A B C s of Carbon Emissions Accounting

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

2. Whatis 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

3. Whyconduct 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

4. 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

5. C D 4 C D M Why is there a need to use a standard methodology? • allows comparability across all countries • ensures consistency, transparency and verifiability of the inventory

6. Development of the methodology guidelines for national GHG inventories: • 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)

7. 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)

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

9. 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

10. Consistency - same approach and practices in the calculation and presentation of data allows meaningful comparison of emissions performance over time. Transparency - 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.

11. 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)

12. Carbon emissions • emissions of carbon dioxide, methane and nitrous oxide • in equivalent carbon dioxide units • Global Warming Potential • Carbon Dioxide = 1 CO2 equivalent • Methane, CH4 = 21 CO2 equivalents • Nitrous Oxide, N2O = 310 CO2 equivalents • Other Gases – HFCs, PFCs, and SF6 = range 600 – 23900x CO2equivalents

13. Steps in carbon accounting: • Identify boundary/ies to be covered • Identify emission sources to be covered • Select an emissions calculation approach • Collect activity data and choose emission factors • Apply calculation tool to estimate emissions

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

15. 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 Emission Categories

16. 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 Emission Categories

17. Direct / off-site emission Direct / on-site emission off-site emission Types of Emissions

18. Who can do the accounting? • 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

19. EQUATION GHG = A x EF where, GHG = emissions (amount of CO2 or CH4, etc) A = activity data (liters of fuel, kg of cement) EF = emission factor (kg CO2/liter of fuel, kgCO2/kg cement)

20. 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) GHG = A x EF

21. 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. DefaultMethod - 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)

22. Sample Emissions Calculation: Emissions from Cement Production GHG = A x EF tons CO2 = tons of cement produced x 0.4985 tons CO2/ton of cement produced

23. The Typical IPCC Worksheet sector Source category A EF GHG Revised 1996 IPCC Guidelines for National GHG Inventories: Workbook page 2.61

24. Tons of CO2 Gg of CO2 = Gg of CO2 X X Tons cement produced 103 Tons of CO2 1994 Philippine GHG Inventory Results Tons cement produced

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

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

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

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

29. Emissions Reduction 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

30. Emissions Reduction Business as usual: baseline CO2 emission Reduced emissions (CER) Project implemented Start of project End of project year

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

32. Emissions Reduction Calculations - objective is to define reference and project scenarios and determine the net difference in GHG emissions between these two scenarios DGHGredn = GHGbase – GHGproj = emissions reduction due to existence of the project GHGbase = an estimation of emissions assuming that no alternative project was implemented GHGproj = measures the GHG emissions following project implementation

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

34. CDM Eligible Projects • Renewable energy • Fuel switching • End-use energy efficiency improvements • Supply-side energy efficiency improvement • Agriculture (reduction of CH4 & NO2 emissions) • Industrial processes (CO2 from cement, HFCs, etc) • Sink projects (only afforestation & reforestation) Energy Industries

35. Sample CDM Projects and Emissions Reduction 1. Renewable Energy Projects (Hydro, Wind, Biomass) - lower emission factor = CO2 savings 2. Landfill Gas to Energy Projects - capture and utilize methane from landfill; and displace fossil fuel used to generate electricity = CO2 savings and CH4 savings 3. Energy Efficiency Projects - lower electricity consumption due to more efficient equipment or appliance (lower activity data) = CO2 savings

36. Sample CDM Projects and Emissions Reduction Calculation Renewable Energy Projects - lower emission factor = CO2 savings Hydro – Aquarius Hydrothermal Project Wind – Burgos Wind Energy Project Hands-on Exercises: Wind – Wigton Wind Farm Project

37. Some References for estimating CO2 emissions and emissions reduction: • Revised IPCC Guidelines for National GHG Inventories (1996) • GHG Assessment Handbook, 1998 – World Bank • GHG Protocol – www.ghgprotocol.org • IPCC Database on Greenhouse Gas Emission Factors (EFDB) - http://www.ipcc-nggip.iges.or.jp/EFDB/main.php • USEPA Emission Inventory Improvement Program http://www.epa.gov/ttn/chief/eiip/techreport/volume08/index.html • PROBASE(forestry)http://e-serem.epu.ntua.gr/