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As some of you may know, researchers at Carnegie Mellon recently published an article in the Aug. 15 issue of Environmental Science & Technology (http://pubs.acs.org/journals/esthag/) in which they claimed that two-thirds of U.S. industries overlook 75 percent of their greenhouse gas emissions using current calculation methods (e.g., GRI or the GRI Greenhouse Gas Protocol). This is generally because most companies report only their own (direct) emissions, and not the emissions of their suppliers, or their proportionate share of the emissions of their suppliers. While this may be true, it completely sidesteps the question of whether or not companies ought to include the emissions of their suppliers in their own reports. I happen to think they should not.
Just as we sometimes say “the polluter should pay”, so too can we say that “the emitter should report”. Contrary to what some say – that businesses should be responsible for measuring and reporting the greenhouse gas emissions of their suppliers – businesses should only feel compelled to measure and report their own emissions. There are six important reasons for this:
- Consumers of energy do not control its production, and should not, therefore, be accountable for measuring and reporting related emissions as though they do. People are not responsible for the consequences of actions taken by anyone but themselves, and should not be compelled, therefore, to engage in processes of accountability as if they are.
- Expecting consumers to report on emissions generated by their upstream suppliers implicitly shifts accountability for mitigating such emissions from suppliers to consumers, thereby absolving suppliers of the responsibility to reduce their own emissions. The effect on actions (or inactions) taken by suppliers of related energy supplies is not particularly helpful, given the global warming state of the world.
- Impending greenhouse gas regulations and existing cap and trade systems all focus on direct emitters of such gases, not their customers. Any practice or protocol that shifts the burden of reporting from direct emitters to their customers is, or will be, wildly at odds with the direction of mainstream regulation.
- It is completely unrealistic to think that a business is going to go to the trouble of reaching upstream into all braches of its supply chain, all the way back to multiple points of initial commodity extraction, to determine what its share of its suppliers’ and its suppliers’ suppliers’ emissions are; just as it is completely unrealistic to think that the same suppliers will be willing to do so.
- If the purpose of protocols designed to capture the emissions of an organization’s upstream suppliers is to understand the overall emissions of an industry or a product set, there are much easier and more practical ways to do so, than placing the burden on countless individual companies. Using existing life cycle assessment (LCA) tools, such measurements can be taken from a top-down or centralized perspective, especially by researchers involved in performing such analyses. Note as well that emissions by suppliers are not confined to energy suppliers. It is logically inconsistent to measure and report emissions from energy suppliers while ignoring emissions by all other suppliers. Current practices and protocols are rife with hypocrisy here. They should either all be in, or all be out.
- It is also interesting to note that supply chain approaches to emissions measurement and reporting are always upstream oriented. Why? If the purpose of such protocols is to measure emissions comprehensively, why aren’t downstream emissions included as well? Why shouldn’t an automobile parts manufacturer, for example, be including the emissions of the automobile makers and retailers it sells to, instead of only the suppliers it buys from? Indeed, why shouldn’t such a manufacturer include the emissions given off by end-users and the landfills they use to dispose of their products at the end of their lifecycle on the downstream side? Why are such protocols only focused on the upstream supply side, and not the downstream demand side? If it is because of control and accountability, then see points 1 and 2 above. A protocol can’t have it both ways.
Instead of expecting energy consumers to account for their energy suppliers’ emissions, we should shift such accountability back to suppliers where it belongs (or wherever direct emissions occur), and expect consumers, instead, to maximize (and measure and report) their use of low-to-no-emissions energy. By doing the latter, pressure can be brought to bear on suppliers to minimize their use of fossil fuels, even as consumers (i.e., businesses, in particular) can take claim and be rewarded for choosing suppliers who do. Here it is important to note that the former involves a greenhouse gas emissions metric, and the latter involves a procurement metric. The current debate over where to place accountability for greenhouse gas emissions fails to make this important distinction, and that is one of its great flaws.
Mark
Mark W. McElroy
Executive Director
Center for Sustainable Innovation
www.sustainableinnovation.org
(802) 785-2293 (office)
(802) 296-1928 (mobile)
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