No species has managed to grow the complexity and scale of activity as we have. Aided by technology and drive for growth, we are exploiting every corner of our planet and impacting every human. Even a century ago, concepts like the indoor bathroom was a luxury majority of us could not afford. Health, food security, longevity and pretty much every measure of our well being has been transformed over the last two centuries.

In the world where everyone is poor with short lifespans, growth is essential to meet the needs and wants of people on the planet. Now, our technology, both physical and social, have created a world where globally, obesity is a bigger problem than starvation. We have improved just about every metric from security to life span. We are now hitting the second limit, the upper limit of our ecosystem.

As we deploy our physical and social tools, we are undermining the very substrate that enables our way of living. The upper limits such as land productivity, air pollution and so on are critical upper limits beyond which we are not going to be able to sustain our current activities. How do we balance human needs with the needs of the ecosystem?

As our technology becomes more powerful, combined with management tools designed only for growth, we not only face existential risk from whatever nature can throw at us but the existential threat of our activities.

Doughnut Economics
 by Kate Raworth
Check out Doughnut Economics Action Lab on Youtube

Challenges

Efficient Markets
Without Ignorance

Even the simplest of products, once available to end customer has significant emissions built into the product. Activities such as mining for the raw materials, manufacturing, transport, and so on all add emissions to the end product. Beyond some crude measure, there is no way for customers to tell the emissions embedded into the product or service they purchase. Not only is this the problem for the end consumer but customers at all levels of the economy.

Until customers make purchasing decisions, at least in part, based on ecological limits, our markets will remain ignorant. Accounting systems currently only keep track of profit or loss and not much else, but these measures do not include the externalities. Value chains are complex adaptive networks and require new ways to conceptualise how we account and manage critical information across multi-actor, multi-jurisdiction and multi-purpose systems. We need new protocols for inclusive accounting (beyond financial accounting). These protocols have to work at multiple scales, from individuals to large corporations and even countries. When much of the accounting theory and ideas were invented, we did not have the technology we do today. We believe it is possible to re-imagine and implement a truly distributed, inclusive set of accounting protocols.

A New Phase of
Productivity

How do we get more for less? Productivity growth has been in decline for several decades. One of the proposed reasons is that we measure productivity as a ratio of inputs and outputs that exclude the energy productivity of the system. Inputs are generally labour or capital. When we consider the problem of understanding and reducing emissions, we realise that energy is a critical input into the productivity equation. We currently convert energy to cost that emits energy type, energy use and granularity needed to understand thermodynamic properties of the value chain or system. Energy accounting is absent from most datasets we use to understand the performance of our activities, businesses or countries.

We believe a new accounting paradigm will enable us to embrace a new phase of productivity understanding. Any attempt to create a sustainable economic activity on our planet needs to account not only for the full set of impacts but provide means to understand and improve operations themselves. Adding energy to the productivity equation (in addition to capital and labour) will enable us to measure and understand emissions like never before, but also point to the new opportunities for productivity growth.

Architecture
Inversion

Most accounting software systems we know are large modular centralised systems like Enterprise Resource Planning platform SAP, and so on. These systems are typically extensive, complex and hard to change. Our reliance on these systems is one of the reasons our foundational accounting practices have not changed. It is expensive and disruptive to improve these systems that are highly regulated across the world.

We need to create a way where financial accounting can continue as it has for decades as we in parallel introduce a highly-distributed set of protocols and solutions that are more appropriate for complex adaptive networks such as our value chains. Instead of encoding complex rules into specific software, we need to create toolkits where individual value chain agents can develop their accounting systems and connect them into a diverse and transparent network.

We have a Plan... maybe...

Develop the protocol

Develop a protocol for information and model exchange. Investigate existing efforts such as Holochain, and either contribute to their development to create a new distributed platform.

Select a popular product and connect all agents into emissions accounting network

Validate and enhance the protocol by connecting a value chain for a popular product back to material flows. Establish a full emissions accounting network for the product.

Establish marketplace

Establish a marketplace where others can connect product value chains. Seed the marketplace with initial data, solutions and models used to develop the first value chain.

Full daughnut accounting

Expand beyond emissions to the full social foundation and ecological ceiling accounting

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