When I first came across the term “Carbon Accounting,” I had no idea what they were talking about, so I looked it up. According to Wikipedia, “Carbon Accounting is the accounting process 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 Protocol.” The Kyoto Protocol identifies six greenhouse gases that are to be accounted for: carbon dioxide, methane, nitrous oxide, HFCs, PFCs and sulfur hexafluoride. Carbon accounting consists of the process of using software programs and actual observations to account for the six greenhouse gases noted above. A quick search of the Internet produced some 38 software programs called enterprise carbon accounting (ECA).
So, who sets the standards for the carbon accountant? The American Carbon Registry (ACR) is the standard setter for carbon accounting. They publish standards, methodologies, protocols and tools for greenhouse gas (GHG) accounting; which are all based on ISO 14064. The process for development and approval of the standards and methodologies is very similar to the process followed by the Financial Accounting Standards Board (FASB) for setting financial accounting standards.
There are a number of Fortune 500 companies including Coca Cola, Google and Wal-Mart who already voluntarily track and report their yearly greenhouse gas emissions. Wal-Mart has announced that they also want all of the products they sell to have an eco-label. So, when Wal-Mart’s 100,000 plus vendors start monitoring their CO-2 emissions they will all need carbon accountants and auditors. According to the Greenhouse Gas Management Institute, “The world faces a shortage of greenhouse gas professionals with the skills needed to meet current measurement, reporting and, verification needs.” Some industry experts believe that a substantial majority of all U.S. public companies will need at least a part-time GHG accountant or consultant in the near future
Measuring, accounting and auditing greenhouse gas emissions potentially have opened up a whole new line of work for accountants. What do you think?
— Post replies at CPE & Training Solutions Blog, a publication of the Tax & Accounting business of Thomson Reuters. Read more blog posts from editor Winford Paschall and other authors at: cpetaxaccounting.blogspot.com.
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