CD4CDMCD4CDM ABCs of Carbon Emissions Accounting May Antoniette Ajero Climate Change Information Center June 19, 2003

CD4CDMCD4CDM What is carbon emissions accounting? Carbon accounting records, summarizes and reports the quantity of carbon emissions by sources and removals by sinks as a direct result from human activities or natural processes that have been affected by human activities

CD4CDMCD4CDM Why conduct an accounting of carbon emissions? provide information on which to build an effective strategy to manage GHG emissions prerequisite for participation in GHG trading markets demonstrate compliance with government regulations, if any is already in place

CD4CDMCD4CDM UNFCCC Article 4 (a) Develop, periodically update, publish and make available to the Conference of Parties national inventories of anthropogenic emissions by sources and removals by sinks of all greenhouse gases not controlled by the Montreal Protocol, using comparable methodologies to be agreed upon by the Conference of Parties

CD4CDMCD4CDM Why is there a need to use a standard methodology?  allows comparability across all countries  ensures consistency, transparency and verifiability of the inventory CD4CDMCD4CDM

CD4CDMCD4CDM OECD Report on Estimation of GHG Emissions and Sinks (1991) IPCC Guidelines for National GHG Inventories (1995) Revised IPCC Guidelines for National GHG Inventories (1996) *Good Practice Guidance and Uncertainty Management (2000) Development of the methodology guidelines for national GHG inventories:

CD4CDMCD4CDM Revised IPCC Guidelines for National GHG Inventories …the Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories should be used as "methodologies for estimating anthropogenic emissions by sources and removals by sinks of greenhouse gases" in calculation of legally-binding targets during the first commitment period. - COP3 held in 1997 in Kyoto consists of three volumes  The Reporting Instructions (Volume 1)  The Workbook (Volume 2)  The Reference Manual (Volume 3)

CD4CDMCD4CDM A good GHG accounting/inventory and reporting must be... relevant complete consistent transparent accurate comparable verifiable

CD4CDMCD4CDM Relevance - clearly defines and reflects GHG emissions of the chosen boundary and the decision making needs of the users Completeness - all GHG emission sources and activities within chosen boundaries are accounted - any specific exclusions are stated and justified

CD4CDMCD4CDM Consistency - same approach and practices in the calculation and presentation of data allows meaningful comparison of emissions performance over time. - relevant issues are addressed in a factual and coherent manner based on a clear audit trail. - important assumptions are disclosed - appropriate references of methods used are made. Transparency

CD4CDMCD4CDM Accuracy - a credible calculation and reporting system with the precision needed for their intended use is practiced. - uncertainties which may arise from default assumptions and methods are kept at a minimum Comparable - methods used complies and adheres to internationally accepted methodology (such as the IPCC Guidelines)

CD4CDMCD4CDM Carbon emissions emissions of carbon dioxide, methane and nitrous oxide in equivalent carbon dioxide units Global Warming Potential Carbon Dioxide = 1 CO 2 equivalent Methane, CH 4 = 21 CO 2 equivalents Nitrous Oxide, N 2 O = 310 CO 2 equivalents Other Gases – HFCs, PFCs, and SF 6 = range 600 – 23900x CO 2 equivalents

CD4CDMCD4CDM Steps in carbon accounting: 1.Identify boundary/ies to be covered 2.Identify emission sources to be covered 3.Select an emissions calculation approach 4.Collect activity data and choose emission factors 5.Apply calculation tool to estimate emissions

CD4CDMCD4CDM community/ project national global Levels/boundaries of accounting organizational operational (companies) geographical project - based

CD4CDMCD4CDM Emission Categories Direct GHG emissions are direct emissions from activities or sources immediately within the set boundary / project. e.g. vehicle emissions Indirect GHG emissions are emissions that are a consequence of the activities of the boundary/project e.g. electricity use On-site and Off-site Emissions (geographical) emissions that take place at a project site/ emissions that result from activity elsewhere

CD4CDMCD4CDM Emission Categories Upstream emissions (includes embedded/embodied) material impacts of activities that relate to the project activity but occur before it Downstream emissions material impacts of activities that relate to the project but occur after the project activity Full cycle accounting a comprehensive accounting of all the significant emissions related to a project

CD4CDMCD4CDM Types of Emissions Direct / off-site emission off-site emission Direct / on-site emission

CD4CDMCD4CDM have previous knowledge on the basics of climate change; are proficient in basic mathematical operations; are computer literate (i.e. Excel); and preferably, are familiar with activity or project process being accounted for carbon emissions Who can do the accounting?

CD4CDMCD4CDM EQUATION GHG = A x EF where, GHG = emissions (amount of CO 2 or CH 4, etc) A = activity data (liters of fuel, kg of cement) EF = emission factor (kg CO 2 /liter of fuel, kgCO 2 /kg cement)

CD4CDMCD4CDM GHG = A x EF A (activity data) - data on the magnitude of human activity resulting in emissions or removals taking place during a given period of time (liters of fuel consumed, etc) EF (emission factor) - a coefficient that relates the activity data to the amount of chemical compound which is the source of later emissions. - Emission factors are often based on a sample of measurement data, averaged to develop a representative rate of emission for a given activity level under a given set of operating conditions. (amount of Carbon/unit activity)

CD4CDMCD4CDM Base year - the year for which the inventory is to be taken Anthropogenic emissions - Emissions of greenhouse gases, greenhouse gas precursors, and aerosols associated with human activities. Default Method - The IPCC Guidelines recommends a number of assumptions and data for use in the estimation of greenhouse gas emissions and removals primarily to provide users with a starting point from which they can develop their own. Top-down Approach (Aggregate)- Evaluate the system from aggregate economic variables. (MACRO) Bottom-up Approach (Disaggregated)- A modeling approach that includes technological and engineering details in the analysis. (MICRO)

CD4CDMCD4CDM GHG = A x EF tons CO 2 = tons of cement produced x tons CO 2 /ton of cement produced Sample Emissions Calculation: Emissions from Cement Production

CD4CDMCD4CDM The Typical IPCC Worksheet Revised 1996 IPCC Guidelines for National GHG Inventories: Workbook page 2.61 A EFGHG Source category sector

CD4CDMCD4CDM 1994 Philippine GHG Inventory Results Tons cement produced X Tons of CO 2 Tons cement produced X 10 3 Tons of CO 2 Gg of CO 2 =

CD4CDMCD4CDM Prefixes, Conversion Factors and Acronyms Revised 1996 IPCC Guidelines for National GHG Inventories: Reporting Instructions, page INTROD.4

CD4CDMCD4CDM Prefixes, Conversion Factors and Acronyms Revised 1996 IPCC Guidelines for National GHG Inventories: Reporting Instructions, page INTROD.4

CD4CDMCD4CDM Prefixes, Conversion Factors and Acronyms Revised 1996 IPCC Guidelines for National GHG Inventories: Reporting Instructions, page INTROD.5

CD4CDMCD4CDM Prefixes, Conversion Factors and Acronyms Revised 1996 IPCC Guidelines for National GHG Inventories: Reporting Instructions, page INTROD.5

CD4CDMCD4CDM GHG = A x EF To reduce the value of GHG: lower the value of A = decreasing frequency or magnitude of activity or emission source; lower the value of Emission factor = shifting into a more efficient technology, less carbon intensive activity; or do both at the same time Emissions Reduction

CD4CDMCD4CDM CO 2 emission year Reduced emissions (CER) Project implemented Business as usual: baseline End of project Start of project

CD4CDMCD4CDM Other terms used for Scenarios: Baseline = Business as Usual (BAU scenario) = Reference Scenario = Without Project Scenario Project = Alternative Project scenario = With Project Scenario

CD4CDMCD4CDM Emissions Reduction Calculations - objective is to define reference and project scenarios and determine the net difference in GHG emissions between these two scenarios  GHG redn = GHG base – GHG proj = emissions reduction due to existence of the project GHG base = an estimation of emissions assuming that no alternative project was implemented GHG proj = measures the GHG emissions following project implementation

CD4CDMCD4CDM  GHG redn = GHG base – GHG proj = (A*EF) base – (A*EF) proj *So that, in renewable energy projects wherein emission factors of the project are considered zero:  GHG redn = (A*EF) base – (A*0) proj = (A*EF) base  GHG redn = GHG base * hydro, solar, wind - excludes leakage and other direct and indirect emissions zero

CD4CDMCD4CDM CDM Eligible Projects Renewable energy Fuel switching End-use energy efficiency improvements Supply-side energy efficiency improvement Agriculture (reduction of CH 4 & NO 2 emissions) Industrial processes (CO 2 from cement, HFCs, etc) Sink projects (only afforestation & reforestation) Energy Industries

CD4CDMCD4CDM Sample CDM Projects and Emissions Reduction 1. Renewable Energy Projects (Hydro, Wind, Biomass) - lower emission factor = CO 2 savings 3. Energy Efficiency Projects - lower electricity consumption due to more efficient equipment or appliance (lower activity data) = CO 2 savings 2. Landfill Gas to Energy Projects - capture and utilize methane from landfill; and displace fossil fuel used to generate electricity = CO 2 savings and CH 4 savings

CD4CDMCD4CDM Sample CDM Projects and Emissions Reduction Calculation Renewable Energy Projects - lower emission factor = CO 2 savings Hydro – Aquarius Hydrothermal Project Wind – Burgos Wind Energy Project Hands-on Exercises: Wind – Wigton Wind Farm Project

CD4CDMCD4CDM Some References for estimating CO 2 emissions and emissions reduction: Revised IPCC Guidelines for National GHG Inventories (1996) GHG Assessment Handbook, 1998 – World Bank GHG Protocol – IPCC Database on Greenhouse Gas Emission Factors (EFDB) - USEPA Emission Inventory Improvement Program html PROBASE (forestry)