Carbon Accounting: A Comprehensive Review of Methodologies, Applications and Future Directions

Abstract

Introduction

Carbon accounting has gained critical importance as a tool for organizations to measure, manage, and reduce their greenhouse gas (GHG) emissions amid growing climate change concerns and regulatory pressures. It helps businesses track emissions across direct operations (Scope 1), purchased energy (Scope 2), and value chain activities (Scope 3), providing a comprehensive understanding of their carbon footprint. This transparency meets stakeholder demands for environmental responsibility and supports sustainable business practices, enhancing reputation and long-term resilience.

The field has evolved significantly since the Kyoto Protocol (1997), progressing from basic emissions measurement to integrated sustainability strategies supported by advanced technologies like AI and blockchain for better accuracy and accountability. Carbon accounting shifts traditional accounting paradigms by incorporating environmental costs alongside financial ones, aiding organizations in balancing economic and ecological priorities.

Methodologies like Production-Based Accounting (PBA) focus on emissions within geographic boundaries but face limitations such as ignoring consumption-driven emissions and risks of carbon leakage, highlighting the need for more holistic approaches that consider entire supply chains. The literature increasingly emphasizes carbon accounting’s integration into broader environmental management systems, transparency, and the challenges faced by emerging markets and SMEs in adopting these practices.

Conclusion

Carbon accounting is an essential component in corporate sustainability efforts, supporting companies in achieving more measurable and transparent carbon reduction outcomes and contributing to a more sustainable future [2]. Continued innovation in carbon accounting practices, driven by technological advancements and policy support, is crucial for achieving global climate objectives and ensuring that organizations are effectively managing their environmental impact [1]. By leveraging carbon accounting, businesses and regulators can enhance sustainability leadership, ensuring long-term environmental responsibility and compliance with international climate standards, and promoting a more sustainable and equitable global economy [18]. The path forward for carbon accounting requires a concerted effort from all stakeholders to promote transparency, accountability, and innovation. This includes investing in research and development, developing standardized methodologies and frameworks, and fostering collaboration among organizations, governments, and civil society. By working together, we can ensure that carbon accounting is used effectively to drive sustainable development and mitigate the impacts of climate change.

References

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Copyright

Copyright © 2025 Dr. Ashish Saxena, Dr. Neerav Verma. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.