Climate change is one of the biggest problems the world is facing today. As countries, companies, and people try to be more aware of the environment and work toward “net-zero” goals (which means not adding extra pollution into the air), you might hear words like “GHG accounting” or “carbon accounting” a lot. These terms show up in many places in reports about how companies are helping the environment, in government plans, in updates for investors, and even in how small businesses make decisions.
But what do these words really mean? And more importantly, why should you care about them?
In this post, we’ll explain everything in a simple and clear way. You’ll learn what greenhouse gases (GHGs) are, what carbon and GHG accounting mean, why they matter, how businesses keep track of the pollution they create, and what tools and rules are used to do it. Whether you’re a student trying to learn more, a business owner thinking about the future, or just someone who wants to understand how climate change works and what actions people are taking, this easy guide is made just for you.
Visit Now: Carbon Credit Consulting Services
What Are Greenhouse Gases (GHGs)?
Greenhouse gases are gases that help trap heat in the Earth’s atmosphere. When sunlight comes to Earth, part of it is taken in by the ground and warms the planet, while the rest goes back toward space. Greenhouse gases catch some of that heat going back out and send it back to Earth again, which helps to keep the planet warm. This is called the “greenhouse effect,” and it is a natural and important process.
But today, people are adding more and more of these gases into the air because of things like driving cars, cutting down trees, and using factories. This extra amount of greenhouse gases is making the greenhouse effect stronger and causing the Earth to get warmer than it should. This is what we call global warming.
Visit Now: CARBON FOOTPRINT ANALYSIS
The Main Greenhouse Gases
Here are the most common greenhouse gases that you should know about:
Carbon Dioxide (CO₂):
This gas is made when we burn things like coal, oil, and natural gas. It also comes from burning plants and cutting down forests. Carbon dioxide is the most common greenhouse gas, making up about three-quarters of all the greenhouse gases that go into the air.
Methane (CH₄):
Methane is released when coal, oil, and gas are taken out of the ground and moved around. It also comes from animals like cows and from farming activities. Even though there is less methane than carbon dioxide, it is over 25 times stronger than carbon dioxide at trapping heat in the air over a 100-year period.
Nitrous Oxide (N₂O):
This gas comes from farming and factory work. It is also made when people burn fuel and plants. It is another greenhouse gas that adds to global warming.
Fluorinated Gases:
These are man-made gases that are used in things like air conditioners, refrigerators, factories, and electronics. They are not found in nature. Even though there is not much of them in the air, they are very powerful and can trap heat thousands of times more than carbon dioxide.
These gases all add to climate change by trapping heat in the Earth’s atmosphere.
Also Read: How Does Carbon Trading Work? Understanding India’s Emerging Carbon Market
What Is GHG Accounting?
Greenhouse gas (GHG) accounting is the process of checking and keeping track of the greenhouse gases that an organization produces while doing its work. It’s similar to financial accounting, where you keep records of money but instead of counting money, you’re counting greenhouse gases. These gases are measured in something called CO₂ equivalents (CO₂e). This means that all types of greenhouse gases are converted into the same unit based on how much harm they cause compared to carbon dioxide. This helps to understand the total impact in a simple and clear way.
Also Read: Can Carbon Credits Effectively Reduce CO₂ Emissions?
Why “CO₂ Equivalent”?
Different greenhouse gases (GHGs) affect the environment in different ways, and some are much stronger than others when it comes to trapping heat in the atmosphere. Because of this, scientists and experts use a standard unit to compare them all fairly. This unit is called CO₂e, which stands for carbon dioxide equivalent.
For example:
- 1 ton of methane causes the same amount of warming as 25 tons of carbon dioxide (CO₂e).
- 1 ton of nitrous oxide causes the same amount of warming as 298 tons of carbon dioxide (CO₂e).
Using this common unit helps make it easier for people and organizations to track, manage, report, and reduce greenhouse gas emissions in a clear and consistent way.
Also Read: What Are Some Potential Alternatives to Carbon Offsetting?
What Is Carbon Accounting?
Carbon accounting is basically a part of greenhouse gas (GHG) accounting that looks only at carbon dioxide emissions. People often use the term “carbon accounting” when talking about sustainability in companies, even though many companies actually include other greenhouse gases in their reports too.
You can think about it like this: every time someone is doing carbon accounting, they are also doing GHG accounting. But not every time someone is doing GHG accounting are they just looking at carbon.
Also Read: How Carbon Credits Help Control Pollution: A Comprehensive Guide
Why GHG and Carbon Accounting Matter
Here’s why more and more businesses, governments, and even regular people are starting to take emissions tracking seriously:
Following the Rules: In many countries, big companies are required by law to share information about their pollution. For example, in the European Union, there’s a rule called the Corporate Sustainability Reporting Directive (CSRD). This rule makes companies give more detailed information about how they affect the climate.
Understanding Climate Risks: Investors, insurance companies, and company leaders want to know how climate change might affect their money and business. Knowing how much pollution a company creates helps them make smarter choices.
Building a Good Image: More people now want to buy from companies that care about the environment. When a company shares honest information about its pollution, people are more likely to trust and support that company.
Saving Money and Energy: When a company keeps track of its pollution, it can find out where it’s using too much energy. This can help the company become more efficient and save money in the long run.
Reaching Climate Goals: Many companies are now setting goals to reduce their pollution and help stop climate change. But they can’t do that unless they know how much pollution they’re making in the first place. Keeping track of emissions is the first important step.
Also Read: What are the big 4 carbon registries?
The Three Scopes of GHG Emissions
Under the Greenhouse Gas Protocol which is the most commonly used system in the world for counting greenhouse gas (GHG) emissions emissions are grouped into three different types, called scopes:
Scope 1: Direct Emissions
These are emissions that come straight from sources the company owns or controls. For example, if a company has cars, furnaces, or generators and they release gases into the air, that’s Scope 1. The company is directly responsible for these emissions.
Scope 2: Indirect Emissions from Energy
These are emissions that come from the electricity, heating, or cooling that a company buys and uses. The company doesn’t create these emissions directly, but they happen because the company uses that energy. For example, when a power plant burns fuel to make electricity and the company uses that electricity, those emissions fall under Scope 2.
Scope 3: Other Indirect Emissions
These are all the other emissions that are connected to what the company does, even though they happen outside the company. This includes emissions from making and transporting the products the company buys, how customers use the company’s products, getting rid of waste, and employees traveling for work. These emissions come from the company’s full supply chain, both before and after the company’s own operations.
For many companies, Scope 3 emissions are the biggest part of their total carbon footprint. But these are also the most difficult emissions to measure and manage, because they happen outside the company’s direct control.
Also Read: Who Is the Biggest Buyer of Carbon Credits?
Key Standards and Frameworks in GHG Accounting
Greenhouse Gas Protocol
This guide was made by two big groups – the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). It gives clear and complete instructions to help companies measure and report the pollution (greenhouse gases) they create.
ISO 14064
This is a group of rules created by the International Organization for Standardization. These rules help companies measure, check, report, and confirm the amount of greenhouse gases they release into the air.
Science-Based Targets Initiative (SBTi)
This program helps businesses create goals to cut down their greenhouse gas emissions. The goals must match what scientists say is needed to fight climate change. To take part, companies must clearly measure their carbon emissions and make a solid plan to reduce them, following the Paris Agreement.
CDP (Carbon Disclosure Project)
This is a non-profit group that collects information from companies around the world about their impact on the environment. Companies report this information themselves. By sharing this data through CDP, businesses show they are being open and honest about their climate actions and the risks they face from climate change.
Also Read: What Every Leader Needs to Know About Carbon Credits
How GHG Accounting Works in Practice
Step 1: Decide What to Include
First, the company needs to decide how it will count its emissions. It can choose to include only the parts of the business it controls directly, the parts it controls financially, or the parts it partly owns. The company also has to decide which offices, factories, or branches to include in the report.
Step 2: Find Out Where Emissions Come From
Next, the company looks at all the places where greenhouse gases are coming from. These include things the company does itself (like burning fuel), things it buys (like electricity), and things related to its suppliers and customers (like shipping goods or business travel).
Step 3: Gather Information
The company then collects real numbers to show what it’s doing. This might be how many liters of fuel were used, how much electricity was used in kilowatt-hours, how many miles employees flew on planes, or how many products were made.
Step 4: Use Conversion Numbers
After collecting the activity data, the company needs to turn that into greenhouse gas emissions. To do this, it uses standard numbers called emission factors. For example, using 1 liter of diesel fuel creates about 2.68 kilograms of carbon dioxide.
Step 5: Do the Math and Share the Results
Now the company multiplies the amount of activity (like fuel used) by the emission factors to find out how much greenhouse gas it produced. These totals are written in units called CO₂e (carbon dioxide equivalent). The company then puts this information into a report that follows known guidelines like the GHG Protocol, CDP, or ISO.
Step 6: Make a Plan and Take Action
With the emissions data in hand, the company can now make smart choices about how to reduce its emissions. This could mean using clean energy, improving transport systems, or changing how products are made to be more eco-friendly.
Also Read: How Does Carbon Trading Have a Positive Impact on the Climate?
Tools and Software for GHG Accounting
Many companies use special software tools to help them keep track of their carbon emissions more easily and automatically. Some well-known tools for this are:
- Sphera
- Watershed
- Normative
- Persefoni
- Emitwise
- Microsoft Cloud for Sustainability
These tools are often connected to a company’s financial and business systems. This way, they can track emissions in real-time, make it easier to collect data, and help create reports that are ready for checking or auditing.
Also Read: Understanding Carbon Credits: A Lucrative Opportunity for Indian Landowners
GHG Accounting for Small Businesses and Individuals
Big companies are the main users of detailed systems to measure their greenhouse gas (GHG) emissions, but smaller businesses and even everyday people can also benefit from knowing and keeping track of their emissions.
For Small Businesses:
A good place to begin is by looking at your energy bills, how much you drive or fly for work, and how much waste your business creates.
You can use free online tools like the EPA’s GHG calculator or tools offered by the Carbon Trust to help figure out your emissions.
It’s also a good idea to think about getting a simple carbon footprint check-up from a professional to understand where you can improve.
For Individuals:
You can measure your personal carbon footprint by using online tools such as the CoolClimate calculator or the WWF’s footprint calculator.
Try to use less energy at home, choose public transportation more often, and eat less meat and dairy to help lower your impact on the planet.
Also Read: Is Buying Carbon Credits a Good Investment?
Conclusion: GHG Accounting is the Foundation of Climate Action
In today’s world, where we are working hard to reduce pollution and protect ourselves from the effects of climate change, keeping track of greenhouse gases (GHGs) and carbon emissions is no longer something we can ignore. It is a basic and important step that helps people, businesses, and governments understand how much they are affecting the environment. It also helps them take responsibility and make smart plans to build a cleaner, greener future.
If you want to help fight climate change whether you are running a business, making rules for your community, or just trying to make better choices in your daily life you need to understand how emissions are measured and managed. When you have the right knowledge and tools, every step you take can be supported by real numbers and can truly make a difference.