From TIME · Justin Worland · · 2m
The hidden battle reshaping climate rules
How companies measure carbon emissions will determine who pays for climate change, and the fight over the rules is fiercer than most people know.
In brief
How companies measure carbon emissions will determine who pays for climate change, and the fight over the rules is fiercer than most people know. A decades-old carbon accounting system faces pressure from companies and academics pushing a rival approach, with the outcome shaping climate regulations and corporate…
Quick answers
- The sharpest divide: who burns it?
- Under the Greenhouse Gas Protocol, an oil company counts emissions from every gallon customers burn. Under e-ledgers, responsibility belongs to whoever does the burning, leaving consumers with greater accountability.
- What is the key takeaway from The hidden battle reshaping climate rules?
- A decades-old carbon accounting system faces pressure from companies and academics pushing a rival approach, with the outcome shaping climate regulations and corporate responsibility worldwide.
The question nobody wants to answer
Carbon accounting is the wonkiest corner of climate policy, but it matters enormously. The core question is simple: who is responsible for each ton of carbon emissions?
One system has ruled for decades
The Greenhouse Gas Protocol has been the de facto global standard for over two decades. It divides emissions into three scopes: direct operations, purchased electricity and heat, and value chain emissions.
But cracks are showing
A growing number of stakeholders, particularly businesses, have called for changes to the Greenhouse Gas Protocol. The debates are both technical and philosophical, cutting to the core of climate responsibility.
The current system has defenders
Supporters say Scope two and Scope three reporting has motivated voluntary corporate action. The predictability has fueled a boom in long-term renewable power contracts known as power purchase agreements.
The main problem: double-counting
The Greenhouse Gas Protocol allows double-counting. Multiple companies end up accounting for the same emissions under different scopes. Steel in a building gets counted by the producer, construction firm, and building owner.
An alternative emerges from academia
E-ledgers account for emissions by placing every unit on a ledger once, then transferring it as a product moves through the world.It incentivizes companies to decarbonize their own operations and gives them high-quality emissions data.
The sharpest divide: who burns it?
Under the Greenhouse Gas Protocol, an oil company counts emissions from every gallon customers burn. Under e-ledgers, responsibility belongs to whoever does the burning, leaving consumers with greater accountability.
Industry backs the new approach
E-ledgers emerged from academia in highly publicized articles beginning in twenty twenty-one. In twenty twenty-five, a coalition including ExxonMobil and BlackRock launched a business coalition to advocate for the e-ledger approach.
The outcome will reshape climate policy
The Aspen Institute summit ended with participants agreeing to work together. The decision on carbon accounting will shape climate regulations in California and the European Union and determine where businesses target climate initiatives.
At a glance
A decades-old carbon accounting system faces pressure from companies and academics pushing a rival approach, with the outcome shaping climate regulations and corporate responsibility worldwide.
