What Is Carbon Accounting?

One of the primary global environmental issues is the need to reduce carbon emissions that enter the atmosphere. Carbon emissions contribute to changes in air quality and climate change, leading to a long list of potential risks and problems in the near and distant future. Carbon accounting is one step in the process of understanding and dealing with carbon emissions from an environmental, economic and political perspective.

Print this article

Definition
- Carbon accounting is the process of recording and reporting the total carbon emissions of a business, facility or organization over a given period. Many different activities -- including industrial factory production, operating gas- and diesel-powered automobiles and using carbon-producing conveyances for shipping -- all cause carbon emissions to enter the atmosphere. Carbon accounting is a process for understanding the sources and quantities of carbon emissions.
Standards
- No single global or national standard exists for carbon accounting, which means that individual businesses can choose which method to use. This makes it difficult to compare the carbon emissions from two different organizations, as each may have used a different accounting method. The Greenhouse Gas (GHG) Protocol is one such standard, but many large businesses refuse to use it, preferring instead to employ carbon accounting methods that reduce the appearance of their impacts.
Uses
- Carbon accounting has multiple uses for the parties involved. Businesses can use it to show evidence of successful steps to reduce their impact on the environment by investing in alternative energy sources and green manufacturing methods. Environmental groups use carbon accounting data to target polluters and praise organizations that produce less carbon. Consumers can also use carbon accounting to determine which businesses to patronize or support.
Cap and Trade
- Another major reason for carbon accounting is the implementation of cap and trade programs. These programs rely on government-imposed limits for carbon emissions, either on the state or national level or as matters of international treaties. Organizations purchase carbon credits, which allow them to produce a limited amount of carbon. Businesses can buy and sell credits to one another, providing an incentive for finding methods that produce less carbon. However, such a system can only work when there is a clear method for standardized carbon accounting that lets governments enforce limits and impose penalties on businesses that exceed their limits.