Identifying options for additionality tests in the context of scope 2 market-based accounting

The current greenhouse gas accounting rules for reporting emissions associated with electricity consumption (known as ‘scope 2’ emissions) have been criticised for failing to differentiate between impactful and non-impactful actions, and for producing inaccurate value chain inventories. One proposed solution to these problems is to introduce an additionality test to demonstrate that there is a causal relationship between a reporting company and the emissions rate that it reports. However, few accounting proposals provide detailed information on how to test for additionality. This paper aims to contribute to discussions on this issue by identifying the range of existing additionality tests that could be used in this context and the results reveal nine relevant types of additionality test. For each type, we discuss the rationale behind it, list illustrative examples, and identify challenges related to applying the test. As two novel contributions, this paper (1) identifies cases where additionality tests have already been applied to electricity attribute procurement and reporting, and (2) examines a number of concepts and principles for selecting appropriate tests, e.g. balancing incidence of false positives and negatives, with specific reference to scope 2. Although this paper is focused on scope 2 market-based instruments, the identified tests and our discussions of them may also be useful for implementing additionality requirements for other emerging environmental attribute markets.