GHG inventory

Copenhagen to become first Carbon Neutral Capital by 2025

On August 23, 2012 an overwhelming majority of the Copenhagen City Council adopted an ambitious climate plan for the city. The plan, entitled CPH 2025, builds on a 2009 climate plan in which the city set out to reduce its carbon dioxide emissions to 20 percent of 2005 levels by 2015 and to become carbon neutral by 2025, making it the first national capital to do so. Copenhagen already met the first target in 2011, four years ahead of schedule, despite the fact that the city’s population grew by ten percent over the same period.

CPH 2025 mirrors the climate plan set out by the Danish government to vastly reduce the country’s carbon footprint and end its reliance on fossil fuels for energy production by 2035. The city released approximately 1.9 million tonnes of carbon dioxide in 2011, a figure that would drop to 1.16 tons a year in 2025 if no new initiatives were introduced. Extensive retrofitting of buildings, reorganisation of the energy supply and changes in transport habits are some of many initiatives the City of Copenhagen will implement in order to achieve its carbon neutral goal. Some of the key targets include:

Energy consumption:

20% reduction of heat consumption.
20% reduction of commercial and 10% reduction of residential electricity consumption.
Installation of photovoltaic cells to generate 1% of 2025 Copenhagen’s electricity.

Energy production:

Carbon neutral district heating.
Electricity produced by wind and biomass will exceed the total energy consumption of Copenhagen.
Separation of commercial and residential plastic waste.
Bio-gasification of organic waste.

Transportation:

75% of overall trips in Copenhagen will be on foot, bike or public transport.
50% of school or work commuting trips will be by bike.
20% increase in public transport passengers.
Carbon neutral public transport.
20-30% of light vehicles will use renewable energy like biogas or hydrogen.
30-40% of heavy vehicles will use renewable energy.

City administration:

40% reduction of energy consumption in municipal buildings.
New municipal constructions till 2015 will meet the requirements of the 2015 classification.
New municipal constructions till 2020 will meet the requirements of the 2020 classification.
City of Copenhagen vehicles will run on electricity, hydrogen or bio-fuels
50% reduction of street lighting energy consumption.
60,000 square meters of solar panelling will be installed on municipal buildings.

CPH 2025 offers a holistic vision for the city that reduces carbon dioxide emissions by transitioning energy production away from coal and toward biomass, wind and solar energy, while also reducing energy consumption and improving energy efficiency in transport, housing, heating and industry. The plan will cost the city about 2.7 billion kroner before 2025, although additional private investments of between 20 and 25 billion kroner will be needed from the private sector in order for the city to meet its targets.

Global Protocol for Community-scale GHG Emissions released for Public Comment

On March 20, 2012, the ICLEI – Local Governments for Sustainability and C40 Cities Climate Leadership Group released a draft edition of the Global Protocol for Community-Scale Greenhouse Gas Emissions (GPC) to help cities around the world measure and report GHG emissions using a consistent protocol. Public comments on the draft GPC may be submitted until April 20, 2012 and a final version will be released on May 15 at the United Nations climate talks in Bonn. The design of the GPC is specified within the scope of the Memorandum of Understanding that was signed between ICLEI – Local Governments for Sustainability and C40 Cities Climate Leadership Group on 1 June 2011 in Sao Paulo.

The GPC is the result of a year-long collaboration between ICLEI – Local Governments for Sustainability and C40 Cities Climate Leadership Group; in June 2011, the two organizations forged an agreement to develop a standard approach for accounting and reporting GHG emissions that will boost the ability of cities to access funding and implement actions. Other organizations that participated in the development of GPC include the World Bank Group, United Nations-HABITAT, United Nations Environment Program, the Organization for Economic Cooperation and Development, and the World Resources Institute. This new collaboratively developed community protocol establishes a single minimum standard for accounting and reporting community scale greenhouse gas (GHG) emissions that can be used across multiple platforms. The GPC complements ICLEI’s programs and tools on local climate action that are being implemented globally, in particular the 2009 International Local Government GHG Emissions Analysis Protocol (IEAP) and its national supplements.

The GPC has three main components:

guiding principles and a policy framework to link the efforts across local and national governments and the private sector;
the 2012 Accounting and Reporting Standard with supplemental guidance on methodologies, and reporting templates; and
a roadmap for institutionalizing the process for updating the Standard on an ongoing basis.

Background

To manage emissions in an effective and transparent way, cities must measure and publicly report them. Planning for climate action at the city level starts with developing a GHG inventory, which allows local policy makers and residents to understand which sectors drive GHG emissions in their city or community, and respond by developing action plans that address those sectors. To date, a consistent accounting and reporting guidance for cities on how to conduct community scale inventories has been lacking. Rather, competing guidance has resulted in a proliferation of protocols and inventories that cannot be easily communicated between financing institutions, local and national governments, and the private sector. The absence of a common approach prevents comparison between cities and across time, and reduces the ability of cities to demonstrate the global impact of collective local actions.

Harmonization of GHG accounting methodologies presents local governments with opportunities for credible reporting of climate data in a transparent, verifiable, consistent, and locally relevant way. An internationally recognized GHG accounting standard which harmonizes prevailing methodologies can help local governments to set targets, measure progress, and leverage national and international financing. The community protocol integrates seamlessly with national and corporate GHG accounting methodologies, facilitating linkages between these entities for improved coordination to reduce GHG emissions. ICLEI is also working with its partners to reflect provisions of the GPC in the GHG performance section of the carbon Cities Climate Registry (cCCR). As of February 2012, the cCCR had compiled more than 1 GtCO2/yr of community GHG emissions reported by over 160 cities worldwide.

The GPC builds upon the principles, knowledge, experiences, and practices defined in previously published city-led inventories, institutional standards, and organizational protocols. These include the International Local Government GHG Emissions Analysis Protocol (ICLEI), Draft International Standard for Determining Greenhouse Gas Emissions for Cities (UNEP/UN-HABITAT/WB), GHG Protocol Standards (WRI/WBCSD), Baseline Emissions Inventory/Monitoring Emissions Inventory methodology (EC-CoM JRC), and Local Government Operations Protocol (ICLEI-USA).

Within the context of the GPC, several challenges have been identified in efforts to account for community-scale emissions:

Developing a community-scale GHG accounting and reporting standard that attributes emissions to the activities of the community.
Harmonizing existing community-based GHG accounting methodologies and standardizing accounting, reporting, and the relationships of community-scale inventories with national, organizational, and global climate efforts.
Advancements in GHG accounting methodologies at the community-scale are continuously evolving. An open, global protocol must therefore include a process for revising the standard to meet the inevitable improvements of tomorrow.

To address these challenges, the GPC provides a template to analyze the relationship with national and organizational GHG accounting methodologies, allocating all community activities and services that may result in GHG emissions, including inter-city emissions, to categories defined by the 2006 IPCC Guidelines and by Scope definition, to reflect varying levels of control by the community over these emissions. In addition, the GPC introduces a community-scale GHG accounting standard – referred to as the 2012 Accounting and Reporting Standard – which harmonizes GHG accounting methodologies and provides step-by-step guidance for cities on how to collect relevant data, quantify emissions, and report results using a series of summary reporting templates. Data collection for reporting is guided through use of data collection tables, providing transparency in activity data, emissions factors, and data sources. The 2012 Accounting and Reporting Standard enhances local policy development by: (i) benchmarking emissions between cities to facilitate peer-to-peer networking and sharing of best practices; (ii) allowing for consistent measurement of a community’s GHG emissions over time to evaluate various GHG abatement efforts; and (iii) facilitating climate-linked finance.

The GPC and associated processes are guided by six principles:

Measurability. Data required to perform complete emissions inventories should be available; where necessary partners will work with communities to develop local capacity communities to enable for data development and collection for compliance with the 2012 Accounting Standard.
Accuracy. The calculation of GHG emissions should not systematically overstate or understate actual GHG emissions.
Relevance. The reported GHG emissions should reflect emissions occurring as a result of activities and consumption from within the community’s geopolitical boundaries.
Completeness. All significant emissions sources included should be accounted for.
Consistency. Emissions calculations should be consistent in approach.
Transparency. Activity data, sources, emissions factors and accounting methodologies should be documented and disclosed/

Comments on the full document should be submitted through the feedback form template. The deadline for feedback is April 20, 2012. Feedback should be sent directly to GPC@iclei.org.

Study Finds that Lowering Levels of GHG Emissions can Increase a Company’s Stock Value

A recent study by researchers at the University of California (Davis and Berkeley) and the University of Otago in New Zealand entitled “The Relevance to Investors of Greenhouse Gas Emission Disclosure” has found that the amount of greenhouse gas (GHG) emissions a company produces and whether a company discloses their emission levels or not has a significant effect on the value of the company’s stock. In particular, the researchers found that the greater the GHG emissions, the lower the value of a company’s stock. Likewise, lower emission levels lead to higher stock values, all other factors being equal. Even if companies do not disclose this information, GHG emission levels are estimated by investors themselves, resulting in an even stronger risk discount to the stock value for high level emitters. This trend is particularly strong in energy intensive industry sectors. The study was led by Paul Griffin, a professor in the University of California, Davis Graduate School of Management.

Professor Griffin and his colleagues also discovered that markets respond almost immediately when a company releases information on their GHG emissions, with stock values responding the same day as the disclosure. “It really does appear to be a valuation factor,” Professor Griffin says. “Greenhouse gas emissions are important to investors in assessing companies.”

The findings bolster the arguments of investor groups, environmental advocates and watchdog organizations that have been seeking greater disclosure of company actions that affect climate change. The U.S. Securities and Exchange Commission (SEC) does not require all companies to report GHG emissions, but companies are required to disclose any information that is considered material to stock values. The findings of this study strongly suggest that GHG emissions data is relevant information to investors, therefore it could be argued that all public companies should disclose their GHG emissions to comply with SEC requirements. Approximately 50% of large U.S. firms report GHG emissions through the Carbon Disclosure Project.

The researchers analyzed four years of data (from 2006-2009) on firms listed in the Standard & Poor’s 500, and five years of data (2005-2009) for the top 200 publicly traded firms in Canada. While the researchers found the link between stock values and GHG emissions to hold true in most industries, the correlation was strongest for energy companies and utilities. According to Griffin, “after controlling for normal valuation factors like assets and earnings, we found the value of stocks to be a function of greenhouse gas emissions”.

Investors care about GHG emissions because markets are forward looking. Professor Griffin has indicated that in this case, investors are anticipating a time when companies will face increased costs for climate change mitigation, regulation and taxes.
The full study can be downloaded at Link.

ICLEI seeks public input on draft Community-Scale GHG Emissions Accounting and Reporting Protocol

In response to the needs of its member local governments, ICLEI-Local Governments for Sustainability USA (ICLEI was originally established as the International Council for Local Environmental Initiatives) has released a draft Community-Scale GHG Emissions Accounting and Reporting Protocol for public comment.

Rationale for the Community Protocol

Local governments are increasingly looking to create policies that will reduce emissions from the activities of their residents, businesses, and visitors. The emissions reduction process begins with identifying primary sources of emissions and quantifying the scale of emissions from these sources. By establishing standards for community-scale inventories, communities can ensure the consistency and quality of their inventories. In addition, such standards will allow for accurate monitoring of progress against emissions targets, and provide standard guidance as local governments pursue environmental review, inventory certification and other relevant processes in their day-to-day operations. A national standard will form the foundation of future climate actions, thereby enabling communities to address the challenges of climate change more effectively.

The Community Protocol will complement the Local Government Operations Protocol and serve as a U.S. Supplement to the International Emissions Analysis Protocol. The draft framework is available for review online.

Accounting for your Footprint / GHG Inventory

A fundamental key to effectively managing your business risk and cost in an increasingly carbon-constrained world is an understanding of your organization’s carbon footprint, which covers emissions generated by your products and supply chain. In order to calculate your carbon footprint, an analysis of your organization’s GHG inventory is essential. A “carbon footprint” represents a measure of the total amount of GHG emissions that are directly and indirectly caused by an activity, organisation or is accumulated over the lifecycle of a product. The carbon footprint captures activities of individuals, communities, companies, processes, or industry sectors and takes into account all direct and indirect emissions. A carbon footprint can be broken down into two parts, the primary footprint and the secondary footprint.
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What is considered “green” or not has always had, and will always have, different meanings depending on a particular point of view as well as the point in time. At the beginning of the green movement, issues such as forest conservation, protection of wildlife and recycling were the focal points. However this has evolved to encompass more comprehensive strategies which we now understand are required to enable meaningful change. These strategies include more holistic approaches to sustainability, biodiversity and climate change. One of the most interesting things in recent years has been the realisation that these strategies make good business sense and result in positive impacts. Examples of these positive impacts include better yields due to crop diversity, lower energy costs due to energy savings, and lower risks and costs associated with having a smaller carbon footprint.

A fundamental key to effectively managing your business risk and cost in an increasingly carbon-constrained world is an understanding of your organization’s carbon footprint, which covers all greenhouse gas (“GHG”) emissions generated by all human direct or indirect activities within the boundaries of direct (Scope 1) or indirect control (Scope 2) of your organisation. In order to calculate your carbon footprint, an analysis of your organization’s GHG inventory is essential.

What is a “Carbon Footprint”?

A “carbon footprint” represents a measure of the total amount of GHG emissions that are directly and indirectly caused by an activity, organisation or is accumulated over the lifecycle of a product (Product footprint). The carbon footprint captures activities of individuals, communities, companies, processes, or industry sectors and takes into account all direct and indirect GHG emissions. A carbon footprint can be broken down into two parts, the primary footprint and the secondary footprint.

The primary footprint is the sum of direct GHGemissions and includes activities such as energy consumption and transportation.

The secondary footprint is the sum of indirect GHG emissions from the entire lifecycle of products used by an individual or organization.

Although carbon footprints are reported in tons of carbon dioxide equivalent (CO₂e) emissions, they actually represent a measure of total GHG emissions. GHGs that are regulated include CO₂, nitrous oxide, methane, hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride. CO₂ is used as the reference gas against which the other GHGs are measured and the impact of all GHGs is measured in terms of equivalency to the impact of CO₂by way of global warming potentials. For example, methane is a far more potent GHG than CO₂, so one metric tonne of methane is measured as 21 metric tons of carbon dioxide equivalent, or CO₂e.

The accurate calculation of an organization’s carbon footprint is important in ensuring that GHG emissions are not under-counted or double-counted, particularly where emission reductions will be used in carbon trading and carbon off-setting transactions. A careful review of a organization’s methodology for calculating its carbon footprint will play a significant role in reducing the risks inherent in carbon trading and carbon off-setting, as well as ensure the credibility of carbon transactions.

GHG Inventories

A GHG inventory is a breakdown of emissions by activity for an organization, expressed in terms of CO₂e. GHG inventories provide the basis for (i) identifying organizational, geographic, temporal and operational GHG inventory boundaries, (ii) identifying all direct and indirect emissions sources, and (iii) determining appropriate methods to calculate emissions through protocols.

The effective accounting and management of carbon requires unambiguous, verifiable specifications. This will ensure that a tonne of carbon can be consistently calculated. To that end, an internationally agreed upon standard for measuring, reporting and verifying GHG emissions was introduced in 2006 by the International Organization for Standardization (ISO) and is referred to as ISO 14064.

ISO 14064 Standard

ISO 14064 consists of three standards, which provide guidance at the organizational and project levels, as well as for validation and verification:

ISO 14064-1 specifies the requirements for designing and developing GHG inventories.
ISO 14064-2 sets out requirements for quantifying, monitoring and reporting emission reductions and removal enhancements from GHG projects.
ISO 14064-3 sets out guidance for conducting GHG information validation and verification.

What GHG Accounting Can Do For You

GHG Accounting Services Ltd. (GHG Accounting) provides specialized GHG consulting and accounting services, including (i) emissions reporting and footprint inventory quantification, (ii) emissions reduction project planning, and (iii) quantification, documentation and carbon offset credit registration.

WCI Proposes Harmonised Reporting Requirements for Canadian WCI Members

On September 8, 2010, the Western Climate Initiative (WCI) released its proposal for revising and harmonising the existing Final Essential Requirements for Mandatory Reporting (the Essential Requirements) for use in Canadian jurisdictions. The proposal is entitled Harmonisation of Essential Requirements for Mandatory Reporting in Canadian Jurisdictions with the WCI Essential Requirements for Mandatory Reporting and the EPA Greenhouse Gas Reporting Program (the Harmonisation Document).

By way of background, on July 16, 2009, the WCI published the Essential Requirements for implementation by WCI Partner jurisdictions. On September 22, 2009, the U.S. Environmental Protection Agency (EPA) adopted its final Mandatory Reporting Rule (the EPA Rule) for greenhouse gas emissions. On May 28, 2010, the WCI invited stakeholder comment on its proposal to harmonise the Essential Requirements with the EPA Rule for use in a cap-and-trade program. In order to maintain consistency across all WCI jurisdictions, WCI members acknowledged that the WCI proposal to harmonise with the EPA Rule necessitated the development of revised Essential Requirements for use in Canadian provinces to ensure harmonised quantification methods throughout the U.S. and Canadian WCI jurisdictions. As a result, WCI members directed the WCI Reporting Committee to develop amended Canadian Essential Requirements that are themselves harmonised with the proposed WCI Essential Requirements for use in U.S. jurisdictions.

The following principles were applied in the harmonisation process:

1. A Canadian facility should apply the same functions, equations, sampling protocols and measurement criteria as U.S. facilities subject to the U.S. version of the harmonised Essential Requirements. This means that the harmonised Essential Requirements will achieve the same level of reporting accuracy for Canadian and U.S. facilities, but the U.S. version may require more data elements to be reported to harmonize with the EPA Rule.

2. The quantification methods included in the harmonised Essential Requirements must remain sufficiently reliable and accurate to be employed in a greenhouse gas (GHG) cap-and-trade program.

3.The WCI reporting system must remain suitable for use in Canadian jurisdictions. For example, it must allow reporting in metric as well as English units and must, where necessary, include Canada-specific emission factors.

4. The harmonised Essential Requirements should facilitate harmonisation with Canadian federal reporting. Some Canadian jurisdictions are working with Environment Canada to develop a one-window reporting tool for provincial and national GHG reporting requirements.

The WCI anticipates that Canadian WCI members will implement the harmonised Essential Requirements by adopting them into or through their reporting regulations. The WCI is also working on minor revisions to the general provisions of the Essential Requirements and the development of quantification methods for upstream oil and gas, natural gas transmission, distribution and storage, underground coal mine and magnesium production that are appropriate for use in Canadian member jurisdictions.

A stakeholder call to discuss the proposal will be hosted by the WCI during the week of September 20th. The Harmonisation Document is available through the WCI web site.

B.C.’s GHG Reporting Regulation has come into force on January 1, 2010

The Reporting Regulation (the Regulation) is a new regulation under the Greenhouse Gas Reduction (Cap and Trade) Act that has come into force on January 1, 2010. The Regulation requires facilities in British Columbia that emit over 10,000 tonnes of greenhouse gases (GHGs) annually to report their emissions.

The Regulation has been designed to allow for a single reporting window with Environment Canada, which aims to create administrative simplicity for industry stakeholders. The Regulation sets out requirements for facilities with GHG emissions from a number of activities within B.C. to report GHG emissions to the Ministry of Environment (MOE).

One of the key objectives of the Regulation is to facilitate an accurate and transparent reporting mechanism, which will support properly functioning cap-and-trade system. As such, the Regulation specifies among other criteria:

· GHGs subject to reporting;

· level of emissions requiring reporting;

· facilities required to report;

· quantification methods to be used in reporting;

· requirements and procedures for annual reporting;

· verification mechanisms; and

· compliance obligations.

Below is an overview of the reporting specifics:

· all six main GHGs included;

· 10,000 tonne carbon dioxide equivalent (CO2e) reporting threshold;

· 25,000 tonne CO2e verification threshold;

· upstream oil and gas; (ii) natural gas transmission and distribution; (iii) electricity transmission and distribution; and, (iv) oil pipeline transportation emissions are aggregated into “linear facilities” to determine whether the 10,000 tonne reporting and 25,000 verification thresholds are exceeded;

· carbon dioxide from wood biomass, or the wood biomass component of mixed fuels, is not included in the determination of thresholds;

· first requirements (data collection and management) for reporting operations start on January 1, 2010;

· not applicable to public sector organizations, except for BC Hydro and BC Transmission Corporation electricity generation or electricity transmission;

· not applicable to emissions of landfill gas as defined under the Landfill Gas Management Regulation;

· registration to occur by April 1, 2010;

· annual emissions reports, beginning with the 2010 calendar year, required by March 31 of the following year;

· facilities with emissions greater than 20,000 tonnes of CO2e in any year between 2006 and 2009 must report these emissions along with the 2010 emissions report submitted in 2011;

· a facility may calculate emissions using alternative methodologies for the lower of 3% of the facilities total emissions, or 20,000 tonnes;

· for the 2010 calendar year, a facility may measure a specific parameter using alternative methods inconsistent with those prescribed in the regulation (approval is required for this after March 31, 2010);

· MOE may publish emissions data from major source categories;

· a facility may request that certain data remain confidential; and

· Western Climate Initiative quantification methods are required to be used (where these do not exist, required methods are specified by the MOE).

Below is an overview of verification specifics:

· verification to a reasonable level of assurance;

· 5% materiality threshold applies;

· verification statements to be submitted by September 1 of the following year for 2010 and 2011 reports (thereafter the verification deadline is the same as the reporting deadline, April 1);

· verification to be completed by an independent third party verification body, accredited by the Standards Council of Canada or the American National Standards Institute in accordance with ISO 14065;

· for verifications completed before Dec. 31, 2012, verifiers can be accredited by the California Air Resources Board; and

· conflict of interest requirements for verifiers apply.

Activities covered include:

· General Stationary Combustion

· Mobile Equipment Fuel Combustion (except for linear facilities; generally on-site, off-road equipment)

· Aluminium or Alumina Production

· Ammonia Production

· Carbon Dioxide Transportation (linear facility)

· Cement Production

· Coal Mining from Underground Mines

· Coal Storage at Facilities that Combust Coal

· Copper or Nickel Smelting or Refining

· Electricity Generation

· Electricity Transmission (linear facility)

· Electronics Manufacturing

· Ferroalloy Production

· Glass Manufacturing

· Hydrogen Production

· Industrial Wastewater Processing

· Lead Production

· Lime Manufacturing

· Magnesium Production

· Natural Gas Transmission, Natural Gas Distribution or Natural Gas Storage (linear facility)

· Nitric Acid Manufacturing

· Oil and Gas Extraction and Processing Activities (linear facility)

· Oil Transmission (linear facility)

· Petrochemical Production

· Petroleum Refining

· Phosphoric Acid Production

· Pulp and Paper Production

· Refinery Fuel Gas Combustion

· Zinc Production

Whether you are required to reduce emissions by regulation or if you choose to reduce emissions voluntarily (for purposes such as marketing, brand management or corporate social responsibility), GHG Accounting Services can assist you in quantifying your total GHG emissions based on the requirements and relevant protocols of ISO 14064-1. This will enable you to comply with required reporting standards or it could be the first step in becoming carbon neutral.

Offset Credits

Whether you are purchasing offset credits on a mandatory or voluntary basis to reduce your carbon footprint, GHG Accounting Services can assist you in evaluating the costs and impacts of such purchases on your bottom line and GHG inventory.