Carbon Accounting and Management
By
Ravinder Singh Zandu
Strategy and Programme Management Consultant
at
BCS, The Chartered Institute for IT
Hampshire Branch
Southampton Solent University, Hampshire SO14 7NN
on
20th October, 2010
Agenda
Ravinder Singh Zandu
• What is Dangerous Climate and 2 degrees effects• Carbon Legislations and Carbon Footprint
• Carbon Accounting and Management process• Carbon Reduction Commitment (CRC)• Carbon Offsetting and Carbon Trading• Benefits of Carbon Accounting and Management
• Carbon Management Maturity Model• Interesting facts
• Major Players
UK & EU define this as 2C
By the time global temperatures reach two degrees of warming in2050, more than a third of all living species will face extinction.
Chance of avoiding two degrees of global warming: 93%, butonly if emissions of greenhouse gases are reduced by 60% overthe next 10 years
What is dangerous climate change?
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• Arica:– Between 350 and 600 million people will suffer water shortages or increased competition for
water.
– Yields from agriculture could fall by half by 2020 while arid areas will rise by up to 8 per cent.
– The number of sub-Saharan species at risk of extinction will rise by at least 10 per cent.
• Asia:– Up to a billion people will suffer water shortages as supplies dwindle with the melting of
Himalayan glaciers.
– Maize and wheat yields will fall by up to 5 per cent in India;
– Rice crops in China will drop by up to 12 per cent.
– Increased risk of coastal flooding.
• Australia/New Zealand:– Between 3,000 and 5,000 more heat-related deaths a year.
– Water supplies will no longer be guaranteed in parts of southern and eastern Australia by 2030.
– Annual bleaching of the Great Barrier Reef.
• Europe:– Warmer temperatures will increase wheat yields by up to 25 per cent in the north
– Water availability will drop in the south by up to a quarter.
– Heatwaves, forest fires & extreme weather events such as flash floods will be more frequent.
– New diseases will appear.
2 degrees effects
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• Latin America:– Up to 77 million people will face water shortages and tropical glaciers will disappear.
– Tropical forests will become savanna and there will be increased risk of coastal flooding in low-lying areas such as El Salvador and Guyana.
• North America:– Crop yields will increase by up to 20 per cent due to warmer temperatures but
– Economic damage from extreme weather events such as Hurricane Katrina will continue increasing.
• Polar regions:– The seasonal thaw of permafrost will increase by 15 per cent and the overall extent of the
permafrost will shrink by about 20 per cent.
– Indigenous communities such as the Inuit face loss of traditional lifestyle.
• Small islands:– Low-lying islands are particularly vulnerable to rising sea levels with the Maldives already
suffering land loss.
2 degrees effects…
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• UK Government has set a target (SOGE*) for the centralgovernment office estate to achieve carbon neutrality by 2012.
• UK, EU & Global - long term reduction targets (base year 1990):
- UK‟s 60% reduction in CO2e by 2050- EU 60%-80% reduction in CO2e by 2050- Bali 50% global reduction in CO2e by 2050
• CO2 stays in atmosphere for 100+ years, hence long-term targetsare highly misleading
Emission-reduction targets for 2C
UK emissions cake
*SOGE- Sustainable Operations on Government Estate
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• the final % reduction in carbon has little relevance to avoidingdangerous climate change (e.g. 2C)
• what is important are the cumulative emissions of carbon & othergreenhouse gases (i.e. the carbon budget)
• this fundamentally rewrites the chronology of climate change
from long term gradual reductions- to urgent & radical reductions
Put bluntly …
Ravinder Singh Zandu
Carbon LegislationsCountry or region Legislation Link Use/ Applicability
Australia Carbon Pollution Reduction Scheme http://www.climatechange.gov.au/emissionstrading/index.
html
Mandatory
Energy Efficiency Opportunities http://www.energyefficiencyopportunities.gov.au/ Mandatory
Greenhouse Gas Reduction Scheme http://www.greenhousegas.nsw.gov.au/ Mandatory (New South Wales only)
Victorian Energy Efficiency Target http://www.esc.vic.gov.au/public/VEET Mandatory (Victoria only)
Canada Clean Air Act http://www.ec.gc.ca/cleanair-airpur/Clean_Air_Act-
WS1CA709C8-1_En.htm
Mandatory
Kyoto Protocol Implementation Act http://www.ec.gc.ca/doc/ed-es/p_123/pre_eng.htm Mandatory
EU 20 20 by 2020: Europe’s Climate Change
Opportunity
ec.europa.eu/energy/climate_actions/index_en.htm Mandatory
EU Emissions Trading Scheme europa.eu.int/comm/environment/climat/emission.htm Mandatory
European Climate Change Programme http://ec.europa.eu/environment/climat/eccp.htm Mandatory
France Bilan Carbone http://www2.ademe.fr/servlet/KBaseShow?sort=-
1&cid=96&m=3&catid=15730
Voluntary
White Certificate Trading www2.ademe.fr/servlet/KBaseShow?sort=-
1&cid=96&m=3&catid=12616
Mandatory
Germany Coalition Agreement www.bundesregierung.de/Webs/Breg/EN/Federal-
Government/CoalitionAgreement/coalition-
agreement.html
Mandatory
Global Greenhouse Gas Protocol (GHG Protocol) www.ghgprotocol.org Voluntary
Japan Trial Emissions Trading Scheme http://www.env.go.jp/earth/ondanka/det/index.html Voluntary
New Zealand Climate Change Response (Emissions
Trading) Amendment Bill
www.climatechange.govt.nz/emissions-trading-
scheme/index.html
Mandatory
Switzerland Swiss Emissions Trading Scheme and CO2
Tax
www.umwelt-
schweiz.ch/buwal/eng/fachgebiete/klima/index.html
Mandatory
UK Carbon Reduction Commitment http://www.defra.gov.uk/Environment/climatechange/uk/
business/crc/index.htm
Mandatory
Climate Change Act www.theccc.org.uk/home/ Mandatory
USA Climate Registry http://www.theclimateregistry.org/ Voluntary
• A „carbon footprint‟ measures the total greenhouse gas emissions caused directly and indirectly by a person, organisation, event or product.
• The footprint considers all six of the Kyoto Protocol greenhouse gases: Carbon dioxide (CO2), Methane (CH4), Nitrous oxide (N2O), Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs) and Sulphur hexafluoride (SF6).
• A carbon footprint is measured in tonnes of carbon dioxide equivalent (tCO2e).
• CO2e is calculated by multiplying the emissions of each of the six greenhouse gases by its 100 year global warming potential (GWP)
• The carbon footprint is a subset of the ecological footprint and of the more comprehensive Life Cycle Assessment (LCA).
What is Carbon Footprint?
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Organisational• Emissions from all the activities across the organisation,
including buildings‟ energy use, industrial processes and company vehicles.
Product • Emissions over the whole life of a product or service, from the
extraction of raw materials and manufacturing right through to its use and final reuse, recycling or disposal.
Types of Carbon Footprint?
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The Greenhouse Gas Protocol standard is commonly used to categorise an organisation‟s emissions into 3 groups or „scopes‟:
Scope 1 - Direct emissionsDirect emissions resulting from activities within the organisation‟s control. Includes on-site fuel combustion, manufacturing and process emissions, refrigerant losses and company vehicles.
Scope 2 - Indirect emissions: electricity and heatIndirect emissions from electricity, heat or steam purchased and used by the organisation.
Scope 3 - Indirect emissions: otherAny other indirect emissions from sources not directly controlled by the organisation. Examples include: employee business travel, outsourced transportation, waste disposal, water usage and employee commuting.
Scopes of Emissions
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A product carbon footprint measures the greenhouse gas emissions at each stage of the product‟s life. This includes:
• Extraction, production and transportation of raw materials • Manufacture or service provision • Distribution • End-use • Disposal/recycling
At each stage greenhouse gas emissions can result from such sources as: energy use, transportation fuel refrigerant losses from air conditioning units and waste.
In the case of a “service product” the life-cycle stages are defined across the duration of the service.
Product Footprint
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Carbon Management Readiness Assessment
Carbon Measurement
• Define current position and carbon management vision
• Organisational readiness
• Definition of detailed programme and priorities
Carbon Management
Strategy
• Establish all data sources
• Configure Software tool for client organisation
• Input data, establish baselines and create carbon balance sheet
• Run required carbon reports
• Identify and prioritise reduction opportunities
• Explore future scenarios and evaluate business cases
• Set carbon reduction targets
• Develop carbon reduction programme
Steps
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Process Flow
Software Solution Decision Support
Data Management
Management Information
System
Investors
Management
Employees
Customers
Suppliers
Government & Regulators
Foot printing
Targets/ Benchmarking
Reporting & Dashboards
Performance monitoring
Initiatives & Scenario planning
Carbon Balance Sheets
Energy(Gas/ Electricity/
Fossil Fuels)
Travel & transport (Air/
Rail/ Road/ Marine)
Process Emissions
Waste/ Water/ Manual inputs
Source Data Carbon BaseStakeholder Management
SPM Dashboard
Embedding Sustainability
Source Data Carbon BaseEmbedding Sustainability
DashboardStakeholderManagement
Calculation engine
Carbon Standards
Calculated data
Carbon Knowledge database
Enterprise Integration
Country Standards, Emission factors, Distance Calculator
External data, Client data
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Organisation not covered
Yes
Does your organisation have any sites with mandatory half hourly metered (HHM)
electricity?
Did your organisation’s total HHM electricity use exceed
6000MWh in 2008?
No
Yes
No
Organisation not covered
Organisation covered
All energy use outside CCAs* and EU ETS covered (subject to a de minimis)
*If more than 25% of a subsidiary’s overall energy use is covered by a CCA then the entire subsidiary is exempted from CRC
CRC eligilbilty
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• The CRC is a cap and trade carbon emissions scheme for all UK organisations, including Northern Ireland, with an annual half hourly metered (HHM) electricity usage of at least 6000MWh.
• It targets non-energy intensive sectors that fall outside the EU ETS, e.g. supermarkets, financial institutions, construction, etc.
• The long-term aim is for CRC organisations to contribute to the UK‟s national target to cut greenhouse gas emissions by 80% on 1990 levels by 2050, and by at least 26% by 2020.
Carbon Offsetting
Carbon Footprint• Set Boundaries• Choose Calculation
methodology/ protocol (e.g. Defra, GHG, Bilan Carbone etc.)
• Gather Data• Calculate emissions• Report Current carbon
Footprint
Plan Emission Reduction• Identify Options• Test with scenarios/
forecasting• Select Priority options• Set targets for emission
reduction• Implement Projects
Monitor and Control• Check progress against
targets, benchmarks and baselines
• Feedback
Offset Strategy• Determine carbon liabilities• Analyse Offset options• Select Preferred credit
type and supplier• Buy Credits• Report performance and
results
What makes a carbon credit?• Real, measurable, and permanent emission reduction• Complies with standard• Third Party Verification
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Mandatory and Voluntary Trading market certificates:
• Certified Emission Reduction (CER)
• Emission Reduction Unit (ERU)
• Verified Emission Reduction (VER)
Flexible mechanisms were introduced for the mandatory market to reduce cost:
• Clean Development Mechanism (CDM)
• Joint Implementation (JI)
• Emissions trading
Carbon Trading
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• Emissions Trading under the Kyoto Protocol• European Union Emissions Trading Scheme (EU ETS)• New South Wales GHG Abatement Scheme (NSW GHGAS) • Regional Greenhouse Gas Initiative (RGGI) – US• Western Climate Initiative (WCI) – US• Japan Voluntary Emissions Trading Scheme
And in the future ...
• UK – Carbon Reduction Commitment (CRC) – 2010• Aus – Carbon Pollution Reduction Scheme (CPRS) – 2010• US – Mid Western Greenhouse Gas Accord• Canada – Emissions Trading Scheme - 2010
Cap and Trade Schemes - National
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Offset Name Certificates Scheme Price
CDM Clean Development Mechanism
Certified Emission Reduction (CER) Credits
Kyoto Protocol for developing countries
€14-30
JI Joint Implementation
Emission Reduction Units(ERU)
Kyoto Protocol for developed countries
EUA European Union Allowances
EU ETS €20
Voluntary MarketOffset Name Developed by Price
VCS Voluntary Carbon Standard Climate Group and the International Emissions Trading Association
€5-15
VER+ Voluntary Emission Reduction Carbon Market Actors, NGOs €5-15
VGS Voluntary Gold Standard WWF-UK. Similar standard to CDM €10-20
VOS Voluntary Offset Standard Based on standards from Kyoto
CBB Climate, Community and Biodiversity Standards
Tries to deliver sustainable projects €5-10
CCX Chicago Climate Exchange US Carbon Market €1-2
Compliance Schemes
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• Improved bottom line – gain efficiency through optimal performance in operational assets and decrease costs through reduced energy consumption
• Regulatory compliance – avoid potential taxes and penalties and achievement of regulatory margins
• Carbon trading – benefit from carbon credits or reduce exposure to carbon debits• Green innovation – emit less GHG in order to be morally responsive to social issues
surrounding excessive emissions• Brand positioning – build a positive reputation platform to communicate to consumers and
stakeholders. Consumer-driven organisations can leverage their green initiatives to their customers, whether they sell directly to consumers or to manufacturers who use their products to make other products for consumers
• Streamline GHG emission reporting process:• Set up a reporting template to generate reports for the regulatory Acts• Report consistently across all facilities and locations and compare individual locations• Reduce labour cost of GHG data collection through automatic data gathering• Carbon network optimisation – utilise existing and ongoing assets optimally to reduce GHG
emissions and:• Improve inventory management• Increase customer satisfaction• Increase revenue growth• Reduce supply chain costs.
Benefits of Carbon Management
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Carbon Management Maturity Model
Level 1 – The BasicsInternal focus on basic operations to reduce energy consumption and waste, starting with re-educating employees on the importance of carbon management strategies.
Level 2 – Company LevelCorporate level footprinting based on international standards. This stage involves measuring your organisation‟s carbon footprint and implementing an emissions reduction strategy.
Level 3 – Process LevelAutomation of the carbon management process, so you can capture a „real-time‟ carbon footprint through both internal and external processes across the supply chain.
Level 4 – Product LevelThis step looks at carbon emissions from raw material origin through to consumption and disposal. This enables conscientious consumers to be informed of the carbon footprint of the products they purchase.
Level 5 – Optimised LevelOnce you have gathered the information and solutions required to optimise trade-offs between cost and carbon, the final step is to integrate carbon and financial data to drive financially optimised sustainable business improvements.
Ravinder Singh Zandu
Interesting Facts
• By turning off just one computer overnight we can save 235kg of CO2 in a year. Over the whole estate the potential is enormous –turning off every one of Whitehall‟s 500,000 computers at night would have the same effect as taking 40,000 cars off the road.
• On average it takes 500KWH of electricity to produce 440 lbs of paper, the typical amount of paper each of us consume annually. That‟s equivalent of powering one computer for five months.
• 20% less CO2 is used by person reading a daily printed newspaper versus a person reading a web-based news for 30 minutes a day.
• In US alone 57.4 % paper is recycled and only 18% of all electronic devices are currently recycled.
• It costs an estimated $ 2.8 billion of energy annually to leave computers sitting idle overnight in US alone. On a CO2 basis, that is 20 million tons of CO2, about four million cars on the road.
• A government study estimates that rise in gadget ownership and the switch from analogue digital TV could boost the electrical usage by 60% by 2010.
Ravinder Singh Zandu
Major Players (in random order)
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Hara Software, USA http://www.hara.com/
SAP Carbon Impact (Clearstandards, USA)
http://www.sap.com/solutions/sustainability/offerings/carbon-impact/index.epx
Greenstone Carbon Management Ltd., UK
http://www.greenstonecarbon.com/
Enviance, USA http://www.enviance.com/
The Carbon Hub, UK http://www.thecarbonhub.com/
Credit 360 Ltd, UK http://www.credit360.com/
Carbonetworks, Canada http://www.carbonetworks.com/
Carbon Check, Scotland http://www.carbonfootprintsoftware.comhttp://www.greenoaksolutions.com/
Carbon Systems, Australia http://www.carbonsystems.com.au
CarbonSim (Emissions Logic), Australia
http://www.carbonsim.com/ http://www.emissionslogic.com
Verteego Carbon, France http://www.verteegocarbon.com/en
Revolution ID, New Zealand http://www.rev-id.com
Intelex, Canada http://www.intelex.com/
The Carbon Neutral Company, UK http://www.carbonneutral.com/
Carbon Trust Standard, UK http://www.carbontrust.co.uk/
For any queries/ questions, please contact:
Ravinder Singh [email protected]: 0044-7725991038Home: 0044- 1628-418921gmail and Orkut: [email protected]: ravinder_zandumsn: [email protected]
Thanks
Ravinder Singh Zandu