8.1 Introduction
When the revised edition of the Corporate Standard, the first of the
GHG Protocol standards, was issued in March 2004, a second standard was being
developed to address accounting for GHG reductions resulting from GHG mitigation
projects. Originally referred to as the GHG Protocol Project Quantification
Standard, this second standard was named the GHG Protocol for Project
Accounting (the “Project Protocol”) when issued in November 2005.
The Corporate Standard differentiates itself from what would ultimately become the
Project Protocol as follows:
Corporate Standard, Chapter 8, “Accounting for GHG
Reductions,” Page 59
The GHG Protocol Corporate Standard focuses on accounting and
reporting for GHG emissions at the company or organizational
level. Reductions in corporate emissions are calculated by
comparing changes in the company’s actual emissions
inventory over time relative to a base year. Focusing on
overall corporate or organizational level emissions has the
advantage of helping companies manage their aggregate GHG
risks and opportunities more effectively. It also helps
focus resources on activities that result in the most
cost-effective GHG reductions.
In contrast to corporate accounting, the forthcoming GHG
Protocol Project Quantification Standard focuses on the
quantification of GHG reductions from GHG mitigation
projects that will be used as offsets. Offsets are discrete
GHG reductions used to compensate for (i.e., offset) GHG
emissions elsewhere, for example to meet a voluntary or
mandatory GHG target or cap. Offsets are calculated relative
to a baseline that represents a hypothetical scenario for
what emissions would have been in the absence of the
project.
The accounting approach under the Project Protocol (“project accounting”) is separate
from that under the Corporate Standard (“corporate accounting”). However, the two
accounting approaches overlap in that an offset resulting from quantification of GHG
reductions under project accounting may be an input into a GHG emission inventory
report prepared under corporate accounting if the reporting company elects to use
offsets.
The remainder of this chapter focuses on considerations related to the calculation
and reporting of GHG reductions.