Home » Environment

Reframing Indirect Emissions: Rethinking the Path to Net-Zero

Understanding and reimagining how indirect emissions contribute to the global journey toward true net-zero carbon goals.

By Medha deb

Created on Sep 27, 2025

Understanding and reimagining how indirect emissions contribute to the global journey toward true net-zero carbon goals.

Reframing Indirect Emissions: Why Our Thinking Needs to Evolve

As the urgency to reach net-zero grows, much of the climate conversation has focused on emissions reduction—but especially, on emissions that are indirect. While companies and organizations adopt ambitious climate goals, the methods for measuring and crediting progress often oversimplify or obscure the bigger picture. Understanding what counts as a real reduction, and what is merely shifting the accounting elsewhere, is essential for driving authentic climate action.

What Are Indirect Emissions and Why Do They Matter?

To fully appreciate the challenges and opportunities of reducing our carbon footprint, we must distinguish between direct and indirect emissions:

Direct emissions (Scope 1): Those released from sources that a company or organization owns or controls, such as emissions from fuel burned in vehicles or manufacturing equipment.
Indirect emissions (Scope 2 and 3): Emissions that occur elsewhere as a consequence of an entity’s activities—most notably electricity purchased (Scope 2) and emissions across the value chain, including those embedded in goods and services (Scope 3).

While direct emissions are easier to track and manage, indirect emissions make up the majority of many organizations’ climate impact. Calculating and reducing them is much more complex, yet absolutely vital. The question of how we count progress against indirect emissions is therefore central to any serious net-zero strategy.

The Limits of Current Carbon Accounting

For years, businesses and institutions have relied on carbon accounting practices that focus on assigning emissions to specific boundaries for the sake of transparency, comparability, and reporting. However, these practices have important limitations:

Boundaries vs. Reality: Reporting frameworks define what gets counted within an organization’s operational boundaries, but the climate itself doesn’t recognize these boundaries. If an emissions reduction is claimed on paper but emissions simply shift location or responsibility to someone else, the climate benefits may be illusory.
Double Counting and the Risk of Inflation: Transactions involving renewable energy credits, offsets, and market-based instruments often lead to multiple organizations claiming the same reductions. This erodes the credibility of reported numbers, especially in Scope 2 and Scope 3 emissions evaluations.
Crediting vs. Causing Reductions: There is a critical difference between reductions that are credited (meaning they appear as lower numbers in a company’s inventory) and reductions that are caused (meaning they actually result in less greenhouse gas in the atmosphere worldwide).

Real Emissions Reductions: The Concept of Additionality

Central to the challenge of indirect emissions is the principle of additionality—the idea that for a reduction to be considered meaningful, it must go beyond what would have happened in the normal course of business. In other words, does an action actually make the world cleaner, or is it simply being counted for the sake of reporting?

Project-Based Offsets: Many entities purchase carbon offsets or renewable energy credits, hoping to compensate for their emissions elsewhere. However, unless these projects are truly additional, and wouldn’t have happened without the purchase, the benefit is questionable.
Market-Based Mechanisms: The widespread use of market-based instruments has enabled organizations to report significant reductions in their carbon accounts—while real-world emissions may not change at all.

To drive real progress, strategies must move beyond accounting, focusing instead on causing or enabling actual emissions reductions—and ensuring these reductions are additional, verifiable, and durable.

Enabling vs. Causing Emissions Reductions

The language of climate leadership frequently distinguishes between actions that directly cause emissions reductions and those that enable or catalyze such reductions elsewhere. For example:

Causing: An industrial site installs on-site renewable energy, directly leading to lower emissions from grid electricity use.
Enabling: A business procures renewable energy credits, sending a market signal that may eventually support additional renewables on the grid, but not necessarily causing any new generation itself.

Understanding this distinction is crucial:

Actions that cause reductions are direct and certain.
Actions that enable reductions are indirect and rely on future, sometimes uncertain, market responses.

Organizations should be clear and honest about how their strategies contribute to global emissions reductions, and avoid over-stating the impact of measures that are primarily enabling.

Systemic vs. Local Effects: Why Context Matters

One of the persistent challenges in climate accounting is that emissions impacts can be very location- and context-dependent. For example, two organizations might both install solar power, but if one displaces coal-fired power in a coal-heavy grid while the other displaces already-clean hydro, the global impact is vastly different.

Marginal vs. Average Effect: Climate benefit depends not only on what is installed or purchased, but on what is displaced. The carbon intensity of the marginal (last-in, first-out) source is critical for understanding real change.
Grid Interaction: In a region saturated with renewables, new projects might curtail each other or simply reduce the use of another clean source, resulting in little or no benefit.
Electricity Market Structure: Some markets have robust systems for preventing double-counting and rewarding new clean generation, while others lag far behind.

This means organizations should prioritize interventions that drive measurable, context-aware change—not just generic investments or credits.

Decarbonization Strategies That Matter

Companies and institutions looking to genuinely reduce indirect emissions—and prove it—can implement a suite of strategies:

Switch to renewable energy sources: Replace grid electricity with on-site or direct renewable generation, or purchase from projects with demonstrated additionality.
Increase energy efficiency: Implement building upgrades, smart energy systems, and process improvements to lower electricity demand at every stage.
Electrify key sectors: Move from fossil-based processes to electric alternatives, especially for heating, transportation, and manufacturing.
Strategic energy management: Use demand response, load-shifting, and energy storage to optimize the timing and source of energy use.
Internal carbon pricing: Factor a shadow price for carbon into investment and operational decisions, steering capital toward lower-emission alternatives.
Engage stakeholders: Involve employees, suppliers, and customers in reduction efforts to influence the entire value chain.
Deploy sector-specific innovations: Leverage technology, supply chain optimizations, and product-level decarbonization for tailored impacts.

Strategy	Key Sector
Switch to renewables	Energy, Manufacturing
Increase energy efficiency	Buildings, Industry
Electrify sectors	Transport, Production
Remove and store carbon	Chemicals, Utilities
Sector-specific innovations	Construction, Packaging

The Problem with ‘Net-Zero’ Narratives

Current net-zero frameworks often allow flexibility in how organizations meet their goals, which can inadvertently promote emissions accounting games:

Many companies reach “net-zero” by relying heavily on offsets and other instruments that may not represent true reductions.
Double counting persists, and real-world emissions may barely change, even as reported numbers look impressively green.
Some sectors can achieve easier reductions (e.g., switching to renewables in low-carbon grid areas), while hard-to-abate and global sectors lag behind.

The climate does not care about reported numbers but about real-world atmospheric greenhouse gas concentrations. We need accountability frameworks that prioritize real global impact, not just flattering reports.

Rethinking Ownership: From Counting to Collaboration

An enduring tension in climate policy is the question of who gets credit for specific emissions reductions. The prevailing approach is to assign ownership to whoever pays for or initiates the reduction, but this:

Incentivizes credit seeking, rather than actual problem solving.
Overlooks the fact that climate change is a shared global challenge—competing for credit doesn’t reduce atmospheric carbon any faster.
Can make collaborative solutions harder to achieve, especially across value chains and among competing organizations.

There is a growing call for models that instead recognize and reward cooperation and systemic impact:

Promote transparency in reporting, but be explicit about the nature and certainty of reductions.
Encourage investments that enable broader transformations—even if the effect isn’t immediately claimable.
Support policies and incentives that foster large-scale shifts, rather than just one-for-one transactions.

How to Reframe Indirect Emissions Reductions: Practical Steps

To put these lessons into action, organizations and governments can rethink how emissions reductions are approached, rewarded, and communicated. Key actions include:

Measure impacts carefully: Use more granular, location-based accounting that reflects actual grid and supply chain conditions.
Seek high-impact interventions: Prioritize actions and investments that cause additional, durable reductions in emissions where they matter most.
Cooperate across supply chains: Work collaboratively to identify and tackle systemic challenges, such as decarbonizing transport or building materials.
Align incentives with outcomes: Advocate for policies, procurement requirements, and markets that reward genuine emission reductions, not just clever accounting.
Use transparent reporting: Clearly distinguish avoided, enabled, or caused reductions, and communicate progress to stakeholders with humility and clarity.

Frequently Asked Questions (FAQs)

Q: What is the difference between Scope 1, 2, and 3 emissions?

A: Scope 1 emissions are direct emissions from sources controlled by a company. Scope 2 are indirect emissions from the generation of purchased electricity, while Scope 3 covers all other indirect emissions in an organization’s value chain, such as those from suppliers or product use.

Q: Why is double counting a problem in carbon accounting?

A: Double counting means several actors claim the same emissions reduction, inflating overall reductions on paper while making less real-world progress than reported.

Q: How can I ensure that my organization’s offsets are truly effective?

A: Focus on additionality, meaning the offset leads to reductions that wouldn’t have happened without your investment, and verify through credible standards and third-party audits.

Q: What is the role of renewable energy credits in indirect emissions?

A: Renewable energy credits can support renewable project financing, but with varying certainty about their additional impact; not all credits equate to real-world carbon reductions.

Q: What matters more: reporting reductions or reducing real emissions?

A: Reducing real emissions is critical for the climate. Reporting should accurately reflect actual reductions, not just shifts on paper.

Key Takeaways and the Way Forward

Indirect emissions reductions are vital but must be framed with honesty and transparency.
Prioritize actions that cause or enable additional, real, global reductions.
Reimagine climate action as a collaborative effort, not a competition for credits.
Push for frameworks that reward real impact over creative accounting.
Continually assess and adapt strategies to align with the reality of decarbonizing a global system.

The journey to net-zero requires more than just changing the numbers—it demands that we change how we think, measure, and collaborate for a truly sustainable future.

References

Author

medha deb

Medha Deb is an editor with a master's degree in Applied Linguistics from the University of Hyderabad. She believes that her qualification has helped her develop a deep understanding of language and its application in various contexts.

Read full bio of medha deb