Consequential Analysis of the Greenhouse Gas Emissions Impacts of Actions That Influence the Electric Grid: The Theory and Practice of Using Marginal Emissions Rates

This paper discusses consequential greenhouse gas emissions analysis for actions that influence the electric grid that is, the analytical approach of estimating how such actions change greenhouse gas emissions, relative to what they otherwise would have been without the action. Although the paper starts with general considerations, it ultimately focuses on consequential analysis with marginal emissions rates as an option likely more scalable than others. Consequential analysis has immense potential to guide efficient, impactful decisions. In theory, selecting actions based on their impact is the optimal way for an organization to maximize its objectives. In practice, however, consequential analysis is constrained by the quality of the estimates it can bring to bear. Although there are many areas where this approach can add value to a decision-making process, there are also many shortcomings in currently available data and methods, which can result in inaccurate impact estimates. Depending on the objectives of a decision maker, this can make the approach unsuitable in some contexts. Consequently, to help guide future research and facilitate discussions about the suitability of this analytical approach for particular applications, this paper focuses to a great extent on the limitations, uncertainties, and unknowns of the current state of the art of consequential emissions analysis when applied to electric sector actions. This paper's focus on limitations should not be misunderstood: Consequential analysis is a valuable tool for many applications and may defensibly be applied to new applications in the coming years. Nonetheless, focusing on current shortcomings can guide research into improvements that increase the likelihood that decisions made with consequential analysis lead to the intended results. It is hoped that this paper will be of transitory relevance, as advances in the practicing of consequential analysis mitigate many of the points raised here, expanding the domain where it can defensibly be applied.