David Rich

World Resources Institute

2 December 2012

Workshop on Mitigation Accounting Quantifying GHG effects of policies and actions and tracking progress toward GHG mitigation goals

• 1:00 – 1:45: Presentation on Greenhouse Gas Protocol Policies and Actions Standard and Mitigation Goals Standard

• 1:45 – 2:45: Panel with experts sharing international experience on measuring GHG reductions from mitigation actions, policies, and goals

• 2:45 – 3:30: Breakout groups to provide feedback on key questions in draft standards

Workshop agenda

GHG Protocol Mitigation Accounting Initiative

• The GHG Protocol was launched in 1998 by

• Multi-stakeholder partnership of businesses, NGOs, governments and others

• Enable corporate and government measurement and management practices that lead to a low carbon economy

The Greenhouse Gas Protocol

Corporate Standard

Corporate Value Chain

(Scope 3) Standard Project Protocol

Product Standard

GHG Protocol standards to date

• A WRI initiative focusing on enhancing capacity to measure emissions/emissions reductions and track performance towards meeting climate and energy goals in developing countries

• Supported by the German Federal Ministry of the Environment

Measurement and Performance Tracking (MAPT) Project

AREAS of WORK

National inventories

Institutions

Mitigation accounting

Forestry

Industry

Civil society policy implementation

International

COUNTRIES

Brazil

Colombia

Ethiopia

India

South Africa

Thailand

Two GHG Protocol standards under development

Policies and Actions Standard

• How to quantify GHG effects from specific policies and actions

• Examples: increased energy efficiency, increased renewable energy, efficiency standards, trading programs, deployment of new product lines and technologies

Mitigation Goals Standard

• How to track and report progress toward national or sub-national GHG reduction goals

• Examples: intensity-based goals, deviations from BAU scenarios, carbon neutrality, etc.

Standard development process

Secretariat (WRI)

Advisory Committee

Technical Working Groups

Review Group

Pilot Testers

• Asian Development Bank • Australia, Department of Climate

Change and Energy Efficiency • Brazil, Ministry of Environment • California Air Resources Board • CCAP • Chile, Ministry of Environment • China, NDRC • Colombia, Ministry of Environment and

Sustainable Development • Costa Rican Institute of Electricity • Ecofys • Ethiopia, EPA • European Commission • Godrej & Boyce Mfg Co. Ltd., India • India, BEE (TBC) • Japan, Ministry of Environment • Johnson Controls

Advisory Committee members

• Maersk Group • New York City, Mayor's Office • OECD • Siemens • South Africa, Department of

Environmental Affairs • State of Rio de Janeiro • Stockholm Environment Institute – US • Thailand Greenhouse Gas Management

Organization • Tsinghua University • UK DECC • United Nations Climate Change

Secretariat • UNDP • US EPA • WBCSD • World Bank

Timeline

Activities 2012 2013 2014

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Convene stakeholder groups

Develop draft standards

First drafts released (November 21)

Workshops (Doha, DC, Beijing) and

review period (through January 11)

Revise draft standards

Pilot test standards

Public comment period

Publish final standards

• The draft standards are available at:

www.ghgprotocol.org/mitigation-accounting

• First drafts are available for public comment from November 21 – January 11

• Participate in pilot testing in 2013

How to participate in the standard development process

GHG Protocol Policies and Actions Standard

• Increasing need to quantify GHG effects of policies and actions

• Where policy effects have been quantified, often lack of consistency and transparency

• Where they have not been quantified, often lack of capacity

• No international, cross-sector guidelines exist for how to quantify GHG effects of policies and actions larger than projects

Context

Estimated GHG reductions from proposed NAMAs

Country and

Sector

Examples of data to be monitored Estimated mitigation

potential

Jordan

(Waste) Not specified Not specified

Mexico

(Buildings)

Electricity use (annual, direct metering)

Emission factor from grid electricity

Gross floor area of building units

Cumulative 84-140

MtCO2 by 2020

South Africa

(Energy supply)

Capacity of CSP installed through program

Electricity produced from funded CSP installations

Capacity of wind power installed through program

60 MtCO2 per year

Chile (Transport)

Number of electric vehicles (quarterly)

Passenger figures (monthly)

Km traveled (monthly)

Cumulative 2.8 MtCO2

by 2035

Colombia

(Transport) Not specified Not specified

Mexico

(Transport) Not specified

Cumulative 6.4 MtCO2e

by 2030

Tunisia

(Energy supply)

Power installed (MW)

Solar panels produced each year

Amount of exchanged refrigerators

1.5 MtCO2e per year

• Provide standardized approaches and guidance on how to quantify GHG effects of policies and actions

• Guide users in answering the following questions:

– Before implementation: What effect is a given policy or action likely to have on GHG emissions?

– During implementation: How to track progress of a policy or action?

– After implementation: What effect has a given policy or action had on GHG emissions?

• Focus is on attributing changes in GHG emissions to specific policies and actions, not only tracking indicators

Purpose of Policies and Actions Standard

• Inform mitigation strategies based on expected GHG effects of policies/actions

• Track effectiveness and performance of policies/actions and progress toward GHG reduction goals

• Report on GHG effects of policies/actions

• Facilitate financial support for mitigation actions (e.g., NAMAs) based on quantification of GHG reductions, including market mechanisms

Objectives of quantifying GHG effects of policies/actions

GHG inventory

and projections

Set GHG goal

Assess and select GHG mitigation

actions

Implement actions

and monitor progress

Evaluate and report

on achieved

reductions

Goal setting and policy cycle

Source: City of New York, 2010

. . .

Example: New York City

Intended users

• Governments (city, sub-national, national)

• Donor agencies and financial institutions

• Businesses

• NGOs/research institutions

• Voluntary

• Policy-neutral

• Internationally applicable

• General guidance applicable to all sectors and types of policies/actions (overarching principles, concepts, and procedures)

• Will include sector-specific and policy-specific examples and guidance (e.g., energy supply, buildings, transportation, AFOLU, waste, industry, cross-sector policy instruments)

Scope

• Regulations and standards

• Taxes and charges

• Tradable permits

• Voluntary agreements

• Subsides and incentives

• Information instruments

• R&D policies

• Public procurement policies

• Infrastructure programs

• Deployment of new products or technologies

• Financing and investment

Types of policies and actions

Table of contents and sequence of steps

1. Introduction

2. Objectives

3. Key concepts, overview of steps, and summary of requirements

4. Accounting and reporting principles

5. Defining the policy or action

6. Mapping the causal chain

7. Defining the GHG assessment boundary

8. Determining baseline emissions

9. Quantifying GHG effects ex-ante

10. Monitoring performance over time

11. Quantifying GHG effects ex-post

12. Assessing uncertainty

13. Verification

14. Reporting

Chapter 5: Define the policy or action

• Clearly define the specific interventions involved

• Decide whether to analyze:

– An individual policy or action

– A package of similar policies or actions

Chapter 6: Mapping the causal chain

• Key step: identifying potential effects of the policy or action

• Types of effects

– Intended effects

– Unintended effects (e.g., rebound effects)

– In-boundary effects

– Out-of-boundary effects (e.g., leakage and spillover effects)

– Short-term effects

– Long-term effects

Chapter 6: Mapping the causal chain

• Example: U.S. vehicle fuel efficiency standards

• Intended effects

– CO2/km so emissions

• Unintended effects (e.g., rebound effects)

– $/km driven so km driven so emissions

• In-boundary effects

– Emissions in the U.S.

• Out-of-boundary effects (e.g., leakage and spillover effects)

– Emissions in Canada

• Short-term effects

– Cars more efficient, but using same technology

• Long-term effects

– New vehicle technologies developed

• Greenhouse gases covered

– CO2, CH4, N2O, SF6, PFCs, HFCs, NF3

• Temporal boundary

– Policy implementation period

– Policy monitoring period

– GHG assessment period

Chapter 7: Define the GHG assessment boundary

Example

Years

2005 –

2009

2010 -

2014

2015 -

2019

2020 -

2024

2025 -

2029

2030 -

2034

2035 -

2039

2040 -

2045

Policy implementation

period

Policy monitoring

period

GHG assessment

period

• Which GHG effects to include in the boundary?

• Current draft: Users shall include all significant effects in the boundary, consistent with the chosen tier

Chapter 7: Define the GHG assessment boundary

Tier

Approach for determining

significance of GHG

effects

Level of completeness

Tier 1 Qualitative, user-defined

assessment of significance User-defined

Tier 2 Quantitative assessment of

significance: based on 1)

likelihood of the effect

occurring, and 2) estimated

magnitude of expected GHG

impact

Significant effects included

Tier 3 Insignificant effects estimated

rather than excluded

Chapter 7: Defining the GHG assessment boundary

• Example: U.S. vehicle fuel efficiency standards

• Intended effects

– CO2/km so emissions

• Unintended effects (e.g., rebound effects)

– $/km driven so km driven so emissions

• In-boundary effects

– Emissions in the U.S.

• Out-of-boundary effects (e.g., leakage and spillover effects)

– Emissions in Canada

• Short-term effects

– Cars more efficient, but using same technology

• Long-term effects

– New vehicle technologies developed

• Define the baseline scenario

– For each effect, define baseline emissions based on underlying drivers

• policy drivers

• non-policy drivers

• Define the policy scenario (ex-ante or ex-post)

– Define emissions in the policy scenario based on what is expected to change as a result of the policy

Quantify GHG effects of the policy or action

Ex-ante and ex-post assessment G

HG

em

issio

ns (

metr

ic t

on

s C

O2e)

Quantified

GHG effect of

policy/action

(ex-ante) Historical

GHG

emissions

2010 2015 2020

Quantified

GHG effect of

policy/action

(ex-post)

Types of interactions

• Neutral

• Counteracting

• Reinforcing

Addressing policy interactions and overlaps

5

10

15 12

20

0

5

10

15

20

25

Em

issio

ns r

ed

ucti

on

(tC

O2e)

Monitoring indicators during implementation

Indicator type Ex: Subsidy for

insulation in houses

Ex: Grants for renewable

lamps replacing kerosene

lamps

Input Money, skills, awareness

raising Money, skills, technology

Activity

Number of energy

surveys carried out to

test eligibility for

insulation

Number of renewable lamps

sold

Output/Effect Number of households

insulated

Market share of renewable

lamps in 2015, 2020, and

2025

Outcome/GHG

effect GHG emissions reduced GHG emissions reduced

GHG Protocol Mitigation Goals Standard

• Provide standardized approaches and guidance on how to track progress toward GHG mitigation goals

• Guide users in answering the following questions:

– For jurisdictions that do not have a mitigation goal: Which factors to consider when developing a mitigation goal

– Before the goal period: How to estimate future GHG reductions associated with meeting the goal

– During the goal period: How to track and report progress toward meeting the goal

– After the goal period: How to evaluate and report whether the goal has been achieved

Purpose of Mitigation Goals Standard

• Australia: 80% reduction below 2000 levels by 2050

• Brazil: Between 36.1% and 38.9% below projected emissions in 2020

• California: reduce to 1990 levels by 2020

• Chile: 20% reduction below the BAU in 2020, as projected from 2007

• China: 40-45% reduction in CO2 emissions per unit of GDP by 2020 compared with the 2005 level

• Costa Rica: Will implement a ‘long-term economy-wide transformational effort to enable carbon-neutrality’

• European Union: 20-30% below 1990 levels by 2020

• New York City: 30% below 2005 levels by 2030

• South Africa: 34% deviation below BAU by 2020

• United States: In the range of 17% below 2005 levels by 2020

Examples of mitigation goals

• Internationally applicable

• Applicable to all levels of government (municipal, subnational, national)

• All types of mitigation goals

– Absolute reductions from a base year

– Reductions from a baseline

– Reductions in emissions intensity

– Reductions to an absolute level

– Sectoral goals

Scope

• Both can be applied independently or together

• Example:

– Use the Mitigation Goals Standard to understand the level of GHG reductions needed to meet a given GHG mitigation goal

– Use the Policies and Actions Standard to quantify the GHG effects of selected policies and actions to determine if they are collectively sufficient to meet the goal

Relationship to Policies and Actions Standard

Table of contents and sequence of steps

1. Introduction

2. Objectives

3. Key concepts, overview of steps, and summary of requirements

4. Accounting and reporting principles

5. Determining the mitigation goal type, goal level, and goal length

6. Defining the goal boundary

7. Determining base year and baseline scenario emissions

8. Accounting for emissions reductions generated outside of the goal boundary

9. Accounting for the land-use sector

10. Estimating future emissions and reductions associated with the goal

11. Tracking progress during the goal period and evaluating achievement at the end of the goal period

12. Reporting

• Scope – Which gases and sectors are included? • Historical reference period and timeframe – Which year(s) of

GHG inventory are the historical reference for the baseline scenario?

• Modelling framework – Which model will be used to project emissions?

• Key emissions drivers and underlying assumptions – Which key emissions drivers and underlying assumption will be used?

• Baseline recalculation – Under what conditions should the baseline scenario be recalculated?

• Uncertainty and sensitivity analysis – How will uncertainty and sensitivity analysis be addressed?

• Policies and measures – How will policies and measures be included in the baseline scenario?

Determining baseline scenario emissions

Draft standard:

• Jurisdictions should use the ‘with measures’ approach and report the cut-off year after which no new policies are assumed to be implemented

• Jurisdictions shall disclose and justify how policies and measures are included in the baseline scenario

Inclusion of policies and measures in the baseline scenario

Type of baseline Description

Without

measures

Does not include impacts of mitigation policies and

measures, including existing policies and measures

With measures Includes mitigation policies and measures that are

currently implemented (in the year baseline is created)

With additional

measures

Includes all mitigation policies and measures that are

currently implemented, in the legislative process, or

planned (in the year the baseline is created)

Source: UNFCCC Guidelines for National Communications, FCCC/CP/1999/7, Page 89

• Emissions reductions outside of the goal boundary may be used towards meeting a jurisdiction’s goal

• Jurisdictions shall not double count or double claim GHG reductions

• Mechanisms to avoid double counting include:

– Legal mandates that disallow double counting

– Registries

– Transaction logs

– Agreements between buyers and sellers that specify who claims emissions reductions associated with offsets and specifies what percentage, if any, are shared

Use of emission reductions outside the goal boundary

• The draft standards are available at:

www.ghgprotocol.org/mitigation-accounting

• Review period from November 21 – January 11

• Participate in pilot testing in 2013

How to participate in the standard development process

Thank you David Rich 1-202-729-7744 drich@wri.org