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WORKBOOK — THE LUMINOUS GAINSHARE EMPLOYEE

Chapter VII.05 · Bioregional Economics

For the person working inside a gainshare arrangement — where a defined share of verified improvement returns to the people who created it. This workbook is about reading a bioregional programme from the inside: what to measure, what to claim, how the ledger works, and what to ask for.

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WHY THIS CHAPTER IS DIFFERENT FROM THE INSIDE

Most chapters in this volume hand you an argument. This one hands you a measured quantity that nobody in your organisation currently owns, and in a gainshare that is the most valuable thing there is.

Here is the structure of the opportunity, plainly. A bioregional programme produces savings in three places: freight avoided, spoilage avoided, and disruption avoided. The first is easy to measure and small. The second is moderate and almost never measured. The third is large and is usually asserted rather than priced. Whoever makes the second and third countable creates the gain, and in a properly written scheme a share of it comes back.

That is not a metaphor. It is the same four-part structure as any gainshare — a baseline, a measure, a share, a period and a verifier — pointed at a set of quantities that currently have no owner.

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PART ONE — DISCOVERY

Weeks 1–4: find the gain nobody is counting

Exercise 1.1 — Read your scheme against this chapter (2 hours)

Five questions, in writing:

1. What is the baseline, and on what date was it set?
2. What is the measure, as a formula?
3. What is the share, and is it of gross improvement or net of programme cost?
4. Who verifies, and when?
5. Does the scheme recognise avoided loss, or only realised cost?

Question five decides whether any of this is worth your time. A scheme that counts only line-item cost reduction cannot see spoilage avoided or disruption avoided, which is where the bioregional gain actually is. If the answer is no, that is your finding, and changing it is worth more than anything else in this workbook.

Exercise 1.2 — The five places, from where you sit (one week)

Write five observations. You are looking for the one where you can see a quantity that is not being counted — because an uncounted gain is never a shared gain, and making it countable is the single highest-leverage act available to you.

Exercise 1.3 — Count one week of load factors (one week)

Stand where the deliveries arrive and record, for each: vehicle type, and your best estimate of how full it was. Nobody else is doing this and it is the variable that decides the whole argument.

The published evidence says why it matters. Coley, Howard and Winter found that a customer driving a 6.7 km round trip to a farm shop emits more than the entire cold-store, hub and doorstep chain of a large box scheme. Mundler and Rumpus measured short chains running from 13.5 to 44.8 grams of oil equivalent per euro of product — urban box schemes at 13.5, on-farm sales at 34.2, producer shops at 44.8 — against a best long-chain comparator at 8.8. The spread inside the short chains is wider than the gap between short and long. That spread is load factor, and load factor is operational, which means it is yours.

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PART TWO — THE ARITHMETIC

Weeks 5–8: compute what the gain actually is

Exercise 2.1 — Price one route, both ways (half a day)

Take one line. Compute delivered emissions for the incumbent and for the regional alternative, using the published intensities per tonne-kilometre: container ship 14 g, rail 18 g, inland water 21 g, truck 180 g, air 680 g.

Worked, so you can check your method. Incumbent by sea over 11,000 km: 11,000 × 14 = 154,000 g = 0.1540 tonnes CO₂e per tonne. Regional by truck over 140 km: 140 × 180 = 25,200 g = 0.0252 t. Difference 0.1288 t. At an internal carbon price of £80 per tonne CO₂e that is £10.30 per tonne — and if the regional premium is £42, the carbon term carries 24.5 percent of it.

The number you have just produced is the honest one and it is smaller than the programme claims. Produce it anyway. A gainshare built on a number that will not survive verification pays out once.

Exercise 2.2 — Now find the part that is large (one week)

The residual £31.70 has to come from somewhere, and it comes from avoided loss and avoided disruption. Price them:

  spoilage     avoided loss per tonne  =  (loss rate long - loss rate short) x value
  disruption   expected loss per tonne =  p x L

At a loss of £400 per tonne on interruption, the residual implies an annual probability of 7.9 percent. Your job is to find out whether that is high or low, from the operational record — how often has this line actually been interrupted in ten years? — because you are the only person who can answer it from evidence rather than from feeling.

That answer is a claimable contribution. Write it down with the date.

Exercise 2.3 — The ceiling, so you do not overclaim (2 hours)

Weber and Matthews put the average household food footprint at 8.1 tonnes CO₂e a year, of which 83 percent is production, 11 percent all transport and 4 percent final delivery. So the most that perfect localisation can save is 11 percent, and only if regional production is no less efficient.

Learn this number and use it against your own programme first. An employee who walks into a verification meeting having already bounded their own claim is the employee whose next claim is believed without argument.

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PART THREE — DESIGN

Weeks 9–12: make the uncounted countable

Exercise 3.1 — Build the load-factor measure (two weeks)

Propose one measure, with a formula, that any two people would compute identically:

  weighted average load factor  =  sum(tonnes carried x km)  /  sum(capacity tonnes x km)

Specify the source — weighbridge tickets, telematics, delivery notes — and the period. Then propose that the regional premium be conditional on it. That is the load-factor covenant from the chapter, and if your organisation adopts it you have authored a contract term, which is a different order of contribution from running a spreadsheet.

Exercise 3.2 — Write the baseline before anything changes (one week)

The single most valuable document in any gainshare is the baseline, signed before deployment by both the sponsor and finance. For a bioregional line it needs four things: delivered cost per tonne, delivered emissions per tonne, loss rate, and the interruption record. Three of those four are usually missing and you can supply all three.

An unagreed baseline is not a baseline. It is a future dispute, and in a dispute the person who did the measuring loses to the person who controls the ledger.

Exercise 3.3 — Find the surplus next door (one week)

Regions are not uniformly short. Measured against what New York City alone would claim, New York State runs 316 percent in corn silage, 255 percent in milking cows and 115 percent in forage — and sits at 11 percent in wheat, 2 percent in pork and zero in rice, peanuts and cane sugar. A surplus means the counterparty already exists at scale, which means a three-year offtake is a conversation rather than a development project.

Find your region's surpluses. That list is a pipeline.

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PART FOUR — DESTINY AND DELIGHT

Weeks 13–15: make it hold, and claim it

Exercise 4.1 — Get the measure into the standing pack (two weeks)

One number, monthly, beside the regional spend share: the load factor. Anything reviewed monthly persists. Anything reviewed by exception does not, and an unreviewed measure cannot generate a verified gain.

Exercise 4.2 — Recruit the second owner (one conversation)

Give somebody else the credit for the first result and ask them to co-own the measure. One person is a hobby; two is a practice. In a gainshare this is also self-interest: a measure with one owner dies when that owner moves, and it takes your claim with it.

Exercise 4.3 — The conversation, scripted

"I've measured our delivery load factors for a quarter. On the regional lines we're averaging ___ percent. At that level the emissions case for the regional premium is worth about £___ a tonne, which covers ___ percent of it — I've done that honestly and it's smaller than we've been saying. What carries the rest is avoided loss and avoided interruption, and I've priced both from our own records: ___ and ___ a tonne. Here's the baseline document. I'd like the load factor in the monthly pack, and I'd like the scheme to recognise avoided loss, because at the moment the measure cannot see the largest part of what we produce."

Four things happen in that paragraph and all four are deliberate. You bounded your own claim before anyone else could. You produced a number nobody had. You asked for a reporting change rather than a payment. And you named the gap in the ledger that is costing everyone on the scheme, not only you.

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KNOW YOUR SCHEME — A CHECKLIST

• Does the baseline reset each period? If it ratchets automatically, every gain you make raises the bar you are measured against.
• Does the measure recognise avoided cost, or only realised cost?
• Is spoilage inside the perimeter of the measure?
• Is the share of gross improvement or net of programme cost?
• Who verifies, and have they seen the baseline document?
• Is there a stated term over which the baseline holds?

If nobody can answer three of these, that is this quarter's most valuable finding and it belongs in writing.

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WHAT TO ASK FOR

In order, and the order matters.

1. The load factor in the monthly pack. Free, and it makes everything else measurable.
2. Avoided loss inside the measure. This is the change with the most money in it and it is a definitional change, not a budget request.
3. A signed baseline for one line, before the next contract renewal.
4. The interruption record, ten years, for the lines with a single source.
5. A named share of the verified gain on lines where the measure was built from nothing. Ask for this last and ask for it after the first verified result, not before.

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THE LEDGER, WORKED

Here is the whole thing as a ledger entry, so you can see where your share comes from and argue about it precisely.

The line. 2,600 tonnes a year. Regional premium £42 per tonne, so the gross cost of localising it is £109,200 a year. That is the number the finance function sees first, and on its own it looks like an expense.

The three credits.

  carbon      0.1288 tCO2e/t saved x £80/tCO2e x 2,600 t  =  £26,790 / yr
  spoilage    (long-chain loss rate - short-chain loss rate) x value x tonnage
  disruption  p x L x tonnage, with p from the ten-year interruption record

The carbon credit alone covers 24.5 percent of the premium. If the spoilage differential is one percentage point on a product worth £900 a tonne, that is £9 a tonne — £23,400 a year — and it takes the coverage past a half. If the interruption record shows three events in ten years, the disruption term at £400 per tonne of loss carries £120 per tonne of expected value, which covers the rest several times over.

Where the gain is. Not in the freight. In the two terms that were never counted. The carbon term is easy, small and already visible. The spoilage and disruption terms are large and invisible, and invisible is the same as non-existent in a ledger.

What you actually produced. If you built the load-factor measure, wrote the baseline and extracted the interruption record, you did not save the money — the supplier and the contract did. You made it countable, and a well-written gainshare pays for exactly that, because until it is countable none of it is shareable.

What to put on the claim. Three lines, dated:

Built the load-factor measure (formula, source, period), adopted into the monthly pack on ___. Wrote and secured signature on the baseline for line ___ on ___. Extracted the ten-year interruption record, establishing p = ___ against the assumed ___. Verified improvement attributable to the measure: £___ in the first full period.

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WHAT THE LEDGER CANNOT SEE, AND WHY YOU SHOULD SAY SO

Two limits belong in your own claim, stated by you before anybody else states them.

The emissions ceiling. Transport is 11 percent of the food footprint and final delivery 4 percent. So the abatement you can claim from routing is bounded, and if regional production is more than about 11 percent less efficient than the incumbent, there is no abatement at all. Name that bound in the claim. It costs you a little and it buys the credibility of everything else in the document.

The premium's incidence. If the firm sells to consumers, the premium is a consumption tax and somebody pays it. The evidence on who is genuinely contested — Fajgelbaum and Khandelwal find real-income losses from autarky of 63 percent at the tenth percentile against 28 percent at the ninetieth, while Borusyak and Jaravel, measuring import shares directly, find them flat between 11.7 and 12.9 percent across the distribution. You will not settle that. You can ask whether anyone here has measured it, which is a better question than most that get asked in these meetings.

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APPRECIATIVE QUESTIONS FOR YOUR TEAM

1. When has a delivery arrangement here worked unusually well? What was different about it?
2. What do we throw away that came a long way, and who already knows how much?
3. Which supplier would we protect even if a cheaper offer arrived tomorrow, and what do we get from them that the price does not show?
4. If we could count one thing next quarter that nobody counts now, what would change most?