Foundational Best Practices for GHG Impact Assessment
Impact accountability, or the desire to be as transparent, accurate, and honest in one’s impact claims, should be at the heart of all emissions impact assessments. But equating, collapsing, and applying different measures is complex and it is easy to make mistakes. These mistakes can lead analysts to misunderstand a solution’s impact or misrepresent their contribution.
If you’re new to climate investing or impact assessment, below are some foundational best practices in quantification. Even experienced analysts should revisit how procedures ensure these best practices are followed.
Distinguish between CO₂e and emissions types
Investors should describe which greenhouse gas (GHG) is being measured and in what units. If new to emissions analysis, Frame recommends investors use CO₂e—or carbon dioxide equivalent—if their solution affects GHGs other than CO₂. However, as a best practice it is recommended to analyze and report different emissions types separately.
GHGs vary remarkably in warming potentials, and analysts use CO₂e to collapse them into a single number by equating the global warming potential (GWP) of different GHGs with that of CO₂.
For example, methane (CH₄) is over 25 times more effective at trapping heat over 100 years than CO₂, meaning that 1 ton of methane is thus equivalent to 25 tons of CO2E over 100 years. For more on GWP, visit the Environmental Protection Agency.
Consider Different Warming Potentials
GWP-100, or looking at a GHG’s warming potential over 100 years, is not the only way to look at warming potential. Some GHGs, like methane, have a much stronger warming effect in the initial years and don’t remain in the atmosphere as long. Averaging out the value over 100 years can mask the huge effect it has in the early years. GWP-20, or over 20 years, better reflects this short-term warming.
To reflect GWP-20, analysts cannot use existing emissions factors. Instead, they must disaggregate GHGs and calculate the GWP values for each applicable GHG using GWP-20.
Example Theoretical Calculation
Disclaimer: This illustration is theoretical; please refer to the EPA for actual GWP values.
Composition: 70 kg CO₂, 0.5 kg CH₄, and 0.1 kg N₂O
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GWP-100 |
GWP-20 |
CO₂ |
70 kg CO₂e |
70 kg CO₂e |
CH₄ |
0.5 kg × 28 = 14 kg CO₂e |
0.5 kg × 84 = 42 kg CO₂e |
N₂O |
0.1 kg × 298 = 29.8 kg CO₂e |
0.1 kg × 264 = 26.4 kg CO₂e |
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|
113.8 kg CO₂e |
138.4 kg CO₂e |
Apply pre-quantified emissions factors with care
Emission factors are multipliers that convert bundled activity data into emissions, expressed as CO2e and typically default to GWP-100. While these factors can be custom calculated, many analysts rely on emissions factors quantified by reputable third-party sources, including open and private databases, government resources, industry-specific data, like cement or steel, and research publications, like peer-reviewed life cycle analyses. Recommendation for specific data sources, prepared by Frame’s 2023-24 Content Working Group include:
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EcoPlatform (and other Environmental Product Declaration sources)
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Do you have other data source recommendations? Send them to impact@primecoalition.org to share with the community!
However, not all published emissions factors meet high standards, and mistakes occur even in well-researched papers. Bundled data thus runs the risk of amplifying errors.
Consider these best practices:
Quantify emissions factors on your own where possible.
Look for the most recent data; emissions factors change over time.
Dive deeper when emissions factors could significantly affect final values.
Understand the system boundaries applied in the emission factor.
Consider regional differences such as grid electricity emission factors that differ by location.
List the GWP time frame used
Clearly explain uses of annual and cumulative values
In the hope for simplicity and sense-making, GHG impact is often reduced to a single cumulative value over a period of time. Cumulative impact values are not inherently wrong, but it is common to find public impact reports sharing cumulative values without sharing the timeframe considered. This can be extremely misleading and result in overstating a solution’s impact.
For decision-making, analysts should also avoid jumping to cumulative numbers, which mask the serviceable obtainable market (SOM) or S-Curve over time and truncate discussions on the company's path to scale. Annual values and/or visual displays of the S-Curve help reveal a more nuanced picture.
Carefully align different units of measurement
Aligning different activities to emissions factors often requires converting units of measurement.
This is described as dimensional analysis: understanding the relationships between different quantities by identifying what is being measured (e.g., distance) and the metric system used to measure it (e.g., kilometers). Coefficients converting between UOMs are called unit factors.
As intuitive as this process may seem, it is common for even the most experienced analysts to make mistakes in the conversion process. In fact, sophisticated engineering projects have gone wrong because of UOM conversion errors. Dimensional analysis includes the following:
Identify quantities: Define what is being measured (e.g., distance, energy, mass).
Recognize measurement systems: Understand the metric system and other systems used (e.g., imperial, US customary).
Utilize unit factors: Employ conversion factors to bridge different units.
To ensure that all units cancel as intended, consider these best practices:
Always show units of measurement.
Clearly show the specific unit factors.
Provide a list of acronyms, abbreviations, and units of measure in models.
Do not confuse common terms with different meanings. For example, a “ton” may refer to 2,000 pounds (908.18 kg) in the US, 2,240 pounds (1,016.05 kg) in Britain, or 1,000 kg in other countries. The latter—“metric ton”—is Project Frame’s default for measuring GHG quantities. Likewise, 1 US gallon is equivalent to 0.832674 imperial gallons.
Do not confuse prefixes within a unit of measure. For example “M” can mean “Mega” (as in million), “thousand” as in MCF for thousand cubic feet (M is the Roman numeral for 1,000), or even “metric” as in MT for metric ton.
Show the cancellation of units with strikethrough formatting (i.e., strikethrough)
Canceling units of measurement to clarify conversion
Example: Identifying emissions per unit of electricity from a natural gas combined-cycle power plant.
The power plant has a heat rate of 7580 BTU/kWh. Natural gas has an emissions factor of 52.91 kg CO₂e/MMBTU. Dimensional analysis convert the emissions factor in terms of T CO₂e/MWh:
Use functional units to equate a solution and incumbent
To accurately compare the GHG impacts of the solution and the incumbent, it is crucial to use a functional unit that equates the two based on their end use. The functional unit allows for a consistent basis of comparison by converting various measurements into a common reference.
For instance, comparing a 100 kg lithium ferrophosphate (LFP) battery to a 100 kg nickel manganese cobalt oxides (NCM) battery might be misleading. Instead, comparing them based on kilowatt-hours (kWh) or the size necessary to drive for 30 miles would be more appropriate. Data collected during quantification should then be adjusted to align with this functional unit.
Want to learn more? Read Project Frame GHG Impact Methodology to dive into emissions impact assessment and reporting.
