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Taking decarbonisation off the page and into practice
Author
Nishadi Davis
Head of Carbon Advisory Americas
At the Energy Council’s New York Energy Capital Assembly (NYECA) event, Nishadi Davis, Head of Carbon Advisory, shared her insights on a panel spotlighting carbon accounting and management.
A consistent theme became clear. We need a global carbon accounting system to create a level of certainty in the market that will drive favourable economics and enable the scalability of decarbonization projects.
In this article, Nishadi shares the importance of a single carbon accounting system and a potential pathway to create one.
If the world’s current carbon account system was a patchwork quilt, then each differently designed and colorful patch would represent a different ISO standard, protocol or sector; stitched together with no cohesive design.
As it stands, there isn’t a common or agreed way to account for greenhouse gas (GHG) emissions. The main guidance, the GHG protocol, is flawed. It is based on using assumptions and not accurate data.
In my previous experience as an engineer, I could rely on accepted global standards that ensured safety and interoperability across industry, without being concerned whether they may contradict one another. This should be no different. We need a consistent and global approach to carbon accounting that takes into account upstream and downstream operations, products, and the countries where the assets are operated and products are distributed.
In the same way we’ve approached evolving our existing energy ecosystem, we need to evolve the standards and guidelines that exist today to make one efficient and effective way of data collection and measurement. If we do this, we can bring assurance to the market and drive much-needed pace behind investment.
In my view, we’ve made something that could have been incredibly simple into something incredibly complex. So, what is the answer?
While reducing the number of standards and guidelines is helpful, it only solves part of the problem. We would still need to adopt a singular method or principle.
One plausible path could be to apply actual accounting principles. Like a ledger item, you could transfer your “carbon item” from one company’s books to another as the carbon makes its way through the “make it, move it, use it” value chain. This method would also enable us to address and bring transparency to scope 3 emissions, arguably the most difficult to measure because it encompasses the broader supply chain.
With the rapid developments in digital technologies, a solution like blockchain could hold the answer to make the accountability and transfer of this carbon data much easier.
During my time at the NYECA event, I had several conversations that indicated this view was shared. As an industry, it’s on us to take the lead and work together to define and drive a new, simpler, more efficient way for global carbon accounting.
Related expertise
Carbon advisory
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