 Thank you all for joining us, and thanks, Tom, for the introduction. I agree trying to fill Alicia's shoes is nearly impossible. It's taking me and Tom. And I thought we would start with some quick introductions for each of the panelists so you understand where we're coming from and our different perspectives on this work. As Tom noted, and as the slide says, I work at the Steyr-Taylor Center at Stanford. My background is primarily in investments in capital markets. I joined Stanford a few years ago to work on climate finance risks. And this led me to the thrilling first thing in the morning topic of carbon accounting and carbon markets. So it's good that you're well caffeinated to listen to what I have to say about carbon accounting. Generally speaking, carbon accounting is very confusing. The way the marketplace does carbon accounting today was designed as a risk management system. It wasn't designed as a carbon accounting system. And over the past couple of decades, people have tried to adapt that system to be actual accounting. And that has led to a whole host of confusing problems around carbon accounting. And what our work does is tries to rethink how carbon accounting ought to work in support of carbon markets so that carbon removals and carbon as an asset can be traded. And we think that's a very important part of the journey to net zero. We also encounter this problem of no one knows what net zero means. And part of our research is to give extremely precise and clear definitions of what net zero means. And we'll get into some more of that topic. I will turn to Bob. Thank you, Mark, it's a pleasure to be here. And I think, Tom, you did a masterful job kind of giving us the big picture here, especially with no notice. My background is as an economist. I actually was an undergraduate here at Stanford in the inaugural class of the Human Biology program. One of the things that I learned in human biology is if you want to understand human behavior, you have to understand economics and incentives. And so I became a PhD in economics. I taught at MIT for a couple of years and then went to Wall Street, spent 30 years on Wall Street, became a partner at Goldman Sachs and head of risk management. And about 15 years ago, after I left Goldman, I started getting interested in carbon pricing. And it was kind of a rabbit hole that I fell into trying to understand the economic literature on the social cost of carbon. And actually wrote a paper on that. More recently have become involved in federal policy. I chaired the CFTC subcommittee on managing climate risk in the US financial system. And I'm now the premier member as the title of something called the CFRAC, which is the Climate Related Financial Risk Advisory Committee. And we advise the Climate Related Risk Committee, which is part of the Financial Stability Oversight Council. So what I would say is that the Treasury Department in particular has become very focused on climate risk in the financial system, has stood up these two committees and is now moving forward. My interest in pricing carbon led me about 10 years ago when I was working at an investment firm, Kepos Capital, to start researching where pricing was in different countries and across time. And we created something we call the carbon barometer. You can look it up online. And what it does is it's a comprehensive measure of the incentives that different countries have put in place to reduce emissions. It includes carbon taxes, of course, but it turns out carbon taxes are among the least important incentives globally. It also includes emissions trading systems, fossil fuel subsidies, as well as fossil fuel taxes. Turns out fossil fuel taxes are by far the most important incentive. And also things like reduced carbon fuel standards, feed-in tariffs, and so on. There's seven different policies that we look at around the world. The basic story of where we are in carbon pricing is nowhere, sadly. The global average price is about $18.5 a ton. The social cost of carbon, where it ought to be. When I started looking at this 15 years ago, I think mainstream economics thought it was maybe around $50 a ton. The UN, in one of its IPCC reports, said it's somewhere between $2 and $200 and no one really knows, and therefore it's not very helpful. Some work that I did with some colleagues. We came up with a model in which we couldn't get a number below $120. And now resources for the future, which is probably the think tank doing the most definitive work on this has estimated it's $180. I think the EPA has a tentative number of 190. So the numbers have clearly gone way up. And yet the global average is about $18.5 a ton. Second thing to know is that there's no harmonization. The incentives to reduce emissions are very strong in Europe. In the UK and in Spain, we estimate them at about $130 a ton. And that comes primarily from their emissions trading system, which applies to manufacturing, to aviation. And then they have high fossil fuel taxes on diesel and gasoline. And so when you add it all up and average it, it's well over $100 a ton, about $130 in the UK. In the US, in contrast, and in China and in India, which are the three big polluters today, you have incentives that are all less than the global average. It's kind of sad. In the US, 90% of it is from the gasoline tax. Then you have these small contributions from other policies, for instance, in California and in the Registrates. And then you have a number of countries around the world, Russia, Venezuela, countries in the Middle East, where there's basically fixed prices for gasoline below the market. And so you have implicit subsidies to pollution. In the UAE, which is going to be the sponsor of the next cop and the head of the oil company is the head of their delegation, they have incentives of about $70 negative per ton of carbon. Because they have the fixed prices on gasoline. So you don't have this common incentive. And what you see when you look historically is that countries that have strong incentives decarbonize their economies. In Europe, they're much more carbon efficient than we are in the US. And you also see another pattern, which is that countries that have significant fossil fuel reserves tend to be slower in terms of their transition to low carbon. So the Middle Eastern countries, Russia, Venezuela, they all have significant fossil fuel reserves. And then where we are in the US is we also have very significant fossil fuel reserves and states where there are strong reserves like Texas, Alaska, West Virginia, you see the politics there are much tougher on reducing emissions than in states that have less reserves. And so it's important to see where this transformation is coming, who's pushing it forward and where it's behind. And then finally, I'll just pick up on some of the discussion that Mark and Tom had, which is when you look at it from an economic perspective and you say, where should we be making progress the fastest? The cheapest way to pull CO2 out of the atmosphere or not continue to put it in is in nature based climate solutions. So not cutting down forests or regrowing trees or changing the way we manage forests. Now, what is true is that these nature based solutions are only a small part of the overall solution because there's just not enough space on the planet. But we need to start there because that's where the cheapest scalable solutions are. And then as the price goes up over time, we need to then move into the more expensive approaches. Eventually we will certainly get to engineered pulling of CO2 out of the atmosphere. Right now that's just very expensive. And so ultimately there's gonna be a much higher price on carbon. And how we get there is an interesting question. There's a number of potential pathways. Obviously you could just have a carbon price. That would be the easiest, most straightforward. It would require an act of Congress. And there's no one right now who expects that to happen anytime soon. More likely in the short run is something that's called a carbon border adjustment mechanism. It's basically an attempt to put a tariff on imports from countries that don't have carbon prices. Of course, one of the problems there is that we don't have a carbon price in the US. Europe, which has moved first on this, they've already passed a carbon border adjustment mechanism which will apply to the US. The US is now negotiating. So it's unclear where we'll get to. There is a lot of support for this from both sides of the aisle. So it's a more politically palatable approach. And it may be that you can incorporate a carbon tax into a border carbon adjustment mechanism. There was, for instance, a fee on methane incorporated in the Inflation Reduction Act. So there's definitely a possibility there. And then the third approach that I would say is perhaps the most likely is that a global carbon market develops for these nature-based and other climate solutions. And that's something that is nascent right now. There's very difficult governance issues associated with nature-based climate solutions. Additionality and permanence are two of the end leakage are some of the important questions. And we can talk more about those. But what I would say is that where you have governments come in, for instance, in California or Australia, now in Washington state, where you have government oversight of these markets, they tend to work much better. And if the US were to come in and create oversight, and there's some push now for the Commodity Futures Trading Commission to come in and provide oversight, that would certainly lead to a scaling of this market, I think, in the short run. So I'll pause there. Thank you so much for having me. My name is Peter Freed. I'm the head of Energy Strategy for Metta, also in Stanford undergraduate. Although I don't think Bob and I overlapped at all. I love coming back to campus to do stuff here. I think I even see some old professors in the room, which is always great. So unlike our first two panelists, I'm not an economist. I tend to think of myself as a practitioner in this space, as a company that is out there in the voluntary market, how and where we transact, how we can think about impact, is one of the central features of the team that I work on. Our Energy Strategy program is really focused around two things. First is the company's energy goals, which, going all the way back to 2011, we set one of the earliest corporate ambitions to be supported by 100% renewable energy. It took us nearly a decade to get there, but we did it in 2020. We continue to have that goal, even as our electrical loads grow meaningfully through time. Similarly, we've got a net zero target for the company. We've been net zero within scopes one and two. And I think we're probably going to get in a little bit to what some of that means in this conversation. I'm not bored by carbon accounting. I love this stuff. So we'll try and keep it interesting, or at least we'll be enthusiastic about it. We've been net zero across scopes one and scope two since 2020 and have recently set a 2030 target for net zero across our entire value chain, so incorporating scope three by 2030, no small feat. If you look at the inventory of a company like ours, a significant amount of it comes from electricity. And so while it is true that many of us think about electricity as a scope two issue, it is ultimately a scope two and a scope three issue. And I think that's going to be true for many companies around the world. So what are we thinking about? Ultimately, I think one of the things that we say at Meta is to focus on impact. That's been a core value of the company for a long time. And so that is what we spend our time doing. What is the impact that we want to have on decarbonization? How can we accelerate the decarbonization of the electricity sector while maintaining reliability? I mention that because I think it is a core feature of whatever a future decarbonized electricity system has to look like, is that it needs to be at least as reliable as our system is today. And so among the things that we are thinking about is the ways in which companies engage in this problem, particularly inside of the voluntary market. And what has historically been a focus on individual PPAs, power purchase agreements, forward renewable energy. And Meta has done quite a great number of those gigawatts of contracts through time. We are beginning to interrogate this question of, how might we think about where we want the system to go, a future decarbonized, reliable electricity system? And then how can we parcel out pieces of that to voluntary market participants to accelerate that change? So that's what we're spending a lot of our time doing. Significant parts of my team are commercially focused. So we are on the ground trying to transact some of the things which are concepts right now for a lot of people, a lot of the things that Mark was talking about. How do we actually write a contract on that? What are the features? Can we actually trade it? So those questions become really interesting when you start putting pen to paper, a lot of the devil in the details comes out there. So I'll leave you with that. Very excited to talk more about how we implement some of these things, how voluntary market participants can help move the needle forward and looking forward to the conversation. Excellent, that leaves me. Nice to be here with all of you today. I'm Brandon Middall with Microsoft. In my role at Microsoft, I'm focused on financing and bringing to market the new climate solutions that will help us on our net zero journey to address scope one, two and three emissions. Microsoft has been on this journey first to carbon neutral and then toward carbon negative since 2012, which is when Microsoft put a carbon fee on all of our business activities and became carbon neutral across scopes one and two plus business travel, which is a small portion of scope three over 10 years ago. Where we've been since then is recognizing that to have a true carbon neutral and ultimately carbon negative plan, we need to set a net zero goal that encompasses all three scopes, one, two and three. And for those who aren't steeped in this day to day, scope one is the company's direct emissions, scope two, electricity from a company's operations and scope three supply chain and value chain, both upstream in terms of sourced materials and goods and services, as well as downstream, which in our cases, consumer use of our devices. For us, the key themes that are top of mind right now are number one, the meaning of net zero and Mark alluded to this in his opening comments, especially in a voluntary commitment context, it's important that everyone is speaking about the same thing when we talk about the net zero transition. And for us, it's really important to recognize that it's great to have scope one and two neutrality. However, for a tech company like ours as a baseline, scope one and two are really just a quarter of the total challenge. Scope three represents the other three quarters and that's different for every company, every industry that you look at. Once you can address your scope two emissions through the use of renewable procurement and carbon-free grids, some of the things that Peter was mentioning, then scope three really balloons to be 97% of the remaining challenge. And so scope three is critically important to the meaning of net zero and we can go into that in a bit more detail. The second thing is around measurement. Having a common nomenclature, a common protocol and framework for how we measure progress on these commitments is not just the execution and minutia of the matter, it is the matter because that's what incentivizes the behavior of all the major players in the system, corporates and other entities as well. And so on measurement, Microsoft is striving to take what we've learned from the last 10 years of our journey on carbon reduction and removals and offer that up in partnership with Climate Works Foundation and other corporates through something called the carbon call which seeks to create interoperable ledgers of measurement of carbon progress. The third piece is really market creation and this is where my day-to-day work comes in. Our objective is to first reduce over half of our total emissions footprint and then remove the rest so that by 2030 we will be carbon negative and by 2050 we will have removed all of the company's historic emissions since its founding. In order to do that though, there are new technologies that need to come to market, particularly in scope three categories such as sustainable chip production, sustainable consoles and sustainable embodied carbon, concrete, steel and the things that form the physical infrastructure that's behind the digital infrastructure of the cloud and all of the services that Microsoft and our peers offer consumers. So I will pause there very much looking forward to the conversation and happy to talk about this interplay between corporate carbon accounting on the one hand and on the other hand emerging climate solutions whether they're on the reduction side of the ledger or the removal side of the ledger which we've begun to recognize is in fact distinct from avoided emissions offsets and is an important part of that net zero journey on the other side of the ledger. Thanks, Brandon. So I thought there are so many different directions I could take this conversation but I think first what I wanna do is lay out a little bit more of the carbon accounting terminology and how our research at SFI is trying to slightly redirect what's going on. So Brandon gave you the quick explanation of this notion of scope one direct burning of fossil fuels. Scope two is the carbon emissions that result from purchased electricity and heat. Scope three sort of splits into two different big buckets. There's upstream emissions that are often described as like cradle to gate emissions for your supply chain upstream and then you have downstream activities. There has been a lot of discussion in the recent past about whether there should be mandatory reporting of the caliber of like financial accounting. Public disclosure of financial accounting for companies is very tightly regulated and it's a extraordinarily well established framework for financial accounting. The greenhouse gas protocol which is the original source of scope one, scope two, scope three emissions as I noted earlier sort of developed in a very different time, very early on in Tom's timeline of climate action and one of the challenges is that it was designed to say well if a carbon tax is right around the corner how's that gonna affect your business and how are you gonna deal with that? And so from the beginning scope one was obvious. It's a direct effect of a carbon tax. Scope two was reasonably close to direct and scope three in the original documents was actually described as sort of a nice to have thing but it was acknowledged that it's extraordinarily hard if not impossible to sort of aggregate scope three measures across the supply chain. But that does not mean that scope three isn't an important component for understanding pathways in energy systems transitions as Brandon and Peter described. What our work is doing is saying let's make this very clear what is going on and it sounds crazy but it was reasonably novel for us and others to start saying look only scope one emissions actually enter the atmosphere. Scope two is someone else's scope one. Scope three is lots of other people's scope one. And so that simple observation makes it very clear that using the greenhouse gas protocol scopes the way we use financial accounting is unlikely to be a successful approach. What our work does is simply says emitting CO2 emissions, greenhouse gas emissions are a liability. They're a liability for as long as they're in the atmosphere. And if you think about how accounting works if you have a liability, if you want to be solvent you need an asset to match it. So the question is what are the assets that can match it? And much of our work has been, thus far has been on if we can correctly describe the liabilities as an accounting exercise then we have to understand what is tradable and what is potentially available as an asset to match those liabilities. And this ties into very much into carbon pricing questions that Bob has looked at and forgive me Peter I don't think it does meta have an internal carbon price? No. And Brandon noted that Microsoft has an internal carbon price. And as Bob described, rationalizing pricing in carbon markets is extremely important but to some degree it's all ad hoc today. There are discussions about social cost of carbon. Do we need to increase the carbon taxes? Do we need to increase prices on carbon to approach the social cost of carbon? One of the things our work does is says we can get around that problem. If we're setting reasonably simple rules that say if you emit, if you create the emissions you have an immediate obligation to remove the emissions then in fact we don't need a price. We don't need a budget. We don't need a global carbon budget. We're simply saying if you impose this simple rule of if you emit it, you've got to remove it, you stop. I mean it sounds very simple. It's very hard in execution. It's extremely hard to understand what it is you need to buy. How do we describe what needs to be purchased? But it also makes very quite concrete what Meta and Microsoft are both doing which is saying they are leaders in their industry who are saying we actually need to do everything we can to halt current emissions and undo the damage we're doing from the emissions we can't halt. So I'd love Brandon if you could go into some of the more details about how Microsoft handles this internal price and how you're thinking about the dollars allocated in that process and how that's impacting decision making. Yeah, happy to take that up. So as I mentioned, we first put price on carbon internally in 2012. That's when we achieved the carbon neutrality at the time through the use of avoided offsets. And one of the ways that we paid for that for those offsets at the time which now we've subsequently replaced with a removals only program was through this carbon fee. It applies to all of the business group activities and is collected and administered internally. And now we're in the process of figuring out how to take that model and apply it to water and other things. But most of the thinking to date has been on carbon. And so each business unit pays into a central, on a counting and general ledger basis. Each business unit is charged a fee according to the operational activities that they've engaged in that fiscal year. And then the fee that is gathered is used to purchase what is needed on the removal side today to address any remaining liability in the terms that Mark shared. What we're doing in terms of those removals is identifying the things that are net negative from an emissions standpoint. So we do not count avoided emissions offsets and we are exclusively purchasing nature-based and engineered removals. Now as Bob said, the engineered removals are quite expensive. They're very nascent. The supply is vanishingly small to the point of being just tiny. And so what's needed there is a combination of a demand signal and early capital to bring all of those solutions to market, both the net negative nature-based carbon removal units as well as the engineered carbon removal units. At the same time, elsewhere in the business, we have centralized energy procurement to create the type of renewable purchasing constructs that will decarbonize the scope to emissions. And so really the vast majority of what's being charged is scope one and scope three, which has a different level of the fee compared to scope one and two. So we've tried to reflect the sort of differentiation of direct control and direct visibility and accuracy of these estimates in that tiered fee structure. And then we have sought to step up on a continued improvement basis, the quality of the pool of removal units that we are purchasing. All of this is done in a voluntary context. And so it's really important to us to have external standards that we can look to to understand the durability, the additionality of what we're removing on that negative side of the ledger. It's also important to us not to use those as some sort of get out of jail free card as a society because it's really important to first reduce and then remove because we know that the reductions, a reduction in absolute in-period emissions is the best way to address corporate emissions footprint. But there are some areas that are really hard to change, hard to find a substitute, hard to find an affordable substitute, and that's where the carbon removals come in. They're useful in addressing difficult to decarbonize sectors where there might not be a solution available for sale in the market at all. Or if it's there, take green steel for instance, it might be very small on a supply basis. The last thing I'll say is that we're moving now as much as possible towards a like for like creation of markets for these type of substitutes. Sustainable aviation fuel is a great example of this. We are in partnership with our airline partners like Alaska Airlines, purchasing sustainable aviation fuel for use on flights that are then applicable to our own scope three business travel emissions. And that's a model that we think can be replicable. It takes some of the tools of the renewable energy industry on the procurement side, in which you can pay for the wreck as opposed to what's called brown power and applies those same tools to other goods and commodities whether that's sustainable aviation fuel or in the future green steel. And Rocky Mountain Institute has done some great work on laying out that approach from a framework perspective for corporates to adopt. Thanks Brandon. Excuse me. Peter, your work if I understand it correctly is much more focused on power procurement and how to avoid the emissions in the first place. And in the theoretical world, that's a heck of a lot easier than it is in the real world where you're operating on grids that are subject to highly varied regulations and different environments depending on where you put a data center in the country. Could you give some insight into how, like what are the tools at your disposal when you're sort of captive to a potentially non-cooperative power provider or grid and how your decisions and transactions can try to make progress in light of, not much in the way of cooperation? Yeah, I'm happy to do that. And we're in a very interesting moment in time where I think the way we've thought about this for the last, call it, 15 years and the way we are beginning to think about it may be in a transitional period. When you look at corporate renewable energy procurement and there's quite a lot of it. So there's a RE 100 which is one of the sort of leadership programs for corporate renewables that's got I think north of 200 members now. There's something like 160 gigawatts of new renewable energy attributed to the voluntary market over the last 10 years. So it's meaningful amounts of production. Most of those transactions are happening under power purchase agreements and those power purchase agreements are happening in markets where there is some mechanism by which contracts can settle, can be financially settled. And we do this not because it's necessarily the best way to do it but it is one of the only ways that you can transact in this way. Meta in particular has spent a very long time working with regulated utilities particularly in the United States to look at alternative approaches. These tend to get called green tariffs. These are electric rates that incorporate renewable energy into the base rate structure and really as a partnership with the utility to figure out how to incorporate renewable energy into the mix for facilities. One of the things that, this is a question that I get a lot although these days I think more and more people are understanding the dynamic here. Hey, the sun isn't shining all the time, the wind isn't blowing all the time. What do you mean when you say you've got 100% renewable energy? And the standard by which we are all doing this is annual volumetric matching. So that means that on an annual basis we are procuring as much renewable energy from projects via these power purchase agreements or green tariffs to match the electric loads that we have at our facilities. In our case, it's mostly data centers. And if you look backwards in time, particularly 15 plus years ago, there was a very reasonable expectation that if you were bringing new renewable energy onto the grid that was having a meaningful emissions reduction impact. There wasn't as much renewable there. We needed a significant amount of additional renewables. And so I think what we have seen happen as time moves on is that we are seeing more and more renewables on the system, which is great. We all acknowledge that that's a really important thing. But we're also seeing that the development of renewable energy in certain markets is becoming more and more saturated. That's also not necessarily a bad thing. At the same time, we have more and more data available to us about how the grid is operating, particularly with respect to emissions. And so one of the things that we've been spending a lot of time on is the way you might begin to think about the emissions associated with renewable energy projects and with electricity use. We were a founding partner of something called the Emissions First Partnership, which has recently put out some interesting work related to thinking about emissions inside of the electricity sector. And basically what we're saying is let us look, if we can, at the best granularity from a data perspective possible, the emissions impact both of loads and of projects. And so to give you an example of this, if you put another wind project, say in Iowa, where there is already a huge amount of wind, you may have a very different emissions impact than putting a solar project in Kentucky, which is a grid which is heavily reliant on coal. And so we can begin to optimize our renewable energy procurement decisions around maximizing emissions reductions impacts. And we think that this is ultimately where we need to be going when we think about impact on the grid. We are still constrained by the tool sets we have available though, coming back to this, we're commercial practitioners, what can we actually buy and sell? So if you're going to buy energy from a renewable energy project, and by the way, maybe it's worth saying for a moment, facility like a data center or a large manufacturing facility, things like putting solar on the roof is great, but it's a tiny drop in the bucket relative to the overall energy needs of these facilities. So we need large scale renewable energy deployments, utility scale is kind of what we end up calling it in the industry. So if you're going to sign a contract with the utility scale renewable energy project, that power has to go somewhere. So you either need a market which already has a clearing mechanism or you need a utilities participation. So to Mark's point, we are still going to need to find transactional tools that allow us to bring energy into markets and drive revenue into those projects. So that is always the overlay that sort of constrains the ways in which we might consider transacting. But today is a very interesting time, more and more data is becoming available by the month really, which allows us to make emissions informed procurement decisions in ways that just weren't possible when we all started doing this 15 years ago. Thanks, Peter. So Bob, you have the nice perch at the top in various government roles of trying to figure out how to drive policy to some degree and whether that's, you know, we've had discussions about farm bill questions or commodities trading oversight. Some of these regulatory questions and concerns are essential to what Peter and Brandon are talking about in moving their companies in the right direction. They are leaders in their field doing this voluntarily. Maybe you could give an overview of the potential paths forward on the regulatory front, both from trying to drive companies to mandatory reporting, potential paths to accounting, but also capital markets oversight in carbon trading. Okay, that's a big set of topics. And let's cover that in 30 seconds. No, whatever part of that you think is most fruitful or interesting in the near term of where you think you're making progress? Sure, yeah. Well, first of all, I would say we have to focus on carbon management if we wanna think about it broadly speaking. And we don't have good handles on the movement of carbon dioxide from the atmosphere into landscapes and then into permanent sequestration. And we need much better technology to measure that so that we can then manage that. And we are getting there. Today, for instance, we have satellites that can give us pretty good estimates of the amount of carbon at least above ground in landscapes around the world. And that's important because when we protect the particular area, let's say we don't cut down a forest over here, let's say the cause of that forest being cut down was toilet paper manufacturer in China, they're no longer gonna get the wood from there, they're gonna get the wood from somewhere else. They're not gonna stop making toilet paper. So that's what we sometimes call leakage. And if you don't have a global picture of the carbon content of your landscapes, how do you address that? Similarly, when we talk about the amount of carbon that's being pulled into a landscape, there's a concept that is called additionality in the voluntary carbon market. Now, when you talk to people about additionality, what they say is something that I guess would be very intuitive. They wanna know what's the impact of the financial incentive that was created to pull carbon into that landscape? What would have happened if we hadn't had that intervention? So it's a counterfactual measurement. And in fact, over time, you just can't, it's, you can't measure it. What would have gone into that landscape if you hadn't done what you did? Well, we don't know. So people try to come up with, we'll look at this similar landscape over here and this one over here and we'll compare the two or you can see where this gets to creating all kinds of bad incentives. And the toilet paper manufacturer stops buying your trees and he buys the trees over here and now you look that much better than there. So there have been all kinds of issues associated with, I won't call it fraud, but lack of integrity in this market. So you've got the, now the integrity council for the voluntary carbon market and the voluntary carbon market integrity initiative. Everyone understands that the reality is we have no idea how much carbon is actually coming out of the atmosphere into these landscapes. Now, some are better than others. Don't get me wrong. If you go to the CME, the Futures Exchange in Chicago and you can go along something called the NGO contract, which will promise to deliver you carbon offsets. Well, it turns out that any carbon offset that has been rated by one of the leading rating agencies Vera is deliverable. And for anyone who's operated in these futures markets, you know that what you get is what's called the cheapest to deliver that's acceptable for a contract. The cheapest deliver is the lowest quality. So you can go along a contract, take delivery and what you will get is the lowest quality carbon offset, which has no legal rights. You have no right to anything when you take delivery. You certainly can't sell it. There's no one, I'm sure Peter and Brandon would have no interest in buying those offsets. So this is a market that's simply not working. And by the way, you might see half a dozen contracts trade on a given day. There's no liquidity. There's no centralized functioning quality market here. If you're a purchaser for a corporation of offsets, you're on your own. You have to try and find the best quality you can. This is really not a functioning market. So what we need to get a functioning market, we need good governance. We need good measurements of carbon flux out of the atmosphere into these landscapes. We need to address permanence as well. When you suck carbon dioxide into trees, it's not gonna be there for several hundred years. It has an expected life of maybe decades. And this problem that we've created is gonna go on for hundreds of years. So we've got to address permanence. And there are ways to do this, but I'm just saying this is not a finished market by any means. And we could talk about scope three emissions too. But let's just say that what we care about is the total amount of emissions that go into the atmosphere or that are coming out of the atmosphere. And when you talk about the emissions going into the atmosphere, that's scope one across the economy. You just add up all the scope one emissions and that's what we care about. So we should stop worrying about other measures. We should start worrying about how do we actually offset the liability that's created by emissions? And that's essentially a permanent liability. So there's a lot of work that needs to go into this. The way to get this done is to create oversight over these markets so that there actually are standards. There's a lot of people working on this. I have hopes that we will get there. Again, if we can get the Commodity Futures Trading Commission to oversee these markets, set up the usual self-regulating organization. Mark, you've written a paper that talks about how we have other commodities like corn and wheat and silver and gold and all these. There are standards. There's no problem about getting acceptable delivery that meets those standards because there's oversight. And that's what we need in the carbon market. So I'll stop there. Okay, thanks, Bob. So we have a few minutes left for questions if there are questions from the audience. Please, anyone? Bueller? We have a question in the back. It's a question over here. Oh, and we... We have one here too. Let's start in the back. Hi, great panel discussion. I appreciate it. Two questions, maybe the first one is a quick one for Brandon talking about the nature-based carbon emissions removal places that you use. And it sounds like there's third-party certification of that. I wonder if you can talk about who the third-party certification groups are and where you're really coming out on specifically which nature-based removal techniques, I guess, Microsoft's using. Yeah, happy to speak about that. So when we're purchasing carbon removals, like I said, today the vast majority of those purchases are of nature-based carbon removals. We generally seek carbon removal purchases with third-party certification and verification and that typically happens through a handful or less than a handful, really, of third-party standards. Vera is one that has been mentioned earlier. That's one of the major ones. In Europe and elsewhere, Gold Standard is another common one. C-A-R, which I believe stands for Climate Action Reserve, Climate Action Reserve is the third. And there's really, depending on how you're measuring it, three to five of these standards bodies that the market is coalescing around. And so most of the developers are designing the projects in order to achieve certification from those three and a couple others. Where we see, a couple comments on that. Where we see the market needing to evolve to Bob's point, this is still early days and the existence of three to five standard bodies is not sufficient to create a robust market. We see certain areas in aforestation, reforestation, soil carbon and engineered solutions where the registries and the standard bodies don't always have a methodology approved. And in those cases, we have invested in doing independent due diligence in partnership with advisors like Carbon Direct and others and have invested in, in fact, building a team on this to evaluate carbon removal purchases. And so in addition to those mainstream standards bodies, we will purchase things that have been certified or really verified by independent engineering firms, DNV being an example there. Now that is really just a stepping stone to getting to third party verification measures. The other thing we've done in the Climate Innovation Fund is invest in technologies that will help scale up the certification stuff. So we've invested in a spin out from gold standard called SustainCert, which is trying to be the turbo tax of carbon project certification. And there's some other examples there. And then on the MRV, monitoring, reporting and verification side that Bob mentioned being a huge gap in the market, we're investing there and you can see that across both forest carbon solutions as well as soil carbon solutions. We've invested in a company called Perennial that does some of the geospatial analysis to bring verification tools at scale to soil carbon and agroforestry type of projects. And so I think right now it's a combination of a base of NGOs that have coalesced around a handful or less than a handful of standard bodies, but then you also have the private sector trying to bring to bear digital technologies. Eventually I expect we will see more AI and machine learning applied to this space to try to drive down the transaction cost of verification and drive up the quality in terms of additionality and durability in particular. Thanks, I think we're gonna squeeze in one more question if that's okay. Thank you for this very insightful discussion. I have a question on Scope 3, whether it incorporates emissions from mining industry and also the end of life of products, for example, electronic waste, so on, so forth. The economists want to speak to that. Sure, I'll take that one. The idea of Scope 3 emissions is that in fact, it does incorporate everything sort of starting from the ground. So if you're a car company, in theory, your Scope 3 emissions are starting at the point where diesel fuel is being burned to extract iron ore from the ground in Australia and put it on a barge and move it to a smelter. So it truly, Scope 3 covers that initial starting point and in theory goes all the way out to, when you throw organic matter into a landfill and it causes methane emissions. The problem is there's so much overlap and the way the Scope 3 protocol, the protocol works, it allows Scope 3 for people to estimate those numbers, which is extremely hard. And what we do and what our research is focused on is how to actually structure carbon accounting in a way that everyone isn't trying to look in every direction around them, all the way to the horizon to understand and frankly estimate their Scope 3 emissions. What we're focused on is saying carbon emissions can just pass from company to company in a supply chain just like the product passes with an invoice that says how much did the product cost? The invoice is also gonna say we just transferred this much carbon liability to you. It becomes a reasonably simple and straightforward cost accounting like exercise. However, what we also say is that you can only worry about things in an accounting sense, in a true accounting sense that are actually under your control. If we're gonna hold people liable for their emissions, then it has to be the things that they're, from cradle to gate. It's very hard to say I'm going to hold someone legally accountable for their carbon emissions after it leaves their facility. So I have a couple of funny examples I use for this, but for example if I'm a car company and someone says bring your Scope 3 emissions down, this is actually really easy if I simply say okay my car, the spark plugs are gonna die after 10,000 miles and you violated the warranty if you change the spark plugs. There, my car now only has 10,000 miles of drivable in a Scope 3 emissions. So this notion of trying to impose some sort of strict liability on downstream activities is terribly fraught. It's very good for discussing and talking about plans. It's not good for accountability and I'm being told I'm totally out of time. So I wanna thank the panelists. And I thank you for listening to us.