“€2,000 in your bank account is equivalent to 1 ton of CO2e emitted in your name.”
You have probably heard this statement in communications from ecological banks, in the press, or on social media. In recent years, several reports and organizations have highlighted the impact of the money we hold in our bank accounts. This money, far from lying dormant, is used to finance projects and companies that emit greenhouse gases (GHGs). Indirectly, these emissions are attributed to us, but we can take action by carefully choosing where we place our money.
Carbon Accounting: Quantifying and Reducing GHG Emissions
To understand the double counting of CO2 emissions, it is essential to grasp the basics of carbon accounting. This discipline, also known as carbon accounting, includes methods for identifying, quantifying, and classifying GHG emissions caused by human activities. Similar to financial accounting, it enables the tracking of indicators such as absolute CO2 emissions or emissions relative to revenue, providing a snapshot of emission sources at a given moment to measure the effectiveness of reduction efforts over time.
The Limitations of Carbon Accounting
Carbon accounting is a valuable tool, but it has limitations, notably the uncertainty of emission measurements and the risk of double counting. Double counting can occur at different levels, affecting emission reduction efforts made by governments, businesses, or individuals.
When the Same Emissions Are Counted Twice
Double counting can occur when measuring the carbon footprint of an individual or organization. While Scopes 1, 2, and 3 within a single organization do not overlap, double counting can arise between Scope 3 emissions of different organizations. For example, emissions related to the transportation of a product may be counted both by the company producing the product and by the company selling it.
This issue is particularly relevant in reports on banks’ carbon footprints. Methodologies like Carbone4Finance assign a volume of GHG emissions to the different financing and investments made by banks, based on what is being funded. For example, if a bank finances a coal power plant, it is partially responsible for that plant’s emissions. These emissions may be accounted for at the company level, the bank level, and even the end consumer level.
And on an Individual Level?
On an individual level, if we account for emissions linked to our bank account and those linked to our daily behaviors and purchases, there is likely to be some double counting. The 10 tons attributed to the bank account and the 10 tons of our annual carbon footprint do not simply add up. However, they represent two levers for changing the same system: choosing how our money is invested and how it is spent.
When the Same Emission Reduction Is Counted Twice
To reduce GHG emissions, stakeholders have two main options: reducing their emissions across their entire value chain and sequestering emissions through natural carbon sinks or carbon capture and storage technologies.
Double counting of an emission reduction can occur when two entities in the same value chain claim the avoided emissions from a single solution. For example, if a renewable energy supplier and a company using that energy both account for the avoided emissions from clean energy use.
The Net Zero Initiative and the World Business Council for Sustainable Development consider this double counting acceptable, as each entity has different levels of influence over emissions and reductions.
The Issue of Carbon Credits
Carbon credits represent a tradable value in voluntary and regulated carbon markets, corresponding to one ton of CO2 sequestered or avoided that an organization can sell. This creates a risk of double counting, as avoided emissions may be counted both by the organization selling the credit and by the one purchasing it.
Defining Climate Responsibility
Measuring emissions helps determine the scope within which each actor can take action to reduce them. This measurement is essential to identify who has the power to influence emissions—this is what defines climate responsibility. A company operating a coal power plant can switch to low-carbon energy, the bank financing it can withdraw its support, and individuals can choose a bank that does not fund fossil fuels.
Double counting of emission reductions can give the illusion that we are closer to our climate goals than we actually are. Carbon accounting continues to evolve to address these limitations and enhance climate action.
Conclusion
While there is an ongoing technical debate on emission accounting, the main priority remains ensuring fair and accurate carbon accounting. This is essential to effectively guide climate change mitigation efforts and achieve our shared goal: preserving life, maintaining a stable climate, and sustaining human societies.
The Contribution of Reusable Loopipak Packaging to CO2 Emission Management
Loopipak plays a role in managing carbon emissions for both senders and receivers by offering its platform (Loopipak Portal) to track and visualize CO2 emissions.
- Centralize data: All information related to GHG emissions from their shipments using Loopipak is gathered in one place, making data management and analysis easier.
- Avoid double counting: By providing precise traceability tools, Loopipak helps distinguish between direct and indirect emissions, ensuring accurate accounting.
By integrating Loopipak packaging into their processes and adopting the Loopipak Portal to manage shipments and track their use, companies can not only improve their operational efficiency but also strengthen their commitment to environmental sustainability—in a measurable and transparent way.
Double Counting of CO2 Emissions and Reusable Loopipak Packaging: Clarifications (Scope 3)