The impact of contractual emission factors on the accuracy and relevance of corporate greenhouse gas accounts

Research output: Working paper

Abstract / Description of output

Companies are increasingly using Renewable Energy Certificates (RECs) or equivalent instruments to claim that their electricity demand is met by renewable generation and their corresponding (scope 2) emissions are zero. However, evidence suggests that in many countries purchasing REC-type instruments does not cause the generation of renewable electricity, and this raises questions about what scope 2 inventories based on such instruments mean. This article uses a number of thought experiments, as well as analysis of how activity-specific emission factors are normally used, to explore the implications of using contractual factors. The analysis shows that contractual emission factors that do not represent some form of causal relationship undermine the accuracy and relevance of greenhouse gas accounts. Existing scope 2 guidance does not adequately consider the impact of using contractual factors on the accuracy and relevance of accounts (despite these being established greenhouse gas accounting principles). The implications of the findings for future guidance are that only contractual factors that represent a causal relationship should be used for calculating scope 2 emissions.
Original languageEnglish
Number of pages13
Publication statusUnpublished - 1 Dec 2013

Keywords / Materials (for Non-textual outputs)

  • Greenhouse gas accounting
  • Scope 2
  • Renewable energy certificates

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