September 15, 2021
With respect to tracking the private sectors greenhouse gas emissions, actual reporting to date has coalesced around the framework of Scope 1/2/3 emissions:
Scope 1 direct emissions from the company itself
Scope 2 indirect emissions from electricity, heat, and steam purchased by the company
Scope 3 indirect emissions that occur in the companys value chain, including both upstream and downstream emissions
This is a solid foundation to build a standard for reporting GHG emissions. However, it is missing the element of indirect positive contributions to climate change by the private sector. Companies whose products are dedicated to combating climate change (such as producers of solar panels, wind turbines, energy efficiency technologies and electric vehicles) provide a tremendous and measurable benefit in the global effort to reduce GHG emissions but their contributions are not counted in the Scope 1/2/3 definitions above.
For example, the EIA estimates 600g/kWh as
the average carbon dioxide reduction from wind generation (from the link below). A typical 2.0 MW onshore wind turbine operating in an average windy location could easily reduce over 2,500 tons of carbon emissions over its lifetime. For a given manufacturer deploying fleets of such turbines, the cumulative carbon reductions from their products operating in the field should greatly overwhelm the direct emissions from its manufacturing and overhead operations as well as the indirect downstream carbon impact of disposing of the energy equipment at the end of its useful life.
Indirect carbon reductions would naturally fit under the definition of Scope 3, which already strives to measure downstream emissions. Therefore I respectfully submit that the definition of Scope 3 ought to be expanded to include indirect downstream carbon reductions.
Thank you.
Sources:
https://plana.earth/academy/what-are-scope-1-2-3-emissions/
https://gwec.net/wp-content/uploads/2012/06/Wind-climate-fact-sheet-low-res.pdf
About me:
I have a long background in renewable energy finance and development.
As an RIA I manage outside capital under a long-short investment strategy focused on publicly traded stocks in the Cleantech sector.
Separately, I perform advisory services for developers and financiers of Cleantech projects (wind, solar, energy storage, and related technologies).