Transparent Carbon Accounting Key To Global Trust and Net-Zero Goals According to IEA, global energy-related CO2 emissions grew by 1.1 per cent in 2023, increasing 410 million tonnes (Mt) to reach a new record high of 37.4 billion tonnes (Gt).

As the need to address global warming becomes increasingly urgent, countries are looking to measure and report on their greenhouse gas emissions.

Greenhouse gas accounting or carbon accounting is the process of quantifying the number of GHGs produced directly and indirectly from the businesses or organisation's various activities including production, manufacturing etc.

In an era where countries are increasingly committing to net-zero targets, businesses, especially large ones, "should also look to define their net zero timelines. Determining this timeline and tracking progress toward it requires a solid grip on the overall emissions and carbon impact of the business," Vivek Agarwal, Global Policy Expert, Country Director India , Tony Blair Institute For Global Change said.

He said that by setting a net-zero target, measuring and reporting emissions transparently, companies not only comply with regulations but also enhance their brand reputation and identify cost-saving opportunities.

According to IEA, global energy-related CO2 emissions grew by 1.1 per cent in 2023, increasing 410 million tonnes (Mt) to reach a new record high of 37.4 billion tonnes (Gt). This compares with an increase of 490 Mt in 2022 (1.3 per cent). Emissions from coal accounted for more than 65 per cent of the increase in 2023.

Discrepancies in carbon accounting affect trust among nations and can lead to difficult negotiations among countries on climate.

Agarwal said that the hardest aspect of resolving such a challenge is achieving cooperation through trust amongst all participating actors. Discrepancies in carbon accounting can significantly affect this trust.

"If countries suspect that others are underreporting emissions or not measuring them rigorously, it can lead to accusations and weakening of collective efforts. Establishing universal accounting standards and rigorous verification processes is critical to maintaining and building trust, ensuring that all countries feel confident in the commitments and reports of their international partners," he said.

There are multiple challenges that countries face in accurately measuring and reporting carbon emissions.

The first challenge is hinged upon the technical limitations of measuring emissions comprehensively. Technical limitations often mean that some emissions are measured directly while others are estimated through statistical methods, which can affect accuracy.

Financial and practical capacity constraints, particularly in developing nations, pose significant hurdles. Compliance costs are often imposed on low-margin businesses, which significantly limits the implementation of carbon accounting in medium and small enterprises.

Political challenges could create a lack of will or conflicting interests that prevent hinder rigorous accounting and transparent reporting.

However, one key trend which according to Aggarwal, is shaping the future of international climate agreements is the integration of carbon pricing mechanisms, such as carbon taxes and cap-and-trade systems.

"This approach encourages emissions reductions by assigning a monetary value to carbon output. Further, this trend is complemented by the development of sector-specific standards tailored to the unique emissions profiles of different industries," he said.