Tools to support BUR reporting

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1 Tools to support BUR reporting The new WRI GHG Protocol Mitigation Accounting Standards Peer-to-peer exchange on BURs Berlin Marion Vieweg 16 October 2014

2 Overview Context - Reporting of mitigation actions in BURs Beyond inventories - From emissions to impact evaluation New tools to support reporting - The GHG Protocol Mitigation Accounting Standards

3 Context Reporting of mitigation actions in BURs

4 Relevant UNFCCC decisions related to the MRV of developing countries From general concepts to concrete modalities Developing countries start registering actions with the UNFCCC Guidelines for BURs and ICA Basis for non- Annex I reporting Enhanced action by developed and developing countries Decision on BURs and ICA Composition, modalities and procedures of the team of technical experts

5 There are different ways to categorise mitigation actions Depending on what the focus of the analysis is, mitigations can be grouped in different ways. The most commen classifications are by: Type of action: Here the main question is what type of action is the focus of the mitigation action. Scope: Another dimension is the coverage of the mitigation action by sector, geography or technology. Source of funding: If the source for funding is the dominant question a different classification will result. Depending on which of these categories or combinations of categories are looked at, different classifications of mitigation actions will be suitable.

6 Types of mitigation actions There are three types of mitigation actions emerging: Goals: Actions that are framed as commitments. They are formulated as economy-wide, sectoral, or technology-related targets. Policies: Actions that aim to impact emissions through relevant national policies. This includes broad strategies as well as the full range of policy instruments, such as regulations, taxes and incentive schemes. Projects: Activities that are targeted at a specific investment or that are limited in scope, scale and duration. This includes the installation of renewable power capacity, infrastructure investments as well as pilot projects and capacity building initiatives. The type of mitigation action will influence the type of information and level of detail provided, especially regarding the steps taken to achieve the action.

7 LEVEL OF DETAIL Relationship between different types of mitigation actions HIGH LOW ABILITY TO INFLUENCE LARGE-SCALE EFFECTS Goals Guide Concretise Strategies Policies & Actions Incentivise Projects & Activities LOW LEVEL OF IMPLEMENTATION HIGH ASPIRATIONAL CONCRETE

8 Beyond inventories From emissions to impact evaluation

9 Designing and implementing mitigation actions IMPLEMENTATION Assess GHG effect (ex-post) Understanding GHG emissions Analyse policy context SELECTION Monitor progress Identify potential actions Implement actions Detail and plan actions Assess and select actions PREPARATION

10 Inventories as the basis for action Understanding results Assess GHG effect (ex-post) Understanding GHG emissions Analyse policy context Understanding potentials and trends GHG Inventories Monitor progress Identify potential actions Implement actions Detail and plan actions Assess and select actions

11 Understanding mitigation actions requires more 12 (d) Estimated emission reductions (ex-post: implemented actions) Assess GHG effect (expost) Understanding GHG emissions Analyse policy context Overall 12 (b) Methodologies and assumptions 12 (d) Progress of implementation, results achieved, such as estimated outcomes Monitor progress BUR Reporting Identify potential actions 12 (c+d) Steps taken or envisaged Implement actions Detail and plan actions Assess and select actions 12 (d) Estimated emission reductions (ex-ante: planned actions) 12 (a) Description, including nature, coverage, goals and progress indicators

12 New tools to support reporting The GHG Protocol Mitigation Accounting Standards

13 Guidance for GHG accounting Audience Type of accounting Business National gov t City gov t Inventory accounting GHG Protocol Corporate Standard* IPCC Guidelines GHG Protocol for Community Scale Emissions Intervention/impact accounting GHG Protocol for Project Accounting* GHG Protocol Policy and Action Standard* NEW Goals accounting Corporate goal setting guidance (under development) GHG Protocol Mitigation Goals Standard NEW * These are also accompanied by sector guidance/tools

14 LEVEL OF DETAIL GHG Protocol Standards HIGH NEW Mitigation goal standard Relevant for BUR reporting LOW ABILITY TO INFLUENCE LARGE-SCALE EFFECTS Mainly relevant for INDC process Goals Guide Concretise Strategies NEW Policies & Actions Incentivise Policy & action standard Project protocol Projects & Activities LOW LEVEL OF IMPLEMENTATION HIGH ASPIRATIONAL CONCRETE

15 Pilot countries UK Belgium Germany US Tunisia Israel China Japan South Korea Mexico Costa Rica Colombia Ethiopia India Bangladesh Indonesia Chile South Africa Mitigation goal pilots Policy and action pilots

16 Purpose of the mitigation goal standard Guide users in answering the following questions: For jurisdictions that do not have a mitigation goal: Which factors to consider when designing a mitigation goal Before the goal period: How to calculate allowable emissions in the target year or period During the goal period: How to assess and report progress After the goal period: How to assess and report goal achievement

17 The mitigation goal standard - Overview Design the goal and define accounting methods Calculate allowable emissions Assess progress and goal achievement Verify (optional) and report results 1. Introduction 2. Overview of Steps, Key Concepts, and Requirements 3. Accounting and reporting principles 4. Designing a mitigation goal 5. Estimating Base Year or Baseline Scenario Emissions 6. Accounting for the Land Sector 7. Calculating Allowable Emissions in the Target Year(s) 8. Assessing Progress during the Goal Period 9. Assessing Goal Achievement 10. Verification 11. Reporting Relevant for BUR reporting

18 Purpose of the policy and action standard Guide users in answering the following questions: Before implementation: What effect is a given policy or action likely to have on GHG emissions? During implementation: How to track progress of a policy or action? After implementation: What effect has a given policy or action had on GHG emissions? The focus is on attributing changes in GHG emissions to specific policies and actions, rather than other factors that affect emissions

19 The policy and action standard - Overview Define objectives and define the policy or action Identify effects Quantify effects Verify (optional) and report results 1. Introduction 2. Objectives 3. Overview 4. Accounting and Reporting Principles 5. Defining the Policy or Action 6. Identifying Effects and Mapping the Causal Chain 7. Defining the GHG Assessment Boundary 8. Estimating Baseline Emissions 9. Estimating GHG Effects Ex-Ante 10. Monitoring Performance over Time 11. Estimating GHG Effects Ex-Post 12. Assessing Uncertainty 13. Verification 14. Reporting

20 Terminology Ex-ante analysis: The process of estimating expected future GHG effects of mitigation action Ex-post analysis: The process of estimating historical GHG effects of a mitigation action

21 Chapter 6: Identification of effects Different types of effects can be described, based on the point of view taken: By geopolitical boundary: in-jurisdiction/out-of-jurisdiction By time frame: short- and long term By objectives: intended and unintended By probability: likely, possible, and unlikely By sign of expected GHG effect: GHG increasing / decreasing Individual effects usually fall into more than one of these categories

22 Chapter 6: The causal chain concept A causal chain is a conceptual diagram tracing the process by which the policy or action leads to GHG effects through a series of interlinked logical and sequential stages of cause-and-effect relationships. Mapping the causal chain can help identify additional effects not previously identified. It helps to structure and understand cause-effect relationships. Developing and reporting the causal chain is required to be in conformance with the standard.

23 Example for a causal chain: Home insulation subsidy Subsidy for home insulation Consumers purchase and install insulation Reduced energy use in homes Increase in disposable income due to savings Reduced demand for electricity Reduced emissions from home natural gas use Increased demand for goods & services Reduced emissions from electricity generation Increased production of goods & services Increased emissions Businesses produce more insulation Increased emissions from insulation mfg Key: Policy or action Intermediate effect GHG effect

24 Chapter 6: Determine significance of effects Based on the assessment of likelihood and magnitude the significance of effects can be determined, following the guidance shown in the table below Likelihood Magnitude Minor Moderate Major Very likely Likely Possible Unlikely Very unlikely May be excluded May be excluded Should be included

25 Chapter 8: Estimating baseline emissions Determine baseline values for each parameter by identifying policy and nonpolicy drivers and assumptions for each driver Parameter Baseline value(s) applied over the GHG assessment period Methodology and assumptions to estimate value(s) Data sources Natural gas used for space heating 1,000,000 MMBtu/year (2020) Historical data Average annual natural gas used for space heating over the previous 10 years is 1,250,000 MMBtu/year The trend over the past 10 years has been constant Implemented and adopted policies included in the baseline scenario: Federal energy efficiency standards (expected to reduce natural gas use by 10 percent in the baseline scenario) Federal energy tax (expected to reduce natural gas use by 7.5 percent, taking into account overlaps with the federal energy efficiency standards) Non-policy drivers included in the baseline scenario: Natural gas prices are projected to increase by 20 percent National energy statistical agency; Peer-reviewed literature: Author (Year). Title. Publication. Natural gas emission factor 55 kg CO 2 e/mmbtu from (2020) Expected to remain constant at historical levels since no policies are implemented or adopted to reduce the GHG intensity of natural gas. Nonpolicy drivers (such as GDP and energy prices) are not expected to affect this parameter. National energy statistical agency

26 Chapter 9: Estimating policy scenario emissions Estimate policy scenario values for parameters Parameters Policy scenario value(s) Method and assumptions to estimate value Data source(s) Natural gas used for space heating 1,000,000 MMBtu/year from ; 910,000 MMBtu/year from Values calculated based on 30% anticipated uptake of the insulation subsidy starting in 2015 and remaining constant through 2025; and 30% energy use reduction per home with insulation (based on previous studies of similar policies) Peer-reviewed literature: Author (Year). Title. Publication. Natural gas emission factor 55 kg CO 2 e/mmbtu (constant) Same value as in baseline scenario since the policy does not affect this parameter National energy statistical agency

27 Chapter 9: Estimating the GHG effect ex-ante Aggregate policy scenario emissions and change across effects/sources GHG effect included Reduced emissions from electricity generation Reduced emissions from home natural gas use Increased emissions from insulation production Affected GHG sources Grid-connected power plants Residential natural gas use Insulation manufacturing facilities Baseline emissions Policy scenario emissions Change 50,000 t CO 2 e 48,000 t CO 2 e -2,000 t CO 2 e 55,000 t CO 2 e 50,050 t CO 2 e -4,950 t CO 2 e 5,000 t CO2e 6,000 t CO2e +1,000 t CO 2 e Total 110,000 t CO 2 e 104,050 t CO 2 e -5,950 t CO 2 e

28 Chapter 10: Examples of parameters to be monitored Examples of policies Selected examples of parameters to be monitored Energy efficiency program in the commercial buildings sector Electricity use (annual, direct metering) Emission factor from grid electricity Gross floor area of building units Solar power incentives Solar panels produced each year Capacity of solar power installed Electricity generated from solar power Electric vehicle subsidy Number of electric vehicles (quarterly) Passenger figures (monthly) Vehicle-kilometers traveled (monthly) Emissions trading system Facility-level monitoring of emissions data from covered facilities Information campaign to encourage energy savings in the residential sector Surveys of a representative sample of households to collect data such as: awareness of the campaign, actions taken as a result of the campaign, household size, household income, and household energy use over time

29 Chapter 14: Reporting Report the results of the assessment according to a standardized set of reporting requirements Five parts to the reporting requirements/template: 1. GHG assessment information 2. Description of the policy or action 3. Estimated change in GHG emissions and removals 4. Methodology 5. Optional reporting information

30 GHG Protocol Standards and BUR reporting Standards provide useful procedures for estimating impact of mitigation actions (ex-ante and ex-post) Standards provide useful guidance on reporting of methodologies and assumptions Individual elements can be used as appropriate

31 Further information Material available at: Contact

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