Cover
Half title
Title page
Imprints page
Contents
Figures and map
Tables
Boxes
Contributors
Acknowledgements
1 Introduction: key notions and trade-offs involved in MRVing emissions
1.1 Purpose and audience for this book
1.2 Climate economics at work
1.3 Scale, scope, uncertainty and related trade-offs: key definitions and stakes of MRV in climate economics
1.4 Outline, editorial choices and comparison tools between chapters
Appendix
Part I MRV of territorial/jurisdictional emissions
2 Trendsetter for territorial schemes: national GHG inventories under the UNFCCC
2.1 Context
2.2 Objectives, national inventory system and challenges
Specifications of UNFCCC national GHG inventories
The different gases
Commitment scope
The temporal scope
Required qualities of national inventory systems
National information system
Challenges and incentives
2.3 Monitoring
Sources of GHG emissions to be monitored
Methodology
Bottom-up vs. top-down approaches
Use of emission factors vs. measurements
Tier approaches of methodologies and key category sources
National statistics and inventory methodology
Activity data and emission factors
Data and process management
Archiving the different processes of the monitoring
How to manage confidential data
Monitoring accuracy and uncertainties
Uncertainty assessment and inventory improvements
Incentives to reduce uncertainty
Illustration of improvements driven by specific studies with technical and research centers
2.4 Reporting
Reporting requirements
National variations
2.5 Verification
Verification procedures at national level
Timing, institutional organization
QA/QC procedures, validation procedure and other possible verification
Verification procedures at international level (UNFCCC)
Institutional arrangements
Timing and format of the UNFCCC review
Role of Secretariat vs. ERT vs. Compliance Committee
2.6 MRV costs
Monitoring costs: a difficult assessment
Reporting: €0.5–0.8 million per country per year
Verification: €0.14 million per country per year
2.7 MRV ID table
2.8 What practitioners say about it
Acknowledgements
3 Variant 1: region/city geographical inventories
3.1 Introduction
3.2 Multiple methodologies and protocols based on actors’ needs
3.3 Monitoring
Whose emissions?
What sector?
How does this occur in practice?
Monitoring uncertainty: making do with available data
Monitoring costs
3.4 Reporting
Reporting procedure
Verification
3.5 Conclusions: local needs currently prevail over harmonization
4 Variant 2: sectoral MRV at the jurisdictional level – forestry (REDD+) in the VCS and the UNFCCC
4.1 Context
4.2 Variable scope of requirements: from baseline only to full jurisdictional MRV
4.3 Monitoring requirements
Activity-based vs. land-based accounting
Differentiation of sources of emissions/sequestration
Criteria for the jurisdictional baseline
Monitoring requirements at jurisdictional scale
At project scale
Uncertainty requirements depend on the accounting approach at the jurisdictional level
4.4 Reporting
4.5 Verification
4.6 Comparison between VCS and UNFCCC requirements for REDD+
4.7 MRV costs
Monitoring costs
Overall MRV costs
4.8 Conclusion
4.9 MRV ID table
Part II MRV of industrial sites and entities
5 Trendsetter for companies and industrial sites: the EU Emissions Trading Scheme
5.1 Context
Lineage and birth of the EU ETS
The cap-and-trade principle
Development and evolution
Phase I
Phase II
Phase III
5.2 Monitoring
Scope: what does the EU ETS encompass?
Monitoring methodology: choose your path
Dual classification: categorization of installations and source streams
Determining parameters
The tier system
Uncertainties and allowed references
Technical feasibility and unreasonable costs
Operator’s instruments vs. supplier’s instruments
The monitoring plan
5.3 Reporting and verification
Reporting deadlines
Reporting format and content
Verification: who and how?
Determination of emissions by the competent authority
Accreditation of verifiers
Improvement reports
5.4 MRV costs
Each year, MRV costs an average €22,000 per installation and €0.07/tCO2e
Four robust qualitative conclusions on MRV costs in the EU ETS
Direct measurement, inclusion threshold and cost vs. uncertainty trade-off
Costs of MRV for other entities than the covered installations
5.5 MRV ID table
5.6 What practitioners say about it
According to you, is there a significant incentive to improve accuracy/precision?
Rémi Bussac, Environment, Health and Consumers, EDF – European Affairs
Eric Dugelay, Partner, Global Sustainability Services Co-Leader, Deloitte
Yann Martinet, Agro Industry & Environment Project Manager, COOP de France Déshydratation
Anonymous operator, UK
Based on your experience, what is the most important thing about MRV at the industrial plant scale?
Rémi Bussac, Environment, Health and Consumers, EDF – European Affairs
Eric Dugelay, Partner, Global Sustainability Services Co-Leader, Deloitte
Yann Martinet, Agro Industry & Environment Project Manager, COOP de France Déshydratation
Anonymous operator, UK
What is the first thing you would change in the procedure?
Rémi Bussac, Environment, Health and Consumers, EDF – European Affairs
Eric Dugelay, Partner, Global Sustainability Services Co-Leader, Deloitte
Yann Martinet, Agro Industry & Environment Project Manager, COOP de France Déshydratation
Anonymous operator, UK
6 Variant 1: the waste sector in Australia’s Carbon Pricing Mechanism, another ETS at site level
6.1 Context
6.2 The waste sector covered by the Carbon Pricing Mechanism
Scope and general MRV requirements
The distinction between legacy and non-legacy waste
6.3 Monitoring the waste sector’s GHG emissions
Choice of the monitoring methodology: default factor or not?
Common elements to all methods for monitoring GHG emissions from landfill
Calculating GHG emissions from waste deposited on a landfill: three method options
Wastewater handling: a different emission calculation between domestic/commercial wastewater and industry wastewater
Waste incineration: only one method to calculate GHG emissions based on default factors
Monitoring accuracy and uncertainty
6.4 Reporting
EERS: an online reporting mechanism
General principles for reporters under the NGER Act
General requirements for reporting
Monitoring and reporting costs
6.5 Verification
Sampling-based verification
Requirements for auditing service
Assurance engagement process
Verification engagement process
Accreditation procedure
Verification costs
6.6 Uncertainty related to waste emissions: is it an issue? Should it be reduced?
Three large sources of uncertainty: classification, emission factors and decay rate
The Australian legislation allows for, but does not incite, uncertainty reduction
Australia and the European Union: diverging views on the importance of uncertainty
6.7 Conclusion
6.8 MRV ID table
7 Variant 2: non-site level emissions in an ETS – the case of electricity importers in the California cap-and-trade
7.1 Context
Electricity in carbon pricing mechanisms
The Californian ETS
Genesis and design
Challenges from setting MRV requirements in the Californian ETS
7.2 Monitoring electricity importers under the GHG Inventory Program
Scope: imported electricity from specified and unspecified sources
Tracking electricity transactions to identify importers
A different treatment for specified and unspecified sources of electricity
Two possible adjustments for renewables sources and sources imported and exported in the same hour
A specified monitoring documentation for power entities
The calculation of covered emissions for electricity importers
The treatment of six emissions sources
Specified and unspecified sources’ emission factors: the main source of uncertainty
Specified facilities and relevant regulation
7.3 Reporting: a separate report for imported electricity according to sources
Web-based reporting
General requirements for reporting
GHG emissions data reports for electricity importers
Confidentiality, when requested, must be demonstrated by reporters
Verification
Annual verification: from a full to a less intensive verification
The key steps of a verification procedure
Accreditation procedure
Uncertainty requirement – avoiding a material misstatement: 5 percent for electricity importers and electricity producers
MRV costs €73,000 per facility and €0.14/tCO2e to electricity deliverers
7.4 Uncertainty in the Californian cap-and-trade program: the carbon leakage issue
The uncertainty of electricity importers’ emission factors
The confusing concept of resource shuffling
7.5 Conclusion
7.6 MRV ID table
8 Variant 3: emissions of a company/institution rather than a site: the case of the Shenzhen ETS
8.1 China’s domestic emissions reduction policy
Cap-and-trade as the policy instrument of choice
8.2 Shenzhen, China’s first operating ETS pilot
8.3 Capping direct and indirect emissions
8.4 MRV and compliance at company level
8.5 Intensity-based cap and allowances
Intensity-based allowances
8.6 Reporting, confidentiality and disclosure
8.7 Enforcement of compliance
8.8 MRV ID table
9 Variant 4: coexistence of voluntary and mandatory frameworks at the company level – Carbon Disclosure Project, EU ETS and French legal requirements
9.1 Introduction
9.2 French entities may be subject to up to four major mandatory or voluntary GHG emissions monitoring and reporting frameworks
Article 75, a dedicated GHG monitoring and reporting process
History
Entities concerned
Scope 3 emissions
Verification
Article 225, a broader reporting process on corporate social and environmental responsibility
History
Entities concerned
Scope 3 emissions
Verification
CDP Sustainability (former Carbon Disclosure Project), a global reporting process for major companies
History
Entities concerned
Motivations/incentives for reporting
Scope 3 emissions
Verification
9.3 MRV ID table
9.4 Four frameworks may be too many, even though they are flexible enough to be synergetic with one another
Convergence with Scope 1 and 2 emissions and synergies between frameworks
Race to the top
Reporting perimeters: many synergies and a few incoherent requirements with higher impact in the first reporting years
Frequency and compliance: improving synergies between systems
Internal coordination to respond to reporting requirements
Differing influences on company governance: case of Scope 3 reporting
Comparability vs. information relevance trade-off: the risks of reporting with “alternative” methodologies, scopes and perimeters
Being prepared for more ambitious methodologies and scope is an asset: a business case for addressing Scope 3 emissions
Ensuring usefulness: reporting seen as a burden rather than an opportunity
9.5 Balancing internal management needs and an increasing range of use for external GHG data
GHG quantification and verification: integration with existing reporting and verification process
Anticipating the use of data by external stakeholders to mitigate the risk
Data use by external stakeholders creates risks and opportunities
9.6 Conclusions: the diversity of reporting frameworks leads to higher costs, risks and opportunities
10 Direct measurement in the EU ETS
10.1 Context
10.2 Direct measurement fundamentals
What are the main principles of direct measurement?
Measuring the concentration of a GHG
Measuring the stack volumetric flow rate
Selecting a fit-for-purpose CEMS
What needs to be measured?
What is the expected range of the GHG concentration?
Could the emissions or process operating conditions change?
What normative documents does the CEMS need to adhere to?
Will it meet the uncertainty requirements of the EU ETS?
And finally what will the total cost be?
10.3 Direct measurement under the EU ETS
What is the scope?
Direct measurement of N2O emission sources
Direct measurement of transferred CO2
Direct measurement of CO2 emission sources
Direct measurement according to EN14181
Quality assurance level 1 (QAL1)
Quality assurance level 2 (QAL2)
Quality assurance level 3 (QAL3)
Annual Surveillance Test (AST)
Continuous flow measurement according to EN ISO 16911
10.4 Uncertainty influencing parameters in mass emission measurement
Flow measurement uncertainty
Concentration measurement uncertainty
Can the MRR tiers be achieved?
10.5 Measurement vs. calculation
10.6 Conclusion: what method should be preferred?
Appendix – Relevant international and European standards
Part III MRV at offset project scale
11 Trendsetter for projects: the Clean Development Mechanism
11.1 Context
The Clean Development Mechanism (CDM) in brief
The CDM regulatory structure and legislation hierarchy
The CDM project cycle
Geography and typology of CDM projects
11.2 Monitoring
The object of monitoring
Methodologies form the cornerstone of monitoring
Monitoring procedure
Monitoring frequency
Pre-implementation costs
Periodic monitoring costs
Treatment of uncertainty
Differences with other major offset standards on monitoring
Differences with the EU ETS
11.3 Reporting
Monitoring report
Reporting procedure
Reporting costs
Differences with other major offset standards on reporting
11.4 Verification
Verification procedure
Request for CER issuance
Request for review
CER issuance
Direct costs of verification
Indirect costs from the DOE accreditation procedure
Accreditation costs
DOE suspension
Differences with other major offset standards on verification
11.5 What practitioners say about it
Is there an incentive to reduce the uncertainty of monitoring in the CDM?
What is the most important thing about MRV in the CDM?
What is the first thing you would change in the MRV procedures in the CDM?
11.6 MRV ID table
Appendix – Transaction costs for CDM projects
12 Case study 1: monitoring requirements for projects reducing N2O emissions from fertilizer use across standards
12.1 Context
12.2 Monitoring
InVivo methodology: legumes inclusion in crop rotations
Calculation based on crop areas and region-specific emission factors
Monitoring of baseline emissions
Monitoring of actual project emissions
MSU-EPRI methodology
Monitoring of baseline emissions
Monitoring of actual project emissions
Monitoring of leakage
Monitoring frequency and crediting period
Monitoring uncertainty
ACR and VCS methodology
CAR methodology
JI methodology
Monitoring costs
12.3 Reporting
12.4 Verification
General requirements
Specificities under the CAR
12.5 Conclusion
12.6 MRV ID table
13 Case study 2: monitoring requirements for reforestation and improved forest management projects across standards
13.1 Context
13.2 Monitoring in the CDM for reforestation projects and VCS IFM projects
Which emissions are monitored?
Possible sources of emissions/sequestration
The CDM focuses on above-ground and below-ground biomass
IFM methodologies pay a specific attention to harvested wood products
Possible leakage: displacement of agricultural activities, activity shifting within the same company and market effect
Stratification and sampling: two key underlying components which drive uncertainty and costs
Monitoring plans
Monitoring in practice: teamwork coordinated by the project proponent
Which supporting evidence for the baseline scenario?
Monitoring frequency: mostly five years
Sampling error, most often the only explicit uncertainty requirement
CDM uncertainty requirements
Activity data: focus on the sampling error of tree biomass
Emissions factors: no requirement beyond uncertainty assessment
VCS uncertainty requirements
The number of sample plots drives monitoring costs
Monitoring costs
Overall MRV costs
13.3 Reporting
13.4 Verification: what are auditors looking for?
13.5 Conclusion
13.6 MRV ID table
Appendix – Determination of monitoring uncertainty
CDM reforestation projects
VCS improved forest management projects
14 Case study 3: monitoring requirements for fugitive emissions from fuels in the CDM
14.1 Fugitive emissions scale and scope
14.2 General principles of fugitive emission methodologies
Tier 1: Top-down average emission factor approach
Tier 2: Country-specific emission factor approach
Tier 3: Bottom-up approach
Monitoring strategy
Methods of leak detection
Methods of leak quantification
Uncertainty in three-tier approaches
Tier 1: average emission factor approach (IPCC, 2000)
Tier 2: country-specific emission factor approach
Tier 3: bottom-up approach
Quality control and quality assurance
14.3 CDM methodology AM0023
Calculation of emission reductions
Uncertainty in the two approaches of CDM methodology AM0023
14.4 Cost of monitoring
LDAR programs cost €30,000–67,000 per refinery per year
MRV costs for CDM projects on fugitive emissions
14.5 Discussion
Appendix
15 Synthesis
15.1 MRV requirements across schemes
Verification requirements are broadly similar across the board
Requirements on monitoring uncertainty are seldom comprehensive
15.2 Incentives to reduce monitoring uncertainty tend to be partial and indirect
Conservativeness: gap between principle and practice
Conservativeness is not a panacea
Should there always be an incentive to reduce uncertainty?
15.3 MRV costs: large economies of scale
MRV costs decrease with the comprehensiveness of the perimeter
MRV costs decrease with size
The share of verification costs
15.4 “Materiality” is commonly practiced but it does not outweigh economies of scale
15.5 Comparability often trumps information relevance
15.6 Staggering MRV vs. carbon pricing implementation
15.7 Conclusion
Index
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