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October 29, 2022

Scope 1, 2, 3, and 4 Emissions (And How About Scope 5?)

Mark Trexler

With new discussions of "Scope 4" emissions, it makes sense to review how all of the "Scopes" fit together, not only for corporate reporting purposes, but for tracking climate progress (or not).

Scope 1 emissions represent "inside the fence" emissions (and reductions). Because all directly anthropogenic emissions are SOMEONE'S Scope 1 emissions, if you added up EVERYONE'S Scope 1 emissions you'd end up with global emissions. The same goes for Scope 1 emissions reductions. It would be a pretty inefficient way of arriving at the numbers, but the numbers would have climate meaning.

Scope 2 emissions represent "crossing the fence" emissions associated with electricity and steam consumed within the fence. Energy consumers' Scope 2 emissions (and reductions) by definition re-count energy producers' Scope 1 emissions and reductions.

Scope 3 emissions represent "beyond the fence" emissions in the form of supply chain and product chain emissions. Scope 3 emissions by definition re-count other organizations' Scope 1 and Scope 2 emissions (and reductions). The same Scope 1 and Scope 2 reductions might show up across thousands of Scope 3 emissions reports.

Scope 4 is being characterized as Avoided Potential Emissions, basically representing "positive emissions leakage." The developer of a new more efficient technology, for example, could count as Scope 4 emissions reductions (there are no Scope 4 emissions per se), the emissions reductions resulting from the technology's global deployment. Obviously, many Scope 4 emissions would also show up as others' Scopes 1, 2, and 3 reductions.

Note as well that most carbon offsets will also show up in the Scope 1, 2, and 3 reports of other organizations.

Arguably, "negative emissions leakage" might be next as Scope 5 (e.g. the healthcare footprint implications of an unhealthy snack food), but that will never happen given the key objective of carbon accounting (below).

Global GHG emissions (equal in theory to globally aggregated Scope 1 emissions) are the only real measure of climate progress. But since only a fraction of entities globally report emissions, it's hard to tell much about climate progress from aggregated Scope 1 emissions.

While Scopes 2, 3, and 4 were developed to encourage companies to act beyond their Scope 1 boundaries to tackle GHG emissions, what they also have in common, along with carbon offsets, is facilitating the use of carbon accounting to help companies demonstrate climate change progress even as global emissions increase.

The bottom line is that more and more complicated spreadsheets for carbon accounting don't necessarily correlate to global climate progress. Nor do they necessarily tell us much about what companies are actually doing, and why.

As such, shouldn't any Scope 1-3 (and/or 4) reporting be accompanied by a Policy Footprint report (as pioneered by InfluenceMap ). Policy Footprint reporting might correlate much more directly to climate progress!

Feature image courtesy of Gerd Altmann on Pixabay.

Additional comments and discussion can be found at the LinkedIn version of this post.

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