Using marginal emission rates to optimize investment in carbon dioxide displacement technologies

Abstract Reduction in CO2 emissions from fossil fuel-based electric power generation is a primary focus of both the public and private sector. Over 1,500 corporations, representing $11.4 trillion in revenue and 6.5 gigatonnes of carbon emissions, have formally announced their objective of meeting net-zero emissions by 2030. In this paper, we focus specifically on CO2 emissions from electricity consumption, and how corporations can reach net-zero goals with respect to these emissions. We focus on three points: (1) the mathematically and economically correct methodology (Marginal Emission Rate, or MER) for calculation of CO2 footprint in the power sector, (2) a detailed comparative analysis and critique of the generally-referenced alternative methodologies, (3) a detailed analysis of the economic benefits of using MER versus other methodologies to private sector corporations focused on net-zero emissions. This paper presents a mathematical framework for organizations to account for and plan their carbon footprint accurately and efficiently whether it is ex post carbon accounting using RTO published real time nodal MER data, or planning for renewable investment using forecasted MER under various future scenarios.