Six Degrees of Mitigation

Reducing CO₂ emissions is becoming more and more important for organizations around the globe. So where do you start? By knowing where you stand. And that means understanding the complicated world of how CO₂ emissions are officially calculated.

Who sets the standard for emissions calculations?

As with any organizational metric, there are different approaches and methodologies. However, the most widely used accounting standard is the Greenhouse Gas Protocol’s Corporate Accounting and Reporting Standard. A collaboration between the World Resources Institute and the World Business Council for Sustainable Development (WBCSD), the standard covers the accounting and reporting of seven greenhouse gases covered by the Kyoto Protocol.

Your typical business creates many different types of emissions. How are they classified?

The GHG Protocol recognizes three different categories of emissions, referred to as “scopes.” They include:

Scope 1: Direct emissions from owned and controlled sources

Scope 2: Indirect emissions from the generation of purchased electricity

Scope 3: Indirect emissions that are a consequence of company activities

So in the world of carbon accountability, your organization is not only responsible for its own emissions. It’s also responsible for every other company and individual’s emissions that help in the production or use of the final product. With regard to Scope 3 emissions, this includes the supply chain materials in your operation and the end use of your products.

Wait. If you calculated it that way, wouldn’t you be held responsible for many other parties’ emissions? And wouldn’t that create double counting?

Yes, that’s correct. So, for example, a child’s lemonade stand looks as follows from a GHG Protocol standpoint:

Scope 1 Emissions

• Vehicle emissions resulting from supply trip to big box store in parents’ SUV

Scope 2 Emissions

• Power consumed by ice maker

• Power consumed on phone/tablet researching permits and spreading the word

• Other miscellaneous power consumption at the actual booth, such as charging your iPad to play video games when you have no customers

Scope 3 Emissions

• All emissions related to the agricultural operation in Argentina which grew the lemons—everything from the airplane fuel in crop dusting to the farmhouse electricity and processing equipment

• Every type of emission created during the growing and processing of the sugar that is used, from the cane/beet growing operation to the front-loaders that move the raw crystals around the warehouse

• Marine diesel emissions from the container ship moving lemons from Buenos Aires, Argentina to a nearby U.S. port

• Petrochemical emissions created during production of the cups

• All the refinery power and VOC emissions used when creating the petrochemicals such as toluene, xylene, ethyl acetate, glycol and other ingredients in the paint used to make the “LEMONADE FOR SALE” sign

• All emissions created in the East Texas pulp and paper facility which made the paper napkins you give each customer, including the pulp production, bonding, processing and truck involved in wholesale distribution

• Vehicle fuel consumed by customers driving to and from the lemonade stand

• The biodiesel emissions from the garbage truck which will pick up the empty cup and used napkin after being thrown away at the customer’s home

• The comprehensive emissions created in the making of the sodium laurel, isopropyl alcohol and other ingredients in the cleaning product used to clean the lemonade off of the table on which it will be inevitably spilled. Do you want ants? Because that’s how you get ants. OK, so this one’s a bit of hyperbole.

Carbon emissions accounting is interconnected and complex. Closer to home in our own industry, an oil well powered by grid electricity incurs Scope 2 emissions from that power. The direct emissions at the well site would be classified as Scope 1 emissions and then every step after that will mean hundreds of Scope 3 emissions points involving the refining and distribution operation; even consumers using the refined fuel in their vehicles are included.

While all of this accounting may seem excessive, the simple fact is that our current carbon challenge can only be resolved with drastic emissions reductions. And the solutions we’ll need to address the problem effectively, while still continuing to make industrial progress, will be just as interconnected and far-reaching.