An Accounting System for Carbon

Climate ‘polycrisis’:

1. It was a term made popular by Adam Tooze.
2. It refers to the interconnected and compounding crises related to climate change that are affecting the planet not only in few sectors but across several sectors and domains.
3. It encompasses all dimensions of impacts of climate change such as physical, social, economic, and political.
4. The impact of climate change can be witnessed in different sectors such as energy, infrastructure, health, migration and food production.
5. Therefore, adoption of a holistic approach imbibing diverse perspectives and priorities of different stakeholders and ensuring resilience, equity, and justice becomes important.
6. Main issue of Climate polycrisis is tweaking one corner of the climate challenge leads to unexpected consequences elsewhere.

Developing a ‘carbon infrastructure’ for accounting carbon:

1. A ‘carbon infrastructure’ can
   1. creates opportunities for a flourishing future carbon regime
   2. the flows of carbon can be taken into account in the formulation of policy at every level: household, panchayat, district, State and country.
2. Measurement as the first step
   1. A measurement system has to be put into place which is capable of measuring carbon emissions from individual citizens to the nation as a whole, including all that is in the flow.
   2. Such a measurement system shall help to build an accounting system for balancing our carbon emissions.
3. National carbon accounting (NCA) system:
   1. Carbon accounting can be used by companies to keep track of the carbon they are producing, removing, storing and offsetting.
   2. Akin to financial balance sheets with their sources and applications, a carbon accounting system can be developed.
   3. Such a system will bring the entire nation, starting from individuals and households, under one carbon accounting framework. 
   4. This can truly internalise carbon reduction goals of the country and the world.
   5. Existing carbon accounting methodologies for tracking carbon balance sheets at the corporate level such as those championed by Karthik Ramanna at Oxford can act as an ideal model.
   6. The system shall mandate businesses and individuals to declare/report their carbon inflows and outflows, making the circulation of carbon visible.
   7. As both an evolutionary and a revolutionary generalisation of these ideas, other goods and services can be ‘financed’ using carbon surpluses, especially if there is convertibility between the carbon accounts and the rupee accounts.
   8. The ability to set targets, make predictions, about future emission reductions and track the progress against the set goals becomes more meaningful.
4. A national carbon budget:
   1. It can help to re-imagine the entire economy, including new technologies and new forms of collective action.
   2. Along with the goal of increasing economic GDP in money terms, a parallel goal of a reducing carbon GDP can be achieved.

The NCA can help in bringing transparency about the carbon footprint of human activities, create new livelihoods and new forms of organising its economy and society, alignment between development and ecological sustainability, besides helping India to meet its commitment to becoming net zero by 2070. Thus, NCA is a polysolution to a polycrisis.