The High-Stakes Debate Over Who Owns Carbon Emissions

A debate over the intricacies of carbon accounting, often overlooked, is emerging as a critical battleground that could reshape climate regulations and corporate energy strategies. The core of the dispute centers on a fundamental question: who is responsible for each ton of carbon emissions?

The Greenhouse Gas Protocol (GHGP) has served as the de facto global standard for carbon accounting for over two decades. This system categorizes emissions into three scopes: Scope 1 for direct emissions from a company's operations, Scope 2 for emissions from purchased electricity, heat, and cooling, and Scope 3 for emissions throughout a company's value chain. This framework has guided numerous guidance documents and influenced regulations and certifications worldwide.

However, the GHGP approach faces increasing scrutiny and calls for reform. Critics point to issues such as the potential for "double-counting," where multiple companies account for the same emissions. For instance, emissions from steel used in a building could be counted by the steel producer, the construction firm, and the building owner under different scopes.

An alternative approach, gaining traction in academic circles and supported by a coalition of industry players, utilizes "e-ledgers." This method aims to account for each unit of emissions only once, tracking its transfer as a product moves through its lifecycle. Proponents argue that this system incentivizes companies to focus on decarbonizing their own operations and provides higher-quality emissions data for procurement decisions. However, challenges to its implementation, particularly ensuring participation across the entire value chain, have been noted.

Fault Lines in Accounting

The disagreements span technical details, such as the time scales for matching electricity use with clean energy purchases and the reliance on estimates versus direct measurements. More philosophically, the debate questions the degree of responsibility assigned to different entities.

A sharp division exists regarding the accounting for emissions from product use. Under GHGP's Scope 3, an oil company might account for the emissions generated when its customers burn gasoline. In contrast, the e-ledger approach would attribute these emissions to the entity performing the burning, potentially placing more accountability on consumers, though their influence over the broader system is limited.

The e-ledger concept gained prominence with academic articles starting in 2021. In 2025, a coalition including companies like ExxonMobil and BlackRock announced their backing for a business coalition to advocate for this approach.

Simultaneously, the push for change occurs as climate action faces shifting public attention. Some companies are reportedly less willing to dedicate resources to the comprehensive efforts required by GHGP. In response, GHGP has implemented reforms and appointed a new CEO.

Despite the disagreements, a recent summit convened by the Aspen Institute, bringing together academics, NGOs, and industry representatives, concluded with an agreement to collaborate on finding common ground. Some participants suggested that e-ledgers could be valuable for tracking a product's carbon footprint, while the existing GHGP rules could still apply to a company's overall emissions.

The outcomes of this technical but consequential debate are expected to influence upcoming climate disclosure rules in regions like California and the European Union, and will significantly impact where businesses direct their climate initiatives. Ultimately, the resolution will shape how the responsibility for future emissions is defined and assigned.