This transcript has been edited for brevity and clarity.

Alexia Kelly:
Good morning, good afternoon, or good evening, and welcome back to another episode of Navigating Net Zero, the podcast where we talk about what's working, what's not, and what's next on our global journey to net zero.

I'm delighted to be joined today by my longtime friend and colleague, the amazing Kim Carnahan, who leads the Center for Green Market Activation.

Kim and I have worked together for almost our entire careers. She has nearly 20 years of experience in climate change, including a decade at the U.S. State Department, where she managed the team that negotiated the Paris Agreement's implementing guidance, as well as climate agreements at the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO).

An expert in carbon markets, greenhouse gas accounting, and alternative fuels, Kim spearheaded the launch of the Sustainable Aviation Buyers Alliance—better known as SABA—in 2021. She founded the Center for Green Market Activation (GMA) in 2024, which continues to support SABA and the Zero Emissions Maritime Buyers Alliance (ZEMBA), while also developing book-and-claim systems and buyers' alliances for heavy-duty trucking, cement and concrete, and chemicals.

GMA also serves as the secretariat for the Advanced and Indirect Mitigation (AIM) Platform, the focus of this mini-series. AIM is developing a new standard and guidance to help companies identify high-quality decarbonization investments associated with their value chains, assess their quality, account for and report their impacts, and coordinate with organizations such as the Greenhouse Gas Protocol and the Science Based Targets initiative.

In the interest of full disclosure, I'm a board member of the Center for Green Market Activation and also serve on the governing committee for the AIM Platform. So I'm especially excited to have this conversation because it's been a big week for the standard-setting work Kim has been leading.

Kim, welcome.

Kim Carnahan:
It's great to be here. Thanks for having me.

Alexia Kelly:
Before we dive into AIM, I'd love to hear the origin story behind GMA. What led you to launch a new nonprofit focused on what is admittedly a pretty niche topic—but one that's also critically important to global decarbonization?

Kim Carnahan:
The story really starts before GMA, with my time at the State Department.

One of the major negotiations I led there was the development of CORSIA—the global aviation emissions framework negotiated through ICAO—which was finalized in 2016. After that agreement was complete, I realized there was still a major gap in aviation decarbonization.

I would talk to airlines, and they'd tell me there wasn't enough customer demand for sustainable aviation fuel. Then I'd talk to corporate customers, who would say they desperately wanted to support sustainable aviation fuel and reduce emissions from business travel or air freight—but they had no practical way to do it.

It was obvious there was a disconnect.

At the time, I knew very little about corporate greenhouse gas accounting. My background had been in international negotiations rather than corporate sustainability.

After leaving the State Department, I joined ENGIE Impact, where my supervisor gave me time to explore this challenge: How could companies that genuinely wanted to decarbonize aviation actually do so?

That work led me to partner with Kelly Kizzier—then at the Environmental Defense Fund—and later with RMI. Together we launched the Sustainable Aviation Buyers Alliance in 2021.

SABA was, honestly, a surprising success.

There was tremendous demand both for a book-and-claim system for sustainable aviation fuel and for an organization that could help companies navigate a very technical market.

Our first pilot procurement involved just seven buyers and raised less than $20 million.

Our second full procurement included around 20 buyers and mobilized roughly $400 million.

Once companies understood what was possible, demand grew incredibly quickly.

Just as importantly, people immediately began asking whether the same model could be applied to other sectors. That demand ultimately led us to launch the Center for Green Market Activation.

Alexia Kelly:
Tell us a little more about this market-making function.

Helping early-stage technologies move from demonstration to commercial scale is a really important—and often underappreciated—part of climate action. SABA has become a great example of how that works in practice.

What's the broader theory of change behind investing in these kinds of market-making organizations?

Kim Carnahan:
It helps to start with why there was so much corporate demand in the first place.

Following the Paris Agreement, we saw an enormous surge of companies adopting ambitious climate goals, particularly through the Science Based Targets initiative. Many companies committed not only to reducing their own operational emissions but also emissions throughout their supply chains—their Scope 3 emissions.

The problem was that the Scope 3 inventory, as currently defined under the Greenhouse Gas Protocol, only allows companies to account for emissions associated with their suppliers or customers.

Many companies found themselves in situations where they genuinely wanted to reduce emissions but simply couldn't influence the physical emissions in their value chains.

Sometimes they lacked sufficient leverage over suppliers.

Sometimes the technologies needed to reduce emissions simply weren't available.

And in other cases, their direct suppliers didn't even control the part of the production process responsible for the majority of emissions.

Companies were effectively stuck.

What SABA—and now GMA—does is help short-circuit that problem.

Book-and-claim systems decouple the environmental attribute from the physical product or service.

A company can continue operating its existing travel program exactly as it does today while separately purchasing sustainable aviation fuel certificates.

Those certificates represent the emissions benefits associated with a defined quantity of sustainable aviation fuel.

That allows companies to financially support deployment of sustainable aviation fuel without having to physically purchase or use the fuel themselves—which is important because most companies aren't actually buying aviation fuel in the first place.

Alexia Kelly:
For listeners who may be familiar with carbon markets but less familiar with book-and-claim systems, how are they similar—and how are they different?

Kim Carnahan:
They're similar in many ways, but there are a few important differences.

First, book-and-claim systems are sector-specific. They're designed around the particular characteristics of one industry, whether that's aviation, cement, chemicals, or heavy-duty trucking.

Second, the units we use at GMA are based on attributional accounting.

Rather than purchasing a generic quantity of emissions reductions, companies purchase the environmental attributes associated with a specific volume of a product or service. That volume carries an associated emissions factor.

This approach fits much more naturally into today's greenhouse gas accounting framework while still allowing companies to calculate the emissions benefits relative to a baseline.

Alexia Kelly:
One of the things I love about SABA is that it demonstrates how buyers can help accelerate deployment of new technologies long before they're commercially widespread.

That's a very different role than companies have traditionally played in climate action. Historically we've asked companies simply to reduce the emissions associated with their own operations or value chains. This feels much more like companies becoming investors in the future markets they ultimately want to exist.

Kim Carnahan:
Exactly. Many of the technologies we need to reach net zero face what people often call the "green premium." They're simply more expensive today than conventional alternatives.

At the same time, companies increasingly have climate commitments and are looking for credible ways to contribute to scaling those technologies.

The challenge is connecting those two things.

Buyers' alliances aggregate demand across many companies, giving suppliers confidence that if they invest in expanding production capacity, there will actually be customers ready to purchase the environmental attributes associated with those investments.

That helps reduce investment risk.

It's also worth remembering that most of these technologies become cheaper over time. We've seen that with solar. We've seen it with wind. We've seen it with batteries.

As deployment increases, costs decline through learning curves, economies of scale, and manufacturing improvements.

The goal is to help accelerate that process.

Alexia Kelly:
And this is really one of the central ideas behind AIM as well. Let's talk about AIM.

There's been an enormous amount of discussion over the last several years about the limits of traditional Scope 3 accounting and the need for companies to invest beyond the emissions currently captured within their inventories.

Where did the idea for AIM come from?

Kim Carnahan:
It actually grew very organically out of conversations we were already having.

As we worked with companies through SABA and later ZEMBA, they kept asking versions of the same question.

"If we invest in decarbonization beyond what's currently reflected in our Scope 3 inventory, how should we account for that?"

Or:

"If we help build markets that ultimately reduce emissions across our value chain, how do we communicate that transparently?"

There really wasn't a good answer.

Companies were making meaningful investments that clearly contributed to decarbonization but didn't fit neatly into the existing accounting framework.

So we began bringing together experts from across the ecosystem—companies, NGOs, accounting experts, standard setters, and academics—to think through what good guidance might look like.

That became the AIM Platform.

Alexia Kelly:
One thing that's always struck me about AIM is that it's not trying to replace greenhouse gas accounting. It's trying to fill an important gap. Can you explain that?

Kim Carnahan:
Absolutely. The greenhouse gas inventory remains foundational. Companies absolutely should continue measuring and reducing emissions within their inventories.

Nothing about AIM changes that. Instead, AIM asks a complementary question: What about investments that help decarbonize your broader value chain but don't show up inside today's inventory boundaries?

Many companies have opportunities to accelerate deployment of low-carbon technologies, build markets, or reduce emissions elsewhere within their value chains. Those activities matter. They produce real climate benefits. But under today's accounting framework, they're often invisible.

AIM is intended to provide a rigorous, transparent framework for identifying, evaluating, and communicating those activities—not replacing inventories, but complementing them.

Alexia Kelly:
One of the themes we've talked about repeatedly on this podcast is that climate accounting shouldn't become climate strategy.

Accounting is incredibly important—but it's ultimately a measurement tool. The objective is reducing emissions. Sometimes the accounting system captures that perfectly. Sometimes it doesn't.

Kim Carnahan:
Exactly. Accounting systems are designed for consistency and comparability. Those are essential goals. But they aren't always optimized to drive the fastest possible deployment of climate solutions.

Sometimes companies have opportunities to create significant emissions reductions that simply fall outside current accounting boundaries.

Ignoring those opportunities because they aren't reflected in an inventory doesn't make much sense from a climate perspective.

So AIM is trying to recognize those opportunities while maintaining transparency and credibility.

Alexia Kelly:
Transparency seems like one of the key words here.

A lot of the debate around climate claims over the last several years has really centered on making sure companies communicate clearly about what they're doing—and what they're not doing.

How does AIM approach that?

Kim Carnahan:
Transparency is absolutely central.

One of the things we learned from earlier generations of climate claims is that ambiguity creates confusion.

So AIM is built around very explicit guidance.

Companies should clearly distinguish emissions reductions inside their inventories, investments beyond those inventories, and the climate impacts associated with those investments.

The objective isn't to blur those categories. It's to make each one more transparent. That allows stakeholders to understand exactly what companies are doing while also encouraging additional investment in decarbonization.

Alexia Kelly:
One thing I've appreciated throughout this process is how collaborative it's been.

The conversations have included environmental organizations, businesses, accounting experts, investors, and standard setters. That's not always easy.

Kim Carnahan:
No—but it's necessary. No single organization can solve these questions alone. The accounting community brings one perspective. Companies bring another. Environmental organizations bring another. Investors have their own needs.

If we're going to develop guidance that's both technically rigorous and practically useful, all of those voices have to be part of the conversation.

That's been one of the strengths of AIM from the beginning.

Alexia Kelly:
Let's zoom out a little bit.

One thing we've talked about throughout this conversation is that voluntary corporate action isn't replacing government policy—it's complementing it. How do you think about the relationship between voluntary action and regulation over the long term?

Kim Carnahan:
I don't think it's an either-or proposition. We absolutely need strong public policy. Governments create the long-term signals and market frameworks that ultimately drive economy-wide transformation. But governments can't do everything on their own.

Companies make investment decisions every day. They decide which technologies to purchase, which suppliers to work with, where to invest capital, and what products to develop.

Those decisions have enormous influence over how quickly markets evolve.

Voluntary action allows companies to move ahead of regulation, demonstrate what's possible, reduce technology costs, and create momentum that often makes stronger public policy easier over time.

So I see the two as highly complementary.

Alexia Kelly:
That really resonates with me. Some of the most successful environmental policies we've ever implemented came after industry had already demonstrated that solutions were practical and commercially viable.

Voluntary leadership helps create confidence that regulation can actually succeed.

Kim Carnahan:
Exactly. Companies can help de-risk innovation. They can demonstrate new business models. They can create demand for technologies that otherwise might struggle to reach commercial scale. That doesn't replace policy—but it often accelerates it.

Alexia Kelly:
You've spent much of your career building coalitions. That isn't always glamorous work. It often involves bringing together organizations that don't agree on everything—or sometimes on very much at all. What have you learned about building successful collaborations?

Kim Carnahan:
One lesson is that you don't have to agree on everything to make meaningful progress.

Successful collaborations usually start by identifying a shared objective. Everyone may have different motivations for participating. Businesses have commercial interests.  Environmental organizations have environmental priorities. Investors have fiduciary responsibilities. Governments have policy objectives.

Those motivations don't need to be identical. They simply need to overlap enough that everyone sees value in moving forward together.

The second lesson is the importance of trust. These collaborations take time. People need confidence that conversations are happening in good faith and that different perspectives are genuinely being heard.

Finally, it's important to stay focused on solving real problems rather than defending institutional positions. When everyone remains focused on the underlying challenge, it's much easier to find practical solutions.

Alexia Kelly:
That feels especially relevant right now.

Climate conversations have become increasingly polarized in recent years.

Yet when you actually bring practitioners into a room, I often find there's much more agreement than disagreement.

Kim Carnahan:
I think that's true. Most people working seriously on these issues recognize that none of us has all the answers. These are genuinely difficult problems. The solutions are still evolving. That creates space for collaboration. People can disagree on details while still agreeing on the overall direction of travel. And honestly, that's how progress usually happens.

Alexia Kelly:
One question I always like to ask is this: What are you most optimistic about today? There are certainly plenty of reasons to be concerned about the pace of climate change. But what gives you hope?

Kim Carnahan:
What gives me hope is the pace of innovation. When I look back even ten years, the landscape is completely different. We have technologies today that simply didn't exist—or weren't commercially viable—not very long ago. We have companies making investments that would have seemed unrealistic a decade ago. We have much greater collaboration across sectors.

And we have growing recognition that climate action isn't separate from business strategy—it's increasingly becoming part of business strategy. That's encouraging.

The second thing that gives me hope is the people. I continue to meet extraordinary individuals across companies, governments, nonprofits, academia, and finance who are deeply committed to solving these problems. They're smart. They're pragmatic. They're collaborative. And they're making steady progress, often without attracting much attention.

That gives me a great deal of optimism.

Alexia Kelly:
I couldn't agree more. One of the great privileges of working in this field is getting to work alongside so many thoughtful people who genuinely want to solve hard problems.

It's easy to become discouraged if you only focus on the headlines.

But when you look at the work that's happening every day—in companies, across supply chains, in research labs, in governments, and in civil society—you realize there's an enormous amount of progress underway. It's not always linear. It's not always as fast as we'd like. But it is happening.

Kim, thank you so much for joining me today. I've really enjoyed this conversation and appreciate everything you and your team are doing to help accelerate credible corporate climate action.

Kim Carnahan:
Thank you, Alexia. It's been a real pleasure. Thanks for having me.