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As the need to combat global warming increases, countries are working to measure and report their greenhouse gas emissions.
Greenhouse gas accounting or carbon accounting is the process of quantifying the number of GHGs produced directly and indirectly from the various activities of a company or organization such as production, manufacturing, etc.
At a time when countries are increasingly committing to net-zero targets, companies, especially large ones, should also look to define the net-zero timeline. To track progress, we need to have a solid understanding of overall emissions and carbon impacts,” said Vivek Agarwal, global policy expert for India at the Tony Blair Institute for Global Change. said.
He said that by setting net-zero targets and transparently measuring and reporting emissions, companies can not only comply with regulations, but also improve their brand reputation and identify cost-saving opportunities.
According to the IEA, global energy-related CO2 emissions increased by 1.1%, or 410 million tonnes (Mt), in 2023, reaching a record high of 37.4 billion tonnes (Gt). This compares to an increase of 490 million tonnes (1.3%) in 2022. Emissions from coal accounted for more than 65% of the increase in 2023.
Discrepancies in carbon accounting could affect trust between countries and complicate negotiations between them on climate change.
Agarwal said the most difficult part of resolving such challenges is achieving cooperation through trust among all participating parties. Discrepancies in carbon accounting can have a significant impact on this trust.
“If countries suspect that other countries are underreporting or not measuring emissions rigorously, it can lead to criticism and weaken collective efforts. Universal Establishing accounting standards and rigorous verification processes is critical to maintaining and building trust and ensuring all countries have confidence in their emissions.”Confirms international partners’ commitments and reports There is a need,” he said.
There are multiple challenges countries face in accurately measuring and reporting carbon emissions.
The first challenge lies in the technical limitations of comprehensively measuring emissions. Often, due to technical limitations, some emissions are directly measured while others are estimated through statistical methods, which can affect accuracy.
Financial and practical capacity constraints are major obstacles, especially in developing countries. Compliance costs are often imposed on companies with low profit margins, significantly limiting the adoption of carbon accounting in small and medium-sized enterprises.
Political agendas can create a lack of will and conflicts of interest, preventing rigorous accounting and transparent reporting.
However, according to Agarwal, one of the key trends shaping the future of international climate agreements is the integration of carbon pricing mechanisms such as carbon taxes and cap-and-trade systems.
“This approach fosters emissions reductions by assigning a monetary value to carbon emissions,” he said. “Furthermore, this trend is driven by the development of sector-specific standards tailored to the unique emissions profiles of different industries. This will be complemented by development.”
