Understanding the Different Scopes of GHG Emissions

Welcome to greenhouse gas (GHG) emissions, where heat-trapping gases contribute to global warming.

It may seem dystopian, but it’s our present reality. The rise in atmospheric greenhouse gases leads to increased Earth temperatures, causing severe weather events, higher sea levels, and ecological disruptions.

Fortunately, tools like the GHG Protocol, created by the World Resources Institute and the World Business Council for Sustainable Development, help organizations manage their carbon footprint.

By dividing GHG emissions into four scopes, organizations can comprehend the sources and magnitude of their emissions, identifying reduction opportunities.

Let’s examine Scope 1, Scope 2, Scope 3, and Scope 4 emissions, learning about their importance and reduction strategies. Together, we can mitigate climate change and ensure a sustainable future for generations to come.

Scope 1 Emissions

Definition: Emissions from owned or controlled sources

Direct emissions from sources owned or controlled by an organization are Scope 1 emissions.

Examples include burning fossil fuels in stationary sources like boilers and furnaces, mobile combustion in company vehicles, industrial process emissions, and fugitive emissions from equipment.

The quantity of Scope 1 emission varies greatly depending on the industry and organization type.

For instance, a power plant’s Scope 1 emissions are much higher than a retail store’s. Fossil fuel usage in industrial processes and transportation are common Scope 1 emission sources.

Fugitive emissions, such as equipment leaks, are often underestimated but can significantly impact an organization’s carbon footprint.

Reporting and accounting requirements

Organizations must report Scope 1 emissions in their GHG inventory and include them in carbon footprint calculations.

This data is generally reported annually to regulatory agencies, stakeholders, and customers. The GHG Protocol offers guidelines for calculating and reporting Scope 1 emissions.

Reporting and accounting requirements may vary by location, industry, and organization size.

Mandatory reporting is required for some industries, like oil and gas. In the United States, the Environmental Protection Agency (EPA) mandates facilities emitting over 25,000 metric tons of CO2 equivalent per year to report their GHG emissions.

However, reporting requirements are becoming more common across all industries and regions.

Scope 1 Emissions reduction strategies

Various strategies can be implemented to reduce Scope 1 emissions, including:

Examples of successful Scope 1 emission reduction include Walmart, committing to sourcing 50% of its energy from renewable sources by 2025, and General Motors, reducing emissions by over 20% since 2010 through energy efficiency improvements and fuel switching.

Scope 2 Emissions

Definition: Indirect emissions from purchased electricity, steam, heating, and cooling generation

Scope 2 emissions are indirect emissions resulting from purchased electricity, steam, heating, and cooling generation.

Typically produced by third parties, these emissions aren’t directly controlled by the organization.

Scope 2 emissions occur when an organization buys electricity from a utility or supplier, with emissions linked to that electricity generation.

Importance of Scope 2 emissions in GHG inventories

Incorporating Scope 2 emissions in GHG inventories is crucial, as they can constitute a significant part of an organization’s overall carbon footprint.

Many organizations rely on electricity consumption for operations, and the electricity generated by utilities or suppliers may stem from fossil fuels, which contribute to GHG emissions.

Accounting methods

Location-based and market-based Scope 2 emissions have two accounting methods: location-based and market-based.

The location-based method uses the average emissions factor of the grid where electricity is generated, assuming all electricity consumed by the organization has the same emissions intensity as the regional grid average.

The market-based method employs renewable energy certificates (RECs) to offset emissions tied to purchased electricity.

This approach enables organizations to claim renewable energy use, even if grid-purchased electricity isn’t renewable.

RECs represent the environmental attributes of one megawatt-hour (MWh) of renewable electricity generation.

Strategies for Reducing Scope 2 Emissions

Organizations can reduce Scope 2 emissions through various strategies, such as:

Examples of successful Scope 2 emissions reduction include Google, which sources 100% renewable energy for its global operations, and Microsoft, which aims to be carbon negative by 2030 and plans to buy 100% renewable energy for its data centers.

Scope 3 Emissions

Definition: Indirect emissions from the value chain

Scope 3 emissions encompass all other indirect emissions occurring along the value chain.

These emissions stem from sources not owned or controlled by the organization, including upstream emissions from the extraction and production of purchased materials and fuels, and downstream emissions from the use of sold products, transportation, and distribution.

Importance of assessing Scope 3 emissions

Assessing Scope 3 emissions is crucial, as they can make up a significant portion of an organization’s overall carbon footprint.

Scope 3 emissions are often the largest emissions source for many organizations, especially in industries like manufacturing, transportation, and agriculture.

Comprehending and managing Scope 3 emissions is vital for achieving sustainability goals and reducing an organization’s overall carbon footprint.

Strategies for reducing Scope 3 emissions

Organizations can reduce Scope 3 emissions by implementing strategies focused on the supply chain and product life cycle, such as:

Examples of successful Scope 3 emissions reduction include Unilever, aiming to cut the GHG emissions of its products by 50% by 2030, and Walmart, targeting a 1 billion metric ton reduction in Scope 3 emissions by 2030 through sustainable sourcing and product design.

Scope 4 Emissions (Not a standard classification in GHG Protocol)

Definition: Emissions beyond traditional scopes

Scope 4 emissions pertain to emissions beyond traditional scopes, not currently included in the GHG Protocol.

These emissions are usually linked to activities like carbon capture and storage (CCS) emissions and stranded assets emissions.

Stranded assets refer to assets, such as fossil fuel reserves, that may become unusable due to climate change policies or market demand shifts.

Importance of considering Scope 4 emissions

Considering Scope 4 emissions is vital, as they can significantly impact an organization’s carbon footprint and pose risks and opportunities.

Stranded assets, for instance, can have a considerable financial effect on organizations holding them, as they may become worthless if they cannot be extracted and sold.

Understanding and managing these risks is essential for long-term sustainability.

Strategies for addressing Scope 4 emissions

Organizations can address Scope 4 emissions by implementing comprehensive emissions monitoring and reporting to identify and quantify them.

This helps organizations understand their Scope 4 emissions’ sources and magnitude and develop strategies to manage and reduce them.

Investments in low-carbon technologies and infrastructure can also help reduce Scope 4 emissions.

For example, investing in renewable energy sources and energy-efficient technologies can decrease emissions related to fossil fuel use and enhance operational efficiency.

Supporting policies promoting a low-carbon economy can also help address Scope 4 emissions.

Organizations can advocate for policies that encourage renewable energy, energy efficiency, and other low-carbon technologies and practices.

Examples of organizations addressing Scope 4 emissions include BP, committing to being a net-zero company by 2050, and reducing emissions related to its products, including Scope 4 emissions.

Microsoft also commits to addressing Scope 4 emissions by investing in carbon removal technologies and supporting policy initiatives promoting a low-carbon economy.

Conclusion

In conclusion, understanding and managing all emission scopes is critical for organizations to effectively reduce their carbon footprint and contribute to climate change mitigation.

As essential stakeholders in the climate change fight, organizations have opportunities to implement emissions reduction strategies, collaborate with suppliers and stakeholders, and advocate for policies promoting a low-carbon economy.

By working together across sectors, we can address climate change’s global challenge and create a sustainable, resilient future for all.