Science-Based Targets Initiative
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Context
- A decision by the Science Based Targets Initiative (SBTi), permitting carbon offsetting for Scope 3 emissions of businesses with SBTi-based climate targets, has stirred controversy and skepticism. This decision involves tightening regulations around carbon offsetting practices.
Debate over the decision of Science Based Targets Initiative (SBTi) :
- The SBTi board of trustees recently announced its plan to expand the use of 'environmental attribute certificates' (EAC) to reduce Scope 3 emissions.
- SBTi defines EACs as including emission reduction credits (or carbon credits) and energy certificates.
- The controversy surrounding the watchdog's decision reflects ongoing debates within the corporate sector and environmental community about the role and effectiveness of carbon offsetting in addressing climate change.
- A new analysis, ‘The Corporate Climate Responsibility Monitor (CCRM) 2024’, by the New Climate Institute and Carbon Market Watch, reveals that Scope 3 emissions could go up to as much as 99%, as seen in the automobile sector.
- This makes measuring, reporting, and reducing Scope 3 emissions incredibly important for companies.
- In SBTi’s Corporate Net-Zero Standard Criteria, the standard does not permit the use of carbon credits to count as emission reductions toward a company’s near-term or long-term SBTs.
- Instead, they are only to be considered as an option for neutralising ‘residual emissions’, which are emissions that persist after a company has achieved its long-term SBTs.
- Or they can be used to finance additional climate mitigation efforts beyond their science-based emission reduction targets, extending beyond their value chain.
Carbon Offset:
- Carbon offsetting is a method used by companies to compensate for their greenhouse gas emissions by funding projects that reduce or remove emissions elsewhere.
- It allows companies to achieve carbon neutrality by balancing their emissions with offset projects.
- Importance of Carbon Offsetting:
- Carbon offsetting is viewed as a valuable tool in the fight against climate change, especially for industries that find it challenging to reduce emissions directly.
- It enables companies to take immediate action to offset their emissions while working on longer-term emission reduction strategies.
- Complexities of Carbon Offsetting:
- Carbon offsetting has limitations and complexities, including concerns about additionality (whether offset projects truly result in additional emissions reductions), permanence (the long-term effectiveness of offset projects), and leakage (emissions shifting from one location to another).
- Despite these challenges, carbon offsetting remains a widely used approach by companies worldwide.
- Need for a Balanced Approach:
- There is a need to take a balanced approach to carbon offsetting.
- While acknowledging its limitations, carbon offsetting can be a part of a broader strategy for corporate climate action, alongside efforts to reduce emissions directly and transition to renewable energy sources.
About Science Based Targets Initiative (SBTi):
- The Science Based Targets Initiative (SBTi) is a collaborative initiative aimed at helping companies set ambitious climate targets aligned with climate science.
- Purpose:
- The primary purpose of the SBTi is to drive corporate action on climate change by providing a framework for setting science-based targets.
- It seeks to ensure that corporate greenhouse gas reduction targets are consistent with the level of decarbonization required to limit global warming to well below 2 degrees Celsius above pre-industrial levels, as outlined in the Paris Agreement.
- Collaborative Effort:
- The SBTi is a collaboration between CDP, the United Nations Global Compact (UNGC), the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF).
- It leverages the expertise of these organizations to develop and promote best practices for setting science-based targets.
- Criteria for Science-Based Targets:
- The SBTi provides companies with criteria and guidance for setting science-based targets.
- Targets are considered science-based if they are consistent with the level of decarbonization required to keep global temperature rise below 2 degrees Celsius, and preferably 1.5 degrees Celsius, compared to pre-industrial levels.
- Targets must cover Scope 1, Scope 2, and Scope 3 emissions and be based on the best available science.
- Benefits for Companies:
- Adopting science-based targets can help companies future-proof their business by aligning with climate goals and reducing risks associated with climate change.
- It can also enhance corporate reputation, attract investors, and drive innovation.
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Scope 1, Scope 2, and Scope 3 emissions Scope 1, Scope 2, and Scope 3 emissions are different categories used to classify greenhouse gas emissions associated with an organization's activities. Here's a breakdown of each scope: Scope 1 Emissions: ●Scope 1 emissions refer to direct greenhouse gas emissions that occur from sources that are owned or controlled by the reporting entity. ●These emissions typically include: ●Combustion of fossil fuels in owned or controlled facilities, such as emissions from boilers, furnaces, vehicles, and other equipment. ●Emissions from chemical reactions, such as those occurring during production processes. ●Emissions from owned or controlled biological sources, such as methane from livestock or wastewater treatment. Scope 2 Emissions: ●Scope 2 emissions represent indirect greenhouse gas emissions associated with the generation of electricity, heating, or cooling consumed by the reporting entity. ●These emissions are produced by third-party sources but are associated with the organization's activities. Scope 2 emissions are typically categorized into two types: ●Market-based emissions: These are emissions associated with the electricity purchased by the organization, accounting for the emissions intensity of the purchased electricity. ●Location-based emissions: These are emissions based on the average emissions intensity of the electricity grid in the location where the electricity is consumed. Scope 3 Emissions: ●Scope 3 emissions include all other indirect greenhouse gas emissions that occur as a result of the organization's activities but are not included in Scope 1 or Scope 2. ●These emissions typically result from sources that are not owned or controlled by the reporting entity but are associated with its value chain, including: ●Upstream emissions from the extraction, production, and transportation of purchased goods and services. ●Downstream emissions from the use and disposal of products and services sold by the organization. ●Emissions from business travel, employee commuting, waste generation, and other activities related to the organization's operations but occurring outside of its direct control. |
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PRACTICE QUESTION Q. Match the following categories of greenhouse gas emissions with their corresponding definitions: A) Scope 1 Emissions B) Scope 2 Emissions C) Scope 3 Emissions
Match:
Answer: A |
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