Carbon accounting refers generally to processes undertaken to "measure" amounts of carbon dioxide equivalents emitted by an entity. It is used inter alia by nation states, corporations, 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.
Carbon accounting in corporations
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.
Carbon accounting of avoided emissions
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.
Carbon accounting software
A number of programs are created in order to assist with carbon accounting.
- Carbon Disclosure Project
- Enterprise carbon accounting
- Flexible Mechanisms
- Greenhouse gas emissions accounting
- Verified Carbon Standard
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- GHG Accounting in the humanitarian sector
- About GHG Accounting
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