The development of carbon markets worldwide has created a host of challenges for companies. Of all these challenges, carbon accounting is among the least understood.
What is carbon accounting?
Carbon accounting is the accounting undertaken to measure the amount of carbon dioxide equivalents that will not be released into the atmosphere as a result of Flexible Mechanisms projects under the Kyoto Treaty. These projects include (but are not limited to) renewable energy projects, biomass, energy saving projects etc.
Europe has so far been unable to reach an agreement on how to account for its carbon emissions. Carbon traders in the US have only just started to engage with the issue of carbon accounting in an already complex and unfamiliar market.
In the report, Deloitte addresses several commonly asked questions that organisations ask about carbon accounting. More specifically Deloitte discusses the following issues:
1. Carbon emission allowances
2. Obligations
3. Presentation of carbon allowances and obligation
4. Forward carbon emission contracts
Deloitte also address addresses different carbon accounting results that can exist as companies develop accounting policies individually in the absence specific carbon accounting guidelines to follow.
Ifti Akbar from Envido welcomes the report, saying that “The issue of carbon accounting needs to be addressed. This Deloitte report is incredibly helpful for organisations that are unsure about the steps they should take with regards to carbon accounting.
Carbon markets are evolving all the time. With new regulations and increased growth they are becoming more and more complex. Organisations need to have a carbon accounting processes in place so they can keep up”.
