the pathway to market for agricultural carbon offsets: science – policy - commodity karen...
TRANSCRIPT
The Pathway to Market for Agricultural Carbon Offsets:
Science – Policy - CommodityKaren Haugen-Kozyra, M.Sc. P.Ag.
Principal, KHK Consulting
June 17, 2010
Agriculture and Carbon Markets: Making Carbon CountWashington, DC
North American Climate Change Initiatives
NBNB
Western Climate Initiative
Regional GHG Initiative
Midwestern GHG Reduction Accord
AB Specified Gas Emitters Regulation
SK Bill 95
Canada’s Regulatory Framework
The American Clean Energy Security Act
American Power Act Discussion Billl
Quantifying Greenhouse Gases
Two Major International Enablers:
1. Intergovernmental Panel on Climate Change Science-based Guidance on GHG quantification Different Tiers of customization (Tier 1,2,3 –
Country level accounting)
2. Project-Level (Offset) Accounting Standards WRI GHG Protocol/ISO 14064-2 Promotes consistency and transparency in GHG
quantification, monitoring, reporting and verification
Similarities:◦ Quantification, assessment, fidelity and
truthfulness stressed in both◦ Principles - completeness, accuracy, consistency,
transparency and documentation
Project Based Accounting Frameworks– The Carbon Market Access Mechanisms
9 | KHK Consulting | Making Your Carbon Count
Projects Accounting – Relative Quantification
Fundamental Principle: Activities and emission reductions must be above and beyond Business as Usual practices
Project Condition◦What happens (GHGs) with the improved practice/new
technology?Baseline Condition
◦What was happening (GHGs) in the old practice, or common industry practice before the change?
◦Are they comparable (same level of activity, product, service) to base calculation on
Evidence – Document it:◦Quantification and Monitoring Plan◦Data Management System and Data Controls
Amount of Offsets = Baseline - Project. Need to quantify both!
Standards for Protocols are Harmonizing
Ease of Use
Policy Neutral, Flexible
ISO 14064-2
Accounting Rigor
CCX
CDM
Others?
WRI GHG Protocol
Standardizing means making policy decisions!
AB/CDN
VCSCAR
Stakeholder Consultation (eg,
communication with interested parties)
Relevant Legislation (eg, regulatory requirements)
Quantification Protocols:
identifying preferred methodologies to
quantify GHG reductions/removals
Streamlined Life Cycle Assessment
Part 2 of ISO 14064 (ie, auditable standard general
process requirements)
Relevant Standards (eg, recognized criteria, rules,
methodologies, equipment)
Applicable GHG Program (eg, additional requirements, criteria,
rules and policies)
Good Practice Guidance (eg, IPCC, recognized
criteria, methodologies, tools and guidance on
how to do it)
Best Available Science
Considered Technical Review
Within the discipline of the ISO Standard
National Emissions Inventory
Tier 2/3 Quantification Science
ISO 14064:2 - Standards Development Process
Quantification Protocols
Approved Protocols:◦Streamlined use
◦Transparency and consistency
◦Reduced costs and administration
◦Scientifically sound (expert/scientific review)
◦Reduces cost and risk for Project Developers
◦Provides certainty for investors – GHG tonnes reduced
◦Done right – can address scale, risk and transaction cost issues.
Completeness Principle:◦Knowledge and Scientific Judgment
Substitute for direct evidence where lacking Models and conversion factors Estimate uncertainty
Conservativeness Principle◦Applied as a risk-based approach where
science is less synthesized, but uncertainties are known
◦Strive to underestimate baseline emissions Use the 80:20 rule; collective decisions through
expert peer review (IPCC style) “Serves as a moderator to accuracy”
ISO 14064:2 Principles
Science – Policy - Commodity
State of Science of GHG-Management Links
Commercializable Commodity = Carbon Offset
Criteria are Harmonizing
Additional/Incremental◦beyond business as usual practices (needs a valid and
defensible baseline at the project start); surplus to regulations/received incentives)
Measurable, Quantifiable◦agreement on best available science and activity data –
develop a Protocol. Must stand up to a Review Process; account for all 6 GHGs.
Verifiable◦carbon accounting, and tracking process must be clear,
defensible, and have good QA/QC procedures; verified by qualified 3rd party.
Permanent◦must protect against carbon reversals; account and replace
mechanismsFunctionally Equivalent – Consistent Metrics
◦same level of quantity or service between baseline and project A common base for calculating emission reductions
Relative Quantification Example – Land Fill Gas (LFG); Identifying Relevant Emission Sources, Sinks and Reservoirs
April 28, 2006Slid
e 19LFG – ID Project SSRs
Time Decommissioning and site restoration
Waste management
Downstream SSRs after Project Termination
Post-closure care
Upstream SSRs during Project Operation
Collection and transportation of
waste to the landfill
Transportation of consumables to the landfill
Production of consumable inputs
(electricity, propane, natural gas, diesel…)
Combusted CH4 portion of LFG
Onsite SSRs during Project Operation
Maintenance
Fugitive CH4 portion of LFG
Use of consumables
Upstream SSRs before Project Operation
Site preparation, installation and commissioning
Production of materials,
components and equipment
Waste production (household, commercial)
Transportation of materials,
components, and equipment to site
Downstream SSRs during Project Operation
Biogas end use (i.e. electricity production)
Biogas storage/transfer
Offsite leachate treatment
Waste transportation
April 28, 2006 Slide 20
Time Decommissioning and site restoration
Waste management
Downstream SSRs after Baseline Termination
Post-closure care
Upstream SSRs during Baseline Operation
Collection and transportation of
waste to the landfill
Transportation of consumables to the landfill
Production of consumable inputs
(electricity, propane, natural gas, diesel…)
Onsite SSRs during Baseline Operation
Maintenance
Fugitive CH4 portion of LFG
Use of consumables
Upstream SSRs before Baseline Operation
Site preparation, installation and commissioning
Production of materials,
components and equipment
Waste production (household, commercial)
Transportation of materials,
components, and equipment to site
Downstream SSRs during Baseline Operation
Offsite leachate treatment
Waste transportation
LFG -ID Baseline SSRs
April 28, 2006 Slide 21
Onsite SSRs during Baseline and Project Operation
Upstream SSRs during Baseline and Project Operation
Downstream SSRs during Baseline and Project Operation
Downstream SSRs after Baseline and Project Termination
Upstream SSRs before Baseline and Project Operation
Production of materials,
components and equipment
Transportation of consumables to the landfill
Post-closure care
Production of consumable inputs
(electricity, propane, natural gas, diesel…)
Waste management
Decommissioning and site restoration
Collection and transportation of
waste to the landfill
Site preparation, installation and commissioning
Fugitive CH4 portion of LFG
Waste production (household, commercial)
Combusted CH4 portion of LFG
Offsite leachate treatment
Transportation of materials,
components, and equipment to site
Use of consumables
Maintenance
Waste transportation
Biogas storage/transfer
Biogas end use (i.e. electricity production)
Exclusion of SSRs that are not within the scope of the protocol
Exclusion of SSRs that are related to the manufacturing of materials
Exclusion of SSRs that are unchanged between the baseline and project scenarios
Exclusion of SSRs that do not significantly changed from the baseline to the project scenario
The C Commodity Pathway
Project Documentation
Project Documentation
Validation and Registration
Validation and Registration
Monitoring and Verification
Monitoring and Verification Offset IssuanceOffset Issuance
• Project / Baseline Description
• Monitoring Plan and Methodology
• GHG emission calculation
• Project / Baseline Description
• Monitoring Plan and Methodology
• GHG emission calculation
• Review• Approve• Registration
• Review• Approve• Registration
• Implement• Monitor• Verify
• Implement• Monitor• Verify
• Issuance of tradable units
• Issuance of tradable units
Driven by Reporting Guidance
TransparencyMarket
Oversight
3rd Party VerificationMonitoring
Requirements
Tradable Commodity
Qua
ntifi
catio
n P
roto
cols