A number of programs that require businesses to report their greenhouse gas (GHG) emissions have emerged in the past decade at the regional, national, and sub-national levels. Most of these programs operate in developed countries, but some developing countries are also showing an interest in adopting mandatory emissions disclosure programs.
Establishing these programs is a resource- and time-intensive exercise. It can be a daunting task for developing countries with competing priorities and limited resources. So where can these countries begin as they consider setting up their greenhouse gas reporting schemes?
WRI’s new working paper, Designing Greenhouse Gas Reporting Systems: Learning from Existing Programs, reviews corporate and facility-level greenhouse gas reporting programs in Australia, California, Canada, the European Union, France, Japan, the United Kingdom, and the United States. The paper identifies steps to implement a mandatory reporting program and discusses factors to be considered at each step in designing the program.
It also discusses some strategies for developing countries keen to set up reporting programs. Developing countries may find it easier to adopt a gradual, phased approach to develop a reporting program. Engaging in the following three key steps allows developing nations to make the most of their more limited resources:
Rio de Janeiro is a leader among the Brazilian cities aggressively promoting low-carbon development. In 2011, the city passed a landmark climate change law with a target to reduce greenhouse gas (GHG) emissions 8% below the business-as-usual (BAU) emissions scenario by 2012, 16% by 2016, and 20% by 2020.
Now Rio is conducting a GHG inventory for 2012, the first target year under its climate change law. The inventory will measure the city’s emissions against its 8% reduction target for 2012, and assess the effectiveness of GHG mitigation actions implemented so far.
On July 2, the city government of Rio invited me and my colleagues from the Greater London Authority and the Federal University of Rio de Janeiro (COPPE) to a seminar to share our experiences in conducting GHG inventories and to discuss Rio’s 2012 inventory. At the seminar, Nelson Moreira Franco, Director for Climate Change Management and Sustainable Development for the City of Rio, stressed that GHG inventories help identify emission sources and provide scientific evidence on GHG levels, so it is extremely important that the city gets it right. To me, the seminar covered four important items:
A growing number of countries and companies now measure and manage their emissions through greenhouse gas (GHG) inventories. Cities, however, lack a common framework for tracking their own emissions—until now.
Brazilian cities and municipalities vary in the status of their efforts to collect GHG data and conduct emissions inventories. The event focused on emissions management efforts so far. Below are six lessons highlighted by participants in the discussion:
1. Strong political commitment is crucial for success. Many cities in Brazil have made strong political commitments to address climate change. For example, Rio and Belo Horizonte have created municipal climate change laws with mandatory GHG reduction targets. Rio’s target is to reduce emissions by 20 percent below 2005 levels by 2020, while Belo Horizonte’s is 20 percent by 2030. In both cases, city-wide GHG inventories have been conducted to inform and track performance toward these targets.
2. The inventory is the first step in low-carbon development. Participants stressed the importance of the GHG inventory process (see figure below) as a planning tool to help cities assess their emissions, identify emission sources, set reduction targets, prioritize mitigation actions, and track performance. For instance, Belo Horizonte’s inventory found that the transportation sector is the city’s major source of GHG emissions (71 percent); this information will help the city identify reduction measures. Prof. Jose Goldemberg, former federal Minister and São Paulo State Secretary of Environment, stressed that GHG inventories help cities identify key emission sources and implement low-carbon technologies. Nelson Moreira Franco, Director for Climate Change Management and Sustainable Development for the City of Rio, stressed that the “GHG inventory is a powerful instrument to manage emissions and influence policy-making.”
Scientific understanding of the chemicals that contribute to climate change is constantly improving. So, too, is the Greenhouse Gas Protocol (GHGP), as we work to keep abreast of such advances and ensure that they are reflected in our tools and standards.
One recent example concerns the greenhouse gas (GHG) nitrogen trifluoride (NF3), a chemical that is released in some high-tech industries, including in the manufacture of many electronics. The GHG Protocol now requires NF3 to be included in GHG inventories under the Corporate Standard, Value Chain (Scope 3) Standard, and Product Standard. A new GHGP Amendment updates the existing requirements.
How does this update affect my organization?
NF3 is used in a relatively small number of industrial processes. It is primarily produced in the manufacture of semiconductors and LCD (Liquid Crystal Display) panels, and certain types of solar panels and chemical lasers. To the extent that these processes occur in your company’s direct operations or value chain, they may need to be reflected in future inventories to ensure conformance with GHG Protocol standards.
Low-carbon city development has become a central part of the Malaysian government’s strategy to meet its greenhouse gas (GHG) commitments. The country, currently ranked second in terms of emissions per capita in Southeast Asia, has committed to reduce the emissions intensity of its gross domestic product (GDP) by 40 percent from 2005 levels by 2020.
Many Malaysian cities have created ambitious, low-carbon visions in order to meet national targets. However, many cities don’t yet have a credible GHG inventory or a comprehensive blueprint to help them systematically implement and monitor low-carbon actions. Without such a framework, it is nearly impossible to establish baseline measurements, set goals, or measure progress.
That’s why the GHG Protocol is currently working with partners to develop a standard methodology, the Global Protocol for Community Scale Emissions (GPC), as well as an accompanying toolkit that cities will be able to utilize to plan for their low-carbon development. Last year, we released the GPC Pilot Version 1.0. Over the next six months, about 30 cities will pilot test it.
An effective corporate climate change strategy requires a detailed understanding of a company’s greenhouse gas (GHG) emissions. Until recently, most companies have focused on measuring emissions from their own operations and electricity consumption, using the GHG Protocol’s Scope 1 and Scope 2 framework. But what about all of the emissions a company is responsible for outside of its own walls—from the goods it purchases to the disposal of the products it sells?
The GHG Protocol Scope 3 Standard, released in late 2011, is the only internationally accepted method for companies to account for these types of value chain emissions. Building on this standard, GHG Protocol has now released a new companion guide that makes it even easier for businesses to complete their scope 3 inventories. The guidance is freely available for download via the GHG Protocol website.
How Can Businesses Use the New Guidance?
Assessing GHG emissions across the entire value chain can be complex. For companies just beginning to assess their scope 3 emissions, it can be difficult to know where to start. This calculation guidance is designed to reduce those barriers by providing detailed, technical guidance on all the relevant calculation methods. It provides information not contained in the Scope 3 Standard, such as:
Agriculture is a major actor in spurring global climate change. The sector is already responsible for at least 10-12 percent of global greenhouse gas (GHG) emissions, and agricultural emissions are expected to increase by more than 50 percent by 2030.
Key Challenges to Measuring Agricultural Emissions
Reporting agricultural emissions in GHG inventories is a decidedly complex endeavor, which can hinder reduction efforts. For example, agricultural emissions are strongly affected by weather and are therefore often calculated with a large amount of uncertainty. This ambiguity makes it challenging to set and track progress toward reduction targets. The carbon stored in biomass and soils can often be emitted into the atmosphere, making it imperative that companies do not over- or under-count the impact of farming practices on stored carbon. And companies vary widely in how they control different parts of agricultural supply chains—such as commodity production, processing, and retail —so it’s difficult to maintain consistency in how inventories are reported.
With the latest round of global climate negotiations at an end, many countries, states, and cities around the world are taking action to reduce greenhouse gas (GHG) emissions through mitigation policies and goals. Decision-makers need to understand the emissions impacts associated with these initiatives in order to evaluate effectiveness, make sound decisions, and assess progress.
However, there is currently little consistency or transparency in how such analysis is done. WRI aims to address this situation through forthcoming Greenhouse Gas (GHG) Protocol standards for mitigation accounting, which have recently been released for review.
The Need for Accounting Standards for Mitigation Policies and Goals
To date, no standardized approach has existed for quantifying the GHG effects of policies and actions and tracking performance toward mitigation goals. For example, there is an ongoing debate on whether the United States is on track to meet its goal of reducing emissions by 17 percent below 2005 levels by 2020. A recent study by Resources for the Future found that the United States is on track to meet its goal. However, the U.S. Energy Information Administration’s 2013 Annual Energy Outlook expects carbon dioxide emissions to be only 9 percent below 2005 levels by 2020 as a result of policies currently in place. This difference in findings reflects differences in assumptions about the emissions impacts of policies, such as performance standards for power plants and vehicle fuel efficiency standards. These variations have very real policy implications for the degree to which the United States needs to ramp up actions to meet its 2020 goal.
The Greenhouse Gas (GHG) Protocol recently partnered with the UNEP Finance Initiative in a critically important endeavor – developing guidance to help the financial sector measure its ”financed emissions” and track reductions. These types of emissions, which are associated with lending and investments, are the most significant part of a financial institution’s carbon footprint.
As risk management experts, it’s essential that financial institutions have the necessary tools to consider the implications of continued investment in, and financing of, carbon-intensive sectors and companies. Some financial institutions have developed their own methodologies for accounting for financed emissions, but there’s a lack of consistency between them. Financial institutions need new guidance like that being developed by GHG Protocol and UNEP to adopt risk-management policies and lending procedures that address climate change in a systematic way across the sector.