Greenhouse Gas Protocol
The Greenhouse Gas Protocol is a comprehensive accounting tool developed to help corporations measure, report, and manage their greenhouse gas (GHG) emissions. Initiated in collaboration between the World Business Council for Sustainable Development (WBCSD) and the World Resources Institute (WRI), the protocol was first published in 2001 and has undergone several revisions to enhance its effectiveness. It categorizes emissions into three distinct scopes: Scope 1 covers direct emissions from owned or controlled equipment, Scope 2 addresses indirect emissions from electricity consumption, and Scope 3 includes emissions related to the lifecycle of purchased fuels. The protocol covers various GHGs, aligned with the Paris Climate Agreement, such as carbon dioxide, methane, and nitrous oxide.
The design of the protocol emphasizes five key principles: relevance, completeness, consistency, transparency, and accuracy, ensuring that companies have a reliable framework for understanding their emissions. It also encourages better communication among businesses and supports participation in both voluntary and mandatory GHG programs. By providing standardized methodologies for reporting emissions, the Greenhouse Gas Protocol aims to level the playing field among companies, facilitate governmental monitoring, and ultimately drive efforts toward reducing GHG emissions in the fight against climate change.
Greenhouse Gas Protocol
Definition
Prior to 2001, there was not a tool for corporations to assess greenhouse gas (GHG) emissions. To remedy this void, the World Business Council for (WBCSD) and the World Resources Institute (WRI) began work on a method for corporations to account for and report their GHG emissions. The result was the Greenhouse Gas Protocol. WBCSD is a coalition of 200 international companies whose shared interest is sustainable development guided by growth economically balanced with ecology and social progress. Members come from more than thirty-five countries. WRI is a nonprofit organization of over one hundred scientists from many different occupations who work toward protecting the Earth while improving people’s lives. There were five ideals controlling the production of the protocol: relevance (that the program provide accurate information to those needing the information, both inside and external to the company), completeness (that the program account for all sources of emissions), consistency (that the program produce meaningful and useful data year after year), transparency (that the procedures be apparent to anyone interested), and accuracy (that emissions are measured correctly with the smallest possible degree of uncertainty). The protocol was published in September 2001, and in March 2004, a revised version was published. Further revisions were made in 2011 and 2015. It was announced in 2022 that revisions of the GHG Protocol standards were being made to determine the need for additional guidance and support for the implementation of standards.
Significance for Climate Change
The accounting tool consists of three modules: The first one is for corporations to use in calculating and reporting GHG emissions, the second is for calculating indirect emissions, and the third is used to calculate the effect of reduction projects. The GHGs covered by this protocol are the gases covered by the Paris Climate Agreement: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs), and sulfur hexafluoride (SF6).
There were five objectives used in the design of this accounting tool. First, it would be a tool that would aid companies in making a true and accurate measure of their GHG emissions. Second, the procedure would be simpler and less expensive than current practices. Third, it would provide the means to acquire the information needed to control and reduce GHG emissions. Fourth, the protocol would provide the information to allow companies to join GHG programs, both voluntary and required. Fifth, the protocol is to increase communication between companies and provide a standard method to report emissions. The procedures are divided into three scopes. Scope 1 is derived from emissions that are produced by equipment or machinery owned or controlled by the company. Most of these emissions are direct emissions; some activity of the company causes the emission. Scope 2 is the electricity indirect GHG emissions. These are the emissions generated in producing the electricity used by the company in its equipment or machinery. This includes electricity that is lost during transport or distribution. Scope 3 is the emissions due to the exploration, production, and transportation of the fuel used to generate electricity.
The 2004 revised edition added more guidelines to the procedure, more case studies, and appendixes on indirect emissions. Information in the revised edition is also designed to aid companies in setting a target for future emissions now that they know their current values. The protocol is also set up to allow the companies to more easily evaluate and trade GHG offsets. Offsets increase the amounts of GHGs that can be emitted without breaking governmental rules. A company with low rates of emissions may sell offsets to a company with high output to allow the second company to stay within the rules. Revisions were made to the protocol in 2011 and 2015, and in 2022, the protocol once again began to determine the need for additions because of changes that have occurred since the original protocol.
The Greenhouse Gas Protocol is designed to allow companies to evaluate their current emissions and set targets for reduction of GHGs. It even allows a company to assess different reduction procedures to determine which might be best. Countries can now set standards for companies in an effort to control the emission of GHGs. By the use of this standard accounting system, one company will not have an advantage over another company when meeting the standards. It will also be easier for the government to monitor companies’ emissions with the new accounting system.
Bibliography
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The Greenhouse Gas Protocol: The GHG Protocol for Project Accounting. Geneva, Switzerland: Author, 2005.
World Business Council for Sustainable Development (WBCSD), www.wbcsd.org/. Accessed 11 Dec. 2024.
World Business Council for Sustainable Development, World Resources Institute. The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard. Geneva, Switzerland: Author, 2001.
World Resources Institute, www.wri.org/. Accessed 11 Dec. 2024.