quantification and reporting of GHG emissions for organizations

European Commission Launches Green Products Initiative

The European Commission is proposing EU-wide methods to measure the environmental performance of products and organisations, and encouraging Member States and the private sector to take them up.

Currently, companies wanting to highlight the environmental performance of their products face numerous obstacles including the need to choose between several methods promoted by governments and private initiatives. As a result, these companies may be forced to pay multiple costs for providing environmental information and consumers are faced with confusion resulting from excessive labelling that makes products difficult to compare.

For example, a company wishing to market its product as a green product in France, UK and Switzerland would need to apply different schemes in order to compete based on environmental performance in the different national markets. In France, it would need to carry out an environmental assessment in line with the French method (BP X30-323); in the UK, it would need to apply the PAS 2050 or the WRI GHG Protocol; and in Switzerland, it would need to apply the Swiss approach which is currently under development.

According to the latest Eurobarometer on Green Products, 48 % of European consumers are confused by the stream of environmental information they receive, which affects their readiness to make green purchases. A number of industrial groups have called for a pan-European approach built on EU-wide science-based assessments and Life Cycle Analysis. This is because of concerns that multiple initiatives at Member State level would run contrary to Single Market principles, confusing consumers and increasing costs for industry.

To address these problems, the European Commission has launched the Single Market for Green Products initiative, which proposes the following actions:

establishing two methods to measure environmental performance throughout the lifecycle – the Product Environmental Footprint (PEF) and the Organisation Environmental Footprint (OEF);
recommending the use of these methods to Member States, companies, private organisations and the financial community through a Commission Recommendation;
announcing a three-year testing period to develop product- and sector-specific rules through a multi-stakeholder process;
providing principles for communicating environmental performance such as transparency, reliability, completeness, comparability and clarity; and
supporting international efforts towards more coordination in methodological development and data availability.

The three-year testing period will be launched soon. An open call for volunteers will be published by the Commission on the Product Environmental Footprint and the Organisation Environmental Footprint sites, inviting companies, industrial and stakeholder organisations in the EU and beyond to participate in the development of product-group specific and sector-specific rules. On these sites, some preliminary information is already available about the objectives and expected timing of the test. For more information, please see this link.

RGGI Proposes Tightening its Regional CO2 Emissions Cap by 45%

Following a comprehensive two-year program review, the nine Northeastern and Mid-Atlantic states participating in the Regional Greenhouse Gas Initiative (RGGI), the United States’ first market-based regulatory program to reduce greenhouse gas emissions, released an updated RGGI Model Rule and Program Review Recommendations Summary in February 2013.

The changes outlined in the Updated Model Rule and Program Review Recommendations Summary are aimed at strengthening the program by making the following improvements:

A reduction of the 2014 regional CO₂ budget (the RGGI cap) from 165 million to 91 million tons – a reduction of 45%. The cap would decline 2.5% each year from 2015 to 2020.
Additional adjustments to the RGGI cap from 2014-2020, which will account for the private bank of allowances held by market participants before the new cap is implemented in 2014. From 2014-2020 compliance with the applicable cap will be achieved by use of “new” auctioned allowances and “old” allowances from the private bank.
Cost containment reserve (CCR) of allowances that creates a fixed additional supply of allowances that are only available for sale if CO₂allowance prices exceed certain price levels ($4 in 2014, $6 in 2015, $8 in 2016, and $10 in 2017, rising by 2.5 percent, to account for inflation, each year thereafter.)
Updates to the RGGI offsets program, including a new forestry protocol.
Requiring regulated entities to acquire and hold allowances equal to at least 50% of their emissions in each of the first 2 years of the 3 year compliance period, in addition to demonstrating full compliance at the end of each 3 year compliance period.
Commitment to identifying and evaluating potential tracking tools for emissions associated with electricity imported into the RGGI region, leading to a workable, practicable, and legal mechanism to address such emissions.

The original RGGI cap was set at 2009 emission levels, with the expectation that emissions would grow. However, emissions have dropped dramatically because of the use of natural gas and other efficiencies in the RGGI states, reducing the demand for the permits. This resulted in depressing the RGGI permit price for carbon credits to under US $2, which is far below the projected US $20-$30. It is anticipated that the lower cap will stimulate interest and raise RGGI permit prices in the next auction. Analyses indicate that the proposed program changes will result in a modest increase in allowance prices, with allowances expected to be priced at approximately US $4 ($2010) per allowance in 2014 and rising to approximately US $10 ($2010) per allowance in 2020. In addition, analysts expect that the proposed program changes will reduce projected 2020 power sector CO₂ pollution more than 45% below 2005 levels.

With the release of the Updated Model Rule, the RGGI states now plan to revise their CO₂ Budget Trading Programs through their individual state-specific statutory and regulatory processes. Each RGGI state seeks to complete their state specific processes such that the proposed changes to the program would take effect on January 1, 2014. A summary of the program review is available online.

U.S. Consumers are taking into account companies’ actions on climate change when purchasing

According to a recent report from the Yale Project on Climate Change Communication and the George Mason University Center for Climate Change Communication, since 2008, approximately 25% percent of U.S. consumers have either rewarded or punished companies for those companies’ actions related to climate change. The report, “Americans’ Actions to Limit Global Warming in September 2012” (available online), indicates that a significant portion of the consumer market continues to care about the position of companies on climate change. The report also concludes that individuals who have not used purchasing power to either reward or punish companies in the past year plan to increase personal acts of consumer activism in the next year.

The report indicates that in the 12 months leading up to the September 2012 survey, about one in three adults rewarded a company that took steps to reduce emissions. In addition to rewarding companies for taking actions to reduce climate change impacts, 24% of those surveyed in September 2012 indicated that they had at some point in the past year chosen not to purchase products by companies that oppose steps to reduce climate change.

When asked to contemplate future behavior, 52% of individuals surveyed expressed the intent to either reward or punish companies sometime in the next year for the companies’ action or inaction to reduce climate change. Since researchers from Yale and George Mason began collecting data four years ago, slightly more than half of Americans have consistently reported plans to use purchasing power to either reward or punish companies. In November 2008, consumers indicated the greatest willingness (58%) to either buy or not buy based on a company’s actions on climate change. In the economic recession of 2010, willingness to utilize purchasing power to support global warming action fell to 51%. Since then, consumer support for utilizing purchasing power has remained at just over half of the surveyed American adults.

The Yale and George Mason researchers also studied three other prongs of climate actions by citizens: (1) saving energy, (2) citizen behavior, and (3) communication behavior. Even though a majority of American adults report that they always or often set their thermostats below 68 degrees and take other actions like replacing traditional light bulbs with compact fluorescent light bulbs, the researchers noted a decline in Americans’ belief that certain energy-saving actions can reduce climate change. Americans are less confident today than four years ago that their individual actions will reduce their contribution to climate change. While Americans may be less optimistic about their individual impact on global warming, the report’s authors observed that a growing number of Americans say they contacted a government official in the past year to support mitigation of climate change. In the next year, the report indicates that more Americans intend to urge government officials to take action on climate change.

Overall, the Yale and George Mason polling data indicate that Americans continue to be concerned about global warming and are willing to use political and consumer activism to push for action on global warming.

Climate Action Reserve Board Adopts Nitrous Oxide Reduction Methodology for Synthetic Nitrogen Fertilizer Management

The Climate Action Reserve (CAR) has developed a Nitrogen Management Project Protocol (NMPP) for the agricultural sector to provide guidance on how to quantify, monitor and verify greenhouse gas (GHG) emission reductions from improving nitrogen use efficiency in crop production. The protocol was adopted by CAR in June 2012. It is available online.
Within the same field, scientists at the National Science Foundation’s (NSF) Kellogg Biological Station (KBS) Long-Term Ecological Research (LTER) are putting the finishing touches on a program called the nitrous oxide greenhouse gas reduction methodology. This program, which is being conducted in partnership with the Electric Power Research Institute, would pay farmers to apply less nitrogen fertilizer in a way that doesn’t jeopardize yields. When farmers reduce their nitrogen fertilizer use, they can use the methodology as a means of generating carbon credits. These credits can then be traded in carbon markets for financial payments. The methodology was recently approved by the American Carbon Registry and is in its final stages of validation by the Verified Carbon Standard.

In the United States, agriculture accounts for almost 70 percent of all nitrous oxide emissions linked with human activity. Nitrous oxide is one of the major gases contributing to human-induced climate change and has a lifetime in the atmosphere of more than 100 years. In addition, a molecule of nitrous oxide has more than 300 times the heat-trapping effect in the atmosphere as a molecule of carbon dioxide.

To achieve desired production levels of crops such as corn, most farmers apply synthetic nitrogen fertilizer to their fields every year. While the production of nitrous oxide through microbial activity is a natural process in soils, the large-scale application of fertilizer has greatly increased the amount of nitrous oxide in soils. Once nitrogen fertilizer hits the ground, it is hard to contain and is easily lost to groundwater, rivers, oceans and the atmosphere. Nitrogen lost to the environment from agricultural fields is nitrogen not used by crops, which costs farmers money and degrades water and air quality. Farmers already manage fertilizer to avoid large losses, but to reduce losses further it currently costs more money than the fertilizer saves.

Carbon credits provide an incentive for farmers to apply fertilizer more precisely, rather than to reduce yields. In addition to providing an economic incentive, the methodology is a tool that farmers can apply to enhance their land stewardship.

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.

New GHG Standards for Corporate Value Chain and Product Life Cycle Released

On October 4, 2011, the Greenhouse Gas Protocol launched two new standards that will enable businesses to better measure, manage, and report their greenhouse gas (GHG) emissions. Developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), the Corporate Value Chain (Scope 3) and Product Life Cycle Standards are aimed at saving money, reducing risks, and gaining a competitive advantage for companies. These new standards were created in response to businesses that want to better understand and measure their climate impacts beyond their own operations. By using these new standards, companies will be able to create better products and improve efficiency throughout the value chain.

Corporate Value Chain (Scope 3) Standard

The Corporate Value Chain (Scope 3) Standard is designed as a first tool that companies can use to assess their entire value chain impacts and to identify opportunities for them to make more sustainable decisions about their activities and the products they produce, buy and sell. In particular, the new standard provides a harmonized global methodology for businesses to measure corporate value chain and product GHG emissions, which will help drive strategic business decisions regarding GHG reductions. Total corporate emissions often come from Scope 3 sources (i.e. indirect emissions that occur in the value chain, including both upstream and downstream emissions), which means that many companies have been missing out on significant opportunities for improvement. Users of the new standard can no account for emissions from 15 categories of Scope 3 activities. The Scope 3 framework also supports strategies to partner with suppliers and customers to address climate impacts throughout the value chain. As a result, both large and small companies can look strategically at GHG emissions across their value chain and focus limited resources in order to yield the biggest impacts.

Product Life Cycle Standard

The Product Life Cycle Standard is a tool to help users understand the full life cycle emissions of a product and focus efforts on the greatest GHG reduction opportunities. The new standard covers raw materials, manufacturing, transportation, storage use and disposal, and is aimed at facilitating the improvement and design of new products. The results can create competitive advantage by enabling better product design, increasing efficiencies, reducing costs and minimizing risks. In addition, the new standard will help companies respond to customer demand for environmental information and make it easier to communicate the environmental aspects of products. Like the Corporate Value Chain Standard, the Product Life Cycle Standard represents a globally consistent approach to measure and manage GHG emissions.

The new standards are available in our link section.

C40 and World Bank Sign Agreement to Form Climate Change Action Partnership

On June 1, 2011, the C40 Cities Climate Leadership Group (C40) and the World Bank signed an agreement that will help cities accelerate activities to reduce greenhouse gas emissions and adapt to climate change. The C40 is an organization of large and engaged cities from around the world committed to implementing meaningful and sustainable climate-related actions locally that will help address climate change globally. C40 cities account for 8 percent of the global population, 12 percent of global greenhouse gas emissions and 21 percent of global GDP. In 2006, the C40 partnered with the Clinton Climate Initiative to tackle climate change in cities.

The agreement was signed by C40 Chair New York City Mayor Michael R. Bloomberg and World Bank Group President Robert B. Zoellick during the C40 Cities Mayors Summit in Sao Paulo, Brazil. Mayor Michael R. Bloomberg said: “This unique partnership with the World Bank will help solve many of the problems that cities face in obtaining financing for climate-related projects, both from the World Bank and other lenders. It will also make it easier for C40 cities to access the resources of the World Bank.” World Bank Group President Robert B. Zoellick said: “This agreement will help us work with C40 cities to integrate growth planning with climate change adaptation and mitigation, with special attention to the vulnerabilities of the urban poor.”

The key objective of this new partnership is to enable megacities to expand mitigation and adaptation actions while at the same time, strengthen and protect economies, reduce poverty and protect vulnerable populations. In particular, it will address structural issues that make it difficult for cities to finance climate actions that have been identified by both C40 and the World Bank Group.

Under the agreement, the C40 and the World Bank will establish:

• A consistent approach to climate action plans and strategies in large cities to enable stronger partnerships between cities on shared climate goals, and to permit potential investors to identify opportunities across cities. The lack of a standard approach or process – such as exists for national government action plans – has made it difficult for investors and grantors to assess city action plans and thus has made them reluctant to fund projects.

• A common approach to measuring and reporting on city greenhouse gas emissions to allow verifiable and consistent monitoring of emissions reductions, identify actions that result in the greatest emission reductions, and facilitate access to carbon finance. This is necessary because carbon finance requires quantitative assessments of impacts, but currently no single standard for reporting citywide carbon emissions exists; the Carbon Disclosure Project’s Measurement for Management report identified several different protocols in use by C40 cities, with no single protocol used by a majority.

In addition, the World Bank will establish a single, dedicated entry point for C40 cities to access World Bank climate change-related capacity building and technical assistance programs, and climate finance initiatives by December 1, 2011. Furthermore, the C40 will identify and work with national governments who are interested in funding climate change projects and identify private sector partners to provide project financing in C40 cities. In turn, the World Bank will identify opportunities from among sources of concessional finance, carbon finance, and innovative market and risk management instruments as well as the private sector through the International Finance Corporation. These may be accessed by project developers supporting climate action in cities.

For more information on this partnership and other C40 initiatives, please refer to the C40 web site

Another Study links High GHG Emissions with Negative Impact on Company’s Value

A study by researchers at the University of Wisconsin-Madison, Georgetown University and the University of Notre Dame has found that high levels of greenhouse gas (GHG) emissions can have a negative impact on a company’s value. According to the study – Voluntary Disclosures and the Firm-Value Effects of Carbon Emissions (April 2011) – a company’s value decreases on average by $202,000 for every additional thousand metric tons of emissions it produces.

Researchers used hand-collected carbon emissions data for 2006-2008 that Standard and Poor’s (S&P) 500 companies disclosed voluntarily to the Carbon Disclosure Project to examine two issues: (1) firm-level characteristics associated with the choice to disclose carbon emissions, and (2) relationship between carbon emission levels and firm value. With respect to the first issue, researchers found a higher likelihood of carbon emission disclosures by firms with superior environmental performance, conditional on firms taking environmentally proactive actions. However, researchers found no association between inferior environmental performance and the likelihood of disclosing carbon emissions, conditional on firms taking environmentally damaging actions. Furthermore, researchers found that companies are more likely to voluntarily disclose their carbon emissions as the proportion of industry peer firm disclosers increases. In connection with the second issue, the researchers found a negative association between carbon emission levels and firm value. From its sample of S&P 500 companies, the study found that a company’s value decreases on average by $202,000 for every additional thousand metric tons of GHG emissions it produces.

In the study, researchers also pointed out that according to the 2009 Goldman Sachs’ GS Sustain Report it is expected that the relationship between carbon emissions and global climate change will drive a redistribution of value from firms that do not control their carbon emissions successfully to firms that do.
The study may be accessed online

UK Study finds that Measuring and Reporting GHG Emissions Delivers Cost Savings and Business Benefits

A research study released by PwC and the Carbon Disclosure Project (CDP) found that voluntary reporting of greenhouse gas (GHG) emissions is helping to cut costs and improve relationships for businesses.

On November 30, 2010, a research study released by PwC and the Carbon Disclosure Project (CDP) found that voluntary reporting of greenhouse gas (GHG) emissions is helping to cut costs and improve relationships for businesses. The research, commissioned by the UK Department for Environment, Food and Rural Affairs (Defra), surveyed more than 150 large companies and found that over 50% said the benefits of GHG reporting outweigh the costs involved. Participating businesses said the emission reports initiated board level interest in environmental issues and drove environmental change company-wide. Furthermore, 72% said they now have a corporate climate change strategy designed to reduce GHG emissions.

Measuring emissions cost less than £50,000 (approximately CAD $80,000) for 65% of the companies surveyed and approximately 14% of companies calculated energy cost savings of more than £200,000 a year (approximately CAD $320,000) as a result of GHG accounting initiatives. Against quantifiable business costs and benefits, 60% of companies found there to be a net cost of reporting, but when considering wider benefits such as reputation and consumer awareness, 53% of companies said there was a net benefit. Companies also said the distinction between voluntary and mandatory reporting is already blurred, with schemes such as CDP becoming semi-mandatory.

Joanna Lee, Chief Partnerships Officer at CDP commented that: “Reporting drives the action of measuring, helping companies to identify opportunities for emission reductions. It also helps companies set meaningful and achievable reduction targets, as well as advancing better risk management and increased awareness of new market opportunities.”

The study has been submitted to the UK Parliament as part of a wider analysis commissioned to inform the government’s decision on mandatory reporting. A decision is expected in early 2011.

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.