Let's look at a use-case for carbon accounting.
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Let’s say a company is interested in knowing its carbon footprint. That glorious first step. The business has data detailing where someone is traveling and how much money is spent; however, they don’t know how much greenhouse gas was emitted as a result of the trip. Let’s say an employee booked a flight to travel from Denver to Phoenix. The company will have a record of this nested within their travel expense data. With carbon accounting, they can use the data for how much money was spent for the flight, and then estimate the emissions emitted from that trip. This is known as the spend-base method. So, assuming the flight cost $200, estimated emissions emitted for the trip is 172 kilograms of carbon dioxide equivalent. This is just an estimate though. When you use the spend-based method, the calculation can be impacted by things that don’t reflect the actuals — such as the fluctuating price of airline tickets. If the company wants more accuracy, they can calculate the emissions by the number of miles traveled. This is known as the distance method. Denver to Phoenix is about 958 miles. Using distance traveled, the calculated emissions for the trip is 79 kilograms of carbon dioxide equivalent. Using more specific activity data — which in this case was miles traveled — a company can more clearly see the impact of decisions to reduce flight activity — like encouraging employees to take a car or train if the trip is under 200 miles.
💡 Expert Tip 💡
Using different types of footprint activity data will cause variances in the final calculation results of greenhouse gas emissions. Using higher-quality data does not necessarily reduce a company's emissions. However, using higher-quality data will provide a more accurate picture of emissions, which allows businesses to make more informed decisions.