://www.youneedabudget.com/the-four-rules, accessed 11th November 2019.
How does my household budget work?
For us it’s now pretty simple. My wife and I both work and are paid a salary. We know (roughly) the things we need to spend money on each month, quarter, and year2YNAB calls this “embracing your true expenses”. We’ve set ourselves up so that each month, we put each dollar we earn into categories for the expenses we will have in the next month, quarter, and year3YNAB calls this “aging your money”. Every time we spend money, we record the transaction details in the budget against a category.
I’m not an expert, but I think this a pretty reasonable example of a functional household accounting process. Our budget gives us a full account of what our money is doing; it tells us how much money is coming in and how much is going out. If we spend more than we earn, that doesn’t really work in the long term.
Tracking carbon pollution
“Carbon accounting” means to accurately account for carbon pollution and use this as a basis for reducing climate change impacts4Stechemesser, Kristin & Guenther, Edeltraud. (2012). Carbon accounting: A systematic literature review. Journal of Cleaner Production. 36. 17–38. 10.1016/j.jclepro.2012.02.0215Csutora, Mária & Harangozo, G.. (2017). Twenty years of carbon accounting and auditing – A review and outlook. Society and Economy. 39. 459-480. 10.1556/204.2017.39.4.1. Like with finance, our households deal with carbon inputs (through processes like planting trees) and carbon outputs (through pollution). As a planet, we have had too much output and not enough input for the last hundred or so years (see the below video for a clear explanation)6Climate Change: Atmospheric Carbon Dioxide by Rebecca Lindsey. 19th September 2019, https://www.climate.gov/news-features/understanding-climate/climate-change-atmospheric-carbon-dioxide, accessed 12th November 2019.
Accurate accounting is not always simple, even in finance. There are times when I haven’t been able to find that last 10 cents of spending to reconcile our budget. It’s very frustrating. But thanks to the quality of current records and tools, accounting for my money can be done even to the last cent.
Unfortunately, the current economic system isn’t set up with the same clarity around carbon pollution. This is partly because of the different scopes of emissions to be considered in understanding our full carbon footprint7http://www.cleanenergyregulator.gov.au/NGER/About-the-National-Greenhouse-and-Energy-Reporting-scheme/Greenhouse-gases-and-energy, accessed 11th November 2019.
Scope 1 – Direct On-site Emissions
These emissions are the easiest to track. Just answer the question “how many greenhouse gases have been released as a direct result of this activity?”. Not many regular suburban household activities fit this scope. Some examples might be:
- burning wood in a fireplace, fire-pit, or pizza oven
- gas heating or cooking
- petrol or diesel vehicle transport
- petrol garden equipment
- scented candles (probably not a huge volume here though…)
We can track scope 1 emissions by:
- identifying the volume of greenhouse gas pollution per unit of usage
- you may need to look this up for your use case
- i.e. your vehicle may pollute 15kg CO2e8CO2e means the carbon dioxide equivalent of various greenhouse gases. This is important because different pollutants have different “global warming potential” (see https://climatechangeconnection.org/emissions/co2-equivalents/, accessed 11 November 2019 per 100km driven
- multiplying this volume of greenhouse gas pollution by the number of units used
- i.e. assuming you drive 10,000km each year
- 15kg CO2e per 100km driven × 10,000km = 15t CO2e
- i.e. assuming you drive 10,000km each year
Scope 2 – Direct Off-site Emissions
Emissions at scope 2 are those caused by the direct emissions of products consumed, however the emissions do not occur in the home. In practical terms, this means electricity produced by burning fuels at a coal-fired or natural gas power station.
Similar to scope 1, these emissions can be calculated simply by multiplying the amount of electricity consumed by the emissions caused by each unit of consumption.
Scope 3 – Indirect emissions
These emissions are the hardest to track. Scope 3 emissions are any emissions caused in the production and delivery of goods and services. Going further, scope 3 also includes emissions from the production and delivery of any secondary and tertiary components in these goods and services, and even beyond. The factors that may need to be considered in scope 3 include:
- obtaining raw materials
- manufacturing components
- distribution of materials and components
- energy consumed in these processes
It is because of this multi-layered and multi-faceted challenge that there are many approaches to calculate scope 3 emissions. It seems that a popular approach to this is Life Cycle Assessment (LCA)9https://sftool.gov/plan/400/life-cycle-assessment-lca-overview, accessed 11th November 2019.
What does a household carbon budget look like?
It seems that an individual can achieve very close to best practices in carbon accounting for scope 1 and 2 emissions. Various tools and reports give us what we need to understand the emissions caused by our electricity suppliers and our vehicles.
At the household level for scope 3, things will be more difficult to determine. Market Forces have shown that in the Banking and Superannuation sector, many popular retail suppliers don’t give enough details on where they are investing to identify their climate impact10https://www.marketforces.org.au/superfunds/, accessed 11th November 2019. These details could be made available, and increasingly funds could do so. This is why organisations like Market Forces exist now, because getting suppliers to provide emissions details for their full product life cycle can require more pressure than a single person.
Calculating my scope 3 emissions will require for me to look at the full supply chain of the technology that I use, the food I eat, the clothes I wear, the furniture I own, the concerts I attend, and any other things that go on in and with my household. That will undoubtedly be the trickiest part of this whole process. However, I’m confident that we can go a long way to accurately tracking (or at least modelling) my household scope 3 emissions.
Really, I need a Carbon Budget
The carbon pollution graphs above are quite alarming. Even more terrifying is this amazing satellite imagery (yes, that is smoke coming from the bushfires in the middle of the screen). Carbon pollution is a big cause of the conditions that have resulted in large chunks of my country being on fire11The burning issue by Tom McIlroy, 12th November 2019 https://www.afr.com/politics/federal/the-burning-deck-20191112-p539sz, accessed 12th November 2019.
But I’m a contributor to the carbon pollution problem, and I need to get my household Carbon Budget in order. Hopefully, as my ixnectomy continues, I’ll be able to figure out how to account for my carbon emissions like my money. That means sequestering more than I’m polluting, “saving” more than I’m “spending”. Maybe one day there will even be an app for that.