Carbon accounting refers generally to processes undertaken to "measure" amounts of carbon dioxide equivalents emitted by an entity. It is used by states, corporations and individuals to create the carbon credit commodity traded on carbon markets (or to establish the demand for carbon credits). Correspondingly, examples for products based upon forms of carbon accounting can be found in national inventories, corporate environmental reports or carbon footprint calculators. Likening sustainability measurement, as an instance of ecological modernisation discourses and policy, carbon accounting is hoped to provide a factual ground for carbon-related decision-making. However, social scientific studies of accounting challenge this hope, pointing to the socially constructed character of carbon conversion factors or of the accountants' work practice which cannot implement abstract accounting schemes into reality.
While natural sciences claim to know and measure carbon, for organisations it is usually easier to employ forms of carbon accounting to represent carbon. The trustworthiness of accounts of carbon emissions can easily be contested. Thus, how well carbon accounting represents carbon is difficult to exactly know. Science and Technology Studies scholar Donna Haraway's pluralised concept of knowledge, i.e. knowledges, can well be used to understand better the status of knowledge produced by carbon accounting: carbon accounting produced a version of understanding of carbon emissions. Other carbon accountants would produce other results.
- 1 Carbon accounting in corporations
- 2 Enterprise carbon accounting
- 3 Life cycle analysis of ECA
- 4 Carbon accounting of avoided emissions
- 5 See also
- 6 References
- 7 Further reading
Carbon accounting in corporationsEdit
Carbon accounting can be used as part of sustainability accounting by for-profit and non-profit organisations. A corporate or organisational "carbon" or greenhouse gas (GHG) emissions assessment promises to quantify the greenhouse gases produced directly and indirectly from a business or organisation's activities within a set of boundaries. Also known as a carbon footprint, it is a business tool that constructs information that may (or may not) be useful for understanding and managing climate change impacts.
The drivers for corporate carbon accounting include mandatory GHG reporting in directors' reports, investment due diligence, shareholder and stakeholder communication, staff engagement, green messaging, and tender requirements for business and government contracts. Accounting for greenhouse gas emissions is increasingly framed as a standard requirement for business. As of June 2011, 60% of UK FTSE 100 companies had published environmental targets, with 53% of these 240+ targets relating to carbon, greenhouse gas emissions or energy reductions (representing 59% of the FTSE 100). In June 2012, the UK coalition government announced the introduction of mandatory carbon reporting, requiring around 1,100 of the UK's largest listed companies to report their greenhouse gas emissions every year. Deputy Prime Minister Nick Clegg confirmed that emission reporting rules would come into effect from April 2013 in his piece for The Guardian.
Enterprise carbon accountingEdit
Enterprise Carbon Accounting (ECA) or Corporate Carbon Footprint aims to be a rapid and cost effective process for businesses to collect, summarise, and report enterprise and supply chain GHG inventories. ECA leverages financial accounting principles, whilst utilising a hybrid of input-output LCA (Life Cycle Analysis)and process methodologies as appropriate. The evolution to ECA is necessary to address the urgent need for a more comprehensive and scalable approach to carbon accounting. While an emerging area, a number of new companies offer ECA solutions. ECA is a critical part of broader Enterprise Sustainability Accounting.
To be successful, an Enterprise Carbon Accounting system should have the following characteristics:
Comprehensive: Incorporates Scope 1,2 and 3 emissions
Periodic: Enables updates at regular intervals and comparisons across reporting periods
Auditable: Traces transactions and enables independent reviews for compliance
Flexible: Incorporates data from multiple approaches to life cycle analysis
Standards-Based: Accommodates existing generally accepted standards and emerging standards
Scalable: Accommodates growing volume and complexity of business operations
Efficient: Delivers data in the timeframe required for decision making
Enterprises that realize reduced emissions and energy consumption utilize systems with the following capabilities:
* Real-time historical energy data that is easily accessible
* Role-based visibility into plant emissions data
* Provides executives with real-time visibility into emissions data
* Ability to benchmark emissions levels with goals and industry standards.
Life cycle analysis of ECAEdit
Process LCA is the most popular method, currently, for conducting life-cycle assessment, and is often referred to as the SETAC-EPA method because of the role played by SETAC and EPA in this method’s development. The inputs and outputs of multiple stages of a product’s life are investigated in turn, and the results are aggregated into single metrics of impact such as eutrophication, toxicity, and greenhouse gas emissions. Three tools exist on the market to assist researchers in conducting process LCA (such as GaBi, Ecoinvent, and Umberto). These tools contain data from previous researchers on the environmental impact of materials and processes that are then strung together by the user to form a system.
Economic Input-Output LCAEdit
Input-Output LCA utilizes economic input-output tables and industry-level environmental data to construct a database of environmental impacts per dollar sold by an industry. The boundary problem of process LCA is solved in this method because the economic input-output table captures the interrelations of all economic sectors; however, aggregated industrial categories limit the specificity of the results. Input–output analysis is a very powerful tool for the upfront screening of corporate carbon footprints, for informing streamlined supply-chain GHG accounting and for setting priorities for more detailed analyses.
Enterprise carbon accounting (ECA)Edit
At its core, ECA is essentially a hybrid life-cycle assessment; however, rather than the traditional bottom-up approach of life-cycle assessment, ECA links financial data directly to LCA data to produce a snapshot of the companies' operations. Rather than probing at areas thought to be problematic, ECA quickly identifies problem areas in the supply chain so that rapid action can be taken. This fundamental shift in thinking enables decision makers to rapidly address critical areas within the enterprise and supply chain.
Socialised supply chainEdit
Socialised supply chain accounting is the term generally applied to Enterprise Carbon Accounting Solutions that provide a collaborative mechanism for supply chain participants to engage, expose and determine supply chain emissions through the process of shared knowledge. The term "Socialised Supply Chain" was coined by the CEO of Nootrol, Mark Kearns to describe a platform where supply chain participants exposed Process LCA and embedded emissions.
Carbon accounting of avoided emissionsEdit
A special case of carbon accounting is the accounting process undertaken to measure the amount of carbon dioxide equivalents that will not be released into the atmosphere as a result of flexible mechanisms projects under the Kyoto Protocol. These projects thus include (but are not limited to) renewable energy projects and biomass, forage and tree plantations.
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