WRI/WBCSD GHG Protocol: Project Module

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WRI/WBCSD GHG ProtocolProject Module

• Jeff Fiedler (jfiedler_at_nrdc.org)
• Natural Resources Defense Council
• Ag Modeling Forum, October 13, 2004

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GHG Protocol Project Module

• Multi-stakeholder, intl, 2-year process
• Road-tested final revisions before public
  comment
• Purpose
• Simple credible project quantification
• Reduce uncertainty and transaction costs
• Increase consistency across projects, programs
• Program- and policy-neutral for broad
  applicability
• Protocol is not a verifiable standard
• Flexibility means that inconsistency is likely
• Interpretation required by projects and programs
• Value Discussion, guidance on trade-offs

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Baselines Additionality

• Additionality is a critical concept for
  credibility, integrity of reported reductions
• Baselines Key to additionality
• Project Specific Identify possible baseline
  candidates, and use barriers tests to select most
  likely baseline
• Performance Standard Key steps are baseline
  sample (geographical, temporal, technology) and
  setting the stringency (10th percentile?)
• Flexibility Approach, stringency, sample

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Application to Forests Ag

• Project Specific is relatively straightforward
• Performance Standard can be used to
• Determine rate of change of land use practices
• Use appropriate sample to estimate baseline rate
• Sector guidance will discuss geographic area,
  temporal range, method of projecting rate of
  change (trend, model), stringency
• Carbon stocks still measured/estimated
• Considerable judgment is needed uncertainty
• Estimate C stock change for a land use change
• For heterogeneous areas, use sample to estimate
  stock change per unit area, for a given activity
  or land use change

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Leakage and Secondary Effects

• Protocol differs from other programs, which
• Define project boundary (but how? ownership?)
• Leakage is an effect outside project boundary
• Leakage is integrated into project assessment
• Define projects primary activity and effect
• Identify secondary effects using guidance
• Upstream/downstream
• Leakage (activity shifting, market effects)
• Quantify all elements, including leakage (within
  reasonable limits recognizing evolving tools)
• Provides greater clarity on assessment boundary

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Permanence/Reversal

• Carbon Reversibility Management Plan
• Identify, assess reversible elements of project
• Describe actions to reduce reversibility
• Easements, prevention, contracts
• Describe mechanisms to compensate for loss
• Insurance, portfolio, buffer/reserve
• Reversibility monitoring plan
• Crediting programs and private contracts will
  determine liabilities and project requirements

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1605(b) Federal Registry

• Baselines Inconsistency is guaranteed
• Multiple definitions (Section 300.8)
• No definitions on stringency, criteria
• Reductions for C storage above base year
• Leakage Attempted entity-wide reporting
• Loose definition of distinct entity
• Only addresses issue if reporting is mandatory
• Indirect Emissions
• Good to separate direct, energy indirect, other
  indirect
• Permanence ???

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1605(b) Other Issues

• Transparency What level of documentation?
• Emissions reporting, baseline selection,
  leakage?
• De minimis exemptions?
• Minimal review of reports by EIA
• Registering vs. Reporting?
• Big Picture
• Flaws of existing 1605(b) will continue
• Doesnt provide certainty for business
• Doesnt provide useful information for policy
  makers
• Sets terrible precedent for future crediting
  programs

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CA Registry Forest Protocol

• Baselines Not generally applicable
• Assumes legal standard defines current land use
• Baseline not updated as law evolves
• Leakage
• Limited treatment creates bad precedent
• Permanence
• Requires annual monitoring tracks losses

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My Ideal Ag Sector Analysis

• What is the effect of mandatory policies?
• Mirror structure of McCain-Lieberman
• Use relevant targets and timetables
• Use range of carbon and energy prices
• Costs and benefits (e.g., new markets)
• Outputs
• Net farm income
• Overall market size how many gallons of
  ethanol?
• Regional distribution
• Soil, water, wildlife, other benefits

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Ag Sector Analysis (2)

• Elements of analysis
• Carbon cap on electricity, transport fuels, large
  sources
• Renewables (on-farm wind biomass energy)
• Methane to Energy
• Offsets Include transaction costs of
  monitoring, rules
• Sequestration
• Nutrient management
• Methane capture/reductions
• Incentives Payments
• Energy Price
• Fertilizer Pesticide (natural gas)
• On-farm fuel energy use

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Ag Sector Analysis (3)

• Analytical Difficulties?
• How to interact with economic studies?
• Do you use all outputs in an ag analysis?
• Studies can project levels of offsets, renewables
  use
• Regional distribution?
• One analysis, or multiple coordinated elements?
• If separate, how to capture the effect of revenue
  from new markets?