The FT reports this morning that:
A major stumble by UN climate adviser Mark Carney over the carbon accounting methods used by Brookfield Asset Management, where he is vice chair, has thrown the spotlight on controversial climate claims and the contested definition of “net zero”.
To summarise the story, Brookfield claimed to be net zero because of its carbon offsetting and because of what are called its avoided emissions in its renewables business.
Avoided emissions are, of course, good things. They are what are being sought. The difficulty is that you cannot both count them once on the basis of the fact that they did not happen and then count them again as emissions avoided and so offset them against the emissions that you do make, which would seem to be what Brookfield was doing. They can only count once.
The issue is big. Carbon accounting has to be sure what net zero carbon means. What is too apparent is that right now it can mean all things because there aren't adequate standards in place.
I have, of course, offered my own version of this in sustainable cost accounting. The suggestion I make is that no offset be allowed unless it can be absolutely certainly demonstrated to have happened, to have been under the company's own control and that it is certain that it would not have happened but for that action. It's a tight demand. But it avoids this problem.
We cannot become net zero carbon by juggling the carbon offset books. We can only do so by eliminating carbon, which is what sustainable cost accosting demands.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
I have to say, I don’t understand the “ins and outs” of Carbon accounting…….. but I think this is actually the key point!
If an interested layperson struggles it becomes absolutely critical that those that DO understand deliver clear standards that simple souls like me can have confidence in.
Richard, please DO keep shining a light on this.
I am being given the opportunities to do so, usually behind the scenes
I think what Richard is saying is it’s like VAT. You can’t claim the VAT paid by your customers as tax you’ve paid on top of the VAT you’ve paid when buying your supplies, because that’s counting the same VAT twice. Your customers’ VAT that they pay on the goods they buy from you is their tax bill not your tax bill, you can’t ostentatiously claim you’ve paid £2M VAT when £1M of that is paid by the people buying your goods not by you.
Yes
But you are insistent that companies double count emissions in terms of Scope 1, Scope 2 and Scope 3? Why the inconsistency?
I do no such thing
I only ask that companies price the elimination of carbon from their activities, including scope 3
You can misrepresent that – but I don’t actually count carbon at all as such – I count the cost of its elimji9nation. And that’s quite different