1. WRI/WBCSD GHG Protocol: Project Module
Jeff Fiedler
Natural Resources Defense Council
Ag Modeling Forum, October 13, 2004

2. GHG Protocol: Project Module
Multi-stakeholder, int’l, 2-year process
Road-tested; final revisions before public comment
Purpose:
Simple & credible project quantification
Reduce uncertainty and transaction costs
Increase consistency across projects, programs
Program- and policy-neutral for broad applicability
Protocol is not a verifiable standard:
Flexibility means that inconsistency is likely
Interpretation required by projects and programs
Value: Discussion, guidance on trade-offs

3. Baselines & Additionality
Additionality is a critical concept for credibility, integrity of reported reductions
Baselines: Key to additionality
Project Specific: Identify possible baseline candidates, and use barriers tests to select most likely baseline
Performance Standard: Key steps are baseline sample (geographical, temporal, technology) and setting the stringency (10th percentile?)
Flexibility: Approach, stringency, sample…

4. Application to Forests & Ag
Project Specific is relatively straightforward
Performance Standard can be used to:
Determine rate of change of land use practices
Use appropriate sample to estimate baseline rate
Sector guidance will discuss geographic area, temporal range, method of projecting rate of change (trend, model), stringency
Carbon stocks still measured/estimated
Considerable judgment is needed; uncertainty
Estimate C stock change for a land use change
For heterogeneous areas, use sample to estimate stock change per unit area, for a given activity or land use change

5. Leakage and Secondary Effects
Protocol differs from other programs, which…
Define project boundary (but how? ownership?)
Leakage is an effect outside project boundary
Leakage is integrated into project assessment:
Define project’s primary activity and effect
Identify secondary effects using guidance:
Upstream/downstream
Leakage (activity shifting, market effects)
Quantify all elements, including leakage (within reasonable limits recognizing evolving tools)
Provides greater clarity on assessment boundary

6. Permanence/Reversal Carbon Reversibility Management Plan
Identify, assess reversible elements of project
Describe actions to reduce reversibility
Easements, prevention, contracts
Describe mechanisms to compensate for loss
Insurance, portfolio, buffer/reserve
Reversibility monitoring plan
Crediting programs and private contracts will determine liabilities and project requirements

7. 1605(b) Federal Registry Baselines: Inconsistency is guaranteed
Multiple definitions (Section 300.8)
No definitions on stringency, criteria
“Reductions” for C storage above base year
Leakage: Attempted entity-wide reporting
Loose definition of “distinct entity”
Only addresses issue if reporting is mandatory
Indirect Emissions
Good to separate direct, energy indirect, other indirect
Permanence: ???

8. 1605(b) – Other Issues Transparency: What level of documentation?
Emissions reporting, baseline selection, leakage…?
De minimis exemptions?
Minimal review of reports by EIA
Registering vs. Reporting?
Big Picture:
Flaws of existing 1605(b) will continue
Doesn’t provide certainty for business
Doesn’t provide useful information for policy makers
Sets terrible precedent for future crediting programs

9. CA Registry – Forest Protocol
Baselines: Not generally applicable
Assumes legal standard defines current land use
Baseline not updated as law evolves
Leakage:
Limited treatment creates bad precedent
Permanence:
Requires annual monitoring; tracks losses

10. My Ideal Ag Sector Analysis
What is the effect of mandatory policies?
Mirror structure of McCain-Lieberman
Use relevant targets and timetables
Use range of carbon and energy prices
Costs and benefits (e.g., new markets)
Outputs:
Net farm income
Overall “market” size: how many gallons of ethanol?
Regional distribution
Soil, water, wildlife, other benefits

11. Ag Sector Analysis (2) Elements of analysis:
Carbon cap on electricity, transport fuels, large sources:
Renewables (on-farm wind; biomass energy)
Methane to Energy
Offsets: Include transaction costs of monitoring, rules
Sequestration
Nutrient management
Methane capture/reductions
Incentives Payments
Energy Price:
Fertilizer & Pesticide (natural gas)
On-farm fuel & energy use

12. Ag Sector Analysis (3) Analytical Difficulties?
How to interact with economic studies?
Do you use all outputs in an ag analysis?
Studies can project levels of offsets, renewables use
Regional distribution?
One analysis, or multiple coordinated elements?
If separate, how to capture the effect of revenue from new markets?