carbon accounting and management

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


• 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


What is Dangerous Climate and

2 degrees effects

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?


• 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


• 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…


• 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


• 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 …



Carbon Legislations and

Carbon Footprint

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

http://www.climatechange.gov.au/emissionstrading/index.html

http://www.climatechange.gov.au/emissionstrading/index.html

http://www.energyefficiencyopportunities.gov.au/

http://www.greenhousegas.nsw.gov.au/

http://www.esc.vic.gov.au/public/VEET

http://www.ec.gc.ca/cleanair-airpur/Clean_Air_Act-WS1CA709C8-1_En.htm








http://www.ec.gc.ca/doc/ed-es/p_123/pre_eng.htm



http://ec.europa.eu/energy/climate_actions/index_en.htm



http://europa.eu.int/comm/environment/climat/emission.htm





http://ec.europa.eu/environment/climat/eccp.htm

http://www2.ademe.fr/servlet/KBaseShow?sort=-1&cid=96&m=3&catid=15730






http://www.bundesregierung.de/Webs/Breg/EN/Federal-Government/CoalitionAgreement/coalition-agreement.html





http://www.ghgprotocol.org/

http://www.env.go.jp/earth/ondanka/det/index.html

http://www.climatechange.govt.nz/emissions-trading-scheme/index.html





http://www.umwelt-schweiz.ch/buwal/eng/fachgebiete/klima/index.html



http://www.defra.gov.uk/Environment/climatechange/uk/business/crc/index.htm

http://www.defra.gov.uk/Environment/climatechange/uk/business/crc/index.htm

http://www.theccc.org.uk/home/

http://www.theclimateregistry.org/

• 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?


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?


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


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


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


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



Carbon Reduction Commitment (CRC)

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


• 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.

CRC Timelines

Source: Department of Energy and Climate Change



Carbon Offsetting and Carbon Trading

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


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


• 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


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


Agenda


Benefits of Carbon Accounting and Management

• 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


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.


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.



Major Players

Major Players (in random order)


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/

http://www.hara.com/





http://www.enviance.com/





http://www.thecarbonhub.com/


http://www.credit360.com/


http://www.carbonetworks.com/



http://www.carbonfootprintsoftware.com/


http://www.greenoaksolutions.com/


http://www.carbonsystems.com.au/


http://www.emissionslogic.com/




http://www.verteegocarbon.com/en


http://www.rev-id.com/




http://www.intelex.com/






For any queries/ questions, please contact:

Ravinder Singh [email protected]: 0044-7725991038Home: 0044- 1628-418921gmail and Orkut: [email protected]: ravinder_zandumsn: [email protected]

Thanks


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