Modernizing GHG Accounting Rules and Climate Leadership Programs

The document examines the limitations of current GHG accounting, particularly the Scope 2 Market-Based method, which allows companies to claim zero emissions through annual matching of renewable energy certificates (RECs) without necessarily reducing actual grid emissions. The authors propose a dual approach: improving attributional accounting to require hourly and locational matching of carbon-free electricity (CFE) to consumption, and implementing consequential accounting to measure the actual marginal impact of company actions on the atmosphere. This framework aims to incentivize a diverse portfolio of CFE, including firm and dispatchable resources, rather than just low-cost variable renewables.

• The current Scope 2 Market-Based method is insufficient for achieving net-zero goals because it does not accurately measure emissions from the actual supply serving electricity use, fails to value firm carbon-free electricity (CFE) and storage, and does not estimate real-world emissions reductions.
• Current accounting allows companies to report a zero Market-Based inventory (MBI) using unbundled RECs from distant sources, even if their actual electricity is supplied by local fossil fuel plants, leading to misleading environmental claims.
• The authors distinguish between attributional accounting, which allocates responsibility for emissions within a company's value chain, and consequential accounting, which assesses whether a company's actions actually reduce or increase system-wide emissions to the atmosphere.
• To improve the Market-Based method, the authors recommend that inventories reflect supply that is deliverable to the location and matches the timing of customer consumption.
• Matching deliverable CFE supply with consumption on an hourly basis is expected to create demand for a diverse mix of resources, including firm CFE and advanced storage, which are necessary for a fully decarbonized grid.
• The climate benefit of a megawatt-hour of CFE varies significantly by location and time; for example, a wind project in Kansas can have 2.3 times the emissions impact of a solar project in California.
• The authors propose a comprehensive measurement framework consisting of three metrics: an improved Scope 2 MBI for emissions from electricity use, qualitative/quantitative descriptions of incremental CFE resource development, and new consequential impact disclosures for reductions in emissions to the atmosphere.

APA

Fisher, N., Ballentine, R., Hobbs, B. F., Cohen, A., Pablo, J., & Kaplan, I. (2024). Modernizing GHG Accounting Rules and Climate Leadership Programs. Clean Air Task Force. https://cdn.catf.us/wp-content/uploads/2024/05/08144502/modernizing-ghg-accounting-attributional-consequential-accounting.pdf

Chicago

Fisher, Neil, Roger Ballentine, Benjamin F. Hobbs, Armond Cohen, Jeanette Pablo, and Iain Kaplan. Modernizing GHG Accounting Rules and Climate Leadership Programs. Clean Air Task Force, 2024. https://cdn.catf.us/wp-content/uploads/2024/05/08144502/modernizing-ghg-accounting-attributional-consequential-accounting.pdf.

Wikipedia

{{cite report |last1=Fisher |first1=Neil |last2=Ballentine |first2=Roger |last3=Hobbs |first3=Benjamin F. |last4=Cohen |first4=Armond |last5=Pablo |first5=Jeanette |last6=Kaplan |first6=Iain |title=Modernizing GHG Accounting Rules and Climate Leadership Programs |publisher=Clean Air Task Force |date=May 2024 |url=https://cdn.catf.us/wp-content/uploads/2024/05/08144502/modernizing-ghg-accounting-attributional-consequential-accounting.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fisher2024modernizing, author = {Fisher, Neil and Ballentine, Roger and Hobbs, Benjamin F. and Cohen, Armond and Pablo, Jeanette and Kaplan, Iain}, title = {{Modernizing GHG Accounting Rules and Climate Leadership Programs}}, institution = {Clean Air Task Force}, year = {2024}, month = may, url = {https://cdn.catf.us/wp-content/uploads/2024/05/08144502/modernizing-ghg-accounting-attributional-consequential-accounting.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }