This section covers greenhouse gases (GHGs), their natural and human sources, and their impacts on climate and the environment. It explains Global Warming Potential (GWP) for comparing gases and converting emissions into CO₂-equivalents.
The section also introduces carbon accounting, key principles, major standards (ISO 14064 and the GHG Protocol), and related concepts such as carbon footprint and decarbonisation.
Image Source: https://pixabay.com/photos/pollution-environment-drone-aerial-4796858/
Greenhouse Gases
The greenhouse effect is a natural process that warms the Earth. When sunlight reaches the planet, it generates heat, some of which escapes back into space.
Greenhouse gases (GHGs), such as water vapour, carbon dioxide, methane, nitrous oxide, and ozone, trap some of this heat, creating an insulating layer that maintains the atmosphere’s warmth. Without it, the Earth would be too cold to support life (Jonker and McGrath, n.d.).
GHGs occur naturally, with carbon dioxide and methane released through processes like volcanic eruptions, wildfires, and the decomposition of plants and animals.
However, since the Industrial Revolution, human activities, particularly the burning of fossil fuels, deforestation, agriculture, and industrial processes, have significantly increased GHG levels in the atmosphere. These emissions can persist for years or even centuries, intensifying the greenhouse effect, raising global temperatures, and driving climate change (Brander, 2012; Jonker and McGrath, n.d.).
Impact: GHGs contribute to global warming, rising sea levels, ocean acidification, and poor air quality. They also lead to extreme weather events, such as floods, droughts, and heatwaves, affecting ecosystems, agriculture, water systems, and human health (Brander, 2012; Jonker and McGrath, n.d.).
GHG emissions arise from five key economic sectors (EPA, 2025a):
- Energy: Burning fossil fuels for electricity, heat, and transport.
- Agriculture: Livestock, soil management, and rice cultivation.
- Industry: Combustion for energy and chemical reactions used to produce goods.
- Buildings (Commercial & Residential): Heating, cooling, refrigeration, and waste management.
- Land Use and Forestry: Land can act as either a source (when cleared or degraded) or a sink (when absorbing CO₂ through vegetation growth).
Carbon Footprints & Decarbonisation
A carbon footprint is the total GHG emissions produced by human activities. It can be calculated for individuals, businesses, or entire industries (Conservation International, n.d.).
It includes the environmental impact of everything we do, from travelling, using electricity, and eating food to producing goods and managing waste. The more energy we use from fossil fuels the larger our carbon footprint becomes. Reducing our carbon footprint involves slower consumption and changes in industry, using renewable energy, recycling, eating sustainably, and travelling less (Conservation International, n.d.).
Decarbonisation is the process of reducing or eliminating carbon dioxide emissions from human activities. It requires transforming how societies produce, transport, and use energy, shifting from fossil fuels to low-carbon or renewable sources.
Key actions include expanding renewable energy, improving efficiency, phasing out fossil fuels, and adopting cleaner technologies such as hydrogen and electrification (Persefoni, 2024; Zachmann, et al., 2021).
Carbon Accounting – Introduction
Carbon accounting is the process organisations use to measure, manage, and report GHG emissions. This enables businesses to understand their climate impact, identify reduction opportunities, and track progress towards net zero (IBM, n.d.).
Carbon dioxide equivalents (CO₂-eq) are used to express the overall environmental impact of different greenhouse gases in a single, comparable unit. This makes it easier to understand the total effect that an activity, event, or product has on the environment. (IBM, n.d.; Spada, 2022).
Key Standards for Carbon Accounting
Two main frameworks guide carbon accounting: The GHG Protocol Corporate Standard and ISO 14064-1:2018.
Both follow the same three-scope framework and provide standards for organisations, projects, and products. This module will focus primarily on the GHG Protocol, which includes seven standards as well as sector-specific guides and tools for measuring emissions.
Differences (carbonology, 2024):
- The GHG Corporate Protocol offers broader guidance across sectors, with optional verification, two electricity reporting methods, and guidance on Scope 3 and avoided emissions.
- ISO 14064-1 provides a step-by-step framework for measuring, reporting, and verifying emissions and removals, with mandatory verification and only one main method for reporting electricity emissions.
Note: ISO and the GHG Protocol are working together to create a single, global standard for emissions accounting, as of September 2025 (Huckins, 2025).
Principles of Carbon Accounting
Carbon accounting should follow and balance internationally recognised principles (Ranganathan, et al., 2004):
- Relevance: Include emissions that reflect the company’s operations and user needs, considering organisational structure, business context, and relationships.
- Completeness: Account for all emissions within the chosen boundary. Even small sources should be included, as they may become significant over time. If emissions are estimated or uncertain, this must be clearly documented and justified.
- Consistency: Apply the same accounting methods, inventory boundaries, and calculation approaches over time. Any changes should be documented and explained to maintain comparability.
- Transparency: Disclose emissions data clearly, factually, and neutrally, providing references for methods and data sources so the inventory can be independently understood.
- Accuracy: Ensure emissions are neither over- nor under- estimated, reducing uncertainty where possible.
Global Warming Potential
Global Warming Potential (GWP) is a measure used to compare how much different greenhouse gases (GHGs) contribute to global warming compared with carbon dioxide (CO₂) over a set period, usually 100 years (EPA, 2025b; Murphy et al., 2013). It considers both a gas’s ability to trap heat (radiative efficiency) and how long it stays in the atmosphere (lifetime).
A higher GWP means the gas traps more heat and has a greater impact on warming. For example, if methane (CH₄) has a GWP of 27, 1 kg of methane warms the atmosphere 27 times more over 100 years than 1 kg of CO₂ (Brander, 2012).
GWPs provide a standard way to convert different gases into CO₂-equivalent (CO₂-eq), allowing total emissions to be expressed in a common unit. This makes it easier for policymakers and analysts to compare gases, prioritise reductions, and calculate total emissions.
Global Warming Potential Values for 100-year time horizon (IPCC, 2024)
Note: These values are based on the IPCC Sixth Assessment Report in 2020 (AR6). GWP values can change overtime.
Case Study
Title: Measuring Emissions: A Guide for Organisations
Overview: This case study examines the New Zealand Ministry for the Environment’s Example GHG Report, demonstrating how a fictional construction company, OPQ Construction Ltd, and its subsidiaries compile a comprehensive greenhouse gas inventory.
It highlights the practical application of the GHG Protocol and ISO 14064-1 standards in measuring, categorising, and reporting both direct and indirect emissions across multiple business units.
Links: https://environment.govt.nz/assets/Publications/Files/example-ghg-report.pdf
Case Study: Measuring Emissions: A Guide for Organisations
Description: The case study outlines the structure of OPQ Construction Ltd and its subsidiaries, highlighting the variety of business units, operations, and emission sources. It emphasises considerations such as data collection methods, handling uncertainties, and decisions around inclusion or exclusion of certain emissions, providing a practical context for understanding GHG inventories in real organisations.
Date & Location: 2019, Wellington, New Zealand.
Description: The case study outlines the structure of OPQ Construction Ltd and its subsidiaries, highlighting the variety of business units, operations, and emission sources. It emphasises considerations such as data collection methods, handling uncertainties, and decisions around inclusion or exclusion of certain emissions, providing a practical context for understanding GHG inventories in real organisations.
Date & Location: 2019, Wellington, New Zealand.
Case Study Questions
Carefully review the Example GHG Report using the link provided. Focus on how emission sources are identified, classified, and reported across the different business units of OPQ Construction Ltd. After reviewing, answer the questions below.
Question 1: Which business units contribute most to OPQ Construction Ltd’s GHG emissions, and why might this be the case?
Question 2: How are Scope 1, Scope 2, and Scope 3 emissions distinguished in the case study? Give examples of each.
Question 3: What challenges might an organisation face when collecting data for Scope 3 emissions, and how does the case study address these challenges?
Question 4: Identify one emission source that was excluded from the inventory. Explain the reasoning and discuss the potential impact of its exclusion.
Case Study – Optional Exercise
Download the GHG Protocol Corporate Report Template and use it to create a GHG report for OPQ Construction Ltd for the year 2026, using the scenario and details below. Classify emissions by business unit and scope, calculate emissions using appropriate factors, note any assumptions or uncertainties, and summarise the results in the template.
Scenario: You are the sustainability officer for OPQ Construction Ltd, responsible for compiling a simplified GHG emissions inventory for the company. For this exercise, focus on three main business units. Use the data below to populate your report, classify emissions by scope, and provide notes on assumptions or uncertainties.
| Business Unit | Emission Source | Scope | Activity/Data | Units | Notes/Assumptions |
| Head Office, Auckland | Electricity | 2 | Online supplier report | kWh | All meters reported accurately |
| L&M Project Engineering – Christchurch | Diesel (vehicles) | 1 | Supplier invoices | Litres | Minor fuel via staff card deemed de minimis |
| L&M Project Engineering – Christchurch | Steel (virgin, structural) | 3 | Supplier invoices | tonnes | All steel used during the year accounted for |
| William Hall Quarry – Eketahuna | Forest – harvested | Outside scope | Forestry records | ha | Assumes accurate land-use classification |
| Head Office, Auckland | Business travel – domestic flights | 3 | Travel provider report | Passenger km | All staff booked via company provider |
| Head Office, Auckland | Employee commuting | 3 | Annual staff survey | km | Average distances used for calculation |
