Challenges in GHG Accounting and Verification

Pierre BoileauPierre BoileauManager, Climate ChangeManager, Climate Change

Canadian Standards AssociationCanadian Standards Association

October 22, 2007October 22, 2007

Climate Change: A Shift in Thinking

• Climate Change – Climate Change – Driving Public PolicyDriving Public Policy

• Need for…Need for…- Carbon Footprint Carbon Footprint

MeasurementMeasurement

- Improved Carbon Improved Carbon ManagementManagement

- Tools to Measure & Tools to Measure & Report ProgressReport Progress

• To support emerging To support emerging market mechanismsmarket mechanisms

The carbon market is growing…

• World Bank says carbon market has grown World Bank says carbon market has grown 3-fold between 2005 and 2006, to a value of 3-fold between 2005 and 2006, to a value of $US30 billion;$US30 billion;

• Ecosystem Marketplace and New Carbon Ecosystem Marketplace and New Carbon Finance say that:Finance say that:- the Over The Counter (OTC) market grew 200% the Over The Counter (OTC) market grew 200%

between 2005 and 2006;between 2005 and 2006;- Combined with the Chicago Climate Exchange, the Combined with the Chicago Climate Exchange, the

total voluntary market is worth more than $US90 total voluntary market is worth more than $US90 millionmillion

• North America appears to be where most of North America appears to be where most of the voluntary action is.the voluntary action is.

…but there are concerns about the quality of the tonnes.

• The Economist, Financial Times and The Economist, Financial Times and Business Week have published articles Business Week have published articles critical of offsetting practice:critical of offsetting practice:- Econ, Aug. 2006, ‘Upset about offsets’;Econ, Aug. 2006, ‘Upset about offsets’;- FT, April 2006 ‘Beware the carbon offsetting FT, April 2006 ‘Beware the carbon offsetting

cowboys’;cowboys’;- BW, March 2007 ‘Another inconvenient truth’ BW, March 2007 ‘Another inconvenient truth’

• UK consulted on a voluntary code for UK consulted on a voluntary code for carbon offsetting. Responses indicated carbon offsetting. Responses indicated wide range of diverging views;wide range of diverging views;

• Guides from The Climate Group, Clean Guides from The Climate Group, Clean Air/Cool Planet attempt to demystify the Air/Cool Planet attempt to demystify the subject mattersubject matter

The challenges are numerous…

• Lack of understanding and education among Lack of understanding and education among market participants;market participants;

• Many ‘anyways’ tonnes in the voluntary Many ‘anyways’ tonnes in the voluntary market;market;

• Development of quantification methodologies Development of quantification methodologies is still evolving;is still evolving;

• Some validators and verifiers relaxing the Some validators and verifiers relaxing the rules;rules;

• Difficulty figuring out what standards to use;Difficulty figuring out what standards to use;

• Lack of transparency in carbon neutral claims.Lack of transparency in carbon neutral claims.

… But CSA is helping…

““GHG Accounting GHG Accounting & Management”& Management”- Secretariat for ISO Secretariat for ISO

14064 Working Group 14064 Working Group on GHG quantification on GHG quantification & verification& verification

- GHG Inventory and GHG Inventory and Reporting RegistriesReporting Registries

- GHG Measurement GHG Measurement Tools & TrainingTools & Training

…With key GHG tracking tools…

Document & Track Carbon FootprintDocument & Track Carbon Footprint- CSA’s GHG CleanStartCSA’s GHG CleanStartTMTM Registry – also Registry – also

based on ISO 14064based on ISO 14064- Available early 2008Available early 2008- Improving Carbon Footprints:Improving Carbon Footprints:• Invest in New TechnologiesInvest in New Technologies• Improve Internal Operations & PoliciesImprove Internal Operations & Policies• Invest in &/or Produce Green PowerInvest in &/or Produce Green Power

- Guidance on accessing quality offsetsGuidance on accessing quality offsets• RegisteredRegistered• Third-party verifiedThird-party verified• RetiredRetired

…And tools for the carbon markets.

CSA CleanProjectsCSA CleanProjectsTMTM RegistryRegistry- Showcases Carbon Showcases Carbon

Reduction ProjectsReduction Projects

- Based on ISO 14064-2 Based on ISO 14064-2 and -3 Standardsand -3 Standards

- Simple, inexpensive, Simple, inexpensive, scaled to meet market scaled to meet market demanddemand

Others are also helping…

• Emerging certification standards:Emerging certification standards:- Voluntary Gold StandardVoluntary Gold Standard- Voluntary Carbon StandardVoluntary Carbon Standard- Green-e standardsGreen-e standards- Carbon Neutral CompanyCarbon Neutral Company

• Accreditation and certification of personnel:Accreditation and certification of personnel:- ISO 14065 accreditation for validation and verification ISO 14065 accreditation for validation and verification

bodiesbodies- ISO 17024 schemes for personnel certificationISO 17024 schemes for personnel certification

• New standardsNew standards- ISO new work items on carbon neutrality standards and ISO ISO new work items on carbon neutrality standards and ISO

14066 on GHG validator/verifier certification14066 on GHG validator/verifier certification

…because there is a demand from the voluntary carbon market.

• Weekly announcements on carbon Weekly announcements on carbon neutrality:neutrality:- Dell, HP,Dell, HP,- Dole, Wal-martDole, Wal-mart- GE and AESGE and AES

• Public is taking action:Public is taking action:- Terrapass, Clean Air PassTerrapass, Clean Air Pass- Major airlines allow offsetting of emissionsMajor airlines allow offsetting of emissions

• Events are going carbon neutralEvents are going carbon neutral- Live EarthLive Earth- Major conferencesMajor conferences

The future looks bright…

• ISO and GHG Protocol have created the basis for ISO and GHG Protocol have created the basis for credible GHG quantification;credible GHG quantification;

• Validators and verifiers can soon become accredited Validators and verifiers can soon become accredited and/or certified;and/or certified;

• Third party verification and registration are becoming Third party verification and registration are becoming the norm;the norm;

• Various certification standards for GHG tonnes or Various certification standards for GHG tonnes or carbon neutral products are emergingcarbon neutral products are emerging- Creating market differentiation;Creating market differentiation;- Creating voluntary carbon market competitionCreating voluntary carbon market competition

…for those who want voluntary action.

• Voluntary markets can complement regulatory Voluntary markets can complement regulatory markets;markets;- Provide for participation of SME’s and individuals;Provide for participation of SME’s and individuals;- Can move economic actors to make decisions out of Can move economic actors to make decisions out of

economic or social self interest;economic or social self interest;

• Voluntary markets are built on clear market signalsVoluntary markets are built on clear market signals- Balance of supply and demand;Balance of supply and demand;- Price fluctuates with grade of offset;Price fluctuates with grade of offset;

• Voluntary markets are built on voluntary standards Voluntary markets are built on voluntary standards and practicesand practices- Do not require intervention of regulators;Do not require intervention of regulators;- With transparency, buyers make decisions with the proper With transparency, buyers make decisions with the proper

information;information;- Market forces will drive the need for quality tonnesMarket forces will drive the need for quality tonnes

Making Standards Work for People & Business

Thank YouThank You