Carbon accounting: ensuring a greener future
In efforts to combat climate change, carbon accounting tools can help to steer us towards effective mitigation decisions, and away from poor ones. But what is carbon accounting and how can it help us to be climate smart?
What is carbon accounting?
Though carbon accounting covers a wide range of different practices and means different things to different groups of people, it can generally be split into two categories: physical carbon accounting, which looks at quantifying physical amounts greenhouse gas emissions to the atmosphere and financial carbon accounting which looks at giving carbon a financial market value.
Physical carbon accounting for example, can be used to help companies and countries work out how much carbon they are emitting into the atmosphere, this is known as a greenhouse gas inventory. Once it has been established how much carbon is being emitted, reduction targets can be set. This method is also important for helping us assign responsibility to different parties for their associated carbon emissions.
How can carbon accounting help us to be climate smart?
Carbon accounting provides us with the tools not only to quantify and measure carbon emissions but also to help us make informed decisions in regards to mitigation strategies.
How much carbon is being emitted? Who is responsible for these emissions? Which methods should we employ to achieve the biggest carbon reductions? Are there strategies or policies which appear ‘green’ but could actually increase our carbon emissions? Carbon accounting can help us to answer all of these questions.
Quantifying carbon emissions is a complex process, which is why researchers at the Centre for Business and Climate Change within the University of Edinburgh are working on ways to improve accounting methods.
“It is highly important that we choose the right methods for a particular purpose” Says Dr Matthew Brander, a Lecturer in Carbon Accounting within the Business School. “There are different forms of carbon accounting, and different methods are appropriate for different purposes. Certain types of methods don’t tell us about the system wide consequences of a particular decision. If you use the wrong method, you could end up increasing emissions when your intention is to decrease them”
Research into Carbon Accounting
The University of Edinburgh is unique is its approach to research around carbon accounting due to the holistic perspective that it takes. “There is a certain amount of research that goes on elsewhere that focuses very specifically on a particular field within carbon accounting” says Dr Brander, “here we take a broad view across all of the different fields of carbon accounting, which allows us to transpose methodological lessons learnt in one area to another”.
Some of Dr Brander’s current research is looking at how certain forms of corporate carbon accounting methods can provide misleading information to companies and consumers. Contractual methods, such as Green Energy Tariffs or Renewable Energy Certificates, allow companies and individuals to purchase the right to claim that their electricity comes from a renewable source, and as such, has zero emissions. However, Dr Brander highlighted the importance of fully understanding how these methods work and whether they do in fact, actually lead to decreases in carbon emissions.
“One of the problems with this practice, is that entering into that contractual arrangement doesn’t actually increase the amount of renewable energy generation that is happening, it just reallocates the emissions that are occurring from grid electricity. This has an impact on the accuracy and the relevance of the information within greenhouse gas accounts for company decision making. It’s very important to look at these carbon accounting practices because they can be highly misleading for the companies themselves and for other stakeholders like investors or customers. The kind of research that we do [here at the university] looks at these types of issues and tries to make recommendations on how these types of carbon accounting methods can be improved so that this misleading information doesn’t continue.”
Learn about Carbon Accounting
The University of Edinburgh is home to the world’s first MSc in Carbon Finance, which teaches students the knowledge and skills needed for managing the large investment flows that are expected in our transition to a low carbon economy.
The Masters degree provides training in areas such as carbon accounting, carbon market design and implementation, the appraisal of low carbon investments, how to design and validate low carbon projects, and also understanding of the policy context, which forms the background and the driver for low carbon finance and investment.
Talking to us about why the MSc was created, Dr Brander, explained that “what we’re seeing at the moment is increased commitment at the international policy level to tackling climate change and what that means is that there is an increased commitment to low carbon investment, and in turn that means we are seeing an increase in the demand for the kinds of skills and knowledge that the MSc in Carbon Finance provides.”