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
Scope 2 Emissions
Scope 3 Emissions
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.< Back