Carbon accounting terms explained
Having trouble understanding the terminology and acronyms used in carbon accounting?
Here’s an overview of terms you’re likely to encounter followed by a short explanation.
The reference level against which emission reductions are measured. It represents the expected emissions without the implementation of specific carbon reduction measures.
A regulatory system where a limit (cap) is set on the total amount of greenhouse gases emitted, and allowances or permits to emit are distributed or auctioned. Entities can buy or sell these allowances based on their emissions.
The process of measuring and reporting the total amount of greenhouse gases, primarily carbon dioxide, emitted directly or indirectly by an entity, organisation, product or activity.
Units representing reducing or removing greenhouse gas emissions used in emissions trading markets. One carbon credit typically equals one ton of CO2 equivalent.
An international non-profit organisation that encourages companies and cities to disclose their environmental impacts, including carbon emissions, and take action to reduce them.
The total amount of greenhouse gases, expressed in terms of carbon dioxide equivalents, directly or indirectly produced by an individual, organization, event, or product throughout its lifecycle.
A measure of the amount of carbon dioxide emissions produced per unit of another metric, such as economic output (e.g. carbon intensity of GDP) or energy produced (e.g. carbon intensity of electricity).
Achieved when an entity balances the amount of greenhouse gas emissions it produces with an equivalent amount of emissions removed or offset, resulting in a net-zero carbon footprint.
Reducing greenhouse gas emissions or removing carbon dioxide from the atmosphere to compensate for emissions produced elsewhere. Offsets can be achieved through reforestation, renewable energy projects or methane capture.
The process of capturing and storing carbon dioxide, preventing it from entering the atmosphere. This can occur naturally through the growth of forests or be implemented through technologies such as carbon capture and storage (CCS).
Similar to carbon credits, these represent the capture and storage of carbon dioxide through activities like afforestation, reforestation or soil carbon enhancement.
The breakdown of organic matter, such as plant material or waste, that releases carbon dioxide and other greenhouse gases into the atmosphere.
A systematic analysis of the environmental impact of a product or process throughout its lifecycle, including raw material extraction, production, transportation, use and disposal.
A state where an entity’s total greenhouse gas emissions are balanced by an equivalent amount of emissions removed or offset, resulting in no net increase in atmospheric greenhouse gas concentrations.
Tradable certificates representing the environmental attributes of one megawatt-hour of electricity generated from a renewable energy source.
A collaboration between the Carbon Disclosure Project (CDP), the United Nations Global Compact (UNGC), World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). The initiative helps companies set greenhouse gas emission reduction targets that align with the level of decarbonisation required to keep global temperature increase well below 2 degrees Celsius above pre-industrial levels, as outlined in the Paris Agreement.
Direct greenhouse gas emissions from sources owned or controlled by an organization, such as on-site combustion of fossil fuels.
Indirect greenhouse gas emissions associated with purchasing electricity, heat or steam. These emissions occur during the production of purchased energy.
Indirect emissions that result from an organisation’s activities but occur from sources not owned or controlled by the organisation. This can include emissions from the supply chain, business travel, employee commuting and product use.
The practice of meeting the needs of the present without compromising the ability of future generations to meet their own needs. It encompasses environmental, social and economic considerations.
The process of independently assessing and confirming the accuracy of reported greenhouse gas emissions data and reduction activities to ensure transparency and credibility.