Download 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
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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
Ravinder Singh Zandu
What is Dangerous Climate
and
2 degrees effects
Ravinder Singh Zandu
What is dangerous climate change?
UK & EU define this as 2C
By the time global temperatures reach two degrees of warming in
2050, more than a third of all living species will face extinction.
Chance of avoiding two degrees of global warming: 93%, but
only if emissions of greenhouse gases are reduced by 60% over
the next 10 years
Ravinder Singh Zandu
2 degrees effects
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Arica:
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Asia:
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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:
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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.
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:
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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.
Ravinder Singh Zandu
2 degrees effects…
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Latin America:
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North America:
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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:
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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 lowlying areas such as El Salvador and Guyana.
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:
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Low-lying islands are particularly vulnerable to rising sea levels with the Maldives already
suffering land loss.
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Emission-reduction targets for 2C
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UK Government has set a target (SOGE*) for the central
government office estate to achieve carbon neutrality by 2012.
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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
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CO2 stays in atmosphere for 100+ years, hence long-term targets
are highly misleading
UK emissions cake
*SOGE- Sustainable Operations on Government Estate
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Put bluntly …
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the final % reduction in carbon has little relevance to avoiding
dangerous climate change (e.g. 2C)
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what is important are the cumulative emissions of carbon & other
greenhouse gases (i.e. the carbon budget)
•
this fundamentally rewrites the chronology of climate change
from long term gradual reductions
- to urgent & radical reductions
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Carbon Legislations
and
Carbon Footprint
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Carbon Legislations
Country or region
Legislation
Carbon Pollution Reduction Scheme
Australia
Canada
France
Use/ Applicability
http://www.climatechange.gov.au/emissionstrading/index. Mandatory
html
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)
Clean Air Act
http://www.ec.gc.ca/cleanair-airpur/Clean_Air_ActWS1CA709C8-1_En.htm
http://www.ec.gc.ca/doc/ed-es/p_123/pre_eng.htm
Mandatory
ec.europa.eu/energy/climate_actions/index_en.htm
Mandatory
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
www2.ademe.fr/servlet/KBaseShow?sort=1&cid=96&m=3&catid=12616
Mandatory
Mandatory
Voluntary
Mandatory
Kyoto Protocol Implementation Act
EU
Link
20 20 by 2020: Europe’s Climate Change
Opportunity
EU Emissions Trading Scheme
European Climate Change Programme
Bilan Carbone
White Certificate Trading
Mandatory
Mandatory
Germany
Coalition Agreement
Global
Japan
New Zealand
Greenhouse Gas Protocol (GHG Protocol)
www.bundesregierung.de/Webs/Breg/EN/FederalGovernment/CoalitionAgreement/coalitionagreement.html
www.ghgprotocol.org
Trial Emissions Trading Scheme
http://www.env.go.jp/earth/ondanka/det/index.html
Voluntary
USA
Climate Change Act
Climate Registry
www.climatechange.govt.nz/emissions-tradingscheme/index.html
www.umweltschweiz.ch/buwal/eng/fachgebiete/klima/index.html
http://www.defra.gov.uk/Environment/climatechange/uk/
business/crc/index.htm
www.theccc.org.uk/home/
http://www.theclimateregistry.org/
Mandatory
UK
Climate Change Response (Emissions
Trading) Amendment Bill
Swiss Emissions Trading Scheme and CO2
Tax
Carbon Reduction Commitment
Switzerland
Voluntary
Mandatory
Mandatory
Mandatory
Voluntary
What is Carbon Footprint?
• 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).
Ravinder Singh Zandu
Types of 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.
Ravinder Singh Zandu
Scopes of Emissions
The Greenhouse Gas Protocol standard is commonly used to categorise an
organisation‟s emissions into 3 groups or „scopes‟:
Scope 1 - Direct emissions
Direct 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 heat
Indirect emissions from electricity, heat or steam purchased and used
by the organisation.
Scope 3 - Indirect emissions: other
Any 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.
Ravinder Singh Zandu
Product Footprint
A product carbon footprint measures the greenhouse gas emissions at
each stage of the product‟s life. This includes:
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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.
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Steps
Carbon Management
Readiness Assessment
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Define current
position and
carbon
management vision
Organisational
readiness
Definition of
detailed
programme and
priorities
Carbon
Measurement
• Establish all data
sources
• Configure Software
tool for client
organisation
• Input data, establish
baselines and create
carbon balance sheet
• Run required carbon
reports
Carbon
Management
Strategy
• Identify and
prioritise reduction
opportunities
• Explore future
scenarios and
evaluate business
cases
• Set carbon reduction
targets
• Develop carbon
reduction programme
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Process Flow
SourceData
Data
Source
Data
Management
Carbon Base
Embedding
Stakeholder
Sustainability
Management
Software Solution
SPM
Dashboard
Dashboard
Decision
Support
Foot printing
Energy
(Gas/ Electricity/
Fossil Fuels)
Travel &
transport (Air/
Rail/ Road/ Marine)
Process
Emissions
Waste/ Water/
Manual inputs
Enterprise Integration
Carbon
Standards
Calculated
data
Calculation
engine
Carbon Knowledge database
Country Standards, Emission
factors, Distance Calculator
External data, Client data
Embedding
Stakeholder
Management
Sustainability
Management
Information
System
Investors
Targets/
Benchmarking
Management
Reporting &
Dashboards
Employees
Performance
monitoring
Customers
Initiatives &
Scenario planning
Suppliers
Carbon Balance
Sheets
Government &
Regulators
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Carbon Reduction Commitment (CRC)
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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.
Does your organisation have
any sites with mandatory half
hourly metered (HHM)
electricity?
No
Organisation not covered
Yes
Did your organisation’s total
HHM electricity use exceed
6000MWh in 2008?
No
Organisation not covered
Yes
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
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CRC Timelines
Source: Department of Energy and
Climate Change
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Carbon Offsetting and Carbon Trading
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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
Offset Strategy
• Determine carbon liabilities
• Analyse Offset options
• Select Preferred credit
type and supplier
• Buy Credits
• Report performance and
results
Monitor and Control
• Check progress against
targets, benchmarks and
baselines
• Feedback
What makes a carbon credit?
• Real, measurable, and permanent emission reduction
• Complies with standard
• Third Party Verification
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Carbon Trading
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
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Cap and Trade Schemes - National
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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 ...
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UK – Carbon Reduction Commitment (CRC) – 2010
Aus – Carbon Pollution Reduction Scheme (CPRS) – 2010
US – Mid Western Greenhouse Gas Accord
Canada – Emissions Trading Scheme - 2010
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Compliance Schemes
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 Market
Offset 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
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Agenda
Benefits of Carbon Accounting and
Management
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Benefits of Carbon 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.
Ravinder Singh Zandu
Carbon Management Maturity Model
Level 1 – The Basics
Internal 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 Level
Corporate level footprinting based on international standards. This stage involves
measuring your organisation‟s carbon footprint and implementing an emissions reduction
strategy.
Level 3 – Process Level
Automation 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 Level
This 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 Level
Once 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
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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
Ravinder Singh Zandu
Major Players
(in random order)
Hara Software, USA
http://www.hara.com/
SAP Carbon Impact
(Clearstandards, USA)
http://www.sap.com/solutions/sustainability/offerings/carb
on-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.com
http://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/
Ravinder Singh Zandu
Thanks
For any queries/ questions, please contact:
Ravinder Singh Zandu
[email protected]
Mobile: 0044-7725991038
Home:
0044- 1628-418921
gmail and Orkut: [email protected]
facebook: ravinder_zandu
msn: [email protected]
Ravinder Singh Zandu