Avoided emissions allocation rules
What is an avoided emission ?
💡 An avoided emission is defined as the contribution of an organisation to the decarbonisation of the economy outside its field of activity.
An avoided emission is the difference between a baseline scenario without the decarbonazing solution and the real scenario with it. In general, avoided emissions happen outside the direct emissions of an organization.
There are three main categories of avoided emissions for an organisation:
- avoidance thanks to products or services ;
- avoidance thanks to investments in value chain ;
- thanks to financing outside the value chain.
✅ On Riverse’s standard, we only allow avoided emissions thanks to products or services provides by a project developer.
How to establish the baseline scenario ?
As opposed to a comparison between two carbon footprint, where both situations are existing, the calculation of avoided emission compared the decarbonizing situation with a fictive situation. This situation refers to what would have happened if the decarbonizing situation had not existed.
✅ The choice of the baseline scenario should follow these rules, depending on the context:
1. if the solution answers to a new demand: the baseline scenario will be chosen on the average market context;
2. if the solution answers to an existing demand, it is necessary to make a distinction between:
a. the improvement of a product, in which the baseline scenario will be the previous situation,
b. and the replacement of a product, in which the baseline scenario will be either the average market context if the replacement occurs at the end of the product's life or the previous situation if the replacement occurs while the product still working.
How to verify emission reduction/avoidance allocation?
As avoided emissions occurs outside company’s direct emissions, several participants to this solution may take responsibility for the decarbonization.
However, it is required to only attribute this avoided emissions to the one that really allow the implementation of the solution.
One can not take full responsibility for this avoidance. Efficient avoidance solutions are most of the time the results of the implementation of several steps in a value chain. Thus, the impact of each step needs to be measured carefully.
However, links in the value chain must be distinguished into two categories:
- managing only: they are accountable but not responsible, one could have done the same work.
- operating: they provide a real added value because they allow impact that was not possible before.
Different organizations have created models to allocate correctly avoided emissions. They are summarized in the following chart :
The question to ask is:
What would have happened if this link was missing ? Could someone have replaced him easily ?
✅ If the response is that the emissions avoidance wouldn’t have occurred, then the project is considered eligible.
How to avoid double accounting ?
To avoid double if several projects are in the same value chain, we have established rules regarding avoided emissions:
✅ The baseline scenario is very rigorous regarding: geography, political, economical context and temporality
The value of the avoided emissions will depend on what would have been done without the solution. Thus, a baseline must be chosen considering multiple criteria such as geography, political and economical context, temporality. As it is a fictive situation, one could ever criticize it, so it is important to build it with many sources and much contextual information.
At Riverse, we believe that the higher your are in the value chain, the greater your responsibility will be regarding this change.
✅ The avoided emissions are “produced” by there own process or downstream the process on the value chain
This criteria will allow to keep only the projects that have a significant responsibility on the creation of a product, and it will exclude those which are at the bottom of the chain and which would attribute to themselves the responsibility of someone else.