For the purpose of voluntary corporate GHG accounting, the use of contractual approaches for attributing Scope 2 emissions from grid connected electricity purchases is questioned by many as being possibly flawed and not entirely credible.  I am not sure, are you?

New Scope 2 Guidance suggests companies that purchase Renewable Energy Certificates (RECs), or enter into other “green power” contracts, may report their GHG emissions from electricity consumption as 0 tonnes of CO2e. Thus by paying a premium on electricity charges to make a claim on renewable power, a company could potentially report having a GHG Scope 2 “footprint” of zero, or an indirect emissions value of zero, although net reporting is frowned upon – so maybe they could not report nil Scope 2 emissions – or could they??  Such reporting could be taken to mean they caused no emissions from any powers station on their grid! Or the equivalent to not having consumed any electricity.  Is this equivocation or genuine?  I am not sure – please share your views as I am a little confused as to the righteousness of this concept.

Is it ethical and proper that the principles (as espoused by GHGP, ISO, Defra and many others) of GHG accounting (Transparency, Relevancy, Accuracy, Consistency, Completeness and Conservativeness) be disregarded in that a company, merely by virtue of its Purchase Orders, be allowed to report a reduction in its GHG footprint for an action that really results in absolutely no change in overall GHG emissions.  Yet this is precisely what can happen if we allow mere purchase agreements dictate environmental goods or benefit!  Such purchase agreements are not driven – in essence – by emission reductions – but what some true blue (and obviously in the minority) environmentalists may call “green-wash” – it is almost akin to the HFC – 23 greenwash issue – which on reflection we all found to be not as pure as the driven snow. Has someone hijacked the true essence of emissions reductions?  I know it is a “good thing” to encourage green power – however not to use “green power” as camouflage to mask unchanged electricity or other purchased power consumption.  It’s like saying it’s a good thing to eat muesli, buy clothing from sustainable sources but yet drive a Chelsea Tractor with a 3-litre engine to travel to the muesli shop!

A recent study for a wind farm in Western Europe showed that the actual GHG associated with the manufacturing & transport of components, land use changes, SF6 in wind farm transformers and other inputs imposed an unusually large volume of GHG which meant the wind farm would take some years to actually make a net reduction in GHG emissions. Another example of the law of unintended consequences. Should purchasers of power from this windfarm be allowed “credit and recognition”? Yes, of course they should, if all externalities are accounted for. Otherwise such renewable sources are merely emulating the non-inclusion of externalities by the fossil-fuelled power industry – possibly not surprising as the investors in both sectors are in some cases the same people using the same techniques?

What do you think? 

Are we being deflected from real actions by a well-intentioned desire to promote some renewable energy investments? 

Or is the exclusion of your electricity-grid related emissions from your GHG accounting valid?  More questions than answers I fear – and I am not sure of the approach to this question – which can satisfy the principles of Transparency, Relevancy, Accuracy, Consistency, Completeness and Conservativeness. These are the principles of the ISO GHG standards, multiple national schemes and the GHG Protocol. 

Are we being principled is really the question? Are we really making and measuring GHGs and GHG reductions?

As the sales of renewable power must compete with the unaccounted-for externalities of fossil fuel – are we – the environmentalists taking a similar sharp accounting approach?  Is it appropriate that as fossil fuel excludes externalities – then renewable power purchases exclude aspects of its production profile also?

We recently reduced biofuel targets as such targets lead to bio-diversity loss in South East Asia in the monoculture of palm-oil plantations to supply the bio-fuel market.  We need to think holistically on environmental matters as the inevitability of the laws of unintended consequences often bites us in the ankle!

Do you think it is critical to the legitimacy of corporate GHG reporting, that Scope 2 emissions be calculated and reported on the basis of credible assumptions and methods that reflect actual environmental performance (of all the power stations on the grid)?

Does this new (investor-centred) approach provide data to educate and inform the markets? Is such education blinkered or transparent?

The CDP reports that “The most reported risk and opportunity is reputation” – does reporting of REC purchases count as disclosure?

Does such GHG reporting honour and adhere to the principles of all GHG programmes of:-

·         Transparency?

·         Relevancy?

·         Accuracy?

·         Completeness?

·         Consistency?

·         Conservativeness?

Does such GHG reporting honour and adhere to the principles of all GHG emission verifications:

·         Fair representation of the emitters’ emissions?

·         Due professional care?

·         Independence?

·         Ethics?

We are merely asking these questions – without prejudice or judgement, we express merely doubt, because essentially we are unsure (can’t really say why – but there is a feeling of unease tingling in our spines)  about the purity of GHG reporting which allows such anomalies.