Municipalities play a strategic role in addressing climate change. They drive developments and act as role models for successful measures in greenhouse gas emissions reduction. To highlight local potential and achievements and to support mutual know how-transfer on policies and implementation, Germany will host the International Conference on Climate Action (ICCA2015). The conference is organized by the German Federal Ministry for the Environment, Nature Conservation, Building and Society (BMUB), the ministry for the Environment, Energy and Climate Protection of Lower Saxony and the German Institute for Urban Affairs (Difu).
Tag: GHG Accounting
Moving the Discussion Forward: Alberta Environment & Parks releases Climate Change Discussion Document
On August 14, 2015, the Alberta government released a Climate Leadership Discussion Document (Discussion Document) to lay the foundation for ongoing consultations with Albertans on climate change policy. The Discussion Document sets out the challenges the province faces, presents considerations and options for action, and offers questions to spur debate and discussion for stakeholders and members of the public. The Discussion Document is a follow up to the Alberta government’s June 2015 announcement that it was taking steps to achieve real, demonstrable reductions in the province’s greenhouse gas (GHG) emissions by tightening the requirements under the Specified Gas Emitters Regulation and appointing an advisory panel to undertake a comprehensive review of Alberta’s climate change policy.
The Discussion Document sets out the province’s new approach to climate change to:
• serve as an important commitment to protect the health of Albertans and our ecosystem;
• make a significant and meaningful contribution to Canada’s greenhouse gas reduction commitments and the global effort to mitigate climate change;
• ensure the continued strength and competitiveness of the province’s economy in a lower carbon world;
• advance innovation, encourage adoption of new technologies and support more renewable and cleaner sources of energy and conservation;
• acknowledge the interactions and coordinate with other related policy initiatives, including the royalty review, land-use plans, infrastructure planning and investment;
• provide open and transparent monitoring and regular reporting to Albertans on progress toward emissions reductions;
• foster partnerships with municipalities, provinces, territories, the federal government and First Nations and Métis communities; and
• ensure Albertans are engaged and part of the solution.
Following the review process, Alberta’s climate change advisory panel will provide its recommendations and advice to the Minister of Environment and Parks in fall 2015. Stakeholders and members of the public are encouraged to engage in public meetings and taking the online survey.
Alberta’s Carbon Price to Increase as the Province Moves Toward Climate Change Policy Renewal
Alberta’s new Premier, Rachel Notley, expects to have a long-term climate change strategy in place for the province before she travels to the Paris Climate Conference (COP21) in December 2015. In taking up the mantle of climate leadership, Alberta’s Minister of Environment and Parks, Shannon Phillips, announced on June 25, 2015 that the government is moving forward with a two-step process for renewing the province’s climate change policy.
The centrepiece of Alberta’s climate change program is the Specified Gas Emitters Regulation (SGER), which came into force in 2007. Under the current regime, Alberta requires any facility emitting 100,000 tons or more of greenhouse gases (GHG) a year to reduce their emissions intensity by 12%. Following Minister Phillips’ announcement, the stringency level is set to increase:
• 15% as of January 1, 2016
• 20% as of January 1, 2017
There are four ways companies can comply:
• by making improvements to their operations;
• using Emission Performance Credit (if a facility reduces its emissions intensity to below its reduction target, it is eligible for an emission performance credit which are used to counteract the emissions of the facility);
• purchasing Alberta-based emission offset credits; and/or
• contributing to the Climate Change and Emissions Management Fund (the Fund).
The price of carbon for regulated entities choosing to pay into the Fund is also scheduled to increase:
• in 2016, $20 for every ton over a facility’s reduction target; and
• in 2017, $30 for every ton over a facility’s reduction target.
In addition to renewing and bolstering the SGER, the province appointed Professor Andrew Leach from the University of Alberta to chair an advisory panel to develop a more ambitious climate change regime in advance of COP21 in December 2015. The advisory panel has a mandate to carry out stakeholder consultations and prepare a discussion paper by the early fall which will inform the development of a new provincial climate change strategy. Indications are that the panel will undertake a comprehensive review and all options will be considered, including a carbon tax and a cap-and-trade scheme which could link with other jurisdictions such as Quebec or California. It is uncertain which aspects, if any, of Alberta’s unique emissions intensity scheme will survive the panel’s review. However, Alberta’s new NDP government seems keen to show that it is willing to commit to a higher carbon price and more stringent emission reduction targets, which will help to lend credibility to future climate change policy measures that it will be introducing in the coming months.
British Columbia joins Sub-National “Under 2 MOU” Climate Change Initiative
On May 19, 2015, British Columbia (BC) joined a new sub-national climate change initiative known as Under 2 MOU. The Under 2 MOU brings together states and regions willing to commit to reducing their greenhouse gas (GHG) emissions and will galvanize action at the Conference of the Parties (COP 21) in Paris this December. The founding signatories, who were present at the May 19 signing ceremony in Sacramento, California, include the following:
• Acre, Brazil
• Baden-Württemberg, Germany
• Baja California, Mexico
• British Columbia, Canada
• California, USA
• Catalonia, Spain
• Jalisco, Mexico
• Ontario, Canada
• Oregon, USA
• Vermont, USA
• Wales, UK
• Washington, USA
The Subnational Global Climate Leadership MOU is nicknamed “Under 2 MOU” in reference to (i) the goal of limiting warming to below 2°c, and (ii) the MOU’s shared goal of limiting greenhouse gas emissions to 2 tons per capita, or 80-95% below 1990 level by 2050. By joining the Under 2 MOU initiative, signatories also commit to establishing midterm targets, increasing energy efficiency and renewable energy, coordinating on a number of issues from transportation to short-lived climate pollutants, and working towards consistent monitoring, reporting, and verification of their emissions. All signatories will submit an appendix to the MOU that will outline their unique set of actions and plans to reach their goals.
The Under 2 MOU originated from a partnership between California and Baden-Württemberg out of the desire to bring together ambitious states and regions willing to make a number of key commitments towards emissions reduction and to help galvanize action at COP 21. Jurisdictions are invited to sign the MOU up to COP 21 in December. Interested jurisdictions are asked to submit a letter expressing their intent to sign on to the MOU and to complete an appendix that outlines the unique set of actions that are in place or planned to reach their emissions reduction targets.
According to the United Nations Development Program (UNDP), 50 to 80% of the mitigation and adaptation actions necessary to tackle climate change will be implemented at the subnational or local levels of governance. Subnational governments are particularly well placed to address climate change for a number of reasons, including:
• They are often responsible for the development and implementation of policies that have the most impact on climate change, including in the following areas: air quality; transportation; energy and energy efficiency; the built environment; natural lands; technology innovation, development, and transfer; and others that have direct implications for greenhouse gas emissions levels.
• Sub-national governments often serve as the laboratories for policy innovations which are then adopted at the national and even international level.
• Sub-national governments provide the critical link in the vertical integration of climate policies between national and local governments.
Carbon Financing
Carbon Financing is financing obtained by way of financial instruments that are issued by program authorities, governments or market participants in exchange or in recognition of documented real GHG emission reductions.
Washington State introduces Comprehensive Climate Change Initiatives
In December 2014, Washington State Governor Jay Inslee introduced an ambitious climate change policy agenda for 2015, including the establishment of an all-encompassing carbon pricing program. This policy follows the signing of Executive Order 14-04 (Washington Carbon Reduction and Clean Energy Action) by Governor Inslee on April 29, 2014, which set out a plan for state climate action.
If passed by state lawmakers, the program would raise an estimated $1 billion a year through a new levy on greenhouse gas emissions. In particular, the program would cap statewide pollution rates at levels that decline over time, with polluters allowed to trade state-sold pollution allowances among themselves. It would aim to address emissions covered other similar programs operating in the US, while avoiding pitfalls of other programs, such as giveaways for certain polluters. The technical aspects of Washington’s proposed program are considered best practices and as such, they have been lauded by outside observers such as the Environmental Defense Fund.
The program has been designed to help Washington get on track toward meeting its legislated goal of reducing emissions to 1990 levels by 2020, with a further 50% reduction by 2050. A November 2014 report by the Carbon Emissions Reduction Taskforce (which was established by Governor Inslee in April 2014 to provide recommendations on the design and implementation of a carbon emissions limits and market mechanisms program for Washington) concluded that Washington is not on target to comply with the 2008 law regarding required reductions in greenhouse gas pollution. It found that the requirement of reducing yearly pollution levels back to 1990 levels in 2020 would “likely” be met if a new cap and trade policy is implemented. Further steps would be needed to meet more ambitious reductions required by 2035 and 2050.
The proposed program would cover an estimated 85% of greenhouse gas emissions produced by Washington and it is anticipated that approximately 130 companies would be required to pay a levy, generating approximately $1 billion a year in revenue. Revenue generated under the cap-and-trade proposal would help to cover shortfalls in transportation and education spending, reduce taxes and fund household energy efficiency improvements for poorer residents, as well as help meeting the general costs of running the state.
Below is an overview of the legislative proposals aimed at reducing Washington’s greenhouse gas emissions:
• Carbon Pollution Accountability Act: The proposed Carbon Pollution Accountability Act (SB 5283 / HB 1314) would create a new market-based program that limits carbon emissions and requires regulated entities to pay for their emissions. The limit will decrease gradually over time, allowing emitters time to transition to cleaner technology and more efficient operations. The program will generate about $1 billion annually which will be used for transportation, education and disadvantaged communities. The draft Carbon Pollution Accountability Act can be found here.
• Clean Transportation: The Department of Transportation has three strategies to decrease transportation emissions: cleaner cars, cleaner fuels and moving people and goods more efficiently.
• Electric Vehicles (EVs): Legislation will extend tax incentives for EVs, create an EV infrastructure bank, and require urban cities and counties to adopt EV incentive programs. Draft legislation can be found below:
o Alternative Fuel Vehicle Sales Tax Exemption (SB 5445 / HB 1925): This bill extend a sales tax exemption on the first $60,000 on the purchase of alternative fuel vehicles.
o Electric Vehicle Infrastructure Carbon Pollution Accountability ActBank (SB 5444 / HB 1572): An EV bank would give financial assistance to install publicly accessible high-speed charging stations.
o Electric Vehicle Readiness in Buildings (SB 5446 / HB 1929): This bill would require urban cities and counties to adopt high speed EV charging station incentive programs.
• Zero Emission Vehicles (ZEVs): The Department of Ecology has requested legislation to allow Washington to adopt the Zero Emission Vehicle program.
• Clean Fuel Standard: The Department of Ecology is preparing a draft rule that outlines a clean fuel standard that would help the state to transition to cleaner fuels over time.
• Sustainable Transportation Planning: To reduce carbon pollution that comes from cars, trucks and other transportation-related sources, the Department of Transportation has developed a five-part action plan.
Public hearings on the proposed Carbon Pollution Accountability Act are continuing and have attracted great interest. Stay tuned for more details.
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The system provides the ability to report using multiple GHG calculation boundaries for different purposes.
Depending on the needs of a client, SoFi allows for the custom creation of reports and the ability to link tailored reporting boundaries for different purposes CDP, GRI, GRESB, ICLEI, Compact of Mayors, etc..
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BC Restructures GHG Emissions Regulatory Framework in Light of LNG Projects
On October 20, 2014, Environment Minister Mary Polak announced the first part of a restructuring of BC’s GHG emissions regulatory framework with the release of Bill 2, also known as the Greenhouse Gas Industrial Reporting and Control Act. This piece of legislation will replace the Greenhouse Gas Reduction (Cap and Trade) Act that came into force on May 29, 2008. The restructuring will continue with the release of the relevant Regulations under the new Act once it is given Royal Assent and comes into force. These regulations will include a new GHG Reporting Regulation and a new Emission Offset Regulation. It is expected that the reporting thresholds in the new GHG Reporting Regulation and the resulting obligations thereunder will remain the same. Tim Lesiuk, Executive Director and Chief Negotiator at Climate Action Secretariat, emphasized in a technical briefing the importance and responsibility of companies assuming to be below the lowest reporting threshold of 10,000 t CO2e annually (called non-reporting entities), to also monitor and document their GHG emissions in order to mitigate the risk of regulatory non-compliance and provide proof of their status as a non-reporting entity in case of an inspection.
A new Emission Offset Regulation is expected to offer an independent offset certification process from the BC Government’s Carbon Neutral purchase program. This will be achieved through a new certification and registry system. The BC Government’s existing Carbon Neutral purchase program conducted by the Climate Investment Branch will continue, but they will source their offsets from the new certification and registry system. Existing offset purchase contracts are expected to be grandfathered into the new system.
The functional new aspect in Bill 2 is the introduction of a new carbon intensity performance requirement. This carbon intensity performance target, called Regulated Operations’ Emission Limits in the Act is an additional requirement beyond the reporting obligation that only applies to industries that are listed in the Schedule of Regulated Operations and Emission Limits in the Act.
The only two listed industries so far are coal-based electricity generation operation with a limit of 0 tonnes carbon dioxide equivalent emissions and liquefied natural gas operations with a limit of 0.16 carbon dioxide equivalent tonnes for each tonne of liquefied natural gas produced. However, additional industries may be added and the BC Government has indicated that it will be announcing climate change measures in other sectors going forward.
The emission target carbon intensity performance quantification is limited to the facility level and therefore does not include any upstream or downstream emissions outside of the facility boundary. In order to meet their obligations, regulated entities with prescribed emission limits will have several compliance mechanisms available to them. In particular, they can:
• improve energy efficiency or increase the use of clean electricity through facility design;
• acquire emissions offsets by investing in BC-based emission reduction projects at market prices; or
• contribute to a technology fund at a rate of $25 per tonne of CO2e.
Besides setting up a new technology fund, Bill 2 also requires the establishment of a registry for the purposes of the Act. This registry will be the only place where offset units and earned credits, resulting from performance below the emissions limit, are tracked. This is also the only place where transactions under the Act can be executed for compliance purposes.
If you have any questions about Bill 2 and the proposed changes to the BC emission offset regime or their potential impacts on your operations or offset project, please contact GHG Accounting Services.
Food for Thought: Assessing the Impacts of Our Dietary Choices on the Climate
Changing food consumption patterns and associated greenhouse gas (GHG) emissions have been a matter of scientific debate for decades. In a study by the Potsdam Institute for Climate Impact Research and the University of Potsdam Department of Geo- and Environmental Sciences , researchers undertook to assess the potential for climate change mitigation through optimal management and dietary changes in light of the agricultural sector’s role as one of the world’s major GHG emitters. Current agricultural practices are resource intensive, requiring fuel and fertilizer as well as significant water use (agricultural accounts for approximately 70% of global water withdrawal). In terms of GHG emissions, the study indicates that agriculture contributes between 10% to 14% to the total anthropogenic GHG emissions. The study also projected emissions and examined dietary patterns and their changes globally on a per country basis between 1961 and 2007.
Global population growth and poverty reduction are driving changes in food consumption both in terms of total amount and composition. Lifestyle-related changes in diet are also driving increases in food demand. A dietary shift towards a reduction in meat consumption has the potential to significantly decrease GHG emissions, but current trends are heading in the opposite direction. While an increase in the consumption of animal products, vegetable oils and sugar sweeteners has occurred primarily in developed countries over the past few decades, a westernization of diets has also been occurring in developing countries. However, animal protein, animal fat and vegetable oil intake remains significantly higher in developed countries as compared to developing countries.
In order to better understand diet related emissions, researchers identified typical dietary patterns of food consumption and composition per country for the period from 1961-2007. Detailed analyses show that food consumption patterns are moving from low to higher calorie diets, which is consistent with an overall trend of improvements to long-term nutrition. While low calorie diets are decreasing worldwide, there is a change in parallel diet composition as well. In particular, there is a discernible shift towards more balanced diets in developing countries and the move towards more meat-rich diets in developed countries is characteristic of this trend. As a result, environmental impacts in terms of fossil fuel requirements and total GHG emissions generally increased as diets become more calorie rich. Low calorie diets, which are mainly observable in developing countries, show a similar emissions burden as moderate and high calorie diets. This can be explained by a less efficient calorie production per unit of GHG emissions in developing countries. Very high calorie diets are common in the developed world and exhibit high total per capita emissions of 3.7–6.1 kg carbon dioxide equivalent (CO2e) per day due to high carbon intensity and high intake of animal products. In case of unconstrained demographic growth and changing dietary patterns, the projected emissions from agriculture will approach 20 Gt CO2e per year by 2050, which represents a 40% increase in agriculture-related GHG emissions compared to 2005 levels. This highlights the tremendous potential the food sector can play with respect to helping us achieve climate protection goals, particularly with the introduction of less energy intensive agricultural practices. The study suggests that optimized management of agriculture may contribute to emission reductions of up to 7 Gt CO2e per year in 2050. The authors also highlight the importance of the livestock sector for diet-related GHG emissions; emissions from this sector are increasing rapidly according to their estimates and approximately 14 Gt CO2e per year by 2050 will be related to the consumption of animal products. The authors conclude by saying that agricultural intensification should focus on an optimization of emission intensities, which keeping other environmental stresses and anthropogenic inputs as low as possible. Or as Michael Pollan, author of the Omnivore’s Dillema, says: “Eat food, not too much, mostly plants.”
Québec’s First Cap & Trade Permit Auction Results
In the first auction of permits under Québec’s cap-and-trade scheme on December 3, 2013, bidders purchased only about one-third of the emission allowances offered – or 1.03 million of the 2.97 million 2013 permits. As a result of the low demand, the permits cleared at the lowest possible price of $10.75 per metric tonne of carbon dioxide equivalent.
Québec said it sold a combined CAD $29 million in 2013 and 2016 allowances in the auction. The province plans to sell the remaining 2013 carbon allowances in future auctions, which will be held every quarter starting March 4. Regulated entities will have until November 1, 2015 to acquire carbon allowances covering emissions generated in 2013 and 2014.
Yves-François Blanchet, Québec’s Minister of Sustainable Development, Environment, Wildlife and Parks said that the province is very satisfied with the results of the first auction and is confident that the remaining units will be sold at the upcoming auctions. Bloomberg New Energy Finance market analyst William Nelson observed that it was a “surprisingly under-subscribed auction”, but went on to say that the province’s failure to sell all the allowances in the first auction was a “one-time freak result”. Nelson anticipates that future auctions will fare better as the entities that did not participate in the auction this week will eventually show up as they still need to cover their emissions for the next two years.
Quebec’s program will be integrated with the larger California cap-and-trade market in 2014, when entities from both jurisdictions will be able to buy and sell emission allowances and offsets in either jurisdiction. At California’s last auction on November 19, 2013, the state sold 16.6 million tons of carbon allowances at a price of $11.48 each, which was in line with market expectations.
The results of the Québec auction are available online (in French only)
The results of California’s November 2013 auction are also available from the state’s Air Resources Board.