This blog is the second of a two-part series. To read part one, go to The world needs more clean energy built in the dirtiest grids. A new accounting system could incentivize action.

In part one of this series, we explored the disconnect in current Scope 2 carbon accounting, specifically how the traditional attributional matching system fails to distinguish between differing emissions impacts across grid regions. Measuring by impact is long overdue.

Now we’ll dive into the mechanics of the proposed “consequential metric,” how it leverages marginal emissions to measure the emissions actually displaced by a project, and what’s next for the GHG Protocol’s Actions and Market Instruments (AMI) workstream. While the Greenhouse Gas Protocol’s existing framework helped kickstart the renewables market, this next phase of global decarbonization requires us to take a long look at what matters most: real-world impact. 

The “consequential metric”: what is it?

The consequential metric, as outlined in the GHG Protocol’s electricity-sector consultation is a reporting method designed to estimate the systemwide emissions impact of specific actions (such as clean energy procurement or infrastructure investment) by comparing them against a “business-as-usual” baseline. Unlike traditional attributional Scope 2 accounting, (which assigns a portion of the grid’s emissions to an organization’s footprint), this metric measures the change in emissions that results from an intervention at a specific location. It utilizes marginal emissions rates (MERs) to reflect how a specific action influences the grid and its fluctuating power plants, rather than using its average emissions. 

It’s worth noting that the consequential metric does not measure an organization’s total carbon footprint or its annual inventory, and currently cannot be used in a Scope 2 inventory (though this part of the proposal is currently debated as it differs from TWG recommendations. Instead, the metric is intended to be used as a decision-making tool to help organizations prioritize high impact strategies, such as building energy storage or developing clean power in coal-heavy regions, where their actions will lead to the greatest real world decarbonization. While many details still need to be developed, the consequential view offers a start towards ensuring that corporate procurement leads to high impact development rather than just accounting shifts.

Why does marginal matter?

When you turn on a battery or buy wind power, you aren’t displacing the average grid mix. You are displacing the specific power plant that ramps down in response to this new, clean power (the marginal generator). This concept is measured by Marginal Emissions Rates (MERs), which are a central part of the consequential framework.

To demonstrate the importance of this, let’s look back at our example from part one where nearby wind projects had diverging emissions abatement potential. Looking back at the November day that we zeroed in on, the chart below illustrates how localized congestion and demand create unique redispatch behavior for the neighboring projects. Redispatch is the ramp up or down of generators by grid operators to ensure stability and cost-efficiency by balancing fluctuating supply and demand. Negative redispatch represents when generation is lowered in congested areas, and positive when it is increased elsewhere.

At Project A’s location, natural gas plants are the marginal generators ramping up to meet load; and at Project B’s location, that marginal increment is being met by wind. Consequently, a project at node A has a much higher “consequential” impact because it has the potential to displace fossil fuels, whereas the same project at node B simply offsets other clean energy (wind, in this case). This hourly difference adds up over time, resulting in two very different carbon avoiding potentials for clean energy projects at each location. Measuring this distinction would provide an organization with decision-making metrics that are not currently measured in Scope 2, and would incentivize investment in Project A’s location in this case; ensuring that capital is funneled toward the specific points on the grid where it can do the most heavy lifting for the climate. 

What’s next?

Beyond intended application (in or outside of Scope 2), several elements of the consequential metric require further development, including load emissions, emissions rate weighting, and additionality verification (proof that new clean power is getting built). For example, the TWG proposes the Marginal Impact Method (MIM), which accounts for both consumption and avoided emissions (unlike the current GHG Protocol proposal, which focuses on avoided emissions only).

The AMI will be tackling unfinished items like these, alongside multiple other issues in their upcoming public consultation period later this month. As guidance develops, it’s clear that the consequential metric offers an unprecedented opportunity to transparently measure what really matters, and incentivize building new clean power where it’s needed most. Certainly a metric worth engaging with–be sure to share your thoughts once the AMI survey opens!

To see how your emissions impact might look under a consequential framework or the proposed GHGP Scope 2 revision, try out our Scope 2 Calculator.

Resurety's consulting is following this topic closely. For more information, refer back to part 1 of this series and other market intelligence posts. To learn more or speak to one of our experts, please fill out the form below.