Charlie Hoffman’s recent blog post A Contract for Meaning raises the interesting point that One form of writing an information exchange contract is an XBRL taxonomy, which got me thinking about Copenhagen, transparency and the Internet of Things.
In Copenhagen, President Obama rightly emphasized the need for effective monitoring systems to ensure transparency in meeting global emissions targets. However, a lot of the talk about how this would be implemented is based on allowing monitoring teams to troop around your country validating emissions. So couldn’t we a bit more innovative and step this up a notch?
XBRL is not just about financial reporting – it is about creating taxonomies for reporting contextualized data. One of the key benefits is transparency – when everyone uses the same taxonomy that is. So it makes sense to suggest that one way to aid transparency and monitor environmental targets is to agree a global XBRL taxonomy for emissions reporting (maybe there is one – please update me if so). We’ve learned just how hard it is to create ‘global’ taxonomies with financial reporting – so this one should be a little easier especially given that even mandating by the SEC is a little dwarfed by the great Gaia tree collapsing, in apocalyptic Pandora style.
Now let’s switch to the Internet of Things (IOT).
In IOT, a core concept is that everything is a node on the Internet, which means it can transmit and receive data automatically through some kind of web service or other. The talking fridge. The singing kettle. The connected car etc. If you are scoffing already then don’t. Consider Google’s Powermeter service. It sucks data from smart energy monitors in your home so you can monitor and visualize it (and Google can aggregate it for commercial purposes of course – this is Google). Your home can already become a node on the IOT.
Scale this up from home energy meters to electricity generating stations, wind turbines, oil platforms, cement factories etc. and you have the basis for a true environmental web (EW) – where nodes are classified as emitters or consumers or both. Once a node is registered on this EW, the data flows and the monitoring and transparency begins. But as ever the problem is not the technology to do it, which already exists – it’s standardizing the data and that’s where XBRL and taxonomies come in.
XBRL for the EW should start by assuming as simple a taxonomy as possible, one that hopefully few countries could disagree with. Something that at a minimum contextualizes the data received from every environmental node, worldwide, to answer the following 5 key questions:
- What/Who am I?
- Where am I?
- What is my status?
- Why am I reporting?
- What am I reporting?
I’m not suggesting that this applies to cows emitting methane. But is it really much of a leap to think that a power station couldn’t transmit a small packet of data to a global environmental monitoring system on the web, in order to submit its emissions statistics for the day? Is it really so far fetched to think that every car, train or plane could not do much the same thing? We can fly by wire but an aircraft can’t tell you how much carbon it has emitted on its last flight? Give me a break.
In Rivet terms, this is just another example of compliance, control and communication in action but for a global cause. It beggars belief that this is beyond the capabilities of our world today. If the USA wants to take the lead in helping to mitigate climate change then this is one way it could use its awesome power of both innovation and execution to do it.
