Approaches and pitfalls to estimating avoided emissions

Emissions impacts can be assessed using two approaches: attributional and consequential. The attributional approach compares the static life cycle greenhouse gas (“GHG”) emissions of a product or service to an alternative providing the same function (see Figure 1). In contrast, the consequential approach considers system-wide changes in emissions resulting from the product or service. For example, consider assessing the emissions impact of a new washing detergent entering the market. The attributional approach would compare the emissions associated with the acquisition of the new detergent's ingredients, as well as its production, distribution, and packaging disposal to those of an existing market alternative. On the other hand, the consequential approach would evaluate additional factors, such as the new detergent's potential to lower wash temperatures or reduce the amount needed per use while maintaining cleaning effectiveness.

While various methodologies and frameworks exist for estimating avoided emissions, the absence of a standardized and widely accepted framework has led to variations in estimation practices, which undermines the comparability and consistency of such reports ​(Russell, 2019)​. However, efforts are ongoing by organizations such as the Greenhouse Gas Protocol, the Project Frame, and investor initiatives led by Mirova and Robeco to establish an industry standard (Robeco 2024; Project Frame 2023). 

Most guidance documents follow the attributional approach but differ in their specifics. Generally, attributional approaches consider absolute emissions attributable to a specific entity—be it a product, service, or company—over its life cycle, known as a life cycle assessment (“LCA”) (Russell 2019). This cradle-to-grave emission total is compared to a reference product, with the comparative emissions impacts denoted as those emissions avoided. Such assessments should adhere to best-practice LCA frameworks, such as those published by the Greenhouse Gas Protocol (Bhatia et al.  2013). 

Conversely, consequential methods for estimating avoided emissions involve assessing the complete, system-wide change in emissions resulting from the introduction of a product, service, or entity into the market (Russell 2019). These assessments, based on consequential LCAs, account for rebound and market-mediated effects, providing a more sophisticated and accurate picture of the potential environmental impact of a product or service (Rich et al. 2014). 

Assessments of avoided emissions typically use the attributional approach because it is simpler to implement and scalable to an entire product portfolio. However, attributional assessments rely on the critical assumption that one product or service is an exact substitute for its alternatives. This approach overlooks indirect rebound effects, such as changes in market size and input prices, making it vulnerable to overestimations of a product or service’s impacts.  

For example, a company evaluating the emissions impact of its range of washing detergents can quickly compare each detergent's life cycle emissions to market alternatives using the attributional approach. However, this method would not account for indirect effects, such as differences in cleaning efficacy or market uptake compared to competitors. In contrast, the consequential approach offers a more accurate, but resource-intensive, picture by considering additional factors: it would require assessing how each detergent influences wash temperatures, usage patterns, and overall market dynamics, leading to a more comprehensive understanding of environmental impacts. In fact, it may be that accounting for these factors may nullify some of the positive impacts estimated by the attributional approach.  

Regardless of the assessment type chosen, it is crucial to recognize that impacts can be either positive (reducing emissions) or negative (increasing emissions). Companies often focus solely on positive impacts, but both positive and negative impacts must be considered to steer climate strategies effectively and make real headway towards a net-zero future. In a similar vein, estimations of avoided emissions should be seen as complementary to comprehensive corporate GHG emissions accounting (on scope 1,2 and 3) and the setting of decarbonization targets, which are more critical in the pursuit of net-zero emissions. As a best practice, companies should not claim positive impacts without being transparent about their emissions trajectory over time and its alignment with their decarbonization targets. 

How can we help? 

At Holtara, we have a wide breadth of knowledge and experience in guiding corporates towards meaningful estimates of their environmental impact.  

If you are interested in learning more about how we can help, please reach out to our Carbon and Climate team for additional information. 

​​References: 

​Bhatia, P. et al (2013) Product Life Cycle Accounting and Reporting Standard, World Resources Institute. Available at: https://ghgprotocol.org/sites/default/files/standards/Product-Life-Cycle-Accounting-Reporting-Standard_041613.pdf 

​Project Frame (2023) Pre-investment Considerations: Diving Deeper into Assessing Future Greenhouse Gas Impact. Available at: https://projectframe.how/publications/preinvestment-ghg-assessment 

​Rich, D. et al (2014) Policy and Action Standard, World Resources Institute. Available at: https://ghgprotocol.org/policy-and-action-standard 

​Robeco (2024) Robeco and Mirova announce I Care and Quantis to develop a global standard for calculating emissions avoided by low-carbon solutions. Available at: https://www.robeco.com/en-int/media/press-release/robeco-and-mirova-announce-i-care-and-quantis-to-develop-a-global-standard-for-calculating-emissions-avoided-by-low-carbon-solutions  

​Russell, S (2019) Estimating and Reporting the Comparative Emissions Impacts of Products, World Resources Institute. Available at: https://www.wri.org/research/estimating-and-reporting-comparative-emissions-impacts-products.