Michael Gillenwater

Abstract

Clearly defined principles are essential elements of GHG accounting and reporting guidelines, protocols, and standards to address the unavoidable expert judgments that must be applied to address ambiguities in these documents. The IPCC guidelines identify transparency, accuracy, completeness, (time series) consistency, and comparability as its foundational data quality principles. The principles of conservativeness, relevance, and comparability see varied use across major GHG… Show more

Abstract

Clearly defined principles are essential elements of GHG accounting and reporting guidelines, protocols, and standards to address the unavoidable expert judgments that must be applied to address ambiguities in these documents. The IPCC guidelines identify transparency, accuracy, completeness, (time series) consistency, and comparability as its foundational data quality principles. The principles of conservativeness, relevance, and comparability see varied use across major GHG accounting references. These differences in principles, especially with respect to the principle of comparability, indicate there are underlying problems with many GHG accounting protocols and standards now heavily referenced and applied. Show less

Many Parties to the United Nations Framework Convention on Climate Change are envisaging the use of significant amounts of biomass as a primary source in their energy supply. The present greenhouse gas (GHG) emission inventory guidelines, based on methods and approaches originally proposed by the IPCC in the 1990s do not add the CO2 emissions from the combustion or incineration of these biogenic fuels to national total emissions, as it is assumed these emissions reverse recent CO2 removals from… Show more

Many Parties to the United Nations Framework Convention on Climate Change are envisaging the use of significant amounts of biomass as a primary source in their energy supply. The present greenhouse gas (GHG) emission inventory guidelines, based on methods and approaches originally proposed by the IPCC in the 1990s do not add the CO2 emissions from the combustion or incineration of these biogenic fuels to national total emissions, as it is assumed these emissions reverse recent CO2 removals from the atmosphere during photosynthetic growth of the biomass, largely within the Party’s own boundaries. In a national annual inventory, the biomass carbon harvested in a specific year is balanced against the biomass carbon oxidation processes addressed in the energy and waste sectors of GHG inventories.

The CO2 emissions from biomass oxidation in the present IPCC inventory approach are accounted for by the country harvesting the biomass via the subtraction of the harvested biomass from C pools on their lands. This harvested biomass carbon is implicitly assumed to be oxidized both in the year and the country of harvest, regardless of whether this is factual. In the case of biomass exports, the CO2 emissions from the combustion/oxidation of this harvested biomass are not included in the national totals of the country where the biomass is used, as under the present approach this would lead to double counting on the global scale. With the increasing use of biomass on industrial scales, the assumptions underlying this approach start to introduce material inaccuracies on a national scale (versus global). Biomass combustion may no longer be negligible compared with fossil fuel combustion as biogenic fuels are increasingly traded internationally. In this paper, we review the present IPCC carbon mass flow approach and propose a change in the reporting and accounting methods that has the potential to address this national GHG emissions reporting issue. Show less

Transparency is the bedrock of the Paris Agreement (PA), including the assessment of that information by qualified experts to ensure consistency with international requirements. Review processes in one form or another have been underway within the UNFCCC for over 20 years. The PA’s Enhanced Transparency Framework introduces a dramatic increase in the scale of review under the UNFCCC process, as it involves several major changes. Because of these changes, simply building on what has been done… Show more

Transparency is the bedrock of the Paris Agreement (PA), including the assessment of that information by qualified experts to ensure consistency with international requirements. Review processes in one form or another have been underway within the UNFCCC for over 20 years. The PA’s Enhanced Transparency Framework introduces a dramatic increase in the scale of review under the UNFCCC process, as it involves several major changes. Because of these changes, simply building on what has been done for the review process in the past is unlikely to succeed. Instead, we argue that it is necessary to “rethink and redesign” a process to support effective and efficient reviews of biennial transparency reports (BTR) for all Parties. This paper presents a road map for building on the best of the current UNFCCC review processes and then identifies solutions to address the most important challenges faced by Parties, the UNFCCC secretariat, and review experts to establish a functioning ETF review process. Show less

Abstract

Electricity generation accounts for approximately 25% of global greenhouse gas (GHG) emissions, with more than two-thirds of this electricity consumed by commercial or industrial users. To reduce electricity consumption-related emissions effectively at the level of individual firms, it is essential that they are measured accurately and that decision-relevant information is provided to managers, consumers, regulators and investors. However, an emergent GHG accounting method for… Show more

Abstract

Electricity generation accounts for approximately 25% of global greenhouse gas (GHG) emissions, with more than two-thirds of this electricity consumed by commercial or industrial users. To reduce electricity consumption-related emissions effectively at the level of individual firms, it is essential that they are measured accurately and that decision-relevant information is provided to managers, consumers, regulators and investors. However, an emergent GHG accounting method for corporate electricity consumption (the ‘market-based’ method) fails to meet these criteria and therefore is likely to lead to a misallocation of climate change mitigation efforts. We identify two interrelated problems with the market-based method: 1. purchasing contractual emission factors is very unlikely to increase the amount of renewable electricity generation; and 2. the method fails to provide accurate or relevant information in GHG reports. We also identify reasons why the method has nonetheless been accepted by many stakeholders, and provide recommendations for the revision of international standards for GHG accounting. The case is important given the magnitude of emissions attributable to commercial/industrial electricity consumption, and it also provides broader lessons for other forms of GHG accounting. Show less

In the United States, electricity consumers are told that they can “buy” electricity from renewable energy projects, versus fossil fuel-fired facilities, through participation in voluntary green power markets. The marketing messages communicate to consumers that they are causing additional renewable energy generation and reducing emissions through their participation and premium payments for a green label. Using a spatial financial model and a database of registered Green-e wind power… Show more

In the United States, electricity consumers are told that they can “buy” electricity from renewable energy projects, versus fossil fuel-fired facilities, through participation in voluntary green power markets. The marketing messages communicate to consumers that they are causing additional renewable energy generation and reducing emissions through their participation and premium payments for a green label. Using a spatial financial model and a database of registered Green-e wind power facilities, the analysis in this paper shows that the voluntary Renewable Energy Certificate (REC) market has a negligible influence on the economic feasibility of these facilities. Nevertheless, voluntary green power marketers at least implicitly claim that buying their products creates additional renewable energy. This study indicates the contrary. Participants in U.S. voluntary green power markets associated with wind power, therefore, appear to be receiving misleading marketing messages regarding the effect of their participation. In the process of completing this analysis, a potentially relevant factor in explaining investor behavior was identified: the potential for the overlap of voluntary REC markets with compliance REC markets that supply utilities need to meet their obligations of Renewable Energy Portfolio Standard (RPS). The majority of state RPS rules allow for regional or even national sourcing of RECs, meaning that projects are generally eligible to provide compliance RECs to utilities not only in their home states, but in several other states.
Volume 63, Pages 452–457. Show less

This paper presents results from a model of a representative wind power investor's decision making process using a Monte Carlo simulation of a project financial analysis. Data, in the form of probability distribution functions (PDFs) for key input variables were collected from interviews with investors and other professionals active in the U.S. wind power industry using a formal expert elicitation protocol. This study presents the first quantitative estimates of the effect of the U.S. voluntary… Show more

This paper presents results from a model of a representative wind power investor's decision making process using a Monte Carlo simulation of a project financial analysis. Data, in the form of probability distribution functions (PDFs) for key input variables were collected from interviews with investors and other professionals active in the U.S. wind power industry using a formal expert elicitation protocol. This study presents the first quantitative estimates of the effect of the U.S. voluntary Renewable Energy Certificate (REC) market on renewable energy generation. The results indicate that the investment decisions of wind power project developers in the United States are unlikely to have been altered by the voluntary REC market. The problem with the current voluntary REC market is that it does not offer developers a reliable risk-adjusted revenue stream. Consequently, the claims by U.S. green power retailers and promoters that voluntary market RECs result in additional wind power projects lack credibility. Even dramatic increases in voluntary market REC prices, in the absence of long-term contracts, were found to have only a small effect on investor behavior.
Volume 63, Pages 1111–1125. Show less

This report assesses the governance of the CDM as a part of the research commissioned by the high-level Panel of the CDM Policy Dialogue. The CDM Policy Dialogue was established by the CDM Executive Board in late 2011 with the objective of providing recommendations on how best to position the CDM to respond to future challenges and opportunities, so as to ensure the effectiveness of the mechanism in contributing to future global climate action. The CDM Policy Dialogue is implemented by a… Show more

This report assesses the governance of the CDM as a part of the research commissioned by the high-level Panel of the CDM Policy Dialogue. The CDM Policy Dialogue was established by the CDM Executive Board in late 2011 with the objective of providing recommendations on how best to position the CDM to respond to future challenges and opportunities, so as to ensure the effectiveness of the mechanism in contributing to future global climate action. The CDM Policy Dialogue is implemented by a High-Level Panel composed of distinguished individuals who possess a broad range of experience and expertise in fields of relevance to the operation and aims of the CDM. Show less

This brief article summarizes the impending doom for much of the global carbon market.

Volume 2, Issue 4, pp. 167–170.

This paper outlines a set of principles for ensuring high-quality offsets, examines the CDM against these criteria, and reviews lessons learned, institutional changes that have been made, and the ongoing challenges.

With few exceptions, universities and other educational institutions have yet to undertake the necessary innovations and transformations that will be needed to prepare a future workforce on the scale necessary to address the challenge of greenhouse gas (GHG) mitigation in a way that instils public and policy-maker confidence. Irrespective of the form or timing of climate change policies, the foundation of policy design and implementation measures to address the root cause of climate change is… Show more

With few exceptions, universities and other educational institutions have yet to undertake the necessary innovations and transformations that will be needed to prepare a future workforce on the scale necessary to address the challenge of greenhouse gas (GHG) mitigation in a way that instils public and policy-maker confidence. Irrespective of the form or timing of climate change policies, the foundation of policy design and implementation measures to address the root cause of climate change is reliable metrics on GHG emissions (and removals). There is currently minimal infrastructure in place to develop or support this workforce. I define GHG measurement and management, which also serves as the title of this journal, as the application of science, engineering and economic principles to improve the way in which society mitigates the anthropogenic causes of global climate change by developing and providing reliable performance metrics related to GHG emissions and removals, and managing activities intended to reduce emissions to, and/or increase removals from, the atmosphere. This journal's unique purpose, as part of the growing literature focused on climate change, is to help us expand this literature to include critical and unexplored questions of implementation. Show less

The recent suspension of a leading CDM verification company has highlighted the need to ‘professionalise’ the auditors of greenhouse gas emissions.

Overall, OQI finds that the CDM’s processes perform sufficiently against most of our core offset quality criteria, and with further refinement should be capable of performing sufficiently against all criteria. The most significant quality issues in the CDM historically have had to do with additionality and the reliability of independent third party verification. These issues are common across all GHG offset programs and, in the case of the CDM, can be addressed through streamlining and… Show more

Overall, OQI finds that the CDM’s processes perform sufficiently against most of our core offset quality criteria, and with further refinement should be capable of performing sufficiently against all criteria. The most significant quality issues in the CDM historically have had to do with additionality and the reliability of independent third party verification. These issues are common across all GHG offset programs and, in the case of the CDM, can be addressed through streamlining and standardizing the additionality tools and significantly restructuring the third party verification system. On all other criteria, OQI finds that the CDM, with some modification, can sufficiently ensure offset quality. Show less

This brief demonstrates that RECs sold in either voluntary or mandatory environmental markets are not equivalent to GHG emission offsets. The first section of this brief defines and provides an overview of GHG emission offsets and RECs. The second section describes the relationship between renewable energy and emissions reported by the electric power industry. The third section presents the problems created by treating RECs as offsets. The final section outlines OQI’s recommendations for the… Show more

This brief demonstrates that RECs sold in either voluntary or mandatory environmental markets are not equivalent to GHG emission offsets. The first section of this brief defines and provides an overview of GHG emission offsets and RECs. The second section describes the relationship between renewable energy and emissions reported by the electric power industry. The third section presents the problems created by treating RECs as offsets. The final section outlines OQI’s recommendations for the definition of a REC and the interaction between the REC and offset markets. Show less

Several western states have considered developing a regulatory approach to reduce greenhouse gas (GHG) emissions from the electric power industry, referred to as a load-based (LB) cap-and-trade scheme. A LB approach differs from the traditional source-based (SB) cap-and-trade approach in that the emission reduction obligation is placed upon Load Serving Entities (LSEs), rather than electric generators. The LB approach can potentially reduce the problem of emissions leakage, relative to a SB… Show more

Several western states have considered developing a regulatory approach to reduce greenhouse gas (GHG) emissions from the electric power industry, referred to as a load-based (LB) cap-and-trade scheme. A LB approach differs from the traditional source-based (SB) cap-and-trade approach in that the emission reduction obligation is placed upon Load Serving Entities (LSEs), rather than electric generators. The LB approach can potentially reduce the problem of emissions leakage, relative to a SB system. For any of these proposed LB schemes to be effective, they must be compatible with modern, and increasingly competitive, wholesale electricity markets. LSE's are unlikely to know the emissions associated with their power purchases. Therefore, a key challenge for a LB scheme is how to assign emissions to each LSE. This paper discusses the problems with one model for assigning emissions under a LB scheme and proposes an alternative, using unbundled Generation Emission Attribute Certificates. By providing a mechanism to internalize an emissions price signal at the generator dispatch level, the tradable certificate model addresses both these problems and provides incentives identical to a SB scheme. Show less

Corporate buyers of green power may want to take the climate change credit for their purchases – but it’s not usually that simple.

This document is intended to provide policymakers with practical recommendations regarding the integration of greenhouse gas (GHG) offsets (“offsets”) into emerging regulatory systems. Offsets have an important role to play in controlling the costs associated with regulating and reducing GHGs, and in driving technology transformation in sectors not mandated to reduce their GHG emissions. In order for offsets to deliver on their intended purpose—the achievement of a real and verifiable reduction… Show more

This document is intended to provide policymakers with practical recommendations regarding the integration of greenhouse gas (GHG) offsets (“offsets”) into emerging regulatory systems. Offsets have an important role to play in controlling the costs associated with regulating and reducing GHGs, and in driving technology transformation in sectors not mandated to reduce their GHG emissions. In order for offsets to deliver on their intended purpose—the achievement of a real and verifiable reduction in global GHG emission levels beyond what would have otherwise occurred—regulatory programs must be designed to ensure the quality and effectiveness of offsets used to meet GHG reduction requirements. Moreover, policymakers must have a clear understanding of both the opportunities and challenges presented by the integration of offsets into GHG emission-reduction systems. Show less

Renewable energy and greenhouse gas emissions markets are currently in a state of confusion regarding the treatment of Renewable Energy Certificates (RECs). Should consumers buy RECs or emission offsets? After examining this question, the author concludes that RECs are not equivalent to emission offset credits, and as currently defined, the retiring of a REC may have no impact on emissions from electric power generation. Consumers who purchase RECs in voluntary green power markets are providing… Show more

Renewable energy and greenhouse gas emissions markets are currently in a state of confusion regarding the treatment of Renewable Energy Certificates (RECs). Should consumers buy RECs or emission offsets? After examining this question, the author concludes that RECs are not equivalent to emission offset credits, and as currently defined, the retiring of a REC may have no impact on emissions from electric power generation. Consumers who purchase RECs in voluntary green power markets are providing financial assistance to renewable generators in the form of a production subsidy. Generators that sell RECs are not transferring emission reductions, since they are unlikely to have ownership or the ability to quantify reductions using a commonly accepted standard. More importantly, RECs currently sold in voluntary markets do not pass credible additionality tests and can, at best, be expected to have a market demand effect, which will be less than the supply of RECs on the market. REC definitions that use the term “environmental attributes” or “environmental benefits” are almost universally ambiguous, providing the mistaken impression that consumers are purchasing a good instead of subsidizing a public good. Show less

Renewable energy and greenhouse gas emissions markets are currently in a state of confusion regarding the treatment of Renewable Energy Certificate (RECs). How should emission-trading schemes treat RECs? How can emission mitigation policies provide real incentives for renewable generation? The objective of REC markets should be to promote additional renewable energy investments. The author asserts that defining RECs in terms of attributes, especially off-site attributes, does not further this… Show more

Renewable energy and greenhouse gas emissions markets are currently in a state of confusion regarding the treatment of Renewable Energy Certificate (RECs). How should emission-trading schemes treat RECs? How can emission mitigation policies provide real incentives for renewable generation? The objective of REC markets should be to promote additional renewable energy investments. The author asserts that defining RECs in terms of attributes, especially off-site attributes, does not further this goal. Ambiguous language such as “environmental attribute” or “environmental benefit” creates confusion in the marketplace while failing to address the relevant coordination issues with Renewable Portfolio Standard compliance markets, voluntary emission offset markets, or emission cap-and-trade markets. Specifically, defining RECs in terms of off-site attributes creates a number of problems, including that once an emissions cap-and-trade scheme is in place, such definitions of a REC can become indefensible. The author proposes to redefine RECs in terms of on-site attributes, which resolves the aforementioned problems and allows compliance and voluntary renewable energy and emission markets to function without conflicts. Ideally, environmental commodities should be homogeneous, first best measures of the relevant environmental good, as well as easily measured and verified. The author proposes tradable environmental commodities that achieve these characteristics. Show less

National governments that are Parties to the United Nations Framework Convention on Climate Change (UNFCCC) are required to submit greenhouse gas (GHG) inventories accounting for the emissions and removals occurring within their geographic territories. The Intergovernmental Panel on Climate Change (IPCC) provides inventory methodology guidance to the Parties of the UNFCCC. This methodology guidance, and national inventories based on it, omits carbon dioxide (CO2) from the atmospheric oxidation… Show more

National governments that are Parties to the United Nations Framework Convention on Climate Change (UNFCCC) are required to submit greenhouse gas (GHG) inventories accounting for the emissions and removals occurring within their geographic territories. The Intergovernmental Panel on Climate Change (IPCC) provides inventory methodology guidance to the Parties of the UNFCCC. This methodology guidance, and national inventories based on it, omits carbon dioxide (CO2) from the atmospheric oxidation of methane, carbon monoxide, and non-methane volatile organic compounds emissions that result from several source categories. The inclusion of this category of “indirect” CO2 in GHG inventories increases global anthropogenic emissions (excluding land use and forestry) between 0.5 and 0.7%. However, the effect of inclusion on aggregate UNFCCC Annex I Party GHG emissions would be to reduce the growth of total emissions, from 1990 to 2004, by 0.2% points. The effect on the GHG emissions and emission trends of individual countries varies. The paper includes a methodology for calculating these emissions and discusses uncertainties. Indirect CO2 is equally relevant for GHG inventories at other scales, such as global, regional, organizational, and facility. Similarly, project-based methodologies, such as those used under the Clean Development Mechanism, may need revising to account for indirect CO2. Show less

Voluntary greenhouse-gas emission offset markets are in need of government oversight.

Several western states have considered developing a regulatory approach to reduce greenhouse gas (GHG) emissions from the electric power industry, referred to as a load-based cap-and-trade scheme. A load-based (LB) approach differs from the traditional source-based (SB) cap-and-trade approach in that the emission reduction obligation is placed upon Load Serving Entities (LSEs), rather than electric generators. The LB approach can potentially reduce the problem of emissions leakage, relative to… Show more

Several western states have considered developing a regulatory approach to reduce greenhouse gas (GHG) emissions from the electric power industry, referred to as a load-based cap-and-trade scheme. A load-based (LB) approach differs from the traditional source-based (SB) cap-and-trade approach in that the emission reduction obligation is placed upon Load Serving Entities (LSEs), rather than electric generators. The LB approach can potentially reduce the problem of emissions leakage, relative to a source-based system. For any of these proposed LB schemes to be effective, they must be compatible with modern, and increasingly competitive, wholesale electricity markets. LSE’s are unlikely to know the emissions associated with their power purchases. Therefore, a key challenge for a LB scheme is how to assign emissions to each LSE. This paper discusses the problems with one model for assigning emissions under a LB scheme and proposes an alternative, using unbundled Generation Emission Attribute Certificates. By providing a mechanism to internalize an emissions price signal at the generator dispatch level, the tradable certificate model addresses both these problems and provides incentives identical to a SB scheme. Show less

This briefing discusses the challenges of enforcing compliance under the Kyoto Protocol.

In this paper, we focus on two aspects of the rationale for quantifying uncertainty: (1) the possible uses of the quantified uncertainty estimates for policy (e.g., as a means of adjusting inventories used to determine compliance with international commitments); and (2) the direct benefits of the process of investigating uncertainties in terms of improving inventory quality. We find that there are particular characteristics that an inventory uncertainty estimate should have if it is to be used… Show more

In this paper, we focus on two aspects of the rationale for quantifying uncertainty: (1) the possible uses of the quantified uncertainty estimates for policy (e.g., as a means of adjusting inventories used to determine compliance with international commitments); and (2) the direct benefits of the process of investigating uncertainties in terms of improving inventory quality. We find that there are particular characteristics that an inventory uncertainty estimate should have if it is to be used for policy purposes: (1) it should be comparable across countries; (2) it should be relatively objective, or at least subject to review and verification; (3) it should not be subject to gaming by countries acting in their own self-interest; (4) it should be administratively feasible to estimate and use; (5) the quality of the uncertainty estimate should be high enough to warrant the additional compliance costs that its use in an adjustment factor may impose on countries; and (6) it should attempt to address all types of inventory uncertainty. Currently, inventory uncertainty estimates for national greenhouse gas inventories do not have these characteristics. For example, the information used to develop quantitative uncertainty estimates for national inventories is often based on expert judgments, which are, by definition, subjective rather than objective, and therefore difficult to review and compare. Further, the practical design of a potential factor to adjust inventory estimates using uncertainty estimates would require policy makers to (1) identify clear environmental goals; (2) define these goals precisely in terms of relationships among important variables (such as emissions estimate, commitment level, or statistical confidence); and (3) develop a quantifiable adjustment mechanism that reflects these environmental goals. Show less

This short article discusses the problems with voluntary REC markets and their claims of reducing emissions.

Lead author for “Volume 1 General Guidance and Reporting” and “Volume 3 Industrial Processes and Product Use"

Lead author for “Cross-Cutting Issues,” Chapter 5

Core adviser and contributing author for Quality Management” chapter 7 and Annex on “Uncertainty Assessment

Lead author of Chapter 3: Greenhouse Gas Inventory

The eddy current decay (ECD) method for determining electrical resistivity uses a relationship between the time constant of magnetic flux diffusion and resistivity. This method is shown to be valid for determining the resistivity of solid high-purity aluminum cylinders with eight equally spaced longitudinal grooves machined into the surface. The effects of changes in groove dimensions for a 25.4-mm-diameter, superconducting magnetic energy storage (SMES) conductor stabilizer are reported… Show more

The eddy current decay (ECD) method for determining electrical resistivity uses a relationship between the time constant of magnetic flux diffusion and resistivity. This method is shown to be valid for determining the resistivity of solid high-purity aluminum cylinders with eight equally spaced longitudinal grooves machined into the surface. The effects of changes in groove dimensions for a 25.4-mm-diameter, superconducting magnetic energy storage (SMES) conductor stabilizer are reported. Observations of machining, heat treatment, and material inhomogeneity effects are discussed. It is found that the ECD time constant is dependent primarily on groove depth and that groove width has only a minor influence. An empirical equation relating groove dimensions with the time constant and with resistivity is presented. Show less

Lead author

Lead author for Chapter 3: Greenhouse Gas Inventory