Carbon emissions: what you need to know

Carbon emissions lead to climate change, which is a growing business risk. Here are some of the key strategies for reducing carbon emissions.



May 10, 2022


Table of contents

Sustainable companies everywhere are working hard to reduce their carbon emissions. When businesses reduce their carbon footprint, it means a lot to customers who want the businesses they depend on to align with their values. 

Carbon emissions are one of the most alarming side-effects of “business as usual” across the world, because they cause climate change. 

Due to climate change, our seasons are becoming less predictable, our water is more scarce, and our economy becomes more risky everyday. We’re now starting to see wide-ranging climate change impacts like heat waves, droughts, wildfires, sea level rise, intense cyclones, and significant biodiversity loss. 

The risks will continue to grow until businesses reduce their carbon emissions. They can start by measuring their carbon emissions to establish a roadmap for ensuring a safe operating space in the future.    

📖 What are carbon emissions?

Carbon emissions are one of the most alarming side-effects of “business as usual” across the world, because they cause climate change. 

Due to climate change, our seasons are becoming less predictable, our water is more scarce, and our economy becomes more risky everyday. We’re now starting to see wide-ranging climate change impacts like heat waves, droughts, wildfires, sea level rise, intense cyclones, and significant biodiversity loss. 

The risks will continue to grow until businesses reduce their carbon emissions. They can start by measuring their carbon emissions to establish a roadmap for ensuring a safe operating space in the future.    

What is carbon dioxide? 💨

Carbon dioxide (CO2) enters the atmosphere from a wide range of sources: burning fossil fuels such as coal, oil, and natural gas, the decomposition of solid waste, deforestation, and chemical reactions in manufacturing processes. 

Apart from these human industrial activities, carbon dioxide is normally released in nature as what’s called the “carbon cycle.” 

When this cycle is in perfect balance, nature absorbs about the same amount of CO2 that’s naturally produced–such as when we exhale our breath. The oceans, soils, and forests are all CO2 sinks. 

However, “the dose makes the poison.” In this case, the “dose” of carbon emissions released into the atmosphere each year has grown exponentially since the time of industrialization. 

The proportion of CO2 particles in the atmosphere which is considered safe is 350 parts per million (ppm). However, we passed that amount in 1987 and today, the atmosphere is 420+ parts per million. 

Are carbon emissions and GHG emissions the same thing? ❓

The primary ingredient of carbon emissions is carbon dioxide (CO2), a heat-trapping gas. All heat trapping gases are considered “greenhouse gases,” which keep the heat from the sun in our atmosphere. This has the effect of warming up the average temperature of the atmosphere over time. 

Carbon dioxide is not the only greenhouse gas (GHG), though. The other main ones causing climate change are methane (CH4), nitrous oxides, and fluorinated gases. GHG emissions encompass all of these heat trapping gases. 

Here are the amounts of GHG emissions by type and percent in the US: 

  • Carbon dioxide: 79%
  • Methane: 11%
  • Nitrous oxide: 7%
  • Fluorinated gases: 3%

To express GHG emissions in a single unit of measurement, scientists calculate the relative heating potential of the emissions from GHGs other than CO2 in terms of their CO2 equivalent (CO2e). This means the amount would heat the planet at the same rate of a comparable amount of CO2. 

What is the problem with the atmosphere? 💥

At our current levels, about 43 gigatons of CO2 emissions are put into the atmosphere in 2019. So far, this overload of CO2 has warmed the planet about an average of 1.1 degrees Celsius since the time of industrialization. 

If we exceed warming of 1.5 degrees Celsius, a wide range of irreversible changes will occur such as sea level rise, extreme heat waves, and species extinctions. These come with huge societal consequences: poverty, migration, and food and water insecurity. 

Every additional degree of warming not only intensifies these impacts, it brings about the likelihood of passing “tipping points.” These are when systems cannot stay in balance and multiple factors reinforce and amplify the heating trend.

We may soon see the results of one such tipping point in the Amazon Rainforest. The forest is now emitting more CO2 than it absorbs, due to deforestation. 

While climate change is often discussed in abstract global terms, it is important to remember that it has direct impacts on businesses. It impacts the people businesses serve or rely on in their supply chains, it threatens real estate, and it makes natural resources more scarce.  

🌎 What are the main sources of CO2 emissions in the United States?

In the US, there are relatively few sectors responsible for the most CO2 emissions. The footprint of these sectors is immense, because they provide the movement, energy, and manufacturing services we depend on. Decarbonizing these sectors will be a challenge, but one that comes with massive benefits. 

Transportation 🚖

In 2022, transportation was responsible for the most carbon emissions of any other sector at 33%. The sector made up 26% of all US GHG emissions.  

Most of our transportation and mobility technologies for cars, trucks, air travel, rail, and shipping still rely on internal combustion engines (ICEs). An ICE functions by burning fuel. 

The most abundant fuel sources available are made from petroleum such as gasoline and diesel. When we burn these fossil fuels, they produce–you guessed it–carbon emissions. 

More than half of transportation carbon emissions are produced by passenger vehicles that travel on the road: cars, trucks of all sizes, SUVs, and minivans. 

The remaining carbon emissions come from the other ICE vehicles used for transportation: aircraft, trains, ships, boats, and the pipelines used to transport oil and gas from point A to point B.  

Electricity ⚡

The electricity sector also has a large carbon footprint, making up 31 percent of the US CO2 emissions and 24% of the total US GHG emissions in 2020. 

The fossil fuels burned to produce electricity in the US include coal, natural gas, and oil. Each of these has different potency in terms of the amount of carbon emissions they produce. 

For instance, coal accounts for just 20% of electricity production, but emits 54% of the total electricity CO2 emissions. 

The rest of electricity production comes from natural gas (39%), nuclear energy (21%), renewable energy (20%), and oil (<1%). This means about 40% of the electricity is produced from sources that don’t produce carbon emissions (nuclear and renewable energy). 

Since 1990, GHG emissions from electricity have declined about 21% in the US, due to policies to reduce coal and adopt renewable energy sources. This shift has shown that decarbonization is possible–it just takes planning and coordinated action.  

Here’s the breakdown of electricity use by sector: 

  • Residential and commercial (31%)
  • Industry (30%)
  • Transportation (27%)
  • Agriculture (11%)

There are numerous viable strategies for reducing carbon emissions from electricity. The most obvious is switching from fossil fuels to renewable energy sources like wind, solar, hydropower, and geothermal energy. Additional approaches include improving energy efficiency and using nuclear energy. 

Carbon capture and storage (CCS) technologies designed to remove CO2 from the atmosphere are also in the research and development stage. So far, there are few scalable CCS technologies capable of reducing carbon emissions. 

Industry 🏭

While industry had a smaller contribution to total carbon emissions at 16% (13% GHG emission) in 2020 in the US, it is one of the more challenging sectors to decarbonize. Yet, total GHG emissions from industry have declined 22% since 1990, which shows improvement is possible.  

Industrial processes produce direct carbon emissions from their own processes, and indirect carbon emissions from the electricity they use. 

Manufacturing often requires intense heating. Manufacturers of all kinds of materials from steel to glass burn fossil fuels to achieve this amount of heating. 

There are also industrial processes that produce CO2 emissions with chemical reactions instead of combustion. The production of cement, iron, steel, and chemicals all produce carbon emissions this way. 

Additional GHG emissions from the sector come from leaks of the fuel or gas used in equipment. Surely, proper maintenance and training could limit these operational inefficiencies. 

Other ways to improve industrial emissions include energy efficiency, fuel switching to low-potency alternatives (e.g. from coal to natural gas), and recycling. 

Everytime steel or aluminum is produced from raw ore, it requires immense heating. Using existing post-production materials could minimize the need for more smelting or forging. 

👉 What are the main trends regarding US’ carbon emissions?

The US is showing a slight downward trend in terms of its overall CO2 emissions, which decreased 8% from 1990 to 2020. 

Without policies in place to reduce the CO2 emissions, the factors that cause CO2 emissions depend on economic behavior, the price of fossil fuels, and population growth. 

For example, the 2020 COVI-19 pandemic caused people to travel less, manufacture less, and use less energy. However, these changes were short-lived, because the trends reversed after 2020. 

On the other hand, actions to address climate change such as switching to renewable energy sources may seem straightforward, but they are also complex. 

While supportive policies kickstarted a shift, it wasn’t until the price of renewable energy dropped below that of oil and gas production that significant adoption of renewable energy picked up. 

Currently, the US has a nationally determined contribution for the Paris Agreement of reducing economy-wide GHG emissions by 26%-28% by 2025 from its 2005 levels. 

👀 How can you evaluate the amount of CO2 emissions emitted by your company?

Whatever their sector, businesses have an immense influence over significant direct and indirect emissions from their operations. Understanding these carbon emissions is the only way to manage them strategically. 

Calculating the carbon footprint of a business starts with a simple formula: 

  • Activity (or consumption) X emission factor = GHG emissions

Activity data means the level of a carbon emissions producing activity that a company engages in. This could be its transportation mileage, electricity consumption, or industrial production activity. An emission factor is the amount of GHGs emitted for each activity.  

Activity data can be collected for three main emissions Scopes, as defined in the GHG protocol: 

Scope 1: Direct operational emissions from transportation, natural gas consumption for heating, etc. 

Scope 2: Indirect emissions generated by your utilities for water, electricity, etc. 

Scope 3: Indirect emissions across the value chain of your business. This includes employee emissions, supplier emissions, and the emissions of your consumers. These hard to quantify emissions are worth calculating, even if it’s a rough sketch to begin with. This is because they are often the largest proportion of a company’s carbon footprint. 

Companies should transparently report which Scopes their carbon footprint calculation includes in their carbon reporting. 

With this data, a company can start using its carbon footprint to plan for reducing carbon emissions. Here are the primary steps to take: 

  1. Choose a specific year to use as a baseline. This is going to be the year the company refers back to to demonstrate its progress. 
  2. Choose limits to the organization’s activities which are considered in the calculation. 
  3. Compile the consumption data for these activities across the organization. 
  4. Calculate the GHG emissions using the emission factor formula. 
  5. Determine an organizational strategy for reducing carbon emissions. 

The reason calculation always comes first before planning for reduction is it takes into account the unique impact of a business. Businesses may also identify opportunities that help them differentiate their brand with sustainability measures that customers care about. 

📉 How can you reduce your company’s carbon emissions?

After identifying its carbon footprint, businesses should start planning for long-term carbon emissions reductions. One way to commit to reducing CO2 emissions is by establishing a clear target. For instance,  Google recently announced its goal to use 24/7 carbon free energy by 2030. 

Here are a few carbon emissions reducing activities: 

Renewable Energy: Companies can both source renewable energy from their utilities, as well as invest in renewable energy production projects. Electrifying operations can also prepare businesses for utilizing the renewable energy from the grid. 

Energy efficiency: Using energy efficient equipment, buildings, and processes helps lower the carbon footprint of a business. There are various low-tech and high-tech opportunities to consider. Think insulation versus smart thermostats. 

Procurement: Sustainable procurement or sourcing for your business needs is an essential ingredient for lowering carbon emissions. 

Carbon offsetting: Companies can pay others to offset their emissions by conducting emissions-reducing projects anywhere in the world. Reforestation projects can help sequester more carbon emissions, while renewable energy deployment projects can avoid likely emissions.  

Recycling: Using recycled content in your production of goods or supplies limits the amount of emissions required to produce new materials. On the other hand, recycling or composting waste rather than landfilling it reduces the amount of carbon emitting solid waste your company produces. 

Leasing or renting equipment: When a business leases rather than buys equipment, it is in the best interest of the leasing supplier to repair and maintain the longevity of the equipment over a long period of time. 

Web hosting: Choosing web servers that rely on clean energy is important for cleaning up your digital footprint. Adopting practices that limit unnecessary file storage is another way to shave off CO2 emissions.  

Travel considerations: Shifting to digital-only or digital-optional events and meetings can reduce the number of travel miles your employees must take. Route optimization, bulk purchasing, and on-shoring sourcing or manufacturing can also limit long-distance transportation requirements. 

Employee awareness:  Helping your employees understand the importance of carbon emissions reductions starts with training. Embedding carbon emissions saving strategies into the company culture is important for gaining employee buy-in. 

🌸 What about Greenly?

Carbon footprint assessments are challenging to navigate on your own. Let Greenly help with our digital tools and strategies for carbon management. 

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