Why We Need to Standardize Emissions Tracing to Get to Net Zero
COMET is the digital framework to harmonize GHG accounting protocols and standardize emissions data. Now is the time to engage in developing this common solution.
When it comes to fighting climate change, we don’t have time for false starts—in the decisive decade, we have to get it right the first time around. That knowledge has guided our work building the COMET Framework, together with our partners at MIT’s Sustainable Supply Chains Initiative, the Columbia Center on Sustainable Investment, and the Colorado School of Mines. COMET’s goal is ambitious but simple: to guide our most carbon-intensive industries toward their net-zero goals.
Just last week, the Harvard Business Review published an essay titled “Accounting for Climate Change.” Its authors took a deep dive into how to intelligently trace emissions through material supply chains using digitally native architecture, rooted in the Greenhouse Gas Protocol, and based on digital ledger technology (think: blockchain). What they came up with looks practically identical to the COMET model, in a strong validation of our work from the past two years.
Now, in the fever pitch of COP26, we hear a steady drumbeat of corporations announcing net-zero goals across all emissions scopes—encompassing their own operations, the energy they purchase, and the emissions from their supply chains. At the same time, standards have recently launched to support these companies and help them assess their progress. Those announcements are a good starting point in the global march toward limiting global warming to 1.5°C, but we still need a well-defined roadmap and well-constructed tools to get us there.
COMET is poised to be the functional engine that streamlines carbon accounting across multiple tools, concepts, and organizations. Now is the time to begin implementing the COMET Framework and engage industrial, political, and financial stakeholders to iterate toward a best-fit solution that guides our economy to a net-zero future.
One Framework to Integrate Multiple Concepts and Tools
The COMET Framework will provide a robust, verifiable reporting system for companies to track and report progress toward announced climate goals, using carbon accounting that covers all activities across the supply chain. We have made gains over the past year in developing the accounting principles and technological framework for COMET, raising funding to build our vision and our team, and engaging key stakeholders such as WBCSD as a part of the Carbon Transparency Partnership.
Here are the four steps that guide our development of the COMET Framework:
Step 1: Create Unified Accounting Principles
By bringing the problem of industrial emissions to the fore, the GHG Protocol started the important work of allowing companies to disclose their emissions in a standardized format. But the Protocol only works well for a single entity (usually a company) to track its own progress, given that it is “not designed to support comparisons between companies based on their scope 3 [supply chain] emissions.” Comparing even two companies in the same industry can be problematic because the Protocol offers multiple options for allocating emissions, and there are fundamental gaps in what can be captured and reported. And while corporate emissions are key to driving wise climate action, they aren’t sufficient for understanding the carbon footprint of the products coming off the assembly line.
The COMET Framework solves those problems by employing a fixed-boundary approach to provide comparability at a product level. It also uses allocation rules to encourage direct decarbonization. For example, increasing the use of scrap as an input for steel production is an important decarbonization lever for the sector—but there is insufficient scrap to meet all demand. Providing separate allocation rules for ore- and scrap-based steel production establishes transparency currently lacking from most reporting tools. Use of these rules also allows data to be shared between businesses and consumers more consistently.
Step 2: Build the Technical Architecture
The next generation of carbon accounting, underpinned by the COMET Framework, should be built on a digitally native architecture using distributed ledger technology (DLT), also known as blockchain. Critically, this technology, coupled with unified accounting principles, allows data about emissions to follow materials along the chain of custody. Think of it as a set of digital barcodes that follow materials as they become transformed from primary inputs to finished products. The barcodes, “scanned” at each stop along the value chain, record the energy inputs added along the way, enabling companies to comprehensively assess the carbon intensity of their products and connect that data up to corporate sustainability reports.
To create this system, RMI is working in lockstep with key stakeholders to create a best-fit solution that will transform commodity markets that were established centuries ago and have proven remarkably resistant to change.
Step 3: Move the Market toward a New GHG Protocol and Beyond
The natural result of this work is that products will be distinguishable on the basis of emissions intensity, and could even carry product labels indicating their carbon footprint. Consumers—whether individuals or other large firms—who are willing to pay a premium for low-carbon inputs will be able to take action to procure more responsibly. Low-carbon goods will fetch a higher price on the market. And that price premium will reward upstream firms taking bold action to decarbonize production processes. Just like that, carbon accounting is flipped on its head, becoming a race to the top.
Step 4: Collaborate to Advance Climate Action
The recent announcement by the United States & EU of a carbon-based trade arrangement in the steel and aluminum sectors makes clear that the COMET Framework is not a solution waiting for a problem. Getting policymakers and industry stakeholders onto the same page in terms of tracking and reporting emissions is a critical first step to meeting climate goals.
We don’t need to wait for regulation to catch up. This is the decisive decade for taking action to limit our planet’s warming to 1.5°C, and there’s no time to lose. We invite all industry stakeholders and aligned organizations to engage in building COMET with RMI’s Climate Intelligence Team and our partners. Together we will implement a 21st century solution to decarbonize our most carbon-intensive industries.
To learn more about the development of the COMET Framework and how it can improve your company’s carbon accounting, please contact Paolo Natali (firstname.lastname@example.org) or visit cometframework.org.