GHG Protocol for Project Accounting - Greenhouse Gas Protocol

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Key GHG Project Accounting Concepts 2.11 Valid Time Length for the Baseline Scenario Generally, the farther out into the future one tries to project “what would have happened,” the more uncertain this projection becomes. For this reason, a particular baseline scenario or performance standard should be valid only for a finite period of time for the purpose of estimating baseline emissions. After a certain period, either no further GHG reductions are recognized for the project activity, or a new (revised) baseline scenario or performance standard is identified. The length of this period may vary, depending on technical and policy considerations, 1 and on whether baseline emission estimates are dynamic or static (see Figure 2.2). The valid time length for the baseline scenario of each project activity is determined in Chapter 10, as a prelude to quantifying GHG reductions. 2.12 Dynamic Versus Static Baseline Emission Estimates Baseline emissions are often estimated using an emission rate, relating GHG emissions to the production of a product or service or to a certain period of time. Baseline emission rates may be dynamic or static. Static baseline emission rates do not change over time, while dynamic baseline emission rates change over time. A static baseline emission rate is most appropriate for GHG projects that are substituting for existing plants or technologies where it can be reasonably assumed that basic operating parameters will not change over a certain time period (see Figure 2.2a). In contrast, dynamic baseline emission rates are better suited to GHG projects that are part of a system that changes significantly over time (see Figure 2.2b). Two types of GHG projects that may require dynamic baseline emission rates include: • Electricity supply projects—The baseline emission rate may be based on displaced generation sources that are expected to change significantly over time. • LULUCF projects—The baseline emission rate may change over time to reflect the changing growth patterns of carbon stocks in trees. 2.13 Equivalence of Products and Services Nearly every project activity will provide products or services in the context of some broader market for them. Therefore, if the project activity were not implemented, it should be assumed that the market would have provided a quantity and quality of products or services equivalent to what the project activity would have produced. 2 This is particularly true when a GHG project is small relative to the market in which it operates (i.e., its presence or absence will not affect market prices). This concept of equivalence has broad application in the quantification of GHG reductions. For example: • Identifying secondary effects (Chapter 5)—If a project activity reduces the production of a product or FIGURE 2.2 Dynamic and static baseline emission rate estimates BASELINE EMISSION RATE L = end of valid time length for the baseline scenario BASELINE EMISSION RATE TIME L TIME L FIGURE 2.2a: Static emission rate FIGURE 2.2b: Dynamic emission rate Baseline emission rates may be dynamic or static. Static baseline emission rates do not change over time, while dynamic baseline emission rates change over time. 14 CHAPTER 2
CHAPTER 2: Key GHG Project Accounting Concepts 15 service, the market will compensate and provide a level of production equivalent to that in the baseline scenario. This response may give rise to a secondary effect. • Identifying baseline candidates (Chapter 7)— Baseline candidates should be capable of providing the same quality of products or services as the project activity. Furthermore, if the project-specific baseline procedure is used, baseline candidates should be capable of providing the same quantity of products or services as the project activity. • Estimating baseline emissions (Chapters 8 and 9)— Baseline emissions should be estimated by assuming equivalent quality and quantities of production in the baseline scenario as in the project activity. Some exceptions to equivalence will occur only when the market for the products or services provided by a project activity is poorly functioning or nonexistent, or where a project activity is so large that the market response would not have been proportional (e.g., because the project activity is large enough to change market prices relative to the baseline scenario, causing a change in the total quantity produced). In quantifying GHG reductions, project developers should fully explain any exceptions to the assumption of equivalence. 2.14 Additionality As previously described in section 2.9, project-based GHG reductions are quantified relative to baseline emissions, which are derived either from an identified baseline scenario (see Figure 2.1) or by using a performance standard that serves the same function as a baseline scenario. Though the presumption is generally that a project activity differs from its baseline scenario, in some cases, a project activity (or the same
Page 1 and 2: The Greenhouse Gas Protocol 2000 20
Page 3 and 4: Table of Contents PART I BACKGROUND
Page 5 and 6: Part I BACKGROUND, CONCEPTS AND PRI
Page 7 and 8: CHAPTER 1: Introduction 5 1.1 The G
Page 9 and 10: CHAPTER 1: Introduction 7 • Chapt
Page 11 and 12: CHAPTER 1: Introduction 9 emissions
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Page 21 and 22: CHAPTER 3: Policy Aspects of GHG Pr
Page 23 and 24: 21 ary effects. The extent and deta
Page 25 and 26: CHAPTER 4: GHG Accounting Principle
Page 27 and 28: Part II GHG Reduction Accounting an
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Page 31 and 32: CHAPTER 5: Defining the GHG Assessm
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Page 41 and 42: CHAPTER 7: Identifying the Baseline
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CHAPTER 9: Estimating Baseline Emis
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67 Britt Sandler, Program on Energy
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CHAPTER 10: Monitoring and Quantify
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CHAPTER 11: Reporting GHG Reduction
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Part III GHG Project Accounting Exa
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EXAMPLE 1: Cement Sector GHG Projec
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EXAMPLE 2: Compressor Station GHG P
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Part IV Supplementary Information A
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Legal Requirements 121 A.2 Finding
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C Assessing Net Benefits Using Inve
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Assessing Net Benefits Using Invest
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Glossary 131 Emission Factor Fuel S
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Glossary 133 Stringency Level Tempo
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References 135 New South Wales Gree
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References 137 Version 1.0: Volume
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Contributors 139 Jesse Uzzell, DNV
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Contributors 141 Wendy Poulton, Esk
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Contributors 143 David Lesolle, Min
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About WBCSD The World Business Coun
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