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Policy and

Action Standard
An accounting and reporting standard
for estimating the greenhouse gas effects
of policies and actions

World Resources Institute team
David Rich
Pankaj Bhatia
Jared Finnegan
Kelly Levin
Apurba Mitra

Advisory committee
Samuel Tumiwa Asian Development Bank
Ajay Mathur Bureau of Energy Efficiency, India
Mary Nichols California Air Resources Board
Ned Helme Center for Clean Air Policy
Andrei Bourrouet Costa Rican Institute of Electricity
Robert Owen-Jones Department of Climate Change and Energy Efficiency, Australia
Brian Mantlana Department of Environmental Affairs, South Africa
Niklas Höhne Ecofys
Dessalegne Mesfin Ethiopia Environmental Protection Authority
Jürgen Lefevere European Commission
Jamshyd N. Godrej Godrej & Boyce Mfg. Co. Ltd., India
Jennifer Layke Johnson Controls
John Kornerup Bang Maersk Group
Karen Suassuna Ministry of Environment, Brazil
Alexa Kleysteuber Ministry of Environment, Chile
Yuji Mizuno Ministry of Environment, Japan
Andrea García-Guerrero Ministry of Environment and Sustainable Development, Colombia
Zou Ji National Development and Reform Commission, China
Jonathan Dickinson New York City Mayor’s Office of Long-Term Planning and Sustainability
Jane Ellis Organisation for Economic Co-operation and Development (OECD)
Kersten-Karl Barth Siemens
Suzana Kahn Ribeiro State of Rio de Janeiro
Michael Lazarus Stockholm Environment Institute – U.S.
Chaiwat Munchareon Thailand Greenhouse Gas Management Organization
Teng Fei Tsinghua University
Neta Meidáv United Kingdom Department of Energy and Climate Change
Katia Simeonova United Nations Climate Change Secretariat
Yamil Bonduki United Nations Development Programme (UNDP)
Maurice LeFranc United States Environmental Protection Agency
Xueman Wang World Bank
Thierry Berthoud World Business Council for Sustainable Development (WBCSD)

Table of Contents

B ac kg r o u n d, c o n c e p t s , a n d p r i n c i p l e s

1. Introduction 4

2. Objectives of Estimating the GHG Effects of Policies and Actions 14

3. Overview of Steps, Key Concepts, and Requirements 18

4. Accounting and Reporting Principles 30

GHG Assessment Steps
Define policy/action 5. Defining the Policy or Action 34

Identify effects 6. Identifying Effects and Mapping the Causal Chain 48

Identify effects 7. Defining the GHG Assessment Boundary 60

Estimate effects 8. Estimating Baseline Emissions 72

Estimate effects 9. Estimating GHG Effects Ex-Ante 94

Estimate effects 10. Monitoring Performance over Time 110

Estimate effects 11. Estimating GHG Effects Ex-Post 120

Estimate effects 12. Assessing Uncertainty 134

Verify 13. Verification 142

Report 14. Reporting 150

Appendices

A. Guidance on Collecting Data 156

B. Guidance on Assessing Policy Interactions 160

C. Examples of Non-GHG Effects 167

D. Cost-Effectiveness and Cost-Benefit Analysis 168

Abbreviations and Acronyms 173

Glossary 175

References 181

Contributors 184

1

7 Considerations for implementing the standard 8 Identify effects 1.15 Terminology: shall.2 How the standard was developed 6 5.3 Map the causal chain 55 1.1 Assess the significance of potential the GHG Effec ts of Policies GHG effects 62 a n d Ac t i o n s 14 7.4 Applicability of the standard 6 5.2 Define the policy or action to be assessed 36 1.11 Sector-­specific guidance 11 6.3 Define the GHG assessment period 70 3. and Requirements 18 7.5 Estimating baseline emissions and GHG effects using the comparison group method (for ex-­post assessment only) 91 8.10 Relationship to the GHG Protocol 6.6 When to use the standard 7 5.1 Key concepts 74 8.1 Select the policy or action to be assessed 36 1.3 Decide whether to assess an individual 1.2 Determine sequence of steps for estimating the GHG effects of the policy or action 74 4 Ac c o u n t i n g a n d 8. Detailed Table of Contents 1 I n t r o d u c t i o n 4 Define policy/action 1.4 Requirements in the standard 27 8.14 Estimating non-GHG effects or co-benefits 12 6.2 Determine which GHG effects. K e y in the GHG assessment boundary 64 Concep ts.5 Scope of the standard 7 policy/action or a package of policies/actions 40 1. source/sink categories.1 Purpose of this standard 5 5 D e f i n i n g t h e P o l i c y o r Ac t i o n 34 1.1 Overview of steps 19 3.12 Calculation models and tools 11 and greenhouse gases associated 1.16 Limitations 12 7 D e f i n i n g t h e G H G A s s e s s m e n t B o u n da r y 60 2 Ob j e c t i v e s o f E s t i m at i n g 7.3 Choose type of baseline comparison 77 R e p o r t i n g P r i n c i p l e s 30 8. and may 12 1.8 Relationship to GHG inventories 8 1.9 Relationship to The GHG Protocol 6 I d e n t i f y i n g E f f e c t s a n d for Project Accounting 10 M a p p i n g t h e C a u s a l Ch a i n 48 1. and greenhouse gases to include 3 O v e r v i e w o f S t e p s .4 Choose ex-­ante or ex-­post assessment 46 1.2 Identify source/sink categories 1.6 Aggregate baseline emissions across all source/sink categories 93 2 Policy and Action Standard .13 Cost-­effectiveness or cost-­benefit analysis 12 with the GHG effects 53 1.1 Identify potential GHG effects Mitigation Goal Standard 10 of the policy or action 50 1.4 Estimating baseline emissions using the scenario method 78 8. should.3 Example of following the steps in the standard 25 8 E s t i m at i n g B a s e l i n e E m i s s i o n s 72 3.3 Intended users 6 5.2 Key concepts 19 Estimate effects 3.

1 Define key performance indicators 112 14.5 Types of verification 146 for parameters 99 13.3 Range of approaches 137 12.3 Select a desired level of accuracy 123 Glossary 175 11.1 Introduction 143 9 E s t i m at i n g G H G E f f e c t s E x.5 Estimate the GHG effect of the policy or action 126 Contributors 184 11.5 Estimate policy scenario emissions 105 13.2 Benefits of verification 144 9.5 Monitor the parameters over time 117 B Guidance on Assessing Policy Interactions 160 C Examples of Non-GHG Effects 167 11 E s t i m at i n g G H G E f f e c t s E x.4 Estimate policy scenario values 13.2 Identify parameters to be estimated 96 13.1 Required information 151 10.P o s t 120 D Cost-Effectiveness and Cost-Benefit Analysis 168 11.2 Define parameters needed for ex-­post assessment 114 10.2 Types of uncertainty 136 12.3 Select a desired level of accuracy 99 the Policy and Action Standard 146 9.2 Select an ex-­post assessment method 122 11.2 Optional information 154 10.4 Create a monitoring plan 116 A Guidance on Collecting Data 156 10.A n t e 94 13.4 Estimate policy scenario emissions 126 References 181 11.6 Quantitative uncertainty analysis 141 Verify 13 V e r i f i c at i o n 142 13.3 Key concepts 144 9.6 Levels of assurance 146 9.1 Introduction to uncertainty assessment 136 12.5 Qualitative uncertainty analysis 140 12.7 Competencies of verifiers 147 9.6 Estimate the GHG effect of the policy 13.1 Update baseline emissions or ex-­ante assessment (if applicable) 122 Abbreviations and Acronyms 173 11.3 Define the policy monitoring period 116 A p p e n d i c e s 155 10.4 Subject matter relevant to 9.6 Additional steps to inform decision making (optional) 130 3 .4 Sensitivity analysis 138 12.1 Define the most likely policy scenario 96 13.8 Verification process 147 or action 105 Report 10 M o n i t o r i n g P e r f o r m a n c e 14 R e p o r t i n g 150 o v e r T i m e 110 14. Detailed Table of Contents 12 A s s e s s i n g U n c e r ta i n t y 134 12.

1 Introduction .

As they do so. there is an urgent need to accelerate efforts to reduce GHG emissions. National and subnational governments. global greenhouse gas emissions must be cut by as much as 72 percent below 2010 levels by 2050 to have a likely chance of limiting the increase in global mean temperature to 2 degrees Celsius above preindustrial levels (IPCC 2014). The standard was developed with the following objectives in mind: 1. and relevant way change in GHG emissions and removals resulting from •• To help policymakers and other decision makers policies and actions. Every degree increase in temperature will  produce increasingly unpredictable and dangerous impacts for ­p eople and ecosystems. consistent. develop effective strategies for managing and reducing GHG emissions through a better understanding of the emissions impacts of policies and actions 5 . financial institutions. transparent.1 Purpose of this standard •• To help users assess the GHG effects of specific policies The GHG Protocol Policy and Action Standard provides and actions in an accurate. This standard helps answer the following questions: and private sector organizations are planning and •• What effect is a given policy or action likely to have implementing a variety of policies and actions to reduce on GHG emissions in the future? GHG emissions. they are seeking to assess •• Is a given policy or action on track and delivering and communicate the effects of policies and actions expected results? on GHG emissions—­both before adoption to inform the •• What effect has a given policy or action had on design of policies and actions and after implementation to GHG emissions? understand whether the intended effects were achieved. As a result. According to climate scientists.G reenhouse gas (GHG) emissions are driving climate change and its impacts around the world. a standardized approach for estimating and reporting the complete.

South instruments. of new technologies. Mexico. and incentives.4 Applicability of the standard workshops. 1. South Africa. NGOs. charges. experience. or other entity. worked in practice.ghgprotocol. Japan. Chile. transparency in the way the GHG effects of policies The following examples show how different types of users and actions are estimated can use the standard: •• Governments: Estimate the GHG effects of planned 1. WRI launched a two-­year process to develop •• Research institutions and NGOs: Estimate the the Policy and Action Standard. Costa Rica. governments.org.3 In June 2012. or practices.•• To support consistent and transparent public reporting of financial institutions. the •• To create more international consistency and term “user” refers to the entity implementing the standard. A 30-­member Advisory GHG effects of any of the above types of policies or Committee provided strategic direction throughout the actions to assess performance or provide support to process. non-­governmental emissions impacts and policy effectiveness 1 organizations.2 How the standard was developed policies and actions to inform decision making. processes. directives. feedback and circulated for public comment in July 2014. Colombia. such as company-­ their adoption in order to achieve a low emissions wide energy efficiency programs implemented by economy worldwide. across a range of sectors to determine how the standard institution. loans to support GHG reductions and low emissions Launched in 1998. subsidies. including during three stakeholder 1. The first draft of the Policy and Action Standard decision makers. Belgium. the United Kingdom.2 is to develop internationally accepted GHG accounting •• Businesses: Estimate GHG effects of private sector and reporting standards and tools. Other intended users include donor agencies and appliances). information India. In 2013. The standard was revised based on pilot testing public or private sector financing and investment. to (2) specific policy and policymakers assessing government policies and instruments to carry out a strategy or achieve desired actions at any level. and may include laws. Germany. Israel. or private sector financing and investment. provincial. voluntary agreements. and the United of new technologies. Tunisia. All GHG Protocol standards and electric utilities. to (3) the implementation of technologies. “policies” and “actions” refer to on 27 policies and actions in 20 countries and cities interventions taken or mandated by a government. and States. then reviewed by members of a Review Group. was developed in 2012 by two Technical Working Groups consisting of over 50 members. academic institutions. implementation guidance are available at www. The GHG Protocol is a retrospectively evaluate GHG effects to learn from multistakeholder partnership of businesses. Throughout this standard. and others convened •• Donor agencies and financial institutions: Estimate by the World Resources Institute (WRI) and the World the GHG effects of finance provided. and decrees. including national. taxes. and businesses. Indonesia. the second draft was pilot tested In this standard. implementation Korea. and to promote actions larger than individual projects. research institutions. The terms “policy” and “action” may refer to interventions at various stages along a policy-­making continuum. such as grants or Business Council for Sustainable Development (WBCSD). regulations and standards. monitor This standard was developed by the Greenhouse progress of implemented policies and actions. Pilot countries included Bangladesh.3 Intended users from (1) broad strategies or plans that define high-­level This standard is intended for a wide range of organizations objectives or desired outcomes (such as increasing energy and institutions. processes. China. or outcomes (such as an energy efficiency standard for municipal. and Gas Protocol (GHG Protocol). state. voluntary commitments. 6 Policy and Action Standard . The primary intended users are analysts efficiency by 20 percent by 2020). the mission of the GHG Protocol development strategies. or practices.

Depending on individual objectives and when the standard Section 1. modifications. or both. either throughout a policy6 design and implementation positive or negative. users must follow all applicable to assess since the level of detail needed to estimate accounting and reporting requirements in order for the GHG effects may not be available without further assessment to be in conformance with the standard. and expected future effects of well as policies and measures under the United Nations a policy or action Framework Convention on Climate Change (UNFCCC). but it does policy instruments and the implementation of not prescribe specific calculation methodologies. transportation. or are •• Before policy implementation: To estimate extensions. or implemented. or eliminations of existing expected future effects of a policy or action (through policies or actions ex-­ante assessment) This standard may be useful for estimating the GHG •• During policy implementation: To estimate effects of nationally appropriate mitigation actions achieved effects to date. CHAPTER 1 Introduction processes. such as low The standard includes both requirements and guidance. or practices (at a scale larger data sources. forestry. However. subnational. It details a general process that users This standard is primarily designed to assess specific should follow when conducting an assessment. tools. and wish to report that their assessment is in conformance or practices that will be implemented to achieve the with it. or technologies.9 provides more information on projects. reporting.6 When to use the standard achieve objectives unrelated or contrary to climate The standard may be used at multiple points in time change mitigation (but that have an effect. users may implement the steps related to ex-­ ante assessment. Users that intend to assess the effects of broad strategies or plans.4 •• After policy implementation: To estimate what effects have occurred as a result of a policy or action Users should follow project-­level methodologies such (through ex-­post assessment) as The GHG Protocol for Project Accounting (2005) for actions at the level of an individual mitigation project. than an individual project). The most comprehensive approach is to apply the standard first 7 .5 It does not provide guidance the same goal could have different GHG effects. as well as specific steps on monitoring. adopted. processes. and other estimation of expected future GHG effects of a policy or land use [AFOLU]. specificity. processes. should first define the users must follow if they choose to implement the standard individual policy instruments or technologies. and verification. residential action—­and ex-­post assessment—­the estimation of historical and commercial buildings. The emissions development plans or strategies framed requirements represent the accounting and reporting steps that in terms of desired outcomes. on GHG emissions) process. is applied. or practices (sometimes called “measures”) 1. Users may choose to implement the standard in part strategy or plan. including: •• That are planned. effects. as performance indicators.5 Scope of the standard that result from policy instruments (such as the This standard includes steps related to estimation of GHG replacement of old appliances with more efficient ones). on what type of policy or action to implement but only The standard is applicable to policies and actions: how to estimate the emissions effects associated with its implementation. ex-­post assessment. and different policies or actions used to achieve The standard is policy-­neutral. industry. municipal) in all countries and regions The standard covers both ex-­ante assessment—­the •• In any sector (such as agriculture. Broad strategies or plans can be difficult rather than in full. energy supply. •• At any level of government (national. as well as cross-­sector policy instruments (such as emissions trading programs or carbon taxes) •• Intended to mitigate GHG emissions or intended to 1. or waste) GHG effects of a policy or action. ongoing performance of key (NAMAs) that are framed as policies or programs.

subnational. 11) potential policies Monitor progress during Assess GHG effect policy implementation of policies ex-ante (Ch. including the complexity of the policy a combination of many different policies that increase or action being assessed. All jurisdictions and organizations Figure 1. or the GHG Protocol Corporate Accounting and Reporting 1. Users National. The time and human reveal the effects of individual policies or actions. Gas Emission Inventories (2014) (along with the IPCC Guidelines) for cities and subnational jurisdictions. following established standards such and implementation process. of policy effectiveness. or organizational level. as well as a range of non-­policy extent of data collection needed and whether relevant data factors (for example. subnational. or weather). annually (or regularly) during policy 1. and again after implementation. this standard can inform level of accuracy and completeness needed to meet the policy selection and design and enable an understanding user’s objectives. the scope of the assessment. the process as the IPCC Guidelines for National Greenhouse Gas is iterative. the WRI/C40/ previous experience. whereby policy development is informed by Inventories (2006) for national governments.before implementation. In this example. Figure 1. Emissions resources required to implement the standard depends on may change as a result of a variety of factors. Not all ICLEI Global Protocol for Community-­Scale Greenhouse steps may be relevant to all users. users should consider establishing However. and company/organizational GHG carrying out an ex-­ante assessment only may skip Chapters inventories are critical for tracking changes in overall GHG 10 and 11. 9) Select and implement policies 8 Policy and Action Standard . Users carrying out an ex-­post assessment only emissions at a national. GHG inventories are also needed to identify and prioritize mitigation opportunities. Policy/action accounting should be Figure 1.1 Assessing GHG effects throughout a policy design and implementation process  Addressed Develop GHG inventory by the standard  Not addressed Assess GHG effect Define policy by the standard of policies ex-post objectives and identify (Ch. whether analysis related to the prices. By attributing changes in emissions policy or action has previously been done. changes in GHG inventories over time do not a working group of experts and stakeholders with relevant explain why emissions have grown or declined over time or and diverse skills and expertise. the and decrease emissions.1 outlines a sequence of steps to monitor and should develop a GHG inventory as a first step to managing assess GHG effects at multiple stages in a policy design GHG emissions. and the desired to specific policies and actions. may skip Chapter 9. 10) (Ch. implementing the standard Before using the standard. changes in economic activity.7 Considerations for Standard (2004) for companies and organizations. such as a variety of factors.8 Relationship to GHG inventories implementation. energy has already been collected.1 is an example only.

to calculate source-­or sector-­level emissions for both GHG inventories and GHG assessments of Table 1. on the one in the IPCC Guidelines for National Greenhouse Gas hand. or action and the GHG inventory. even if the effect of individual policies and actions may not be visible in the To the extent possible.1 Comparison of GHG inventory and policy/action accounting Type of accounting Purpose Limitations • Comprehensive accounting of a jurisdiction’s or organization’s GHG emissions impact on the atmosphere • May not explain why emissions change GHG inventory over time • Provides information on the sources of accounting emissions and trends over time • Does not reveal the effects of individual policies • Necessary to track overall progress toward GHG reduction goals • Not a comprehensive accounting of total • Attributes changes in emissions to specific emissions. See Table 1.2 Comparison of inventory accounting and policy/action accounting Inventory accounting methodology Policy/action accounting methodology Actual GHG reductions s sion relative to Year oe mis 1 emissions e nari e sc elin Bas Estimated GHG GHG emissions GHG emissions effect relative to baseline Pol scenario ic y sc ena rio em issi ons Year 1 Year 2 Year 1 Year 2 9 . Common methods can improve a GHG inventory on a regular basis. and policy and action accounting. Inventories. such as those provided difference between inventory accounting. See Figure 1. CHAPTER 1 Introduction carried out as a complement to developing and updating policies and actions. on the other. overall emissions may increase Policy/action policies and actions even if individual policies and actions are accounting • Informs policy design and evaluation reducing emissions (compared to a baseline scenario) Figure 1. users should apply the same GHG inventory.1 for a comparability between the GHG assessment for a policy comparison of GHG inventory and policy/action accounting.2 for an illustration of the basic calculation methods.

2). to evaluate and report overall progress toward national practices. infrastructure and actions. Intended to between policies or actions. Conversely. users can first apply Table 1. such as development general. For example. project-­level methodologies users can apply the Mitigation Goal Standard to are typically designed for crediting or offsetting. For example. objectives.7 Table 1.2 illustrates the differences in their both of the standards. users should consider their the standards can also be used together. The Policy and Action Standard applicability. including addressing additionality Protocol crediting or photovoltaic installation of projects offsetting Policies and actions at a larger Provides guidance on estimating interactions scale than an individual project. The Mitigation Goal Standard enables users programs. they apply to different scales: in overlapping topics. and methodological approach. Provides detailed guidance on project-specific Project primarily on such as an individual solar baselines. such as those occurring at a single site. while this standard should be used for interventions at a The user’s objectives should drive the use of one or broader scale. Both involve estimating changes in GHG intended to support evaluating and reporting progress emissions from the implementation of an action relative toward GHG mitigation objectives. However. standards are applicable. projects and policies.10 Relationship to the GHG Protocol Protocol for Project Accounting Mitigation Goal Standard The Policy and Action Standard is based on an accounting The GHG Protocol Policy and Action Standard and GHG framework and a sequence of steps similar to those of Protocol Mitigation Goal Standard (2014) are relevant to The GHG Protocol for Project Accounting (or Project policies and goals undertaken by governments and are Protocol). such as international policies and actions that increase Chapter 2) leakage of emissions or decrease emissions 10 Policy and Action Standard . or implementation of new technologies. objectives. In situations where multiple While each standard can be implemented independently. or processes—­may blur the line between or subnational GHG reduction goals (see Table 1. enables users to estimate the expected change in Some types of interventions—­such as projects of the emissions and removals resulting from specific policies same type implemented at multiple sites. where they exist. verification scale interventions.3).9 Relationship to The GHG 1. (described in effects at a broader scale.1.2 Comparison of the Project Protocol and the Policy and Action Standard Standard Applicability Objectives Differences in approach Focused Individual mitigation projects. defining a baseline Policy such as renewable energy support broader scenario at a larger scale than a project. uncertainty assessment. The two standards were to a baseline scenario that represents what would have developed simultaneously as part of the same standard happened in the absence of that action (as illustrated in development process in order to ensure harmonization of Figure 1. and accounting and reporting principles. and and Action policies at the sectoral or objectives identifying and estimating various indirect Standard jurisdiction level. procedures. understand the level of GHG reductions needed to meet a given GHG mitigation goal and then use the Policy and Action Standard to estimate the GHG effects of selected policies and actions to determine if they are collectively sufficient to meet the goal. the Project Protocol should be used for small-­ of baseline scenarios.

concepts. transparently reporting those assumptions. and waste—­are available at www.org/policy-­and-­action-­standard).org/calculation-­tools).ghgprotocol.ghgprotocol.3 Comparison of the Policy and Action Standard and the Mitigation Goal Standard Standard Description How to estimate the greenhouse gas effects of policies and actions. To complement this general standard. 11 . energy supply. and assumptions.11 Sector-­specific guidance lack of consistency and transparency regarding methods This standard provides a general framework of principles. or other methods to carry out calculations. Users should supplement the standard with models. 1. reductions in emissions intensity. Use of models in the absence of a standard may result in a 1. The standard may also be useful to inform model development. calculation tools. Table 1. taxes and charges. spreadsheets. To help users apply the standard. How to assess and report overall progress toward national.org/policy-­and-­action-­standard. The GHG Protocol website also provides GHG calculation tools that allow users to calculate GHG emissions from specific sources (available at www. including defining the scope of the use the Mitigation Goal Standard to set a mitigation goal assessment and making deliberate assumptions and and track and report progress. and procedures applicable to all sectors and types of policies and actions.ghgprotocol. and GHG reductions from a baseline scenario. transportation. subnational. and sectoral GHG reduction Mitigation Goal goals. but it does not prescribe specific calculation methodologies or tools that should be used. Types of policies and actions include Policy and Action regulations and standards. processes. CHAPTER 1 Introduction the Policy and Action Standard to estimate expected GHG This standard can be used in tandem with models by reductions from various mitigation policies and actions to providing an overarching framework to guide the GHG understand the range of possible GHG reductions. reductions to a fixed level Standard of emissions (such as carbon neutrality). or practices. voluntary Standard agreements. Types of mitigation goals include GHG reductions from a base year. and implementation of new technologies.12 Calculation models and tools The standard details a general process that users should follow when estimating the GHG effects of policies and actions. information instruments. sector-­specific guidance and examples for five sectors—­AFOLU. the GHG Protocol website provides a list of calculation tools and resources relevant to estimating the effects of policies and actions (available at www. subsidies and incentives. residential and commercial buildings. then assessment process.

in tonnes of provisions of the standard are requirements.14 Estimating non-GHG permissible or allowable. and economic impacts of a implementing a requirement or to indicate when an action policy or action. Using results that are sufficiently accurate for estimating GHG reductions from promotion of public the stated objectives: This standard incorporates a transit requires information on how many passengers range of approaches to allow users to manage trade-­offs no longer travel by private vehicle. GHG estimates can be combined with information are recommendations. Understanding this standard with additional estimation methods the uncertainty of the results (described in Chapter 12) and data sources related to each non-­GHG effect. should. which is needed to between the accuracy of the assessment and available calculate fuel savings and GHG reductions. resources. Depending purchasing that fuel.15 Terminology: cost-­benefit analysis shall. cost-­b enefit analysis. public health impacts or broader economic impacts. and ensure that the uncertainty of the results assess impacts less related to GHG emissions.” and “cannot” are used to provide guidance on environmental. For example. also be described qualitatively rather than estimated. The term “should” is used to indicate a recommendation.16 Limitations use. social. especially for non-­GHG effects most clearly linked to GHG emissions in terms of data needs. and may This standard estimates the change in GHG emissions This standard uses precise language to indicate which and removals caused by a policy or action. Differences in reported emissions impacts may be a result of differences in methodology rather than real-­world 12 Policy and Action Standard . which CO2e. or local air pollution. When doing so. “Needs. Appendix C provides examples of various non-­GHG Comparing results: Users should exercise caution effects that may be estimated along with GHG effects. such as particulate matter. and reduced emissions of local air on the methods used. Appendix D provides term “shall” is used throughout this standard to indicate guidance on using the results in a cost-­effectiveness what is required in order for a GHG assessment to be in analysis. when comparing the results of GHG assessments. ground-­level ozone. procedures outlined in this standard are applicable. the results of the assessment should be interpreted such as changes in GDP or jobs. waste generation. and which are permissible or on costs and used as part of a cost-­effectiveness allowable options that users may choose to follow. Given the uncertainties. The term “required” is used in the effects or co-benefits guidance to refer to requirements in the standard. conformance with the standard.” This standard may be used to assess the broader “can. or multicriteria analysis. the results of the assessment may pollutants. such as is communicated appropriately. Non-­GHG effects may as “estimates” of the effect of policies and actions. users should supplement policies—­can result in high uncertainty. The analysis or cost-­b enefit analysis. The same time. The basic is or is not possible. or may not be sufficiently accurate for effective decision SO2.1. The term “may” is used to indicate an option that is 1. making. and NO x . in the context of individual information can be used to estimate money saved by not objectives (described further in Chapter 3). can help identify where more effort is needed to gather Additional methods and data will be necessary to accurate data. and capacity. such as energy 1.13 Cost-­effectiveness or 1. rather than GHG effects only. but not a requirement. Several challenges involved in estimating the GHG effects of policies and actions—­such as the need Users that estimate non-­GHG effects should follow to estimate effects relative to a counterfactual baseline the steps in each chapter for each non-­GHG effect scenario and estimating interactions between related of interest.

For more information policy effectiveness. “Policy-­neutral” means the methodology is generic and applicable interactions. greater Clean Development Mechanism (CDM). calculation than one goal or compliance obligation.” To quantify GHG reductions from NAMAs framed as individual projects. and data instruments. such as those developed under the to lead to more consistent and comparable results. reportable and verifiable manner.ghgprotocol. as well as achieving can best be achieved if GHG assessments are undertaken or improving any specific non-­GHG effects that users choose to by the same entity in order to ensure consistency of include in the assessment. Under the UNFCCC. Where this standard refers to policy effectiveness. programs. accounted for. Users following the Project Protocol should also refer to two sector-­ specific guidelines as applicable: the GHG Protocol Guidelines Potential crediting of GHG reductions: The results from for Quantifying GHG Reductions from Grid-­Connected Electricity using this standard are not sufficient to support crediting Projects (2007) and The Land Use. available at www. assumptions. CHAPTER 1 Introduction differences. as a result of overlapping Mitigation Goal Standard. For guidance methodologies. on quantifying project-­level GHG reductions to generate and data sources.) Results should also not be aggregated across to any policy type. 7. Aggregating results: Users should also exercise caution 3. Both are carbon market. but may need different policies or actions.org. baseline assumptions. 2. 13 . in Chapter 4) and provisions to ensure additionality. GHG effects should not to adapt concepts to the business context or supplement with be directly aggregated across policies or actions if they additional methodologies. For NAMAs framed the combined effect of the two policies is likely not equal to as jurisdiction-­level GHG reduction goals. supported combination of policies. To understand whether Endnotes comparisons are valid. emphasis on the principle of conservativeness (described unfccc. Additional measures are necessary to enable programmatic decisions about eligibility of credit-­generating valid comparisons. such as consistency in the timeframe of activities. Additional specifications would be necessary. sector-­specific calculation methods project-­level methodologies. see the GHG Protocol the sum of the individual effects. the types of effects included in the GHG each emission reduction is counted toward no more assessment boundary. and registries and procedures to ensure that the assessments. it is limited used must be transparently reported. since The GHG Protocol for Project Accounting. available at http://cdm.int/methodologies. sources are not comparable or if the baseline scenarios 6. see a national energy efficiency policy in the same country. it is used as shorthand to refer to developed for each policy were not developed to enable both policies and actions. through GHG reporting programs or more detailed sector-­ specific guidance (see Section 1. For example. Companies may find some of the concepts and guidance useful to when aggregating the results of GHG assessments for estimate the GHG effects of private sector actions. The standard does not provide a methodology for allocating GHG reductions among various donors or financial institutions. see The GHG Protocol for Project Accounting. see Chapter 4. in aggregate the effects of a local energy efficiency policy and a measurable. the sum would either over 4. Comparable results to effectiveness in reducing GHG emissions. accurate aggregation (further described in Appendix B). Additional consistency can be provided credits. rather than a broader definition of methodology between assessments. or policy framework. methods for assessing policy interactions. (Chapter 5 provides more information on policy 5. all methodologies and data sources 1.11). Where the word “policy” is used. Users may also consider other such as more detailed. and of GHG reductions from policies or actions for sale in the Forestry Guidance for GHG Project Accounting (2006). NAMAs are undertaken “by developing country or underestimate the GHG effects resulting from the Parties in the context of sustainable development. rather than designed for any specific policy policies if the methodologies. users should not and enabled by technology. Land-­Use Change. on comparability. In such a case. financing and capacity building. Companies seeking to quantify GHG affect the same emissions sources or sinks and potential reductions associated with mitigation projects should refer to The interactions exist between them that have not been GHG Protocol for Project Accounting. sources.

2 Objectives of Estimating the GHG Effects of Policies and Actions .

A GHG assessment should begin by defining the objectives During or after policy implementation: of the assessment. Examples of objectives for assessing •• Understand whether policies and actions are effective in the GHG effects of a policy or action are listed below. delivering the intended results •• Inform and improve policy implementation Before policy implementation: •• Decide whether to continue current activities or •• Choose among policy options based on their expected implement additional policies GHG effects •• Learn from experience and share best practices •• Improve the design of policies by understanding the •• Evaluate the contribution of policies and actions GHG effects of different design choices toward broader GHG reduction goals •• Understand potential GHG reductions from policy •• Ensure that policies and actions are cost-­effective and options to inform GHG reduction goals that limited resources are invested efficiently •• Report on expected future GHG effects of policies and •• Report on the GHG effects of policies and actions over actions being considered or implemented (for domestic time (for domestic or international purposes) or international purposes) •• Meet funder requirements to report GHG reductions •• Attract and facilitate financial support for mitigation from mitigation actions actions by estimating potential GHG reductions 15 .A ssessing the GHG effects of policies and actions is a key step toward developing effective GHG reduction strategies and reducing emissions. Quantitative GHG assessment supports evidence-­b ased decision making by enabling policymakers and stakeholders to understand the relationship between policies and actions and expected or achieved changes in GHG emissions.

not only to assess The city’s specific objectives were the following: GHG mitigation policies. understanding of cost-­effectiveness. including its GHG emission actions that have objectives unrelated or contrary to effects. understand or minimize GHG increases. The As mentioned in Chapter 1. The assessment actions (such as installing solar water heaters) that would may also incorporate information on costs to facilitate an result in electricity savings and save consumers money.1 provides a case study of defining the objectives of • Understand the drivers behind changes in electricity an assessment. The Energy Research Centre at the University climate change mitigation. the general public. consumption and behavior and the impact of the campaign in driving such changes • Understand city performance in meeting electricity reduction targets and GHG targets • Report on emissions reductions. since CO2 emissions reporting is part of the city’s electricity and financial savings reporting • Communicate the benefits of the campaign to stakeholders • Provide accurate data to feed into the South African National Climate Change Response Database. financial institutions.1 Objectives of assessing the GHG effects of the actions with a sufficient level of accuracy and completenes City of Cape Town’s Electricity Saving Campaign s to meet the stated objectives of the assessment. analysts. For an example of applying the standard to a non-­mitigation policy. Policymakers and analysts may choose to prepared recommendations on how to carry out such assess the GHG effects of all major policies and actions to an assessment. Possible audiences reduced electricity consumption and associated GHG may include policymakers.1 • Determine whether the campaign was a justifiable Users shall report the objective(s) and the intended use of financial and human resources (on the basis of audience(s) of the GHG assessment. 16 Policy and Action Standard . South Africa. see Box 8. which is part of the national climate change monitoring and evaluation system Endnote 1. funders. and the UNFCCC.3 in Chapter 8. designed to increase its effectiveness Box 2. emission reductions) companies.Users should estimate the GHG effects of policies and Box 2. including those that increase of Cape Town worked with the City of Cape Town and GHG emissions. electricity-­saving information campaign in 2009. research • Inform how future elements of the campaign could be institutions. The level of accuracy and completeness needed may vary The City of Cape Town. NGOs. the assessment may be campaign is designed to educate consumers and designed to assess non-­GHG effects of policies and actions businesses and encourage a range of behavior-­changing to meet a wider range of objectives. The city decided that it needed to monitor and evaluate GHG assessments may be carried out on policies and the results of the campaign. launched an by objective.

CHAPTER 2 Objectives of Estimating the GHG Effects of Policies and Actions 17 .

and Requirements .3 Overview of Steps. Key Concepts.

voluntary agreements. and decrees. processes. 19 . or and may include laws. if the standard is applied before a policy an action. among others.1 Policies and actions 1. and public or private sector financing and follows in accounting for and reporting changes in GHG investment. users may skip Chapters 9. or other entity and the implementation of technologies. action or a package of related policies/actions. Depending on when all steps in the standard. See Figure 3. is made between what constitutes a policy versus or 11. directives.1 for an “Policies” and “actions” are treated equivalently in overview of steps in the standard. 3. Users may assess either an individual policy/ and standards. or This standard is organized according to the steps a user practices. “policies” as distinct from “actions” depending on their objectives and context. However. charges.2 Key concepts subsidies. subsidies. mandated by a government. an example of following the steps in the standard. For example.1 Overview of steps implementation of new technologies. policy instruments. as replacement of technology or changes in behavior). 2 information instruments. taxes. taxes.1 “Actions” may also be defined more broadly. so no further distinction the standard is applied. For example. and information instruments) that enable or This section describes several key concepts used incentivize concrete actions to be implemented (such in this standard. 10. policies could be defined as instruments (such as regulations. and incentives.2. users may choose to define is implemented.T his chapter provides an overview of the steps involved in policy and action accounting and reporting. emissions from a policy or action. institution. processes. and a checklist of accounting requirements. 3. an introduction to key concepts.4 provides more information on the relationship “Policies” and “actions” refer to interventions taken or between broad strategies or plans. users may skip Chapters 10 and 11. regulations practices. Section 3.

Figure 3. include them in a map of the causal chain 6 Identify effects Define the GHG assessment boundary around significant effects. 9. 10 monitor performance over time Ex-post assessment: Estimate policy scenario emissions for affected 11 sources/sinks. and 11) 12 Verify Verify results (optional) 13 Report Report results and methodology used 14 20 Policy and Action Standard .1 Overview of steps Overall steps Detailed steps Chapter Define the policy or action to be assessed. 7 identify the sources/sinks in the boundary Estimate baseline emissions for all affected sources/sinks 8 included in the boundary Ex-ante assessment: Estimate policy scenario emissions for affected 9 sources/sinks. 10. subtract baseline emissions to estimate GHG effect Estimate effects Identify key performance indicators. subtract baseline emissions to estimate GHG effect Assess uncertainty (relevant to Chapters 8. 5 Define policy/action choose ex-ante or ex-post assessment Identify all potential GHG effects of the policy or action.

if relevant) that are included in the GHG assessment. while removals are removals of GHG emissions from 3.4 GHG assessment boundary assessment and “GHG evaluation” is used to describe The GHG assessment boundary defines the scope of ex-­p ost GHG assessment.2. social. “GHG appraisal” is sometimes used to describe ex-­ante GHG 3. The GHG assessment period may differ or economic conditions other than GHG emissions or from the policy implementation period—­the time period climate change mitigation that result from the policy during which the policy or action is in effect—­and should or action. This standard uses “GHG the assessment in terms of the range of GHG effects assessment” to refer to both cases. This standard encourages a 3. The GHG assessment period is the time period over which GHG effects resulting from the policy or action Non-­GHG effects are changes in environmental.2 GHG assessment energy savings). For additional refer to the estimation of changes in GHG emissions examples of non-­GHG effects.2. a home insulation subsidy may be as comprehensive as possible to capture the full range lead to both GHG effects (reduced GHG emissions from of effects based on when they are expected to occur. are assessed. In other contexts. Chapter 7 provides that result from a policy or action. see Appendix C. (and non-­GHG effects. Chapter 6 provides more information This standard uses the term “GHG assessment” to on GHG effects and non-­GHG effects.3 GHG effects and non-­GHG effects comprehensive assessment that includes the full range of GHG effects are changes in GHG emissions or removals effects considered to be significant. Key Concepts. reduced home energy use) as well as non-­GHG effects Chapter 7 provides more information on defining the GHG (increased household disposable income resulting from assessment period. 21 . releases of greenhouse gases into the atmosphere. For example. Emissions are guidance on defining the GHG assessment boundary. CHAPTER 3 Overview of Steps.2.2. and Requirements 3.5 GHG assessment period the atmosphere through sequestration or absorption. resulting from a policy or action.

to policies is also distinct from tracking trends in key since GHG emissions can change as a result of a variety of performance indicators. Chapter 8 provides guidance on policy or action (Chapter 9 or 11) developing the baseline scenario. A correlation Estimating the change in GHG emissions resulting from between a policy being implemented and emissions a given policy or action requires a reference case. weather. emissions may have declined because an economic downturn The baseline scenario represents the events or conditions reduced demand for electricity. energy prices. or decreasing is not sufficient to establish causation.3. and (3) various external drivers a policy or action is on track and being implemented as that affect emissions.1 for the basic equation for estimating the to policies and actions GHG effect of a policy or action.1 Estimating the GHG effect of a policy or action Total net change in GHG emissions resulting from the policy or action (t CO2e) = Total net policy scenario emissions (t CO2e) – Total net baseline scenario emissions (t CO2e) Note: “Net” refers to the aggregation of emissions and removals. 3. not because the policy has most likely to occur in the absence of the policy or been successful. planned but does not explain why the changes in indicators population. The baseline scenario depends 1. tracking performance For example. Attributing changes in emissions in emissions to specific policies and actions can be difficult. “Total” refers to the aggregation of emissions and removals across all sources and sinks included in the GHG assessment boundary. weather. Define the policy scenario and estimate policy scenario and market forces that affect emissions. such as changes in economic activity.7 Baseline scenario and policy scenario policy has caused the decrease in emissions. against which the change is estimated. or structural shifts in the economy. This standard is designed to support users in attributing changes Attributing changes in emissions to specific policies and in GHG emissions and removals to a specific policy or action actions is distinct from tracking changes in overall emissions (or package of policies or actions) to understand how effective through a GHG inventory. In actuality. users follow three basic steps: were not implemented.) emissions in the following year have declined. which is helpful to understand whether same emissions sources. and structural scenario emissions to estimate the GHG effect of the shifts in the economy. such as changes emissions (Chapter 9 or 11) in economic activity.2. Equation 3. To meet certain objectives. autonomous technological are occurring or demonstrate the effectiveness of a improvements.6 Attributing changes in emissions See Equation 3. Attributing changes emissions have changed. historical reference point but is instead an assumption about conditions that would exist over the policy To estimate a change in emissions resulting from a policy or implementation period if the policy or action assessed action. as well as various external drivers 2. Further analysis is required to understand why action being assessed. the fact that emissions have decreased does not mean that the 3. Define the baseline scenario and estimate baseline on assumptions related to other policies or actions that scenario emissions (Chapter 8) are also implemented. (Chapter 10 provides guidance in the electricity sector and then observe that energy-­related on monitoring performance indicators over time. Monitoring trends in indicators factors. However. (2) can demonstrate changes in the targeted outcomes of the other policies or actions that directly or indirectly affect the policy or action. including (1) the policy or action being assessed. a city may implement a GHG mitigation policy indicators may be sufficient. which does not explain why various policies are in reducing emissions. 22 Policy and Action Standard .2. Subtract baseline scenario emissions from policy autonomous technological improvements. population. energy prices. The baseline scenario is not a emissions have changed. policy. baseline scenario.

The ex-­post policy scenario Users may carry out an ex-­ante assessment. A user carries out an ex-­ante assessment in 2010 policy scenario is the same as the baseline scenario except to estimate the expected future GHG effects of the policy that it includes the policy or action (or package of policies/ through 2020 by defining an ex-­ante baseline scenario and actions) being assessed. an ex-­post may differ from the ex-­ante policy scenario for the same assessment. In general. the ex-­post baseline historical GHG effects of a policy or action scenario will differ from the ex-­ante baseline scenario. The difference between the ex-­ scenario and the baseline scenario represents the effect of ante policy scenario and the ex-­ante baseline scenario is the the policy or action. In 2015. The difference between the policy an ex-­ante policy scenario.2 Ex-ante and ex-post assessment enario bas eline sc Net GHG emissions* (Mt CO2e) Ex-ante GHG effect of GHG effect of Ex-post baseline scenario policy/action policy/action Historical (ex-post) (ex-ante) GHG Ex-p os emissions (obs t policy erve s d em cenario Ex-an issio te po ns) licy sc enario 2010 2015 2020 Note: * Net GHG emissions from sources and sinks in the GHG assessment boundary. the developing the policy scenario. or if significant carried out either during or after policy implementation. and Requirements In contrast to the baseline scenario.2 illustrates the relationship between ex-­ante and represents the events or conditions most likely to occur in ex-­post assessment. a policy comes into effect the presence of the policy or action being assessed. by 3. Key Concepts. depending on objectives. the policy scenario Figure 3. or both. the ex-­post and ex-­ante baseline scenarios will Ex-­ante assessment can be carried out before or during differ if observed fuel prices or rates of economic growth policy implementation. CHAPTER 3 Overview of Steps. while ex-­post assessment can be differ from ex-­ante forecasts made in 2010. either ex-­ante or ex-­post. user carries out an ex-­post assessment of the same policy to estimate the historical GHG effects of the policy to date.8 Ex-­ante and ex-­post assessment observing actual emissions over the policy implementation A GHG assessment is classified as either ex-­ante or ex-­post period—­that is. In the figure. The in 2010.2. 23 . •• Ex-­ante assessment: The process of estimating expected future GHG effects of a policy or action If conditions unrelated to the policy or action unexpectedly •• Ex-­post assessment: The process of estimating change between 2010 and 2015. new policies are introduced. Chapters 9 and 11 provide guidance on estimated GHG effect of the policy (ex-­ante). or if the policy is less effective in practice than it effective GHG management involves both ex-­ante and ex-­post assessment. Figure 3. The difference between retrospective (backward-­looking): the ex-­post policy scenario and the ex-­post baseline scenario is the estimated GHG effect of the policy (ex-­post). the ex-­post policy scenario—­and defining a depending on whether it is prospective (forward-­looking) or revised ex-­post baseline scenario. reasons. For example.

•• Top-­down methods (such as econometric models or more rigorous approaches should be applied to policies and regression analysis) use statistical methods to calculate actions that are most significant in terms of expected GHG or model changes in GHG emissions and can be applied impact or are otherwise most relevant to decision makers to either bottom-­up or top-­down data. less rigorous approaches may be used to valuable for different purposes. resources. on the other. of the GHG effects of a given policy or action. Often the methodological options present scenario is hypothetical. entity. users will confront a choice in the scenario are both hypothetical or forecasted. or the results represent an accurate and complete estimate entities to determine the total change in GHG emissions.9 Bottom-­up and top-­down approaches with varying levels of accuracy and completeness. using a measuring device such as a fuel results.10 Choosing the desired level estimates of the policy’s GHG effect will differ. actions with a sufficient level of accuracy and completeness to meet the stated objectives. top-­down data are aggregated from bottom-­up Users should estimate the GHG effects of policies and data sources. population. combine elements of both bottom-­up and top-­down requiring fewer resources to implement than a more approaches may also be used. and the level of accuracy and completeness meter) at the source. The GHG Protocol website accurate and complete assessment. Both bottom-­up and top-­down data and methods are In contrast. rather than methodological options available to estimate changes observed. including both bottom-­up and top-­down approaches. the baseline scenario and policy In many cases. required to meet stated objectives Examples include energy used at a facility (by fuel type) •• Relative significance of the policy or action being assessed and production output. including the following: •• Bottom-­up data are measured. Hybrid approaches that roughly estimate the GHG effect of a policy or action.was assumed to be. However. GDP. In an ex-­post assessment. used to estimate the GHG effects of policies and actions. hand. monitored. project. More rigorous methods B ottom-­up and top-­down methods enable a wider set of uses than less rigorous methods. since the ex-­post policy scenario a trade-­off between accuracy or completeness. or entity affected by the policy or and stakeholders can generally have high confidence that action. In general. of accuracy and completeness among a range of methodological options In an ex-­ante assessment. of accuracy and completeness is sufficient. and fuel prices. In such cases. only the baseline in emissions. such as certain 24 Policy and Action Standard . and the cost of implementation. the ex-­ante and ex-­post 3. on one can be observed. then aggregate across all sources. •• Data availability •• Top-­down data are macro-­level statistics collected at the •• Capacity. The •• Bottom-­up methods (such as engineering models) results of a comprehensive and accurate assessment can be calculate or model the change in GHG emissions for used to meet the widest range of applications. and stakeholders. In such cases. or project level. and time available to carry out the jurisdiction or sector level. projects. intended uses of the (for example.2. In some cases. since users each source.org/policy-­and-­action-­standard). rather Multiple types of data and estimation methods can be than a single method. the results provides a list of calculation tools and resources relevant of simplified approaches should be limited to a smaller to estimating the effects of policies and actions (available range of applications and objectives for which a lower level at www. or collected •• Objectives of the assessment. facility.ghgprotocol. Users should determine the desired level of accuracy and completeness of the GHG assessment based on a range Bottom-­up and top-­down data of factors.2. Examples include national assessment energy use. this standard allows for a range of methods 3.

GHG the steps in the standard accounting for policies and actions is intended to support Table 3. if applicable) policies. However. such as an international For more information. CHAPTER 3 Overview of Steps. refer to the GHG Protocol 3. of transferable emission units such as offset credits across jurisdictional boundaries. agency within a jurisdiction can also help reduce potential for double counting (for example. Guidance on transaction log. users should develop a baseline scenario that includes all other implemented (and adopted. Subsequent minimize the potential for double counting by using more chapters provide more detail using the same policy example accurate and complete methods described in subsequent to illustrate the various steps throughout the standard. users should home insulation. users should acknowledge any Subsequent chapters provide tables outlining a range of potential overlaps and possible double counting with other methodological options.2. An individual policy or action may interact with other If GHG reductions take on a monetary value or receive policies and actions to produce total effects that differ credit in a GHG trading or crediting program. including specifying whether or reinforcing ways or can be independent of each the reductions are claimed by the implementing other. When reporting results. Chapter 9 for estimating GHG misinterpretation of data. Users should also group related policies or actions together and assess exercise caution in using the results from a simplified them as a package (further described in Chapter 5). actions. users should from the sum of the individual effects of each individual take additional measures to avoid double counting or policy. specifying multiple points during the GHG assessment. assessment to claim that a specific policy or action results in If double counting between policies is suspected. For guidance on avoiding double counting assessing policy interactions is provided in Appendix B. Potential interactions should be considered at jurisdiction or are sold to another jurisdiction. a GHG assessment following avoid double counting of emission reductions. without further understanding the reductions from overlapping policies and actions should associated uncertainty.1 provides an example of following the various the simultaneous action of multiple entities to reduce steps in the standard for an illustrative policy—­a subsidy for emissions throughout society. and Chapter 12 for assessing uncertainty. see Chapter 5. including exclusive ownership of reductions through contractual when deciding whether to assess an individual policy agreements. of GHG reductions Multiple actors in society may implement similar or overlapping policies or actions and each may claim GHG 3. by specifying the 3. In particular. Users may estimates of GHG effects are acceptable.3 Example of following reductions resulting from their policies or actions. In practice. including Chapter 8 for estimating policies and actions to ensure transparency and avoid baseline emissions. Key Concepts.11 Policy interactions same methodology and identifying potential overlaps). coordination effects ex-­ante. Policies and actions can interact in either overlapping double claiming of credits. and GHG mitigation projects in the baseline scenario that have a significant effect on 25 . and Requirements internal planning or reporting purposes where indicative emissions (further described in Chapter 8). chapters.2. GHG specific GHG reductions. Users may consider implementing not be aggregated to determine total emissions or simplified approaches in the short term and more rigorous reductions in a given jurisdiction or geographic region. or international registries. Users can this standard would be more comprehensive. and recording all transactions in domestic or action or a package of related policies and actions. approaches in the longer term. Chapter 11 for estimating GHG effects of GHG accounting for policies and actions by a single ex-­post.12 Avoiding double counting Mitigation Goal Standard. Where applicable.

Policy scenario emissions in a given year are calculated as: 910. The increase in emissions from GHG Assessment increased production of goods and services is expected to be insignificant based on initial estimates. the same emissions estimation method is used.000. Chapter 5: The policy to be assessed is a government subsidy for home insulation.000. (Figure 6.000 MMBtu/year × 0. 26 Policy and Action Standard .000 MMBtu/year. so they are included in the GHG assessment boundary. dependent on projected changes in household income and current rates of home insulation.) Chapter 7: The reductions in CO2 emissions from reduced natural gas use and reduced electricity use are expected Defining the to be significant.000 – baseline emissions of 204.3 × 0. thereby increasing emissions. which is expected Chapter 6: to reduce natural gas and electricity use in homes.3 provides more detail on the GHG assessment boundary. The energy Identifying Effects savings is also expected to result in consumers having more disposable income.000 t CO2e/year. so it Boundary is excluded from the boundary. Policy or Action The subsidy aims to incentivize consumers to purchase and install more insulation. based on the assumption that 30% of households will install insulation as a result of the subsidy and that insulation will Chapter 9: reduce household natural gas use by 30%.1 Example of carrying out the various steps in the standard for an illustrative policy Chapter Simplified example for an illustrative subsidy for home insulation Chapter 2: The objectives are: (1) to inform the design of a government subsidy for home insulation before Objectives implementation. thereby reducing GHG emissions.2 t CO2e/MMBtu). An individual policy is Defining the assessed.2 t CO2e/MMBtu) Baseline emissions in a given year are calculated as: 1.3) in Estimating GHG residential natural gas use.000 t CO2e/year (policy scenario emissions of 182. (Box 7.000 t CO2e/year To estimate policy scenario emissions.Table 3. The policy scenario emission factor is assumed to be the same as in the Effects Ex-Ante baseline scenario (0.6 in Chapter 6 Causal Chain illustrates the causal chain. but the assumed parameter values in the policy scenario are different. the emissions estimation method is assumed to be: Chapter 8: Baseline emissions for household natural gas combustion (t CO2e/year) = historical natural gas use Estimating (MMBtu/year) × (1+ % change in GDP) × baseline emission factor (t CO2e/MMBtu) Baseline The estimated values of the parameters in this equation are assumed to be: Emissions • Average annual historical natural gas use (1. since the policy does not affect the emissions intensity of natural gas.000).2 t CO2e/ MMBtu = 204. rather than a package of related policies. and (2) to track and report on the policy’s effectiveness during implementation. To estimate baseline emissions from natural gas use.02 x × 0. absent the subsidy.000 MMBtu/year) • Average annual change in GDP (2%) • Baseline emission factor (0.2 t CO2e/ MMBtu = 182. The GHG effect of the policy in the same year is estimated ex-ante to be a reduction of 22. so the policy will lead to a 9% reduction (0. leading to the and Mapping the consumption of more goods and services. The emissions estimation method is: Policy scenario emissions for household natural gas combustion (t CO2e) = policy scenario natural gas use (MMBtu/year) × policy scenario emission factor (t CO2e/MMBtu) Policy scenario natural gas use is estimated to be 910.) The baseline scenario is assumed to be the continuation of historical residential energy consumption trends.000 MMBtu/year ×1.

000 – baseline emissions of 206. Chapter 12: Uncertainty is assessed in both qualitative and quantitative terms and sensitivity analyses are carried out Assessing to identify which parameters are most sensitive to changes in assumptions. including the number of homes that have applied for the Monitoring subsidy.2 compiles all the “shall” of the accounting requirements included in the standard. following the reporting requirements in Chapter 14.6.03 × 0. the accounting requirements in each chapter. Data needed for ex-post assessment are also over Time collected. 27 .2 t CO2e/MMBtu = Estimating GHG 206.000 t CO2e/year (rather than 182.000). Effects Ex-Post Residential energy use decreased by 6% rather than 9%. Table 3.2 provides a summary checklist permissible or allowable. for the policy scenario calculations.2 t CO2e/MMBtu = 188. so ex-post policy scenario emissions are calculated to be: 940.000 t CO2e/year +/. rather than forecasted estimates.1 Example of carrying out the various steps in the standard for an illustrative policy (continued) Chapter Simplified example for an illustrative subsidy for home insulation Chapter 10: Key performance indicators are identified. Key Concepts. Table 3.000 t CO2e/year as estimated ex-ante).000 t CO2e/year. Chapter 11:  E  x-post baseline emissions are calculated as: 1. the term “shall” is used throughout Subsequent chapters include accounting and reporting the standard to indicate requirements. so the total GHG Performance reduction is likely to be lower than estimated ex-ante.4 Requirements in the standard As noted in Chapter 1. while “shall” statements A box at the beginning of each chapter also summarizes related to reporting are compiled in Chapter 14. GDP grew at 3% rather than 2% over the period. the parameter value for energy use is based on observed energy use and data on the actual number of homes that installed insulation. The uncertainty range is Uncertainty estimated to be a GHG reduction of 18.000. Verification Limited assurance is attained. while the emissions estimation method and the values of other parameters remained the same. actual rather than predicted GDP data. The GHG effect of the policy is estimated ex-post to be a reduction of 18. and Requirements Table 3.000 t CO2e/year (rather than 204. Chapter 13: The results of the GHG assessment are verified by an accredited third-party verifier.000 MMBtu x 1. Chapter 14 provides a summary checklist of reporting requirements. Similarly. Reporting 3. including GDP and a representative sample of residential energy use. The parameter values in the baseline calculation are updated with actual data for the identified baseline drivers—that is. The estimated reduction ex-post is less than the 22. “Should” is used requirements to help users develop a GHG assessment that to indicate a recommendation but not a requirement. represents a true and fair account of the GHG effects of while “may” is used to indicate an option that is a policy or action. Chapter 14: The results and the methodology are reported. CHAPTER 3 Overview of Steps. statements related to accounting.000 t CO2e reduction estimated ex-ante.000 t CO2e/year (policy scenario emissions of 188. Monitoring reveals that only 20% of homes have applied for the subsidy.000 MMBtu × 0.000 t CO2e/year as estimated ex-ante).

• Estimate the GHG effect of the policy or action by subtracting baseline emissions from policy scenario emissions for each source/sink category included in the GHG assessment boundary. Effects and Mapping the • Identify all source/sink categories and greenhouse gases associated with the GHG effects of the policy Causal Chain or action.Table 3. the GHG Assessment • Define the GHG assessment period based on the GHG effects included in the GHG assessment Boundary boundary. or Action • Identify all potential GHG effects of the policy or action. 28 Policy and Action Standard . Ex-Ante • Apply the same GWP values used to estimate baseline emissions. and greenhouse gases in the GHG Defining assessment boundary. If carrying out an ex-ante assessment: • Define a policy scenario that represents the conditions most likely to occur in the presence of the policy or action for each source or sink category included in the GHG assessment boundary. source/sink categories. based on the GHG GHG Effects effects included in the boundary. Principles Chapter 5: Defining the Policy • Clearly define the policy or action (or package of policies/actions) that is assessed. • Develop a map of the causal chain. and Reporting consistency. Estimating If applying the comparison group method: Baseline Emissions • Identify an equivalent comparison group for each source or sink category included in the GHG assessment boundary. completeness. Chapter 9: • Estimate policy scenario emissions and removals over the GHG assessment period for each source/ Estimating sink category and greenhouse gas included in the GHG assessment boundary. • Apply GWP values provided by the IPCC based on a 100-year time horizon. If applying the scenario method: • Define a baseline scenario that represents the conditions most likely to occur in the absence of the policy or action for each source or sink category included in the GHG assessment boundary. Chapter 7: • Include all significant GHG effects. and accuracy. transparency. • Estimate emissions and removals from the comparison group and the policy group over the GHG assessment period for each source/sink category and greenhouse gas included in the GHG assessment boundary. if relevant and Identifying feasible. • Estimate baseline emissions and removals over the GHG assessment period for each source/sink category and greenhouse gas included in the GHG assessment boundary.2 Checklist of accounting requirements Chapter Accounting requirement Chapter 4: Accounting • GHG accounting and reporting shall be based on the principles of relevance. Chapter 8: • Apply global warming potential (GWP) values provided by the IPCC based on a 100-year time horizon. Chapter 6: • Separately identify and categorize in-jurisdiction effects and out-of-jurisdiction effects.

3. In most steps throughout the standard. In project accounting. the term “policy or action” is used to refer to either case. Chapter 14: Reporting • See Chapter 14 for a list of reporting requirements. Assessing Uncertainty • Conduct a sensitivity analysis for key parameters and assumptions in the assessment.1 is used in this standard because it enables calculation of changes in emissions (whether positive or negative). Negative results indicate GHG reductions achieved by the policy or action. Performance over Time • Create a plan for monitoring key performance indicators (and parameters for ex-post assessment. If carrying out an ex-post assessment: Chapter 11: • Estimate policy scenario emissions and removals over the GHG assessment period from Estimating each source/sink category and greenhouse gas included in the GHG assessment boundary. 29 . Chapter 12: • Assess the uncertainty of the results of the GHG assessment. Equation 3. to be consistent with the overall methodology. CHAPTER 3 Overview of Steps. if relevant). • Monitor each of the parameters over time.2 Checklist of accounting requirements (continued) Chapter Accounting requirement If monitoring performance over time: Chapter 10: • Define the key performance indicators that will be used to track performance of the policy or action Monitoring over time (and parameters for ex-post assessment. users typically calculate “GHG reductions” as the difference between baseline emissions and project emissions. GHG Effects • Apply the same GWP values used to estimate baseline emissions. either quantitatively or qualitatively. Ex-Post • Estimate the GHG effect of the policy or action by subtracting baseline emissions from policy scenario emissions for each source/sink category included in the GHG assessment boundary. in accordance with the monitoring plan. while positive results indicate an increase in GHG emissions resulting from the policy or action.” 2. Concrete actions are sometimes called “measures. rather than GHG reductions. Endnotes 1. and Requirements Table 3. since the basic approach is the same. if relevant). Key Concepts.

4 Accounting and Reporting Principles .

transparency. GHG assessment level of accuracy and completeness among a range of boundary. following five principles: sources.G enerally accepted GHG accounting principles are intended to underpin and guide GHG accounting and reporting to ensure that the reported GHG assessment represents a true and fair account of changes in GHG emissions resulting from a policy or action. and accuracy. Transparently apply the principle of relevance when selecting the desired document any changes to the data. 31 . or any other relevant factors in the methodological options. Disclose and justify any specific exclusions. and calculation methods to allow for internal and external to the reporting entity. GHG accounting and reporting shall be based on the Completeness: Include all significant GHG effects. Applying the principle of relevance time series. and sinks in the GHG assessment boundary. Users should meaningful performance tracking over time. consistency. Relevance: Ensure the GHG assessment appropriately reflects the GHG effects of the policy or action and serves Consistency: Use consistent accounting approaches.1 depends on the objectives of the assessment (Chapter 2). Checklist of accounting requirements Section Accounting requirements Chapter 4: Accounting • GHG accounting and reporting shall be based on the principles of relevance. especially where the standard provides flexibility. The five principles described below are intended to guide users in estimating and reporting changes in GHG emissions. data the decision-­making needs of users and stakeholders—­both collection methods. and Reporting Principles completeness. methods.

assumptions. Achieve sufficient accuracy to enable users and stakeholders to make appropriate and informed decisions with reasonable confidence as to the integrity of the reported information. users should follow the principle of detailed sector-­specific guidance. Accuracy should be pursued as far as possible. to enable valid comparisons. and understandable manner through an audit trail with clear documentation. factual. comparing the results of policy assessments based on Conversely. assumptions. Disclose all relevant methods. as far as can be judged. If the objective is to compare the results example. procedures. Users should balance real-­world differences. such as consistency in the Over time. which would compromise overall accuracy. baseline assumptions. may be a result of differences in methodology rather than compromising overall completeness. a user may find that achieving the most complete of independent assessments of policies carried out assessment requires using less accurate data for a portion of by different entities. calculations. Accuracy: Ensure that the estimated change in GHG emissions and removals is systematically neither over nor under actual values. conservative estimates should be interactions. and uncertainties. the trade-­off between these accounting principles in the GHG assessment boundary. data sources. and limitations of the GHG assessment in a clear. achieving the most accurate assessment may this standard. and data sources. Additional measures are necessary trade-­offs between principles depending on their objectives. Differences in reported emissions impacts require excluding sources or effects with low accuracy. For methodology. neutral. 32 Policy and Action Standard .Transparency: Provide clear and complete information for internal and external reviewers to assess the credibility and reliability of the results. and that uncertainties are reduced as far as practicable. all methodologies. assumptions.1 provides guidance on conservativeness. Disclose the processes. be provided through GHG reporting programs or more In addition. To understand whether comparability if relevant to the assessment objectives. Additional consistency can used. will likely diminish. methods for assessing policy practically reduced. The information should be sufficient to enable a party external to the GHG assessment process to derive the same results if provided with the same source data. users may encounter trade-­offs between and compare multiple policies or actions using the same principles when developing a GHG assessment. Comparability (optional): Ensure common methodologies. users should exercise caution in the assessment. data sources. comparisons are valid. as the accuracy and completeness of data timeframe of the assessments. but once uncertainty can no longer be calculation methodologies. and reporting formats such that the estimated change in GHG emissions and removals resulting from multiple policies or actions guidance can be compared. The principle of comparability should be applied if the objective is for a single entity to assess In practice. the types of effects included increases. Box 4. and data sources used must be transparently reported.

or when uncertainty is high. when developing baseline scenarios). Chapter 12 provides guidance on uncertainty and sensitivity analysis. or as a justification for not improving data collection systems to collect more accurate data.1 Conservativeness Endnote 1. 33 . Users should apply sensitivity analysis when uncertainty is high to understand the range of possible outcomes using both more conservative and less conservative assumptions. see IPCC 2006: Vol. when a range of possible values or probabilities exists (for example. For additional guidance on ensuring consistency. CHAPTER 4 Accounting and Reporting Principles Box 4. Chap. Conservativeness should not be used as a substitute for collecting accurate data where data exist and can be collected. 5. For some objectives. “Time Series Consistency. The principle of relevance can help guide what approach to use and how conservative to be. 1. accuracy should be prioritized over conservativeness in order to obtain unbiased results.” Conservative values and assumptions are those more likely to overestimate GHG emissions or underestimate GHG reductions resulting from a policy or action. Users should consider conservativeness in addition to accuracy when uncertainty can no longer be practically reduced. Whether to use conservative estimates and how conservative to be depends on the objectives and the intended use of the results.

5 Defining the Policy or Action .

1) (Section 5. D e f i n e p o l i c y/a c t i o n I n order to estimate the GHG effects of a policy or action. and choose whether to carry out an ex-­a nte or ex-­p ost assessment. Note: Reporting requirements are listed in Chapter 14. Figure 5. users first need to define and provide a detailed description of the policy or action that will be assessed.2) assessed. 35 .3) Checklist of accounting requirements Section Accounting requirements Define the policy or action to be assessed • Clearly define the policy or action (or package of policies/actions) that is (Section 5.1 Overview of steps in the chapter Decide whether to Select the policy Clearly define the Choose ex-ante assess an individual or action to policy or action to or ex-post policy/action or a be assessed be assessed assessment package of policies/ (Section 5.4) actions (Section 5. decide whether to assess an individual policy or action or a package of related policies or actions.2) (Section 5.

subsequent chapters Table 5. users shall report the required information in can be applied to any policy type.2. that hinder a complete and credible assessment. GHG effects may be less direct. Users that assess a package of policies/actions should apply Table 5. Some types of policies and actions the policy or action is necessary to effectively carry out are more difficult to assess than others. development.5. Users that assess a modification of an existing policy or action. The optional information in Table 5.2 Define the policy or action to be assessed action to be assessed Table 5. While the standard minimum. information Users shall clearly define the policy or action (or package instruments and research.1 presents general types of policies and actions A complete and accurate definition and description of that may be assessed.2 may be may pose data collection and estimation challenges relevant depending on the context.2 provides (RD&D) policies may have less direct and measurable a checklist of information that should be provided.2 either to the package as a whole or separately to each policy/action within the package. and deployment of policies/actions) that is assessed. 36 Policy and Action Standard . For example. since the causal subsequent steps in the assessment process and to relationship between implementation of the policy and its transparently report the results. rather than a new policy or action. Table 5. depending on the objectives. may define the policy to be assessed as either the modification of the policy or the policy as a whole. At a effects than regulations and standards.1 Select the policy or 5.

Provision of (or granting a government permit for) infrastructure. or measure undertaken voluntarily by public or private sector Voluntary agreements or actors. such as a fuel tax. Policies aimed at supporting technological advancement. or other activities standards (performance standard). traffic Taxes and charges congestion charge. A program that establishes a limit on aggregate emissions from specified sources. technologies. development. Requirements for public disclosure of information. processes. requires Emissions trading sources to hold permits. These programs may be referred to as emissions trading systems (ETS) or cap-and-trade programs. benchmarking. Public procurement Policies requiring that specific attributes (such as GHG emissions) are considered as part of policies public procurement processes. rating and certification systems. commitment. those that reduce emissions compared to existing technologies. policies and deployment activities. They typically include penalties for noncompliance. emissions Information instruments reporting programs. carbon tax. those supporting development strategies investment or policies). in technology research. and allows programs permits to be traded among sources. and high speed rail. Implementation of new Implementation of new technologies. Some voluntary agreements measures include rewards or penalties associated with participating in the agreement or achieving the commitments. development. pollution output. or practices). tax reductions. Source: Adapted from IPCC 2007. and information or education campaigns aimed at changing behavior by increasing awareness. 37 . These include labeling programs.1 Types of policies and actions Type of policy or action Description Regulations or standards that specify abatement technologies (technology standard) Regulations and or minimum requirements for energy consumption. or facilitation of investment. urban Infrastructure programs services. water. D e f i n e p o l i c y/a c t i o n CHAPTER 5 Defining the Policy or Action Table 5. such as roads. A levy imposed on each unit of activity by a source. or practices at a broad scale (for example. processes. allowances. either unilaterally or jointly in a negotiated agreement. Research. or other units equal to their actual emissions. or practices Financing and Public or private sector grants or loans (for example. or import or export tax. price supports or the equivalent thereof from a government Subsidies and incentives to an entity for implementing a practice or performing a specified action. through direct government funding or and deployment (RD&D) investment. processes. demonstration. Direct payments. An agreement.

the purpose Reduction in residential energy use policy or action stated in the legislation or regulation) The jurisdiction or geographic area where the policy or action is implemented or enforced. or any other entities The intended effects(s) or benefit(s) the policy or Objective(s) of the action intends to achieve (for example. which may be more limited targeted than the set of greenhouse gases that the policy or CO2. categories are targeted. Implemented or action or implemented The date the policy or action comes into effect (not Date of implementation 2010 the date that any supporting legislation is enacted) If applicable. and source/sink Residential energy use (energy sector. adopted. subsectors. categories targeted classifications electricity generation) If applicable. N2O (if applicable) action affects 38 Policy and Action Standard . Department of Energy of City X entities national. which greenhouse gases the policy or Greenhouse gases action aims to control. Primary sectors. such as the date a tax is no longer levied or the end date of Date of completion an incentive scheme with a limited duration (not the 2020 (if applicable) date that the policy/action no longer has an impact on GHG emissions) Which entity or entities implement(s) the policy or Implementing entity or action. subsectors. such as those presented Type of policy or action in Table 5. or other categories of policies or actions Subsidy that may be more relevant Description of specific The specific intervention(s) carried out as part of the Subsidy of $200 per household interventions policy or action The status of the policy Whether the policy or action is planned. the date the policy or action ceases.Table 5. using sectors and subsectors IPCC category 1A4b.2 Checklist of information to describe the policy or action assessed Information Explanation Example Required information The title of the policy Policy or action name Federal subsidy for home insulation or action The type of policy or action. residential). which may be Geographic coverage City of X more limited than all the jurisdictions where the policy or action has an impact Which sectors. subnational. and from the most recent IPCC Guidelines for National grid-connected electricity generation emission source/sink Greenhouse Gas Inventories or other sector (energy sector.1. including the role of various local. CH4. IPCC category 1A1ai. international.

and income resulting from energy savings the policy or action any relevant target indicators Other relevant information Any other relevant information N/A 39 . information Other related policies Other policies or actions that may interact with the campaign to educate residents on or actions policy or action assessed the financial benefits of installing insulation Optional information If relevant and available. and number of energy audits carried out. such as energy security. reporting. mechanisms such as penalties for noncompliance see website Information to allow practitioners and other Reference to relevant interested parties to access any guidance documents N/A guidance documents related to the policy or action (for example. such as other policies or actions that the significance of the Department of Energy programs and policy/action replaces. improved air Increase in household disposable effects or co-benefits of quality. see website. or establishing the policy or action (or other founding Energy Policy Act (2005) or other founding documents if there is no legislative basis) documents Data are collected monthly on Monitoring. regulations.000. for more information.000 t CO2e mitigation to be removals to be enhanced as a result of the policy or annually.000 t CO2e (if applicable) the target level of key indicators (such as the number by 2020. the total emissions and removals from the sources and sinks targeted. and/or annual emissions of 800. through websites) Broader context for understanding the policy or The broader context/ See website for a full list of action.2 Checklist of information to describe the policy or action assessed (continued) Information Explanation Example Natural gas tax. References to any monitoring. D e f i n e p o l i c y/a c t i o n CHAPTER 5 Defining the Policy or Action Table 5. health benefits. installed. or increased jobs. the policy/action Any anticipated benefits other than GHG Outline of non-GHG mitigation. Audits to ensure installation is Enforcement Any enforcement or compliance procedures. of homes to be insulated) Title of establishing The name(s) of legislation or regulations authorizing legislation. and amount procedures the policy or action of insulation installed. reporting. both annually and cumulatively over the life emissions by 20% to result in level of other indicators of the policy or action (or by a stated date). The residential energy use sector Intended level of the target amount of emissions to be reduced or currently emits 1. for more information. and verification verification procedures associated with implementing total subsidies provided. or the political context of policy or action targets to reduce energy use. The subsidy aims to reduce achieved and/or target action.

2 illustrates independent. individual policy or action assessed or to the package of Figure 5. Depending on the choice.1 When making this decision. users follow the same general steps and requirements. CO2e when implemented on its own. users shall report which on its own and Policy Y reduces emissions by 60 tonnes individual policies and actions are included in the package. users may assess sector are likely to interact. Policies or actions interactions when estimating GHG effects. the GHG Table 5. If a package is assessed. reinforcing. a carbon tax that reduces consider the assessment objectives. since they likely affect the same the policies or actions either individually or together as source(s). In the figure. Policies or actions do not interact if they do not affect the same source(s) or sink(s). as well as policies that may have both Users shall report whether the assessment applies to an overlapping and reinforcing effects. and the the GHG intensity of the electricity grid and an energy degree of interaction between the policies and actions efficiency policy that reduces demand for electricity. feasibility. that differ from the sum of the individual effects individual policy/action or a had they been implemented separately. or overlapping and reinforcing. policies or actions. Policy X individual policy/action or a package of related policies/ reduces emissions by 100 tonnes CO2e when implemented actions. when implemented 40 Policy and Action Standard . If multiple policies or actions are being developed or For example. users should may also interact—­for example. Effect O represents an overlapping effect. overlapping. See Box 5. under consideration. either directly or indirectly.1 for an example that illustrates the various Multiple policies or actions can either be independent of possible relationships and the importance of considering each other or interact with each other. interact if they produce total effects. national and subnational policies in the same implemented in the same timeframe. In subsequent chapters.5. reinforcing policies.3 provides an overview of four possible relationships effect estimated in later chapters will either apply to the between policies and actions.3 Decide whether to assess an together. Two policies implemented at the same level a package. Policies or actions package of policies/actions may interact if they affect the same source(s) or sink(s). and policies and actions assessed. while Effect R represents a reinforcing Overview of policy interactions effect. whether they choose to assess Policies or actions that interact with each other can be an individual policy or action or a package of related overlapping.

20 + 40 = 180 t CO2e Note: Effect O represents an overlapping effect. This includes policies that have the same Overlapping or complementary goals (such as national and subnational energy efficiency standards). The combined effect of Overlapping implementing the policies together may be greater than or less than the sum of the individual effects of and reinforcing implementing them separately. and have both overlapping and reinforcing interactions. Source: Adapted from Boonekamp 2006.2 Types of relationships between policies and actions Independent Overlapping Policy X Policy Y Policy X O= Policy Y 100 t CO2e 60 t CO2e 100 t 20t 60 t Combined effect = X + Y Combined effect < X + Y Combined effect = 100 + 60 = 160 t CO2e Combined effect = 100 + 60 . D e f i n e p o l i c y/a c t i o n CHAPTER 5 Defining the Policy or Action Table 5.3 Types of relationships between policies and actions Type Description Multiple policies do not interact with each other. The latter are sometimes referred to as counteracting policies. as well as policies that have different or opposing goals (such as a fuel tax and a fuel subsidy). Multiple policies interact. Figure 5. and the combined effect of implementing the policies together is greater than the Reinforcing sum of the individual effects of implementing them separately. Multiple policies interact. Multiple policies interact. and the combined effect of implementing the policies together is less than the sum of the individual effects of implementing them separately. Effect R represents a reinforcing effect. 41 .20 = 140 t CO2e Reinforcing Overlapping and reinforcing Policy X Policy Y Policy X O= Policy Y 100 t 60 t 100 t 20t 60 t R = 40 t R = 40 t Combined effect > X + Y Combined effect may be > or < X + Y Combined effect = 100 + 60 + 40 = 200 t CO2e Combined effect = 100 + 60 . The combined effect of implementing the policies together Independent is equal to the sum of the individual effects of implementing them separately.

000 households that would only respond to the implemented would be 60.000 households would install home insulation.000 t CO2e/year install insulation if either policy were in place. Overlapping and reinforcing case: Both the subsidy and information campaign are introduced.000 t CO2e/year only install insulation if both policies were in place.000 households would install home insulation the 10. reducing 60. resulting in total GHG reductions of 100. If the subsidy were implemented on its own. Some households would 25.000 50. place (rather than either on its own).000 40. insulation as well as an information campaign to educate Suppose that 5. In practice.000 t CO2e/year C. Reinforcing case: Both the subsidy and information campaign are introduced. presence of both policies). E. either one of the policies were in place. Some households would install insulation if either policy 45.000 90. plus an additional and the total GHG reduction from both policies being 20. the combination of policies may reinforce each If the information campaign were implemented on its own.000 households in Scenario B. Conversely. the policies would overlap if some households there may be both overlapping and reinforcing effects would install insulation in either scenario (if either the subsidy (see Scenario F). Number of households Scenario that install insulation Total GHG reduction A.000 t CO2e/year B. reducing both the subsidy and the information campaign were in emissions by a total of 20. Some households would 50. In this case.000 100. emissions by a total of 40.000 t CO2e/year (see Scenario E).000 t CO2e/year (see Scenario B).000 60.000 t CO2e/year. In this case.Box 5. Overlapping case: Both the subsidy and information campaign are introduced. while a separate set both policies.000 t CO2e/year were in place.000 households would install home insulation. 50.000 households would install of households responds to the information campaign.000 20. 30.000 households would install home insulation. Subsidy alone is introduced 20.000 t CO2e/year (see Scenario A).000 households would install insulation if residents on the financial benefits of installing insulation. only Both policies are intended to reduce household energy use 25.000 households would respond only to the presence of households responds to the subsidy. In home insulation (the 20.000 t CO2e/year (see Scenario D). other if some households would only install insulation if 10. in total GHG reductions of 50. Information campaign alone is introduced 10. D.1 Example of interacting policies and actions A city government implements a subsidy program for home were in place or if the information campaign were in place). while other households would only install insulation if both policies were in place. Independent case: Both the subsidy and information campaign are introduced.000 t CO2e/year households respond to each policy. Suppose an additional The two policies would be independent if one set of 20. However.000 t CO2e/year (see Scenario C). 42 Policy and Action Standard . resulting and emissions. rather than 20. F. Separate sets of 30.000 households from Scenario A. this case.

Potentially interacting policies and actions can be identified by identifying the targeted emission source(s) or sink(s). there can be advantages and Step 1: Characterize the type and degree disadvantages to assessing the interacting policies and of interaction between the policies actions individually or as a package (see Table 5.5). but it may not be feasible to model the whole interaction should be based on expert judgment. Users should exercise judgment based on the should assess the relationship between the policies/actions specific circumstances of the assessment. Table 5.6. overlapping.4 provides examples of identifying interactions among policies or actions. certain criteria may suggest assessing an then identifying other policies and actions that target the individual policy/action.3 guidance For more guidance on characterizing policy interactions. inaccurate given the interactions between the policies. or case. To decide whether to assess an individual policy/ action or a package of policies/actions. (independent. Once these are identified. users a package. while other criteria suggest assessing same source(s) or sink(s). users should: Table 5. moderate. or reinforcing) and the degree of related policies may have significant interactions (suggesting interaction (major. To or actions under consideration help decide. D e f i n e p o l i c y/a c t i o n CHAPTER 5 Defining the Policy or Action 5. For example. or minor). •• Step 1: Characterize the type and degree of interaction between the policies or actions under consideration Step 2: Apply criteria to determine •• Step 2: Apply criteria to determine whether to assess an whether to assess an individual package/ individual policy/action or a package of policies/actions action or a package of policies/actions If policy interactions exist. refer to the policy interaction matrix in Appendix B. users should apply the criteria in Table 5. a user may undertake an assessment of an individual consultations with relevant experts. In this studies of similar combinations of policies/actions. published package (suggesting an individual assessment).4 E  xamples of identifying policies/actions that target the same emission source and characterizing the type and degree of interaction Policy or action Targeted emission Other policies/actions targeting Type of Degree of assessed source(s) or sink(s) the same source(s) or sink(s) interaction interaction Example 1: Energy tax Overlapping Moderate Subsidy Household space for home heating Information instruments Reinforcing Moderate insulation Example 2: Energy efficiency standards Overlapping Moderate Energy use in Appliance refrigerators energy labels Subsidies for new appliances Reinforcing Moderate Fuel taxes Overlapping Minor Example 3: Emissions of Biofuel subsidies Overlapping Minor Fuel economy new car fleet regulation Rebates for efficient cars Overlapping Minor 43 . The assessment of a package). The assessment should policy (since a package is not feasible). but acknowledge also be qualitative. In some cases. since a quantitative assessment would in a disclaimer that any subsequent aggregation of require many of the steps needed for a full assessment of both the results from individual assessments would be the individual policy/action and the package of policies/actions.

and undertaking both is practically feasible. for example. is it possible to disaggregate the observed If “No” then consider assessing impacts of interacting policies/actions? a package of policies/actions Users may also conduct assessments for both individual If users choose to assess both an individual policy/action policies/actions and packages of policies/actions. that will interactions a package of policies/actions be difficult to estimate if policies/actions are assessed individually? Will the assessment be manageable if a package of policies/actions is If “No” then undertake an assessed? Is data available for the package of policies/actions? individual assessment Feasibility For ex-post assessments. either overlapping or reinforcing. if interactions are not significantly more complex accounted for • Captures the interactions between policies/actions in the package Assessing and better reflects the total GHG effects of the package • Does not show the policies/ • May be simpler than undertaking individual assessments in some effectiveness of individual actions as a cases.6 Criteria for determining whether to assess policies/actions individually or as a package Criteria Questions Guidance Do the end-users of the assessment results want to know the impact Objectives and If “Yes” then undertake an of individual policies/actions. since it avoids the need to disaggregate the effects of policies/actions package individual policies/actions Table 5.5 Advantages and disadvantages of assessing policies/actions individually or as a package Approach Advantages Disadvantages • The estimated GHG effects • Shows the effectiveness of individual policies/actions.Table 5.2 provides a case study of deciding whether to assess analyses. to inform choices on which use of results individual assessment individual policies/actions to implement or continue supporting? Are there significant (major or moderate) interactions between the Significant If “Yes” then consider assessing identified policies/actions. resources are available to undertake multiple Box 5. users should define one option or the other. 44 Policy and Action Standard . Doing and a package of policies/actions that includes the so will yield more information than conducting only individual policy/action assessed. on both. a package of policies. since to determine total GHG individually the causal chain and range of impacts for a package may be effects. Undertaking both individual each assessment separately and treat each as a discrete assessments and assessments for combinations of policies application of this standard in order to avoid confusion of should be considered if the end-­user requires information the results. which from assessments of Assessing decision makers may require to make decisions about which individual policies cannot be policies/ individual policies/actions to support straightforwardly summed actions • May be simpler than assessing a package in some cases.

which is one of the most significant EE policies in China. set out to assess the Top 1000 Enterprises program. IGES initially the four EE policies as a package. examining other related EE policies revealed that structural shifts in the economy accounted for the remainder the enterprises involved in the Top 1000 Enterprises program of the change in sectoral energy use. 2006 to 2010.2 Deciding whether to assess a package of policies for China’s industrial energy efficiency policies The Institute for Global Environmental Strategies (IGES) carried were also affected by three other policies: (1) the Ten Key out an ex-­post assessment of China’s energy efficiency (EE) Projects energy efficiency program. accounting for consuming industries and aimed to achieve energy savings of 58 percent of the industry sector’s total energy savings from 100 Mtce (2.9 EJ) during the 11th Five-­Year Plan. Since all four policies were energy savings achieved by the industry sector during the 11th implemented during the same time period and by the same Five-­Year Plan could be attributed to the implementation of EE set of entities. the policies likely interacted with each other. and However. The program The assessment found that the EE policies collectively affects roughly 1. 45 . External factors such as economic activity. The objective was to evaluate to what extent the differentiated electricity pricing. the sum of energy savings from the policies would likely not accurately represent the total effect The first critical step in the assessment was to decide whether on energy conservation. IGES therefore decided to evaluate to assess policies individually or as a package. energy prices.000 of the largest enterprises in nine energy-­ achieved energy savings of 316 Mtce (9.2 EJ). If assessed individually. (2) a value-­added tax policies in the industry sector during the 11th Five-­Year Plan reduction for utilizing waste heat and pressure. and (3) (2006–10). policies as opposed to other factors. D e f i n e p o l i c y/a c t i o n CHAPTER 5 Defining the Policy or Action Box 5. autonomous technology improvements.

or a combined ex-­ante and ex-­p ost assessment will be ex-­ante by definition.5. assessment if the objective is to estimate the effects of ex-­post. or a combination of ex-­ante and ex-­post. see Section 3. but not yet implemented. users should carry out an ex-­post Users shall report whether the assessment is ex-­ante.2 or a combined ex-­ante and ex-­post assessment to estimate both the past and future effects of the policy or action. the policy or action to date.2. or a combination of ex-­ante and ex-­post. if assessment.4 guidance ex-­post assessment After defining the policy or action (or package of Choosing between ex-­ante or ex-­post assessment depends policies or actions) to be assessed. can be ex-­ante.4 Choose ex-­ante or 5. Alternatively. an ex-­ante assessment if the objective is to estimate the expected effects in the future. In this case. ex-­post. 46 Policy and Action Standard . then the ex-­post assessment. Box 5.3 provides a case study of carrying out a combined ex-­ante and ex-­post assessment. For descriptions of ex-­ante and ex-­p ost the policy has been implemented. then the assessment assessments. an is planned or adopted. If the policy or action choose whether to carry out an ex-­ante assessment. the next step is to on the status of the policy or action.

The ex-post assessment shows the Service. which were obtained using a Monte period (2008–12). while the latter helps assess tax reduction for roof insulation investments by households in to what extent existing policies will be sufficient to meet Belgium (ECONOTEC and VITO 2014). D e f i n e p o l i c y/a c t i o n CHAPTER 5 Defining the Policy or Action Box 5.3 Combined ex-­ante and ex-­post assessment of Belgium’s federal tax reduction for roof insulation ECONOTEC and VITO. In the future. 47 . on behalf of the Belgian Federal Public the years 2013–20. An ex-­ante assessment may include historical data if the policy or action is already implemented. 2. and Environment. see Chapter 8. Figure 5. while the ex-ante assessment covered Carlo simulation method (further described in Chapter 12).3 presents the results of the combined ex-post and The assessment was undertaken in 2013. Food Chain Safety. ex-post assessments will also to evaluate the emissions reduction generated as part of enable the government to evaluate whether implementation a follow-up of the implementation of the Belgian National is on track.3 Ex-post and ex-ante assessment results 5000 Ex-post assessment Ex-ante assessment Emissions reductions 4000 (ktonne CO2e) 3000 2000 1000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020  Likely  Maximum Minimum Endnotes 1. The assessment includes uncertainty assessment covered the Kyoto Protocol first commitment ranges for each year. The objective was future targets. The ex-post ex-ante assessment. Policies or actions that are implemented earlier in time than the policy or action being assessed should be included in the baseline scenario for the policy or action being assessed. For more information. Climate Plan and the European Union climate policy for 2020. carried out contribution to the federal and national commitments in the a combined ex-ante and an ex-post assessment of the federal framework of the Kyoto Protocol. but it is still an ex-­ante rather than an ex-­post assessment if the objective is to estimate future effects of the policy or action. Health. Figure 5.

6 Identifying Effects and Mapping the Causal Chain .

A subset of effects identified in this chapter will then be included in the GHG assessment boundary in Chapter 7.3) (Section 6. Note: Reporting requirements are listed in Chapter 14. Identify all sources/sinks and greenhouse gases • Identify all source/sink categories and greenhouse gases associated with the GHG effects (Section 6. This chapter explains how to identify all potential GHG effects of the policy or action and include them in a map of the causal chain.1) effects (Section 6. Users may carry out the steps in parallel or in any sequence.2) associated with the GHG effects of the policy or action.2) Note: The three steps in this chapter are closely interrelated.1 Overview of steps in identifying effects and mapping the causal chain Identify potential Identify all sources/sinks GHG effects of the and greenhouse gases Map the causal chain policy or action associated with the GHG (Section 6. if relevant and feasible. Figure 6. 49 .1) and out-of-jurisdiction effects. Identify potential GHG effects of the policy or • Separately identify and categorize in-jurisdiction effects action (Section 6. Map the causal chain (Section 6. Identify effects I n order to estimate GHG effects of the policy or action. Checklist of accounting requirements Section Accounting requirements • Identify all potential GHG effects of the policy or action. users have to first understand what the effects are.3) • Develop a map of the causal chain.

and activities are necessary for and nitrogen trifluoride (NF3). perfluorocarbons (PFCs). technology. home natural gas and effects result from the policy or action electricity use are reduced Changes in greenhouse gas emissions by sources or removals Reduced CO2. for activities to occur. provision Activities implements the policy or action). are not omitted from the assessment. if relevant and feasible.” In this example (used throughout the standard). of subsidies procurement. homes may be heated by oil. sulfur hexafluoride (SF6).6. Understanding action. activities. K. 50 Policy and Action Standard . such as permitting. Users shall identify and report all potential GHG effects it is useful to first consider how the policy or action is of the policy or action. See decreases in GHG removals—­that result from the policy or Table 6. Table 6. or economic Increase in disposable income Non-GHG effects conditions other than GHG emissions or climate change due to energy savings mitigation that result from the policy or action Source: Adapted from W. since inputs are necessary (HFCs). licensing. homes are heated by natural gas and electricity. CH4. inputs and activities is a means to understanding which methane (CH4). processes. Users should then identify and categorize in-­jurisdiction effects and out-­ identify all intermediate effects of the policy or action of-­jurisdiction effects. social. and effects Examples for a home Indicator types Definitions insulation subsidy program Resources that go into implementing a policy or action. hydrofluorocarbons effects are expected to occur. intermediate effects are called “outcomes” and GHG effects and non-GHG effects are called “impacts. or compliance and enforcement Consumers purchase and install Intermediate Changes in behavior. Users should ensure that less obvious effects. Users may also identify relevant non. and N2O GHG effects by sinks that result from the intermediate effects of the policy emissions from reduced natural or action gas and electricity use Changes in relevant environmental.­GHG effects of the policy or action. in reality.1 Summary of inputs. or practices that insulation.1 Identify potential GHG effects 6 .1 for definitions and examples. Money needed to implement Inputs such as financing the subsidy program Administrative activities involved in implementing the policy or action (undertaken by the authority or entity that Energy audits.2). or other fuels. Kellogg Foundation 2004. Users shall separately GHG effects to occur (see Figure 6. GHG effects include both increases implemented by identifying the relevant inputs and activities and decreases in GHG emissions—­as well as increases and associated with implementing the policy or action. Notes: In other frameworks.1 g u i d a n c e of the policy or action In order to identify the GHG effects of the policy or action. Greenhouse gases include carbon dioxide (CO2). that may lead to GHG effects. nitrous oxide (N2O). coal. which may be potentially significant.

to a variety of unexpected •• Intended and unintended effects: Effects that are or unintended consequences. Policies and 5 years or 10 years). may include a variety of effects. and to long-­lasting impacts. based on identify as many potential GHG effects as possible. Unintended effects development over a long time period. emissions outside the jurisdictional boundary. jurisdictional boundary. 51 .2 for examples of the various types of effects for an illustrative policy.2 effects •• In-­jurisdiction and out-­of-­jurisdiction effects: in sectors other than the targeted sector (such as leakage Effects that occur inside the geopolitical boundary between sectors). both intentional and unintentional. and many GHG effects (whether GHG increasing distinction between “short term” and “long term” or GHG decreasing) may be far removed from the direct based on the individual assessment (for example. GHG effects.2 Relationship of inputs. for private sector actions). such as rebound effects (marginal increases in energy-­using activities or behavior Users should consider the following types of effects: resulting from energy efficiency improvements). Out-­o f-­jurisdiction effects are called as early action). Jurisdictional boundaries •• GHG increasing and decreasing effects: Effects may not be relevant for all GHG assessments (for that both increase and decrease GHG emissions from example. RD&D policies may spur technological objectives of the policy or action. users should both nearer and more distant in time. as participant spillover effects). or immediate effects of the policy or action. where they are implemented. while others are permanent. intermediate effects. and •• Likely. regardless of how likely they are to occur. or lack of compliance or enforcement. effects on members of society not over which the implementing entity has authority. See Table 6. Users should define the apparent. CHAPTER 6 Identifying Effects and Mapping the Causal Chain Identify effects Figure 6. activities. sources and removals of GHGs by sinks. possible. effects on behavior once a well as effects that occur outside of the geopolitical policy is announced but before it is implemented (such boundary. Many the amount of time between implementation of effects of the policy or action may not be immediately the policy and the effect. based on the original For example. Some effects may also be actions can lead to effects beyond the sector or country temporary. and unlikely effects: All potential leakage if they increase emissions outside the effects. and non-GHG effects1 GHG effects Intermediate Inputs Activities effects Non-GHG effects Types of effects •• Short-­and long-­term effects: Effects that are To ensure a complete GHG assessment. spillover effects or multiplier effects if they reduce Unintended effects may increase or decrease emissions. targeted by the policy or action (sometimes called non-­ such as a city boundary or national boundary.

not all potential effects need to be included downstream activities.S. changes in prices. The various types of effects are also not •• Consumer behavior and practices: Changes in mutually exclusive. since improved vehicle fuel efficiency decreases the cost of driving per kilometer. automakers produce more efficient vehicles. automakers might sell old models to countries without similar standards. • Emissions from the U. • Some consumers drive further distances. such as GDP. unintended. of energy and materials. or changes in market structure or market share resulting from the policy or action While users should identify a long list of potential effects •• Life-­c ycle effects: Changes in upstream and in this step. Each effect will be a combination of the purchasing decisions or other practices characteristics listed above. which reduces gasoline consumption In-jurisdiction effect in the United States. a single effect may •• Business behavior and practices: Changes in be out-­of-­jurisdiction. and manufacturing decisions or other practices GHG increasing and may involve market effects. or effects in sectors not targeted by the policy or action Methods for identifying GHG effects •• Macroeconomic effects: Changes in macroeconomic Various approaches may be used to identify conditions. such as extraction and production in the GHG assessment boundary in Chapter 7.S. income. life-­c ycle •• Market effects: Changes in supply and demand.S. using the same basic technology (cars fueled by gasoline and diesel). long-­term. electricity generation sector increase as a result of more electric vehicles being sold. • Because of the U. This is a spillover effect. They are not intended to be prescriptive or exhaustive. effects. regulation. Users should also consider potential GHG effects in terms of The above lists of types of effects are intended to guide the the following: development of a comprehensive list of potential effects. •• Technology effects: Design or deployment of Not all types of effects listed may be relevant to the policy new technologies or action under consideration.2 Illustrative example of various effects for a United States vehicle fuel efficiency standard Type of effect Examples of effects Intended effect • Fuel consumption and tailpipe emissions per mile driven are reduced. and not all relevant effects •• Infrastructure effects: Development of new infrastructure may be listed. or potential effects. Canada adopts a similar vehicle fuel efficiency regulation. effect • U. Short-term effect • U.S. thereby reducing some of the emissions benefits. • Automakers in the U. which could increase emissions in other countries (leakage). possible. leading Out-of-jurisdiction to reduced emissions from cars in Canada. such as Long-term effect zero emissions vehicles. produce and sell more efficient cars.S. This is Unintended effect called a rebound effect. automakers develop new vehicle technologies that reduce emissions even further. For example.Table 6. such as the following: structural changes in economic sectors •• Literature review of prior assessments of similar policies •• Trade effects: Changes in imports and exports. • U. and trade effects. and circumstances such as leakage 52 Policy and Action Standard . employment.S.

separate Defining source/sink categories tracking may not be feasible. HFCs. See Appendix C for additional examples of non-­GHG effects. CH4. Separate categorization also creates without additional gases included.2 Identify source/sink categories define a source as “residential natural gas combustion for and greenhouse gases associated space heating” (for the whole residential sector) or may with the GHG effects define the source more narrowly as “residential natural gas Users shall identify and report a list of all source/sink combustion for space heating in homes that receive the categories and greenhouse gases associated with the subsidy. consider defining the sources and sinks narrowly around the income. the types of include the following: data collected and monitored. This step is necessary 53 . such as improved health or quality of life When defining affected sources and sinks. development individual source/sink categories and greenhouse gases. or panels with relevant experts since estimation of baseline emissions and policy scenario and stakeholders emissions (in Chapters 8. users may identify additional GHG mitigation goals (since out-­of-­jurisdiction GHG gases that are identified by the IPCC or covered by the effects do not contribute to GHG mitigation goals that Montreal Protocol. such as increased employment.4 If additional gases are included in apply only to emission sources within the jurisdictional the assessment. Sinks are processes or activities that increase Separate tracking of in-­jurisdiction storage or removals of GHGs from the atmosphere. Alternatively. users may choose Users may define sources and sinks either as individual to apportion the effect between in-­jurisdiction emissions and sources and sinks (such as fossil fuel combustion in specific out-­of-­jurisdiction emissions based on assumptions.3 out-­of-­jurisdiction effects. The IPCC and out-­of-­jurisdiction effects Guidelines for National Greenhouse Gas Inventories provides By separately identifying and categorizing in-­jurisdiction and definitions of source/sink categories that may be used. users can more accurately link In addition to the greenhouse gases covered by the the GHG effects of the policy or action to the relevant UNFCCC and the Kyoto Protocol (CO2.3 provides examples of source/sink categories and greenhouse gases. Table 6. and NF 3).2 guidance •• Sector-­specific guidance or methodologies •• Expert judgment Sources are processes or activities that release GHGs into the atmosphere. 9. such as improved air quality or used. and the estimation methods •• Environmental effects. users should •• Economic effects. regulatory impact analyses. users should report the results with and boundary). or GDP specific processes or activities affected by the policy or action. environmental impact assessments. power plants) or as aggregated categories of sources and sinks (such as all fossil fuel combustion in all power plants Identifying non-­GHG effects connected to an electric grid). jurisdiction’s GHG inventory and any jurisdiction-­level PFCs. In certain cases. •• Social effects. CHAPTER 6 Identifying Effects and Mapping the Causal Chain Identify effects •• Consultations. SF6. This helps ensure that processes or activities not affected by the policy or action are not unnecessarily estimated in later steps. statutory authorities. which may sinks depends on the policy or action assessed. users may define a source as “fossil fuel GHG effects of the policy or action. plans. The decision of whether to Users may also identify any non-­GHG effects of the policy identify individual sources/sinks or categories of sources/ or action that are relevant to the assessment. and 11) occurs at the level of •• Review of regulations. or economic studies 6. transparency around any potential double counting of out-­of-­jurisdiction effects between jurisdictions. Individual sources correspond to bottom-­up data water quality and aggregated sources correspond to top-­down data. Using the example of a home insulation subsidy. users may 6.” Likewise. surveys. N2O. a single effect may affect both in-­jurisdiction and out-­of-­jurisdiction emissions. In this case.

furnaces. boilers. PFCs processes Fugitive emissions from Natural gas systems natural gas transmission and Pipelines CH4. trains. N2O combustion generate energy turbines Mobile fossil fuel Trucks. N2O management emissions from fertilizer use Forests and other Forest degradation. CO2.Table 6. cars. geological CO2 storage formations 54 Policy and Action Standard . Carbon capture and Removal and storage of CO2 power plants. CH4. N2O combustion ships. soils CO2. CH4. N2O land use deforestation Examples of equipment Relevant Sink category Description or entity greenhouse gases Removal and storage of CO2 Biological processes Forests.3 Examples of sources/sinks and greenhouse gases Examples of emitting Relevant Source category Description equipment or entity greenhouse gases Power plants. CH4. vegetation. industrial Stationary fossil fuel Combustion of fuels to facilities. buses Chemical or physical Cement manufacture Industrial facilities CO2 processes Chemical or physical Aluminum production Industrial facilities CO2. Forests. airplanes. Combustion of fuels CO2. CO2 distribution systems Degradation or Landfills Landfills CH4 decomposition of waste Electrical transmission Fugitive emissions Electricity T&D systems SF6 and distribution Refrigeration and air Fugitive emissions from Refrigeration and air HFCs conditioning equipment equipment conditioning equipment Agricultural soil Biological processes. soils CO2 through photosynthesis Industrial facilities. Agricultural soils CO2. vegetation.

users should be sure communicate the effects of the policy to stakeholders.1 and the sources/sinks and greenhouse gases electricity generation sector) or may define the source more identified in Section 6. and Section 6. based on the effects identified in that includes intermediate effects and GHG effects. Either approach is likely to help identify overlaps and interactions between the policies and actions included in the package. CHAPTER 6 Identifying Effects and Mapping the Causal Chain Identify effects combustion in grid-­connected power plants” (for the whole Section 6.3 Generic example of mapping GHG effects by stage First stage Second stage Third stage Fourth stage X stage Fourth stage Third stage effect effect GHG effect Third First stage Second stage stage effect effect effect GHG effect Policy or First stage Second stage Third stage Fourth X stage effect action effect effect effect stage effect GHG effect Second First stage stage effect  Policy or action effect GHG effect  Intermediate effect Third GHG effect Second stage stage effect effect GHG effect 55 . the causal chain should include all how the policy or action leads to changes in emissions. not to include the same effect in the causal chain twice. intermediate effects and GHG effects that have been which can serve as a useful tool to enhance policy design.3 provides a generic example of a causal chain policy or action assessed. Users shall develop and report a causal chain for the Figure 6.3 guidance help identify effects not previously identified. identified. Since the various categories of effects outlined in improve understanding of policy effectiveness. 6.3 Map the causal chain which may be useful in subsequent estimation steps. narrowly as “fossil fuel combustion in grid-­connected power Users assessing a package of policies and actions may plants for supplying electricity to the homes that receive either (1) develop a single causal chain for the package the subsidy.” How best to define the source depends on as a whole or (2) develop separate causal chains for the estimation methods and data that will be used. each policy or action included in the package. Figure 6.2. 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. It also helps Scope the user and decision makers understand in visual terms At a minimum. Mapping the causal chain can 6.1 are not mutually exclusive.

Figure 6.4 Generic example of mapping inputs, activities, and effects by stage

First stage Second stage X stage

Intermediate
GHG effect
effect

Intermediate Intermediate
Activity GHG effect
effect effect

Policy or Intermediate Intermediate
Inputs Activity GHG effect
action effect effect

Intermediate
GHG effect
effect

Users may include inputs and activities in the causal chain of the causal chain through a series of cause-­and-­effect
as steps toward identification of effects. See Figure 6.4 for relationships—­that is, a series of intermediate effects—­
a generic example that includes inputs and activities along until it leads to a GHG effect—­a change in GHG emissions
with intermediate effects and GHG effects. Users should or removals occurring at a source or sink. For example, a
include non-­GHG effects along with GHG effects in the change in electricity use (an intermediate effect) should
causal map, if relevant. be followed through the causal chain until it reaches a
change in fuel combustion to generate grid-­connected
The causal chain represents the changes expected to
electricity (a GHG effect occurring at a source).
occur as a result of the policy or action. Implicitly, these
changes are relative to a baseline scenario that represents In some cases, multiple branches of effects lead to distinct
the conditions most likely to occur in the absence of the sources or sinks. In other cases, two or more branches of
policy or action. Users may refine the causal chain after effects lead to the same source or sink (if the policy or action
more clearly defining the baseline scenario in Chapter 8. has two or more effects on the same source or sink). See
Users may also choose to develop two separate causal Figure 6.5 for an example where two distinct effects (emissions
chains—­one representing the baseline scenario and one per kilometer traveled decrease and consumers drive more)
representing the policy scenario—­rather than a single causal lead to the same source (tailpipe emissions from cars).
chain representing the policy scenario.
Completeness
Users should separately indicate which GHG effects in the
The causal chain should be as comprehensive as possible,
causal chain are in-­jurisdiction effects and which are out-­of-­
rather than limited by geographic or temporal boundaries.
jurisdiction effects, if relevant and feasible.
To make the mapping step more practical, users should
only include those branches of the causal chain that are
Stages
reasonably expected to lead to changes in GHG emissions
To develop the causal chain, users should identify the
or removals. Users do not need to identify effects or
proximate (first stage) effects of the policy or action.
branches that are unrelated to changes in GHG emissions
Each first stage effect represents a distinct “branch” of
or removals. Where feasibility is a concern, users may
the causal chain. Users should then extend each branch

56 Policy and Action Standard

CHAPTER 6 Identifying Effects and Mapping the Causal Chain

Identify effects
summarize the GHG effect for each branch without mapping and sinks, and affected greenhouse gases for the same
each intermediate effect for each stage separately. policy example.

See Figure 6.6 for an illustrative causal chain for a subsidy See Box 6.1 for a case study of developing a causal
for home insulation. Table 6.4 provides an example of chain for Belgium’s offshore wind promotion program.
developing a list of potential GHG effects, affected sources

Figure 6.5 Example of multiple effects leading to the same source (for an illustrative vehicle fuel efficiency regulation)

First stage Second stage Third stage Fourth stage

Emissions Reduced
per kilometer tailpipe
traveled emissions
decrease from cars
Vehicle fuel Businesses Consumers
efficiency produce more purchase more
regulation efficient cars efficient cars
Marginal
Consumers increase
 Policy or action drive more in tailpipe
emissions
 Intermediate effect from cars

GHG effect

Figure 6.6 Example of a causal chain for an illustrative subsidy for home insulation

First stage Second stage Third stage Fourth stage Fifth stage

Reduced
Reduced Reduced
emissions
Reduced electricity emissions from
from electricity
demand for generation coal mining
generation
electricity
and natural
Reduced Reduced Reduced
Consumers gas to heat
emissions from emissions emissions from
purchase and homes
home natural from natural natural gas
install insulation
gas use gas systems systems

Subsidy Increase in Increased Increased
for home Increased
disposable demand for production
insulation emissions from
income due goods & of goods &
manufacturing
to savings services services

Increased  Policy or action
Businesses
emissions
produce more
from insulation  Intermediate effect
insulation
manufacturing
GHG effect

57

Table 6.4 E
 xample of developing a list of potential GHG effects, affected sources and sinks, and affected greenhouse
gases for a home insulation subsidy program

Affected Affected
Potential GHG effect Affected sources
sinks greenhouse gases

Reduced emissions from electricity Combustion of fuels to generate grid-
N/A CO2, CH4, N2O
generation connected electricity for use in homes

Reduced emissions from coal mining Coal mines N/A CH4

Reduced emissions from natural gas
Natural gas systems N/A CO2, CH4
systems (from reduced electricity use)

Reduced emissions from home natural Residential natural gas combustion
N/A CO2, CH4, N2O
gas use (space heating) (space heating)

Reduced emissions from natural gas
Natural gas systems N/A CO2, CH4
systems (from reduced natural gas use)

Increased emissions from manufacturing Manufacturing processes N/A CO2, CH4, N2O

Increased emissions from insulation
Insulation manufacturing processes N/A CO2, CH4, N2O, HFCs
manufacturing

Box 6.1 Developing a causal chain for Belgium’s offshore wind energy promotion program

VITO, on behalf of the Belgian Federal Public Service, Health, assumed that without offshore wind, the same amount
Food Chain Safety, and Environment, carried out a combined of electricity would have been generated by a combined
ex-post and ex-ante assessment of a package of policies taken by cycle gas turbine power station, which could be from
the Belgian federal government to promote the development of an existing power plant or a new installation.
offshore wind energy. These policies include a green certificate
3. Changes in emissions from macroeconomic effects
scheme that offers financial support to offshore wind turbine
resulting from the green certificate scheme, which will
operators for each megawatt of electricity generated. The
increase electricity prices for industry, the commercial
objective of the assessment was to estimate the GHG effects
sector, and households and thus affect electricity
(both in-jurisdiction and out-of-jurisdiction) of the program.
consumption.
The first step was to identify and map all the sources and
The causal chain (see Figure 6.7) proved to be a useful
sinks affected by the program. Three categories of affected
tool to identify all the sources and sinks affected by the
sources and sinks were identified:
policy, beyond the boundaries normally used in impact
1. Increased GHG emissions resulting from the construction, assessments. Although not all of the effects were included
installation, and connection to the grid of the offshore in the GHG assessment boundary and estimated at a later
wind turbines. stage, mapping the causal chain was an insightful way to
illustrate that policies can have significant upstream and
2. Avoided emissions from electricity generation relative to
downstream effects as well as in-jurisdiction and out-of-
a baseline scenario without offshore wind energy. It is
jurisdiction effects.

58 Policy and Action Standard

hydrochlorofluorocarbons (HCFCs).2. Sec. See IPCC 2006: Vol.6).” Users may also separately estimate the effects of the policy or action on black carbon as long as the results are not aggregated with other GHGs included in the assessment. 8.2. “Gases Included.5. 1. such as an increase in disposable income from home insulation leading to more consumption and therefore more emissions (as illustrated in Figure 6. 3. carbon monoxide (CO). Chap. “Classification and Definition of Categories.1 Developing a causal chain for Belgium’s offshore wind energy promotion program (continued) Figure 6. and ammonia (NH3). sulfur dioxide (SO2). households using more space heating in winter as a result of energy efficiency improvements that allow for higher indoor temperatures at lower costs. non-­methane volatile organic compounds (NMVOC). 8. Chap. 8. Additional gases include chlorofluorocarbons (CFCs). Sec. nitrogen oxide (NOX). Some non-­GHG effects may also lead to GHG effects. 8.” 4. 1. For more information.7 Causal chain of Belgium’s offshore wind energy promotion program First stage Second stage Third stage Fourth stage Fifth stage Sixth stage Reduced Reduced emissions Increased power from existing emissions generation power plants by existing Increased from Increased power Reduced emisions in installation offshore plants price of fossil other sectors Increased fuels (leakage) wind Offshore demand for installation wind offshore Increased Avoided energy wind and power emissions promotion mfg of Increased generation Reduced from new program offshore wind emissions by offshore Reduced additions power plants turbines from mfg wind emissions of new power from mfg of Reduced mfg plants new power of power  Policy or action plants plants  Intermediate effect Increased Reduced Reduced GHG effect electricity emissions consumer price from reduced demand demand Endnotes 1. see IPCC 2006: Vol. halogenated ethers. 2. CHAPTER 6 Identifying Effects and Mapping the Causal Chain Identify effects Box 6. 59 . For example.

7 Defining the GHG Assessment Boundary .

sources and sinks.3) (Section 7. Note: Reporting requirements are listed in Chapter 14. Identify effects I n this chapter. and greenhouse gases to include in the GHG and greenhouse gases in the GHG assessment boundary. source/sink categories. The GHG assessment boundary defines the scope of the assessment in terms of the range of GHG effects.2) Checklist of accounting requirements Section Accounting requirements Determine which GHG effects. This chapter also defines the GHG assessment period—­t he time period over which GHG effects resulting from the policy or action are assessed.1 Overview of steps for defining the GHG assessment boundary Determine which GHG effects. and Define the GHG of potential greenhouse gases are included in assessment period GHG effects the GHG assessment boundary (Section 7. 61 . Assess the significance source/sink categories.3) effects included in the GHG assessment boundary. Figure 7. • Include all significant GHG effects. source/sink categories.1) (Section 7. and greenhouse gases included in the assessment.2) • Define the GHG assessment period based on the GHG Define the GHG assessment period (Section 7. users define the GHG assessment boundary by determining which potential GHG effects identified in Chapter 6 are significant. assessment boundary (Section 7.

This involves approximating the change in GHG emissions Step 1: Estimate the likelihood and removals resulting from each GHG effect. or other methods. users should categorize the relative magnitude •• The relative magnitude of each GHG effect (Step 2). About as likely as not. The that each GHG effect will occur relative magnitude of each effect depends on the size For each potential effect identified in Chapter 6. a probability in the range of 33–66%.) Reason to believe the effect may or may not happen (or may or may not have happened) as a result Possible of the policy. For ex-­post assessments. (Certain effects may have occurred identified in the causal chain to determine which are during the GHG assessment period for reasons unrelated significant and should therefore be included in the to the policy or action being assessed. a probability in the range of 66–90%.) Reason to believe the effect will not happen (or did not happen) as a result of the policy. consultation with experts and stakeholders. a probability in the range of 10–33%. The likelihood should be based on evidence to the extent possible. users of the source/sink category affected and the magnitude should estimate the likelihood that it will occur by classifying of change expected to result from each source/ each effect according to the options in Table 7. moderate. such as published literature.” effects and short-­term and long-­term effects. (For example. Very unlikely a probability in the range of 0–10%. Reason to believe the effect probably will not happen (or probably did not happen) as a result of the Unlikely policy. Very likely (For example. Table 7. each potential GHG effect in terms of both: Step 2: Estimate the relative •• The likelihood that each GHG effect will occur (Step 1). 7.1 g u i d a n c e modeling results.) Cases where the likelihood is unknown or cannot be determined should be considered possible. risk management methods. (For example. magnitude of each GHG effect and Next. The size of the source/sink category assessments.1 Assess the significance effect occurring in the future as a result of the policy or of potential GHG effects action. expert judgment should be used. a probability in the range of 90–100%. or minor. this involves predicting the likelihood of the affected may be estimated based on jurisdictional GHG inventories or other sources.1 Assessing likelihood of GHG effects Likelihood Description Reason to believe the effect will happen (or did happen) as a result of the policy. 62 Policy and Action Standard . (For example. prior experience. If relevant In order to identify significant effects. For ex-­ante sink category. Any type of effect may be likelihood is unknown or cannot be estimated.7.1. of each GHG effect as major. Likely (For example. users should assess evidence does not exist.) Reason to believe the effect will probably happen (or probably happened) as a result of the policy. including in-­jurisdiction and out-­of-­jurisdiction should be classified as “possible. the effect significant. this involves assessing the The primary step in defining the GHG assessment likelihood that the effect occurred in the past as a result boundary is to assess each of the potential GHG effects of the policy or action.) Source: Adapted from IPCC 2010.) In cases where the GHG assessment boundary.

rather than changes in emissions. < 1% 63 . a second effect reduces emissions by 2. To follow a total change in emissions in absolute value terms. Evidence may include results from previous studies The absolute value of a number is the non-­n egative and literature. CO2e| = 6. For example.2. and the third effect represents three-­s ixths (or one-­h alf) Table 7. In this emissions and removals associated with the various effects.000 t CO2e. if relevant. Users should consider based on their absolute value. or minor based on evidence to the extent possible. as changes in vehicle kilometers traveled or electricity To compare each effect. or other methods. moderate. When estimating the relative stakeholders. users should compare effects expert judgment should be used. For (national or international).000 t CO2e| + |– 2000 t CO2e| + |– 3. the second effect represents emissions and removals. The effect influences the effectiveness of the policy or action. life-­c ycle databases or studies example.000 t GHG effect by using simplified calculation methods. value terms. The Moderate 1%–10% change in GHG emissions or removals could be significant in size.2 provides percentage figures as a rule of thumb to of the total estimated change in emissions in absolute help identify whether an effect is major. assume the size of the groups (such as businesses or consumers) that one effect increases emissions by 1. Users may estimate changes in relevant activity data (such and a third effect enhances removals by 3. The effect is inconsequential to the effectiveness of the policy or action. The relative magnitude of each The relative magnitude of each GHG effect should be estimated effect should be compared to other effects in relation based on the absolute value of the total change in GHG to the total change in absolute value terms. The percentage figures represent the estimated relative magnitude of the GHG effect being considered (in absolute value terms). magnitude of effects. or minor. and the absolute (for out-­of-­jurisdiction effects). emission factor databases value of that number without regard to its sign. the first effect represents one-­s ixth of the taking into account both increases and decreases in GHG total estimated change. For more information.000 t CO2e. CHAPTER 7 Defining the GHG Assessment Boundary Identify effects Users do not need to accurately calculate GHG effects in this Box 7. relative to the estimated total change in GHG emissions and removals resulting from the policy or action (in absolute value terms).000 t CO2e. users should estimate the consumption). If evidence does not exist. The change in GHG emissions or removals is likely to be > 10% significant in size. consultation with experts and value of -5 is also 5. but the relative magnitude should be categorized as based on absolute values major. expected to take action as a result of the policy. moderate.1 Estimating relative magnitude step. the absolute value of 5 is 5.1. see Box 7. as more rigorous approach.000 t CO2e. example.2 Assessing relative magnitude of GHG effects Relative Approximate relative magnitude Description magnitude (rule of thumb) The effect significantly influences the effectiveness of the policy or Major action. Table 7. prior experience. users may estimate each potential follows: |1. Users may choose to use different percentage thresholds than those presented in Table 7. Minor The change in GHG emissions or removals is insignificant in size. two-­s ixths (or one-­third) of the estimated change.

it may GWP values convert emissions data for non-­CO2 GHGs affect one source/sink category or multiple source/ into units of carbon dioxide equivalent (CO2e).2 for guidance based on the context and objectives of the assessment. users should combustion. Users should report If a GHG effect affects more than one greenhouse gas. SF6. Users may define significance warming potential (GWP) values. Regardless of whether 20-­year GWP assessed separately for each gas. Twenty-­year GWP values the magnitude of change expected to result from each may be used to focus on short-­term climate drivers. CH4. Users may consider unlikely effects that 64 Policy and Action Standard . Table 7. N2O may be excluded from the assessment. 100-­year. GWP sink categories.2 Determine which GHG effects. or other sources—­and magnitude of GHG effects. Doing so can enable values or 100-­year GWP values are used to determine the exclusion of certain gases. since not all greenhouse significance. For using 100-­year GWP values in Chapters 8. source/sink category. In most cases. as the magnitude of change expected to result from source/sink categories. and N2O) should be separately IPCC. the GWP values and time horizon used to determine the relative magnitude of the GHG effect should be significance. In Chapters 8. 9. The relative The IPCC provides GWP values for 20-­year. See Box 7.Assessing relative magnitude Box 7. and 11. HFCs. magnitude depends on both the size of the source/sink and 500-­year time horizons. The change in CO2 emissions may be expected (1) the IPCC GWP values agreed to by the UNFCCC. The relative magnitude depends on both the relative contribution of the greenhouse gas—­e stimated based on national emission factors. users should category—­e stimated based on national emission factors. N2O.2 Selecting global warming potential (GWP) values separately by source/sink category Depending on how a GHG effect is defined. In general. If it affects more than one source/ values describe the radiative forcing impact (or degree sink category. since not all sources/sinks affected may be significant and some may therefore be excluded. relative to one unit of carbon dioxide. and NF 3) requires global assessment boundary. and greenhouse gases in the GHG (CH4. but the change in N2O emissions may be (2) the most recent GWP values published by the IPCC. and 11. the relative magnitude of the GHG effect of harm to the atmosphere) of one unit of a given GHG should be assessed separately by source/sink category. In this case. if an insulation subsidy reduces natural gas For purposes of determining significance. such as methane. jurisdictional GHG inventories. expected to be minor.2). example.3 provides an example of assessing greenhouse gases to include in the significance of GHG effects separately by gas. or to be major. users may either apply assessed. users should consider all GHG effects to be significant (and therefore included in the GHG assessment boundary) unless they are estimated to be either minor in size or expected to be unlikely or very unlikely to occur (see Figure 7. on selecting GWP values when determining significance. or other sources—­as well 7. users are required to estimate GHG effects gases related to a given effect may be significant. source/ Assessing the relative magnitude of non-­CO2 gases sink categories. and each gas. the relative magnitude of each affected apply the most recent GWP values published by the greenhouse gas (CO2. PFCs. 9. and should be used if the policy or action assessed is specifically designed to reduce emissions of short-­lived Assessing relative magnitude separately by gas greenhouse gases. the GHG assessment boundary Users shall include all significant GHG effects. use 100-­year GWP values to estimate the relative jurisdictional GHG inventories.

Users shall disclose and justify any exclusions of or agreement) GHG effects. and transparency when deciding Box 7. Users may exclude GHG effects from the assessment.2 Recommended approach for determining significance based on likelihood and magnitude Magnitude Likelihood Minor Moderate Major Very likely Likely Should include Possible Unlikely May exclude Very unlikely Note: The area shaded green corresponds to significant GHG effects. that it serves the decision-­making needs of users of the assessment report. depending on the in GHG emissions resulting from the policy or action and context and objectives. users should: limitations related to: •• Use simplified or less rigorous estimation methods to •• Measurability or data availability approximate the magnitude of the effect. completeness.1 the requirements of the applicable program. Users should exercise caution in excluding any significant effects from the assessment. Users should follow the principles of relevance. relevance of the GHG assessment. significant effects may not be feasible in all cases. Users shall report the approach used to determine the significance of GHG effects. source/sink categories. consistency. Users should ensure that the GHG assessment appropriately reflects the changes 65 . instead of excluding significant effects effects may be necessary in certain cases based on altogether. but accounting for all the change in emissions resulting from the policy or action. 2 g u i d a n c e accuracy. or greenhouse •• User resources and capacity gases from the GHG assessment boundary. Exclusions are likely to lead to Disclosing and justifying exclusions misleading and biased results and not accurately represent Users should strive for completeness.3 provides an example of selecting GHG effects whether to exclude any GHG effects. and should not for inclusion in the GHG assessment boundary based exclude any GHG effects that would compromise the on an estimation of likelihood and relative magnitude. provided that any exclusion is disclosed and justified. CHAPTER 7 Defining the GHG Assessment Boundary Identify effects Figure 7. or •• Relevance to policy objectives and context (such as •• Use proxy data to fill data gaps. are moderate or major to be significant. Excluding Where possible. project. 7.

Figure 7.Box 7.3 and Table 7.3 Example of assessing each GHG effect to determine which effects to include in the GHG assessment boundary First stage Second stage Third stage Fourth stage Fifth stage Reduced Reduced Reduced emissions electricity emissions from from electricity Reduced generation coal mining generation demand for Likely. Increased minor Businesses emissions produce more from insulation  Policy or action insulation manufacturing  Intermediate effect Possible. major Possible.6). stars indicate GHG effects included in the boundary. Figure 7. moderate GHG effect Note: Stars indicate GHG effects included in the boundary.3 E  xample of assessing each GHG effect separately by gas to determine which GHG effects and greenhouse gases to include in the GHG assessment boundary GHG effect Likelihood Relative magnitude Included? Reduced emissions from electricity generation CO2 Likely Major Included CH4 Likely Minor Excluded N2O Likely Minor Excluded 66 Policy and Action Standard . Table 7. electricity minor and natural Consumers gas to heat Reduced Reduced Reduced purchase and homes emissions from emissions from emissions from install home natural natural gas natural gas insulation gas use systems systems Very likely. In Figure 7. Possible.3 illustrate how to assess each effect in terms of expected likelihood and relative magnitude to determine which effects to include in the GHG assessment boundary.3 Illustrative example of defining the GHG assessment boundary for a home insulation subsidy program Chapter 6 includes an illustrative example of a causal chain for a home insulation subsidy program (Figure 6. Subsidy major minor minor for home insulation Increase in Increased Increased Increased disposable demand for production emissions from income due to goods & of goods & manufacturing savings services services Possible. Possible.3.

CHAPTER 7 Defining the GHG Assessment Boundary Identify effects Box 7. and greenhouse gases are included in the GHG assessment boundary (see Table 7. the significant GHG effects.3 E  xample of assessing each GHG effect separately by gas to determine which GHG effects and greenhouse gases to include in the GHG assessment boundary (continued) GHG effect Likelihood Relative magnitude Included? Reduced emissions from coal mining CH4 Possible Minor Excluded Reduced emissions from natural gas systems (from reduced electricity use) CO2 Possible Minor Excluded CH4 Possible Minor Excluded Reduced emissions from home natural gas use (space heating) CO2 Very likely Major Included CH4 Very likely Minor Excluded N2O Very likely Minor Excluded Reduced emissions from natural gas systems (from reduced natural gas use) CO2 Possible Minor Excluded CH4 Possible Minor Excluded Increased emissions from manufacturing of goods and services CO2 Possible Minor Excluded CH4 Possible Minor Excluded N2O Possible Minor Excluded Increased emissions from insulation manufacturing CO2 Possible Moderate Included CH4 Possible Minor Excluded N2O Possible Minor Excluded HFCs Possible Moderate Included Finally.4). 67 . source/sink categories.3 Illustrative example of defining the GHG assessment boundary for a home insulation subsidy program (continued) Table 7.

and Ecofys carried out an ex-­ante assessment each potential GHG effect (identified in the causal chain) of the nationally appropriate mitigation action (NAMA) was assessed in terms of both its likelihood of occurring for energy conservation in the building sector in Tunisia. HFCs manufacturing processes Reevaluating significance impacts in nonlinear systems. photovoltaic energy) and a thermal insulation program for Table 7.Box 7. If more accurate estimation through an iterative process leads to significant differences in the estimated magnitude The application of the significance criteria may be an of GHG effects.4 Example of developing a list of GHG effects.5 presents the results for the solar water heater existing and new residential buildings. Effects were included in the assessment boundary residential buildings (including solar water heaters and solar unless they were found to be either minor or very unlikely. in Chapters 8. and 11 may result in changes to the Box 7. and its estimated emissions impact (using initial calculation The NAMA includes a solar program for commercial and methods). while ensuring that no international support for the NAMA. significant effects of the NAMA were excluded. and greenhouse gases included in the GHG assessment boundary GHG effect included Sources Sinks Greenhouse gases Reduced emissions from electricity Fossil fuel combustion in N/A CO2 generation grid-connected power plants Reduced emissions from home Residential natural gas N/A CO2 natural gas use (space heating) combustion (space heating) Increased emissions from insulation Insulation manufacturing N/A CO2. a reevaluation of significance in this iterative process. For example. The estimation of the GHG effects chapter may be necessary. assessment boundary.3 Illustrative example of defining the GHG assessment boundary for a home insulation subsidy program (continued) Table 7. The objective of program and the thermal insulation program. 9. Alcor. 68 Policy and Action Standard . Tunisia.4 provides a case study of defining the GHG expected magnitude or likelihood of effects.4 Defining the GHG assessment boundary for the Tunisian NAMA for energy conservation in the building sector The National Agency for Energy Conservation (ANME) of To define the GHG assessment boundary for the NAMA. Defining the the assessment was to estimate and report the expected boundary around significant effects helped focus efforts GHG emission reductions in order to attract and facilitate on the most significant impacts. small or unlikely effects can result in large unforeseen Box 7. source/sink categories.

5 E  xample of identifying the GHG effects to include in the GHG assessment boundary for the Tunisian energy conservation NAMA Estimated relative Included in Relative GHG effect Likelihood magnitude (in assessment magnitude absolute value terms) boundary? Solar water heater program Reduced GHG emissions as a result Very likely Major 70% Included of reduced residential LPG use Reduced GHG emissions as a result of reduced residential Very likely Major 27% Included natural gas use Reduced fugitive GHG emissions Excluded as a result of reduced gas transport Likely Minor 0. CHAPTER 7 Defining the GHG Assessment Boundary Box 7. and services minor) 69 .4 Defining the GHG assessment boundary for the Tunisian NAMA for energy conservation in the building sector Identify effects (continued) Table 7.3% (minor) and storage Increased emissions as a result Excluded of increased demand for goods Very unlikely Moderate 2% (very unlikely) and services Increased emissions as a result of Excluded increased transport activity by solar Likely Minor 1% (minor) water heater service providers Thermal insulation program Reduced GHG emissions as a result of reduced combustion in Very likely Major 14% Included conventional power plants for a household building Reduced GHG emissions as a result of reduced residential Very likely Major 84% Included natural gas use Reduced fugitive GHG emissions Excluded due to reduced gas transport Likely Minor 1% (minor) and storage Increased GHG emissions due to Excluded increased demand for goods Very unlikely Minor 1% (very unlikely.

and 2015–40. Endnote 1. a user may separately estimate and report GHG effects over the periods 2015–20. The GHG assessment period may be longer than the policy implementation period—­the time period during which the policy or action is in effect—­ and should be as comprehensive as possible to capture the full range of significant effects based on when they are expected to occur. In addition.7. if the GHG assessment period is 2015–40. For guidance on filling data gaps. “Approaches to Data Collection. 7. Users shall define and report the GHG assessment period—­the time period over which GHG effects resulting from the policy or action are assessed—­based on the time horizon of the GHG effects included in the GHG assessment boundary.” 70 Policy and Action Standard . 1. 3 g u i d a n c e The ex-­ante GHG assessment period (forward-­looking) is determined by the longest-­term effect included in the GHG assessment boundary. The ex-­post GHG assessment period (backward-­looking) should cover the period between the date the policy or action is implemented and the date of the assessment. both short-­term and long-­term effects are included in the GHG assessment boundary if determined to be significant. The GHG assessment period for a combined ex-­ante and ex-­post assessment should consist of both an ex-­ante GHG assessment period and an ex-­post GHG assessment period. 2.3 Define the GHG assessment period In the steps outlined above. For example. see IPCC 2006: Vol. Chap. 2015–30. users may separately estimate and report GHG effects over any other time periods that are relevant.

CHAPTER 7 Defining the GHG Assessment Boundary Identify effects 71 .

8 Estimating Baseline Emissions .

5) • Apply GWP values provided by the IPCC based on a 100-year time horizon. (Section 8. Estimate For users applying the comparison group method: baseline • Identify an equivalent comparison group for each source or sink category included in the GHG assessment emissions using boundary. or baseline scenario. 73 .1 Overview of steps for estimating baseline emissions Review key Estimate baseline Choose type Aggregate baseline concepts (Section emissions using scenario of baseline emissions across 8.3) (Section 8. Properly estimating baseline emissions is a critical step.4) comparison all sources/sinks sequence of steps or comparison group (Section 8. Figure 8. since it has a direct and significant impact on the estimated GHG effect of the policy or action.2) method (Section 8. the scenario • Estimate baseline emissions and removals over the GHG assessment period for each source/sink method category and greenhouse gas included in the GHG assessment boundary. against which GHG effects are estimated. users estimate baseline scenario emissions for the set of sources and sinks included in the GHG assessment boundary. Estimate effects E stimating the effect of a policy or action requires a reference case. The baseline scenario represents what would have happened in the absence of the policy or action being assessed.6) (Section 8.4) • Apply GWP values provided by the IPCC based on a 100-year time horizon.1) and determine method (Section 8.5) Checklist of accounting requirements Section Accounting requirements Estimate For users applying the scenario method: baseline • Define a baseline scenario that represents the conditions most likely to occur in the absence of the emissions using policy or action for each source or sink category included in the GHG assessment boundary. (Section 8. the comparison • Estimate emissions and removals from the comparison group and the policy group over the GHG assessment group method period for each source/sink category and greenhouse gas included in the GHG assessment boundary. In this chapter. Note: Reporting requirements are listed in Chapter 14.

the GHG effects across source/sink categories to estimate the total GHG effect of the policy or action. economic activity. Ex-­ante baseline policy or action directly.3). These to key emissions drivers over the GHG assessment steps cover both Chapters 8 and 9 (for ex-­ante assessment) period.1 Key concepts The methods described in this chapter apply to both To estimate the change in GHG emissions resulting from ex-­ante and ex-­post baseline scenarios. users follow four basic steps (see Figure 8. or may implement the two steps in parallel change in emissions resulting from the policy or action. of emissions drivers (such as projected changes in population. Users may first estimate baseline emissions (described in energy prices. as long as both steps are carried Baseline scenarios can be determined ex-­ante or ex-­post. See Figure 8. users should proceed first with Chapter 8 minimum estimate all sources and sinks expected to change and then subsequently with Chapter 9 or 11. users define two scenarios: a diagram illustrating both types of baseline scenarios. See Box 8. Drivers include other policies or actions and Chapters 8 and 11 (for ex-­post assessment). and technological development. if necessitated by certain models).8. such as economic conditions. In When estimating baseline emissions.2 for a given policy or action. and •• The policy scenario. if an Users may apply different sequences of steps for ex-­ante assessment was first undertaken. that have been implemented or adopted. For more information. users should implement scenario. users may calculate the GHG effect of the emissions). or other drivers that affect In certain cases. see Box 8. users should at a this case. which represents the events or conditions most likely to occur in the presence of the 8. Ex-­post baseline different categories of sources/sinks and then aggregate scenarios are used for ex-­post assessment in Chapter 11. users may first estimate policy scenario sinks that remain constant between the baseline scenario emissions before estimating baseline scenario and the policy scenario. Ex-­post baseline scenarios should include updates to the ex-­ante forecasts of emissions drivers. users should still use the guidance provided in Chapters 8 and 9 An ex-­post baseline scenario is a backward-­looking baseline (for ex-­ante assessment) or Chapters 8 and 11 (for scenario established during or after implementation of the ex-­p ost assessment). rather than in sequence (for example. In this case. •• The baseline scenario. being assessed. out and separately reported (if feasible based on the An ex-­ante baseline scenario is a forward-­looking baseline method used). which is based on forecasts Chapters 8 and 11 jointly (for ex-­p ost assessment). this chapter) before estimating policy scenario emissions. between the baseline scenario and the policy scenario. in addition to historical data. since they do not contribute to the emissions. Users do not need to calculate emissions from sources and Alternatively. of the policy or action To estimate a change in emissions resulting from a policy or The baseline scenario depends on assumptions related action. typically established prior to implementation Chapters 8 and 9 jointly (for ex-­ante assessment) or of the policy or action. In these cases. 74 Policy and Action Standard . as well as non-­policy drivers. without explicitly defining separate scenarios are used for ex-­ante assessment in Chapter 9.2 Determine sequence of steps policy or action (or package of policies and actions) for estimating the GHG effects being assessed. baseline and policy scenarios.1 policy or action (or package of policies and actions) for more information. which represents the events or This standard is not based on the concept of additionality as conditions most likely to occur in the absence of the commonly defined in project-­based accounting. policy or action.2. either ex-­ante (Chapter 9) or ex-­p ost (Chapter 11).

additionality requirements or tests beyond the scope of this The concept of additionality in project-­based accounting standard to determine whether the policy or action would often concerns whether a GHG mitigation project would have been implemented without receiving the additional have been implemented in the absence of financing or finance or incentives generated by the program. A or action results in GHG effects that are additional to project is additional if it would not have been implemented what would have happened in the absence of the policy in the absence of such incentives.1 Additionality This standard is designed to determine whether a policy incentives generated by an offset crediting program.3 Typical steps in estimating the GHG effect of the policy or action For each source/sink Estimate baseline Estimate policy Aggregate GHG category. For been implemented in the absence of a particular financing example. those programs may impose happened otherwise.2 Ex-ante and ex-post assessment Net GHG emissions* (Mt CO2e) scenario b aseline Ex-ante GHG effect of GHG effect of Ex-post baseline scenario policy/action policy/action Historical (ex-post) (ex-ante) Ex-p GHG ost p (obs olicy erve sc emissions d em enario Ex-ante issio policy ns) scenar io 2010 2015 2020 Note: * Net GHG emissions from sources and sinks in the GHG assessment boundary. the policy does not lead If GHG reductions achieved by policies or actions are to GHG effects that are additional to what would have credited by programs.1 This standard does not or action. if emissions under the baseline scenario and or support mechanism. Box 8. since GHG effects are estimated relative to a address additionality in this sense. CHAPTER 8 Estimating Baseline Emissions Estimate effects Figure 8. subtract emissions for scenario emissions effects across source/ baseline from policy each source/sink for each source/sink sink categories to scenario emissions to category in the GHG category in the GHG estimate total GHG estimate the GHG effect assessment assessment boundary effect (Chapter 9 of the policy or action boundary (Chapter 9 for ex-ante or for ex-ante or Chapter (Chapter 9 for ex-ante or (Chapter 8) Chapter 11 for ex-post) 11 for ex-post) Chapter 11 for ex-post) 75 . the policy scenario are the same. because the objective baseline scenario that represents what would have most is not to determine whether a policy or action would have likely happened in the absence of the policy or action. Figure 8.

The primary method outlined carrying out the deemed estimates method. in Chapters 8. Users should also apply calculate the GHG effect of the policy or action directly.4 outlines the steps involved in in Chapters 8. or other factors not otherwise considered scenario emissions. users should define the most likely baseline and policy scenario assumptions.4). where the change in emissions is estimated in certain cases—­for example. which are reflected in the default “estimated insulation relative to buildings without insulation or relative to change in GHG emissions per action taken” value. One example is the deemed estimates (further described in Section 8. or sink – baseline emissions and removals for each affected unit. users may apply a simplified method to (further described in Section 8. source. Users should the estimated change in GHG emissions or other relevant exercise caution in using the deemed estimate method.Box 8. 9. Figure 8.4).6). Users buildings with a different type of insulation). where a lower level of accuracy a result of the policy (such as the number of buildings that and completeness is sufficient to meet stated objectives. without separately estimating baseline emissions and policy policy interactions. and 11 is the most comprehensive and In order to estimate baseline emissions and removals in transparent approach to developing explicit baseline scenario Equation 8. and 11. or sink) 76 Policy and Action Standard . then aggregate them (in Section 8. Figure 8. Default values should be explicit about baseline scenario and policy scenario may be derived from previously estimated effects of similar assumptions by following all applicable reporting requirements policies or actions. scenario by considering various drivers (both existing Users may use the deemed estimates method for some policies and non-­p olicy drivers) that would affect emissions source/sink categories affected by the policy or action and in the absence of the policy or action being assessed use the primary method for other source/sink categories. 9.2) total GHG effect Equation 8.2.2 Calculating the GHG effect directly In certain cases. relative to a baseline (such as it involves establishing implicit baseline and policy scenario the average reduction in energy use per building that installs assumptions. method (also called the “deemed savings” or “unit savings” The deemed estimates method may be more practical approach). conservative assumptions and correct for free rider effects. source. since parameter per action taken. where it is not feasible to directly by collecting data on the number of actions taken as estimate separate scenarios.2 Calculating GHG effect using the deemed estimates method Change in emissions and removals = number of actions taken as a result of the policy × (policy scenario emissions and removals for each affected unit.4 Steps in carrying out the deemed estimates method Aggregate GHG effects Estimate change Multiply to estimate Estimate number across source/sink in GHG emissions the GHG effect of actions taken categories to estimate per action taken (see Equation 8. install insulation) and applying default values that represent or for less significant source/sink categories.

5 provides a but not in a similar neighboring jurisdiction (assuming that decision tree for choosing between the two methods. since no Determining whether the comparison comparison group would exist. the scenario method should be used. the subnational jurisdictions are otherwise equivalent).5 Decision tree for choosing the type of baseline comparison Is the assessment ex-ante or ex-post? Ex-ante Ex-post Is the comparison group method Use scenario method feasible and appropriate? Yes No Use either the scenario method or Use scenario method comparison group method 77 . or emissions trading programs. If an appropriate comparison group is or action not available. the two groups would be randomly assigned to ensure that any differences between the •• Scenario method: A comparison of a baseline scenario groups are a result of the policy. rather than any underlying with a policy scenario for the same group or region systematic differences or biases. Figure 8. Under ideal This comparison can be done in one of two ways: experimental conditions.3 Choose type of baseline comparison group exists and the type of policy or action.6). To reliably Estimating the GHG effects of a policy or action ex-­p ost and credibly implement a comparison group method. The comparison group method may be feasible for policies Ex-­post assessments can either use the scenario method or actions implemented in one subnational jurisdiction or the comparison group method. involves a comparison of the outcome of the policy actors affected by the policy (the policy group) and actors or action with an estimate of what would most likely not affected by the policy (the comparison group or have happened in the absence of that policy or action.5). taxes or charges. The comparison group method may not be feasible for 8. Ex-­ante assessments can only use the scenario method. then aggregating the results (in Section 8. including whether an equivalent comparison subset. Figure 8. If random assignment is •• Comparison group method: A comparison of one not possible. control group) must be otherwise equivalent. group method is feasible and appropriate (for ex-­post assessment only) Users may use a combination of both approaches by using Whether to choose the scenario method or comparison the comparison group method for one subset of source/ group method for ex-­post assessment depends on several sink categories and the scenario method for another factors. other methods can be used to avoid “selection group or region affected by the policy or action with bias” and ensure valid comparisons (further described an equivalent group or region not affected by the policy in Section 8. such as regulations and standards. CHAPTER 8 Estimating Baseline Emissions Estimate effects 8.3 guidance broad policies and actions applied to all relevant actors in a sector or jurisdiction.

4.4) (Section 8.4.3) 78 Policy and Action Standard . It is applicable to all ex-­ante assessments and to ex-­post assessments that use the scenario method.4. 8. and consequently on the assessed—­and justification for why it is considered to be eventual estimate of the GHG effect of the policy or action.5) (Section 8. the most likely scenario. data obtained from a comparison group can also be used to update or calibrate specific parameters in what is otherwise an ex-­post baseline scenario developed using the scenario method. users shall sinks included in the GHG assessment boundary define a baseline scenario that represents the conditions •• Non-­policy drivers: Other conditions such as most likely to occur in the absence of the policy or action. Drivers that affect emissions are divided into two types: 8.4.1 Define the most likely baseline scenario •• Other policies or actions: Policies.4. socioeconomic factors and market forces that are expected to affect the emissions sources and sinks The most likely baseline scenario depends on drivers that included in the GHG assessment boundary would affect emissions in the absence of the policy or action being assessed.Users should only use a combination of methods if it yields more accurate and complete results than would be obtained by using one method consistently for all source/ sink categories. Figure 8.1) baseline emissions (Section 8. See Figure 8. In some cases.4.4.6 for an overview of steps. Users implementing the scenario method should proceed with Section 8.6 Overview of steps for estimating baseline emissions using the scenario method Define emissions Estimate Estimate Define the estimation Select a baseline baseline most likely method(s) desired level values for emissions for baseline and parameters of accuracy each each source/ scenario needed to calculate (Section 8. Identifying key drivers and determining Users shall report a description of the baseline reasonable assumptions about their “most likely” values in scenario—­a description of the events or conditions most the absence of the policy being assessed have a significant likely to occur in the absence of the policy or action being impact on baseline emissions.2) parameter sink category (Section 8.4 Estimating baseline emissions using the scenario method This section provides guidance on estimating baseline emissions using the scenario method. actions. Users implementing the comparison group method should proceed to Section 8.5. For each source or sink category that are expected to affect the emissions sources and included in the GHG assessment boundary. and The first step in applying the scenario method is to define projects—­other than the policy or action being assessed—­ the baseline scenario.

or scenarios (such as the least-­cost alternative practice or technology). subsidies and incentives. instruments. or projects likely to be other policies. actions. Possible is carried out (for ex-­ante assessment) or are options include: implemented during the GHG assessment period (for ex-­post assessment). If planned boundary. and projects in the baseline scenario that: •• Have a significant effect on GHG emissions (increasing 8 . emissions shall report that the baseline scenario includes planned trading programs. practices. CHAPTER 8 Estimating Baseline Emissions Estimate effects Users shall report a list of policies. technologies. identified using environmental. practices.1 g u i d a n c e or decreasing) from the sources or sinks included in the Users should identify plausible baseline options and then GHG assessment boundary. policies are included in the baseline scenario. or behavioral analysis or modeling •• A performance standard or benchmark indicative of baseline trends 79 . or conditions •• Discrete baseline alternatives.) the baseline scenario and disclose and justify any relevant non-­policy drivers excluded from the baseline scenario. information policies and report which planned policies are included. financial. These may include regulations and standards. or voluntary market offset projects. 4 . actions. actions. Users should include all other policies. (For more Users shall report a list of non-­policy drivers included in examples of policies and actions. see Table 5. actions. and choose the option that is considered to be the most likely •• Are implemented or adopted at the time the assessment to occur in the absence of the policy or action. economic. Clean Development Mechanism (CDM) projects. users taxes and charges. there are any implemented or adopted policies.1. •• The continuation of current technologies. and projects Including other policies or actions included in the baseline scenario and disclose and justify In addition to the policy or action being assessed. voluntary agreements. or projects that affect with a potentially significant effect on GHG emissions the sources and sinks included in the GHG assessment that are excluded from the baseline scenario.

a law has been passed. (b) one or more voluntary agreements have Implemented been established and are in force.1 Definitions of implemented. forest management policies. if they are likely to be implemented and if there is enough For other policies or actions that are included. Table 8. conservation program subsidies Afforestation/reforestation policy Voluntary/mandatory carbon markets. and planned policies and actions Policy or action status Definition Policies and actions that are currently in effect.2) or other criteria to determine which adopted policies should be included in the baseline scenario policies. land-use policies 80 Policy and Action Standard . adopted. but that have not yet begun to be Adopted implemented (for example. regulations covering waste combustion.1 for definitions of implemented. renewable energy Renewable portfolio standard certificate markets.2 Examples of other policies or actions that may be included in a baseline scenario Examples of policies or actions Examples of other policies or actions being assessed that may be included in the baseline scenario Feed-in tariffs. adopted. tolls on bridges. highways Mandatory landfill diversion rates.See Table 8. but regulations to implement the law have not yet been established or are not being enforced). (c) financial resources have been allocated.2 for examples of other policies or actions that may be included. tunnels. utility regulations and interconnect fees. Table 8. Policies and actions for which an official government decision has been made and there is a clear commitment to proceed with implementation. (d) human resources have been mobilized. inclusion Landfill gas management of landfill gas management activities as offset mechanisms in voluntary or mandatory carbon markets. regulations for landfill gas management Sustainable agriculture policy National agricultural policies. but that have not yet been adopted. For ex-­ante assessment. and projects are significant. Policy/action options that are under discussion and have a realistic chance of being adopted Planned and implemented in the future. for example if the objective is to or actions will operate indefinitely unless an end date is assess the effect of one planned policy relative to other explicitly stated. production tax credits or renewable incentives. rate structures Subsidies for public transit Fuel taxes. users should information to estimate the effects of the policy. Users should assume that policies for ex-­ante assessment. Users may determine whether they are designed to operate indefinitely optionally include planned policies in the baseline scenario or are limited in duration. Users should establish a significance threshold (such as the and planned policies and actions. See Table 8. as evidenced by one or more of the following: (a) relevant legislation or regulation is in force. actions. planned policies. thresholds in Table 7. Source: UNFCCC 2000.

CHAPTER 8 Estimating Baseline Emissions Estimate effects Including non-­policy drivers See Table 8. or processes associated with the policy or program in Users should identify non-­policy drivers based on literature the absence of the policy or program.e.2 For example. practices. expert judgment. multiple baseline options may seem equally likely. energy efficiency improvements. non-­policy drivers are significant. biofuels. coal. users may report a range of results based policy scenario. The free rider that may cause changes in emissions but are not a result effect refers to participants in a policy or program who of the policy or action assessed. users do not need on multiple alternative baseline scenarios. calculated emissions between the baseline scenario and In such cases. Users should consider the would have implemented the technologies. that a fraction of consumers receiving the subsidy may have modeling results. or other methods. consultations baseline scenario for an insulation subsidy should consider with relevant experts and stakeholders.. types of non-­policy drivers outlined in Table 8. cooling degree days Autonomous technological Ongoing decarbonization of economic sectors.3 Examples of non-policy drivers Examples of non-policy drivers Specific examples Economic activity GDP. city population Energy prices Prices of natural gas.or energy-intensity of the economy Structural changes in economic sectors. see Chapter 12). shifts from industry to service sector jobs. Structural effects shifts of industrial production between countries Consumer preferences Changes in preferences for types of vehicles. depending on the selection of baseline options. Users should include all non-­policy drivers in the baseline Defining a range of baseline scenario options scenario that are not caused by the policy or action being To the extent possible. baseline scenario that is considered most likely. users should identify the single assessed (i. long- improvement over time term trends in the carbon. Table 8. household income Population National population. installed the same insulation even without the subsidy.4 for examples of non-­policy drivers by policy type. that are exogenous to the assessment). commuting practices 81 .3.2) or other criteria to determine which Box 8. household size. the reviews of similar assessments and policies. (For more Users should establish a significance threshold (such as the information on sensitivity analysis. Users should to include drivers that are expected to remain the same conduct sensitivity analysis to see how the results vary under both the policy scenario and baseline scenario. electricity Other relevant prices Commodity prices Costs Costs of various technologies Weather Heating degree days. Non-­policy drivers include a wide range of exogenous Users should also identify potential free rider effects when factors such as socioeconomic factors and market forces identifying the most likely baseline scenario.3 for a case study of choosing the baseline scenario. petroleum products. See thresholds in Table 7. In ex-­ante assessments. In certain and that are expected to result in a significant change in cases.

3 Choosing the baseline scenario for the Keystone XL pipeline The Stockholm Environment Institute (SEI) carried out an and (3) half of the oil would go to market and be consumed ex-­ante assessment of the proposed Keystone XL pipeline.4 Examples of non-policy drivers that may be included in a baseline scenario Examples of policies or actions Examples of non-policy drivers Load forecast. population. GDP Landfill tipping fees. demand for production of food. renewable technology prices. both in-­jurisdiction and out-­of-­jurisdiction effects. each was Mexico. (a middle-­ground option). the pipeline could either increase global emissions by objective of the assessment was to inform that decision by 93 Mt CO2e annually. fertilizer and seed prices. transmission Renewable portfolio standard and distribution accessibility. availability of land area for new landfills. and conducting sensitivity the range of possibilities if the pipeline were not built: (1) analyses to understand the range of possible results given none of the oil to be carried by Keystone XL would otherwise the uncertainties. the U. waste collection and transport Landfill gas management costs. 82 Policy and Action Standard . population. population. determination of the most likely baseline scenario: What since the results of the assessment hinge on the selection would most likely happen to the oil from the Canadian oil of the most likely baseline scenario.Table 8. cropland expansion rate. GDP Value of forest products (fiber or timber). GDP Fuel prices. suitability of lands to support forest Afforestation/reforestation policy growth. the pipeline contingent in part on whether the pipeline would The assessment found that based on the choice of baseline not result in a net increase in greenhouse gas emissions. It also shows the sands if the pipeline to the Gulf of Mexico were not built? importance of defining and reporting alternative baseline SEI defined three illustrative baseline scenarios to represent scenarios when uncertainty is high. population. (2) all of the sensitivity analysis.) oil would otherwise make it to market and be consumed. including or increase emissions by some amount in between. government made its approval of considered to be equally likely. The scenario. estimating the net global GHG effect of the pipeline. decrease global emissions by 0. GDP Agricultural productivity. The assessment shows the limitations of ex-­ante assessment The most critical step in the assessment was the if there is no way to identify the most likely baseline scenario.3 Mt CO2e. GDP Box 8. socioeconomic status of commuters. convenience of transit Subsidies for public transit alternatives. (For more information on uncertainty and make it to global oil markets and be consumed.S. Given lack of better information which would deliver oil from Canada’s oil sands to the Gulf of and the different perspectives in the literature. see Chapter 12. value of recycled commodities. mixed farming and improved Sustainable agriculture policy agroforestry practices. fuel prices by fuel type. In 2013. grid storage capacity. cost of transit alternatives. population. biomass supply.

For each source/sink category and greenhouse gas included in the GHG assessment boundary.5 Range of methodological options for estimating baseline emissions using the scenario method Assumptions Emissions Other policies Non-policy about Source of data Level of estimation or actions drivers drivers and for drivers and accuracy method included included parameters parameters Lower accuracy methods Lower Most assumed to (such as Tier 1 Few significant Few significant be static or linear International methods in the policies drivers extrapolations of default values IPCC Guidelines historical trends for National GHG Inventories) Intermediate Most significant Most significant National Combination accuracy methods policies drivers average values Most assumed to Higher accuracy be dynamic and methods Jurisdiction.3 Define the emissions estimation A range of methods and data can be used to estimate method(s) and parameters needed baseline emissions using the scenario method. users should follow the most accurate parameters (such as activity data and emission factors) approach that is feasible. then identify the resources. Table 8. CHAPTER 8 Estimating Baseline Emissions Estimate effects 8. For models default data. the level of accuracy needed algorithm.4.5 to calculate baseline emissions outlines a range of methodological options.or All significant All significant estimated based (such as Tier 3 source-specific policies drivers on detailed methods in the data Higher modeling or IPCC Guidelines) equations 83 . this may require the methods and data that yield the most accurate results within user to extract and simplify key sections of model a given context. More complex methods often yield more accurate results Users shall report the methodology used to estimate than simpler methods. but not in all cases. In general. objectives of the assessment. but not in all cases. including the emissions estimation source-­specific data often yield more accurate results than method(s) (including any models) used. based on the methodological and data documentation so the methodology is accessible to options available. needed to estimate emissions using the method. Users should choose without clear documentation. and capacity/ or removals from that source. relevant stakeholders.4. or model) for estimating baseline emissions to meet stated objectives.2 Select a desired level of accuracy 8. users Users should select a desired level of accuracy based on the should first identify a method (such as an equation. data availability. Similarly. Table 8. more baseline emissions.

The GHG Protocol website provides a list of calculation 8. The typical method of estimating emissions from a source or sink category. 84 Policy and Action Standard . advantages of top-­down and bottom-­up modeling by linking See Box 8. may also be appropriate when the emissions estimation method includes multiple interacting parameters. up and top-­down methods •• Simple equations (such as simple extrapolation) Emission factors and complex models (such as simulation models or An emission factor is a factor that converts activity data into integrated assessment models) GHG emissions data. Hybrid models attempt to combine the provides examples of emission factors.org/ Defining the emissions estimation method(s) policy-­and-­action-­s tandard). with a process or an operation. in addition to using 100-­year GWP values. Users may to estimate the effects of certain policies or actions separately estimate and report GHG effects using 20-­year (such as an emissions trading program).6. estimate baseline emissions. regression an emission factor to derive the GHG emissions associated analysis. The identified parameters will guide the user used to estimate baseline emissions (in this chapter) and in understanding what data needs to be collected to policy scenario emissions (either in Chapter 9 or 11).4 for an example of identifying emissions the two types of approaches. whether baseline scenario emissions Identifying parameters in the emissions or policy scenario emissions. Detailed models GWP values.4. simple equations based on a 100-­year time horizon. including: Activity data Activity data is a quantitative measure of a level of activity •• Bottom-­up methods (such as engineering models). top-­ that results in GHG emissions. Detailed modeling approaches may be needed Users shall report the GWP values used.Users shall apply GWP values provided by the IPCC For certain types of policies or actions. that make up the emissions estimation equations or The same emissions estimation method(s) should be algorithm. see estimation methods and parameters. Users may use either may not be sufficient to represent the complexity (1) the IPCC GWP values agreed to by the UNFCCC or necessary to accurately estimate baseline or policy scenario (2) the most recent GWP values published by the IPCC. Table 8. is to multiply activity data estimation method(s) by an emission factor.6 or sink data. Users should select variables such as activity data and emission factors methods consistent with the desired level of accuracy. Users may use existing methods or models that guidance on collecting data.3 guidance tools and resources relevant to estimating the effects of policies and actions (available at www. and models may be used to estimate baseline emissions. or computable general equilibrium models). Parameters are for various sectors and sources/sinks. emissions. Users should refer to the most Users should identify all parameters required to estimate recent IPCC Guidelines for National Greenhouse Gas baseline emissions using the emissions estimation Inventories for GHG estimation methods and equations method(s) for each source and sink. Examples of activity data and hybrid methods that combine elements of bottom-­ are provided in Table 8.ghgprotocol. are relevant to the affected sources/sinks or may develop new methods or models (if no relevant and appropriate methods or models exist). For more information. See Appendix A for Section 3. whereas of diesel consumed) or physical output (such as kg CO2e bottom-­up approaches typically use disaggregated source emitted per tonne of steel or cement produced). Emission factors may be expressed in Top-­down methods typically model economic relationships terms of energy output (such as kg CO2e emitted per liter and often rely on more aggregated data sets. Activity data is multiplied by down methods (such as econometric models.2. A variety of equations. algorithms.

3 in Chapter 7 outlines three emission sources that are affected by a home insulation subsidy program and need to be estimated. In practice. CHAPTER 8 Estimating Baseline Emissions Estimate effects Table 8. 85 . the choice between these two emissions estimation methods may depend on data availability. as follows: GHG emissions from residential natural gas combustion related to space heating (t CO2e) = natural gas used for space heating (Btu) × natural gas emission factor (t CO2e/Btu) In this case. GHG emissions from residential natural gas combustion (t CO2e) = [natural gas used for space heating (Btu) + natural gas used for water heating (Btu) + natural gas used for cooking (Btu)] × natural gas emission factor (t CO2e/Btu) The parameters in the emissions estimation method are natural gas used for space heating. natural gas used for water heating.4 Example of identifying emissions estimation methods and parameters for a home insulation subsidy program Box 7. One of the sources is residential natural gas combustion. The following equation is an example of an emissions estimation method for this source. users may narrow the equation and parameters to focus only on the specific process or activity affected by the policy. natural gas used for cooking.6 Examples of activity data and emission factors Examples of activity data Examples of emission factors Liters of fuel consumed kg CO2 emitted per liter of fuel consumed Kilowatt-hours of electricity consumed kg CO2 emitted per kWh of electricity consumed Kilograms of material consumed kg PFC emitted per kg of material consumed Kilometers of distance traveled t CO2 emitted per kilometer traveled Hours of time operated kg SF6 emitted per hour of time operated Square meters of area occupied g N2O emitted per square meter of area Kilograms of waste generated g CH4 emitted per kg of waste generated Box 8. and natural gas emission factor. Since the policy only affects space heating in particular. the parameters in the emissions estimation method are natural gas used for space heating and natural gas emission factor.

government statistics. Potential data sources of historical or if the policy or action is not implemented—­over the GHG projected data include peer-­reviewed scientific literature. that affect each parameter Table 8. up-­to-­date.4. Users new baseline data and assumptions or to use published should develop new baseline data and assumptions baseline data and assumptions. where multiple sources of data should use conservative assumptions to define baseline exist. users should: Figure 8. more likely to underestimate GHG emissions in the baseline scenario. of poor quality. including whether quality indicators in Table 8. source is not reported. Collect historical data for the parameter emissions by estimating baseline values for each parameter. users should apply the data baseline values for key parameters.4 guidance For each parameter. or the were estimated existing data may be incomplete. 86 Policy and Action Standard . and assumptions Option 2: Developing new baseline values •• Any potential interactions with other policies and In some cases. reports published by international institutions (such as the IEA. Conservative values should be used to avoid overestimation of emission reductions.7 provides an example of reporting parameter 3. the next step is to In some cases. completeness. credible sources if available. World Bank. and reliability is should first decide whether to develop new baseline values available. including activity data.8 as a guide to obtaining the each parameter is assumed to be static or dynamic highest quality data available.4. assessment period. non-­policy drivers that affect each parameter time. •• The methodology and assumptions used to estimate When selecting data sources. Users should select data and assumptions regarding other policies/actions and that is the most representative in terms of technology. existing data sources of sufficient quality estimate the values of each parameter under the baseline may be available to determine values for baseline scenario—­that is.8. based on values and assumptions. the most likely values for each parameter parameters. no published baseline data and assumptions actions and whether and how policy interactions will be available for historical or projected data. and peer-­ emissions estimation method(s) reviewed data from recognized. Conservative values and assumptions are those annual data. assumptions for each driver Collect historical data for the parameters 8. and most reliable.4 Estimate baseline values Option 1: Using baseline values for each parameter from published data sources Once parameters are identified.). emission factors. most complete. Users that are not able to when no relevant data are available that supports the document and report a data source shall justify why the level of accuracy needed to meet the stated objectives. For example.7 illustrates the concept of estimating baseline 1. monthly data should be preferred over values when uncertainty is high or a range of possible quarterly data. Users as is available and relevant. •• The baseline values for key parameters in the baseline Users should use high-­quality. or in Users shall justify the choice of whether to develop need of supplementation or further disaggregation. Users should collect data with as high a frequency or use baseline values from published data sources. users should collect historical data going back to the earliest date for which data of sufficient To estimate baseline values for each parameter. consistency. Estimate baseline values for each parameter. •• All sources of data used for key parameters. users accuracy. and quarterly data should be preferred over values exist. FAO. To develop new baseline values. 2. IPCC. and geography. Users shall report the following: and economic and engineering analyses and models. etc. Identify other policies/actions and non-­policy drivers based on underlying drivers.

000 MMBtu/year • The trend over the past 10 years has been constant (after normalization for variation in heating degree days and cooling degree days) rather than increasing or decreasing Implemented and adopted policies included in the baseline scenario: • Federal energy efficiency standards (expected to reduce National energy natural gas use by 10% in the baseline scenario) Natural statistical agency.5% in the baseline scenario. • Natural gas prices are projected to increase by 20% (expected to reduce natural gas use by 2% in the baseline scenario based on price elasticity of natural gas) • Free rider effect: 10% of households that receive the subsidy are expected to install insulation even if they did not receive the subsidy (expected to reduce natural gas use by 3% in the baseline scenario.250. Non-policy drivers included in the baseline scenario: Title.7 E  xample of reporting parameter values and assumptions used to estimate baseline emissions for a home insulation subsidy Baseline value(s) applied over the Parameter GHG assessment Methodology and assumptions to estimate value(s) Data sources period Historical data • Average annual natural gas used for space heating over the previous 10 years is 1. Publication.7 Estimating baseline emissions by estimating baseline values for each parameter Emissions estimation Emissions estimation Emissions estimation Emissions estimation method A method B method C method D Other policies or actions Parameters Parameters Parameters Parameters Parameters Parameters Parameters Parameters Non-policy drivers Emissions from Emissions from Emissions from Emissions from Source A Source B Source C Source D Baseline emissions Table 8. 87 . • Federal energy tax (expected to reduce natural gas use by gas used 1. CHAPTER 8 Estimating Baseline Emissions Estimate effects Figure 8.000 MMBtu/ peer-reviewed 7.000. taking into account overlaps for space year from 2010–25 literature: with the federal energy efficiency standards) heating Author (Year). given 30% expected reduction in energy use per home insulated) Natural Expected to remain constant at historical levels since no policies gas 55 kg CO2e/MMBtu are implemented or adopted to reduce the GHG intensity of National energy emission from 2010–25 natural gas. Non-policy drivers (such as GDP and energy prices) statistical agency factor are not expected to affect this parameter.

Temporal representativeness The degree to which the data set reflects the relevant time period.4. If divided into two types: (1) other policies or actions. Similar types of estimation judgment. or assumptions are highly uncertain. city. Users should policy drivers in the baseline scenario. or various models to The baseline value for each parameter depends on the forecast the baseline value of a parameter in the future effects of the implemented or adopted policies or actions based on assumptions for key drivers. government statistics. and models outlined in Step 2 reliable sources. As described drivers that affect each parameter in Chapter 5. the second scenario may interact with each other in overlapping step is to identify key drivers of the emission sources and or reinforcing ways—­especially if they affect the same sinks being estimated. the next step is guidance on estimating policy interactions. data collection methods. such as parameter and the assumptions for each driver over the peer-­reviewed literature. users may apply regression to underestimate GHG emissions in the baseline scenario. users should estimate the policy interactions identifying and including other policies/actions and non-­ when estimating baseline parameter values. Drivers that affect emissions are parameter(s) in the emissions estimation method(s). Completeness also addresses seasonal and other normal fluctuations in data. or expert GHG assessment period. and verification Reliability procedures used to obtain the data are dependable. Some models used Estimate baseline values for each parameter to estimate baseline emissions may automatically calculate by making assumptions for each driver interactions between policies. 88 Policy and Action Standard . based on evidence. users may be used to estimate baseline values of individual should use conservative assumptions that are more likely parameters.8 Data quality indicators Indicator Description Technological representativeness The degree to which the data set reflects the relevant technology(ies). The degree to which the sources. and multiple policies included in the baseline scenario are likely (2) non-­policy drivers. taking implemented). If a variety of assumptions are available from equations. Completeness includes the percentage of locations for which data are available and Completeness used out of the total number that relate to a specific activity. For example. Appendix B provides further Once key drivers have been identified. simple extrapolation. Identify other policies/actions and non-­p olicy that are included in the baseline scenario. algorithms. Source: Adapted from Weidema and Wesnaes 1996. See Section 8. The degree to which the data are statistically representative of the relevant activity. analysis.1 for guidance on to interact.Table 8. or site). estimate the total net effect of all policies included in the baseline scenario on each parameter. Data should represent the most likely value of the parameter over the GHG assessment period. policies or actions included in the baseline If users choose to develop new baseline values. The degree to which the data set reflects the relevant geographic Geographical representativeness location (such as the country. Assumptions should represent the most into account the historical data collected for each likely scenario for each driver. to develop assumptions regarding the change in each Users should estimate baseline values for each driver over the GHG assessment period under the parameter and specify how each parameter is expected baseline scenario (assuming the policy or action is not to change over time in the baseline scenario.

CHAPTER 8 Estimating Baseline Emissions Estimate effects Each parameter in the baseline scenario (such as activity Sensitivity analysis data or an emission factor) may be assumed to be either For either Option 1 or Option 2. Static sensitivity analysis around key parameters to determine parameters are those assumed to stay constant over time.8 Illustration of static and dynamic parameters Baseline Emission Rate Time Time Static emission rate Dynamic emission rate Figure 8. Sensitivity analysis time. A linear example. See Figure 8. Figure 8.9 overall results to changes in those parameters. Users for different trends parameters can take over time. Dynamic should prioritize data collection efforts to obtain models that allow for conditions to change throughout the more accurate assumptions for those parameters that GHG assessment period are typically the most accurate are highly sensitive to changes in assumptions—­for and should be used where relevant and feasible. the range of likely values based on upper-­bound while dynamic parameters are assumed to change over and lower-­bound assumptions.9 Types of parameter changes over time Constant value Linear increase/ Non-linear decrease Parameter value Time Time Time Time 89 . where a small change in assumptions leads extrapolation of historical trends may be used if there to a large change in estimated GHG effects. see Chapter 12.3 See Figure 8. users should conduct static or dynamic over the GHG assessment period. (For more are justifiable reasons to assume that historical trends information on sensitivity analysis.8 for an illustration of static and dynamic involves varying the parameters (or combinations parameters.) would continue in the baseline scenario during the GHG assessment period. Dynamic parameters can be assumed to of parameters) to understand the sensitivity of the change at a linear or nonlinear rate over time.

the electricity production of contribution to mitigation at the national level. PROSOL Elec is a renewable energy support program. such as from ALCOR Consulting—­c arried out a combined ex-­post natural gas and coal. with support mix used in power plants (by power plant type. the primary source affected by the program to calculate emissions in units of carbon dioxide equivalent.321. Box 8.5 Estimate baseline emissions Users shall estimate baseline emissions and removals over for each source/sink category the GHG assessment period for each source/sink category The final step is to estimate baseline emissions by and greenhouse gas included in the GHG assessment using the emissions estimation method identified in boundary. objectives of the assessment were to assess the program’s and technical costs) and other implemented policies. Emissions of methane and nitrous oxide were multiplied by their global warming potential (GWP) values For the first effect. Box 8.895. power plants in 2010: {Electricity consumption in residential and commercial buildings in 2010 [5. the installation of photovoltaic (PV) systems in residential and These data sources took into account the development of key commercial buildings with low-­voltage grid connections.039 GWh] / (1—­transmission and distribution losses factor for 2010 [13.4. The drivers (such as economic activity.3 and the baseline values for each parameter GHG assessment boundary that have not been estimated identified in Section 8.6]) x national emission factor for natural gas in 2010 [56.000 kg/Tj] = CO2 emissions from natural gas combustion in 2010 [3.5%] ) x natural gas share in energy mix for electricity generation in 2010 [99%]} / (average gas power plants efficiency in 2010 [35%] × conversion factor GWh -­>Tj [3. is the production of electricity by conventional power plants for consumption in the residential and commercial buildings The following equation was used to calculate baseline sector. progress to date and to estimate the program’s future To calculate baseline emissions. shall be disclosed.8. To calculate baseline emissions for this source. the different power plant types was divided by the efficiency The GHG assessment boundary included three significant of each plant type to calculate the quantity of gas and fuel effects that needed to be estimated: (1) reduction of GHG consumed in each plant. and described qualitatively.214 kg = 3.4. (2) reduction of fugitive GHG emissions the total emissions from combustion. justified. of the National Electricity and Gas Utility and studies on the launched by ANME in 2010. or greenhouse gases in the Section 8. energy prices. The quantity of consumed gas or emissions resulting from reduced combustion in conventional fuel was multiplied by national emission factors to calculate power plants. population.5 provides a case study of calculating baseline emissions for a policy. that aims to promote and support assessment and development of the energy sector in Tunisia.895 t] 90 Policy and Action Standard .4. Fugitive emissions from resulting from reduced gas transport and storage. taking into account grid losses). and (2) the electrical Internationale Zusammenarbeit (GIZ) GmbH. sinks. Baseline and ex-­ante assessment of the PROSOL Elec program in values for each parameter were derived from statistical reports Tunisia. derived from the IPCC. and gas transport and storage were calculated by multiplying the (3) increased GHG emissions resulting from increased quantity of gas consumed with the default emission factor production of PV systems (an out-­of-­jurisdiction effect).4.321.5 Calculating baseline emissions for Tunisia’s PROSOL Elec program The National Agency for Energy Conservation (ANME) Data were needed on: (1) the electricity consumption of of Tunisia—­together with the Deutsche Gesellschaft für residential and commercial buildings. the CO2 emissions from natural gas combustion in conventional emissions estimation method and parameters were identified. Any sources.

group method cannot be used for ex-­ante assessments. group for each source or sink category in the GHG To be equivalent means the comparison group should assessment boundary. facilities subject to the same external trends. The comparison comparison groups may be groups of p ­ eople.10 for an overview of key steps. weather. policy for the policy group and absence of the policy for The comparison group method involves comparing the comparison group. facilities using the shall apply GWP values provided by the IPCC based on a same technology 100-­year time horizon. jurisdictions. population. or country group and the policy group over the GHG assessment •• Time: for example.3. Users following the comparison subset of entities to participate in a program and randomly group method shall identify an equivalent comparison assigning the other subset to not participate in the program. The policy groups and carrying out an ex-­p ost assessment. or other relevant groups. companies. facilities built within the same period for each source/sink category and greenhouse time period gas included in the GHG assessment boundary. Users •• Technology: for example. •• Non-­policy drivers: for example. facilities gases in the GHG assessment boundary that have subject to the same set of policies and regulations. Any sources. since comparative data for the comparison group and The policy group and the comparison group should be policy group during policy implementation cannot be equivalent in all respects except for the existence of the observed prior to policy implementation. sinks. and energy prices 8. This section collect data from both the policy group and the comparison includes a final step of estimating the GHG effect of the group before the policy or action is implemented to policy or action. in addition to estimating baseline emissions. sectors. be the same or similar to the policy group in terms of: Users applying the comparison group method shall •• Geography: for example. not been estimated shall be disclosed. by randomly assigning one that policy or action. The most robust way to ensure one group or region affected by a policy or action with two groups are equivalent is to implement a randomized an equivalent group or region that is not affected by experiment—­for example. Users Figure 8. facilities. justified.10 Overview of steps for using the comparison group method Estimate emissions Identify the policy Collect data from from both groups and group and comparison the policy group and estimate the GHG effect group comparison group of the policy or action 91 . users may use the comparison group or control group (an equivalent group or region group method to define the baseline scenario when not affected by the policy). such as the same changes in economic activity. determine whether the groups are equivalent.5 Estimating baseline emissions Identify the policy group and GHG effects using the and comparison group comparison group method The first step is to identify the policy group (the group (for ex-­post assessment only) or region affected by the policy) and the comparison As outlined in Section 8. estimate emissions and removals from the comparison subnational region.5 guidance When identifying a potential comparison group. and except for the policy or action being assessed described qualitatively. CHAPTER 8 Estimating Baseline Emissions Estimate effects 8. facilities in the same city. or greenhouse •• Other policies or actions: for example. users should See Figure 8.

If so. This method estimates the difference emissions (from the comparison group) and policy scenario between the groups prior to policy implementation (A1 . representative sampling may be used to statistically significant effect of the policy being assessed. the difference between the two groups after policy policy group and comparison group are equivalent.B1 emissions (from the policy group). so users should non-­equivalent groups. If outcome. If the difference between two groups (a policy group and a comparison group) more the two groups is statistically significant.6 Statistical methods for estimating guidance on selecting an emissions estimation method. the implementation (A2  . and the comparison group for all the parameters (such as activity data and emission factors) included in the emissions estimation methods. relative to the comparison group. If the expanded regression model shows a bottom-­up data. other factors. should be employed to ensure that the difference in values Matching methods are statistical approaches for making cannot be attributed to chance. energy prices. rather than to are not directly or indirectly affected by the policy.) GHG effects and controlling for factors Users should collect data from both groups at multiple that differ between groups points in time to account for changes in emissions and various drivers that occur over time. users should use statistical methods to control the groups are not sufficiently equivalent. should be used. A statistical test (such as a t-­test) attributable to the policy. the difference can equivalent. the comparison for variables other than the policy that differ between the group method will yield misleading results.B2 = Y). See Box 8. population. and the sample size should be large enough to draw valid statistical conclusions. when random assignment is not possible. differences are expected to exist between methods can be used to control for certain factors that the groups. and that the two groups can be compared during both the weather) as explanatory variables in a regression model. users should estimate baseline group does not. If material differences exist that may affect the differ between the groups (described further below). and comparison group For additional guidance on estimating GHG effects ex-­post. At a minimum. Such methods are intended to help follow the scenario method instead (see Section 8. and the difference between outcomes of each group in terms of emissions over time the two differences (Y  . 92 Policy and Action Standard . address the “selection bias” and isolate the effect of the policy being assessed. appropriate statistical sampling procedures policy group.4). (Section 8. Users should collect data from both the policy group refer to Chapter 11. statistical In most cases. groups over two periods of time: a first period in which neither the policy group nor the comparison group Estimate emissions from both groups and implements a given policy and a second period in which estimate the GHG effect of the policy or action the policy group implements the policy and the comparison After data are collected. users Regression analysis involves including data for each should collect data from both groups before and after the relevant driver that may differ between the groups (such policy or action is implemented (in the policy group). collect data from a large number of individual sources or then the policy can be assumed to have an effect on the facilities. Chapter 10 and Difference-­in-­difference methods compare two Appendix A provide additional guidance on collecting data.should ensure that the entities in the comparison group be attributed to the existence of the policy. In rare cases where the = X). To collect assessed).3 provides Box 8.X) as a measure of the change can be compared directly. as well as proxies for other relevant policies that may differ between the two groups (other than the policy being Either top-­down or bottom-­up data may be used. so as economic activity. If the groups are similar but not equivalent. pre-­policy period and the policy implementation period.6 for examples of methods Collect data from the policy group that may be used.4.

000 t CO2e Note: The table provides data for one year in the GHG assessment period. See Table 8. Table 8. 93 . Users shall report total annual and cumulative baseline scenario emissions and removals over the GHG assessment period.000 t CO2e Total baseline emissions 75. where the term if anthropogenic emissions of greenhouse gases by sources are “dynamic baseline” refers to a baseline scenario that is changed reduced below those that would have occurred in the absence of or updated ex-­post during or after the project implementation the registered CDM project activity. if feasible based on the method used. users should address any possible overlaps or interactions between sources and sinks to avoid over-­or underestimation of total baseline emissions. and Witte 2014. This standard uses the terms to refer not to updating a 2. if feasible based on the method used. Adapted from Kushler.000 t CO2e (space heating) Increased emissions from insulation production Insulation manufacturing processes 5. This may involve aggregating baseline emissions across sources and sinks calculated using the scenario method and/or the comparison group method.9 Example of calculating and aggregating baseline emissions for a home insulation subsidy GHG effect included in the Affected sources Baseline emissions GHG assessment boundary Fossil fuel combustion in Reduced emissions from electricity use 50.6 Aggregate baseline emissions across all source/sink categories The final step is to aggregate estimated baseline emissions across all categories of sources and sinks included in the GHG assessment boundary to estimate total baseline emissions. Endnotes 1. baseline scenario over time but instead to parameter values that are assumed to change over time. These terms are sometimes used differently in the context Mechanism (CDM) as follows: “A CDM project activity is additional of project-­based accounting (such as CDM). if relevant and feasible. When aggregating across sources and sinks. The UNFCCC defines additionality under the Clean Development 3. Users should separately estimate in-­jurisdiction baseline emissions/ removals and out-­of-­jurisdiction baseline emissions/ removals. Nowak.9 for an example of calculating and aggregating baseline emissions.000 t CO2e grid-connected power plants Reduced emissions from home natural gas use Residential natural gas combustion 20.” period. CHAPTER 8 Estimating Baseline Emissions Estimate effects 8.

9 Estimating GHG Effects Ex-­Ante .

• Estimate the GHG effect of the policy or action by subtracting baseline emissions Estimate the GHG effect of the from policy scenario emissions for each source/sink category included in the GHG policy or action (Section 9.4) (Section 9.6) assessment boundary.1) (Section 9. Figure 9. users estimate policy scenario emissions for the sources and sinks included in the GHG assessment boundary. The GHG effect of the policy or action is estimated by subtracting baseline emissions (as determined in Chapter 8) from policy scenario emissions (as determined in this chapter).3) Estimate policy scenario Estimate the GHG effect Estimate policy scenario values for parameters of the policy or action emissions (Section 9. • Estimate policy scenario emissions and removals over the GHG assessment period Estimate policy scenario for each source/sink category and greenhouse gas included in the GHG assessment emissions (Section 9. • Apply the same GWP values used to estimate baseline emissions.1 Overview of steps for estimating GHG effects ex-ante Define the most Identify parameters Select a desired likely policy scenario to be estimated level of accuracy (Section 9. Users that choose only to estimate GHG effects ex-­p ost may skip this chapter and proceed to Chapter 10. 95 .2) (Section 9. based on the GHG effects included in the boundary. Estimate effects T his chapter describes how to estimate the expected future GHG effects of the policy or action (ex-­a nte assessment). Note: Reporting requirements are listed in Chapter 14.5) (Section 9.1) assessment boundary.5) boundary.6) Checklist of accounting requirements (for users carrying out ex-ante assessment) Section Accounting requirements • Define a policy scenario that represents the conditions most likely to occur in the Define the most likely policy presence of the policy or action for each source or sink category included in the GHG scenario (Section 9. In this chapter.

differences in estimation methodology.9.2 in Chapter 8 for more information on the sequence of steps. To identify affected parameters. then choose the one considered to be the most likely users should consider each GHG effect included in to occur in the presence of the policy or action. Section 8. of policies/actions) being assessed. 9. since they do not contribute to the ex-­ante policy scenario emissions either before or after change in emissions resulting from the policy or action.2 Estimating GHG effects ex-ante Net GHG emissions* (Mt CO2e) enario bas eline sc Ex-ante GHG effect of policy/action Historical (ex-ante) GHG emissions Ex-ante policy scenar io 2010 2015 2020 Note: * Net GHG emissions from sources and sinks in the GHG assessment boundary. estimating ex-­ante baseline emissions. Consistency ensures that the The policy scenario represents the events or conditions estimated change in emissions reflects underlying most likely to occur in the presence of the policy or differences between the two scenarios.1 Define the most likely Users do not need to calculate emissions from sources and policy scenario sinks that remain constant between the baseline scenario Users carrying out an ex-­ante assessment may estimate and the policy scenario. each source or sink. method(s) that are affected by the policy or action.2 Identify parameters Chapter 8 outlines two approaches to defining the baseline to be estimated scenario: the scenario method and the comparison The same emissions estimation method(s) used group method. users shall define a policy scenario. Parameters that are not affected by the policy scenario that represents the conditions most likely to or action do not need to be estimated because the occur in the presence of the policy or action. users should emissions are an estimate of GHG emissions and removals first identify all the parameters (such as activity data associated with the policy scenario. Figure 9. Policy scenario To estimate policy scenario emissions. This chapter assumes the user has used to estimate policy scenario emissions from estimated baseline emissions using the scenario method.4. see Chapter 8. Users values remain constant between the baseline scenario should identify various policy scenario options and and the policy scenario. rather than action (or package of policies or actions) being assessed. Users the GHG assessment boundary (see Figure 9.2 for and emission factors) in the emissions estimation an illustration of estimating GHG effects ex-­ante. See Section 8. For more The policy scenario is the same as the baseline scenario information on emissions estimation methods except that it includes the policy or action (or package and parameters. See Figure 9. shall report a description of the policy scenario. 96 Policy and Action Standard . For each source or sink category included in the GHG These parameters need to be estimated in the policy assessment boundary. Only the scenario method is relevant to to estimate baseline emissions should also be ex-­ante assessment.3).

it may be straightforward to determine which parameters are affected by the policy or action. For parameters unlikely or very unlikely to be affected by the policy or action—­or where the expected impact is expected to be minor—­ baseline values may be used in the policy scenario.3 Identifying parameters affected by the policy or action Emissions estimation Emissions estimation Emissions estimation Emissions estimation method A method B method C method D GHG Effect 1 GHG Effect 2 GHG Effect 3 Parameters Parameters Parameters Parameters Parameters Parameters Parameters Parameters Emissions from Emissions from Emissions from Removals by Source A Source B Source C Sink D Policy scenario emissions Note: Stars indicate parameters affected by the policy or action. under the assumption that the parameter remains constant between the baseline scenario and the policy scenario. In such cases users may apply the significance methodology outlined in Chapter 7 to determine the likelihood of each parameter being affected and the relative magnitude of the expected impact. See Box 9. 97 . 9.2 guidance Identifying parameters affected by the policy or action In some cases.1 for an example. CHAPTER 9 Estimating GHG Effects Ex-­A nte Estimate effects Figure 9. In other cases it may be difficult to determine whether a parameter is affected.

Box 9. The difference in emissions between the policy scenario and baseline scenario for this source (residential natural gas use) will result from the change in parameter A (natural gas used for space heating). so the policy scenario value for this parameter is expected to differ from the baseline scenario value. Alternatively. natural gas used for space heating B. C. natural gas used for water heating C. However. since the policy only affects space heating in particular.4 in Chapter 8 defines an emissions estimation method and parameters needed to estimate baseline emissions for residential natural gas combustion. so the policy scenario values for these parameters are expected to stay the same as in the baseline scenario. natural gas used for space heating B. parameters B. the difference in emissions between the policy scenario and baseline scenario for this source (residential natural gas use) will also result from the change in parameter A (natural gas used for space heating) only. 98 Policy and Action Standard . the same emissions estimation method and parameters are used to estimate policy scenario emissions. natural gas emission factor The next step is to identify which parameters are affected by the home insulation subsidy and which are not. natural gas used for cooking D. To estimate policy scenario emissions from this source. users may narrow the equation and parameters to focus only on the specific process or activity affected by the policy. and D are not affected by the policy (since insulation does not reduce energy demand for water heating or cooking). as follows: GHG emissions from residential natural gas combustion (t CO2e) = [natural gas used for space heating (Btu) + natural gas used for water heating (Btu) + natural gas used for cooking (Btu)] × natural gas emission factor (t CO2e/Btu) The parameters in the emissions estimation method are: A. Parameter A (natural gas used for space heating) is affected by the policy (since insulation reduces energy demand for space heating). as follows: GHG emissions from residential natural gas combustion related to space heating (t CO2e) = natural gas used for space heating (Btu) × natural gas emission factor (t CO2e/Btu) The parameters in the emissions estimation method are: A.1 Example of identifying parameters and determining which are affected by the policy or action assessed (for a home insulation subsidy) Box 8. natural gas emission factor In this case. one of three sources affected by the subsidy.

Users shall report the methodology used to estimate policy scenario emissions. Users should and baseline scenario. about how the policy or action is expected to affect each parameter over the GHG assessment period. action: For these parameters. CHAPTER 9 Estimating GHG Effects Ex-­A nte Estimate effects 9.1 Range of methodological options for estimating policy scenario emissions Interactions with Assumptions about Level of Emissions policies included in parameters in the Data accuracy estimation method the baseline scenario policy scenario sources Lower accuracy methods Most assumed to Lower (such as Tier 1 methods Few interacting be static or linear International in the IPCC Guidelines policies assessed extrapolations of default values for National Greenhouse historical trends Gas Inventories) Intermediate Most interacting National Combination accuracy methods policies assessed average values Most assumed to Higher accuracy methods be dynamic and Jurisdiction- All interacting (such as Tier 3 methods estimated based on or source- Higher policies assessed in the IPCC Guidelines) detailed modeling specific data or equations 99 .4 but should values for parameters estimate the policy scenario value for each parameter The approach to estimating policy scenario values for each rather than the baseline scenario value for each parameter depends on whether the parameter is expected parameter. and capacity/resources. All drivers and assumptions estimated in In general. the level of accuracy needed to meet used as the policy scenario value for that parameter (in stated objectives. the parameter value policy scenario emissions. This requires developing assumptions to be affected by the policy or action. this chapter).1 outlines a range of is not expected to differ between the policy scenario methodological options that may be used. Users should follow the same 9. scenario except for those drivers and assumptions that are affected by the policy or action being assessed. the parameter value is expected to differ between the policy scenario and baseline scenario. users should follow the most accurate approach the baseline scenario should be the same in the policy that is feasible. data availability. Table 9.4 Estimate policy scenario general steps described in Section 8. Table 9. The baseline value for that select a desired level of accuracy based on the objectives parameter (estimated in Chapter 8) should also be of the assessment.3 Select a desired level of accuracy •• For parameters not affected by the policy or Users may use a range of methods and data to estimate action: For these parameters. including the emissions estimation •• For parameters affected by the policy or method(s) (including any models) used.

Users shall report the following: •• Barriers to policy implementation or effectiveness
•• Policy interactions
•• The policy scenario values for key parameters in the
•• Sensitivity of parameters to assumptions
emissions estimation method(s)
•• The methodologies and assumptions used to estimate To the extent relevant, users should also consider the
policy scenario values for key parameters, including whether following additional factors:
each parameter is assumed to be static or dynamic
•• Non-­policy drivers included in the baseline scenario (see
•• All sources of data for key parameters, including activity
Chapter 8), which should be the same between the policy
data, emission factors, GWP values, and assumptions
scenario and baseline scenario if they are not affected by
•• Any potential interactions with other policies and actions
the policy assessed, but should be different between the
and whether and how policy interactions were estimated
two scenarios if they are affected by the policy
If users are not able to report a data source, users shall •• Learning curves (economic patterns related to new
justify why the source is not reported. product development and deployment)
•• Economies of scale
•• Technology penetration or adoption rates (the pace of
9.4 guidance adoption by targeted actors, which may be slow initially then
accelerate as products become more socially accepted)
Estimating policy scenario values for
Depending on the assessment, users may not need to
parameters affected by the policy or action
consider each of these factors. In practice, users may also
Users should estimate the change in the parameter over
be limited by the following considerations:
time based on what is considered to be the most likely
scenario for each parameter, based on evidence, such as •• Type of policy or action (which may require
peer-­reviewed literature, modeling or simulation exercises, consideration of certain factors but not others)
government statistics, or expert judgment. Existing literature •• Emissions estimation method (for example, simplified
or methodologies may not be similar enough to use directly. approaches may be limited to linear approximations)
Users may need to make adjustments to results found in •• Data availability (which may limit the number of factors
literature to adapt to the assumptions made in the baseline that can be considered)
scenario and other elements of the assessment. Users may •• Objectives of the assessment (which may require a
need to apply new methods, models, and assumptions not more or less complete and accurate assessment)
previously used in the baseline methodology to estimate the •• Available resources to conduct the assessment
expected change in each parameter as a result of the GHG
effects of the policy or action.1 Historical trends and expected values
in the baseline scenario
Each parameter may be assumed to be static or dynamic over
Historical data informs the expected future values of
the GHG assessment period, and dynamic parameters can
each parameter, in both the baseline scenario and the
change at a linear or nonlinear rate. In many cases, dynamic
policy scenario. Understanding the historical values of the
models that allow for conditions to change throughout the
parameter as well as the expected values in the baseline
GHG assessment period are expected to be most accurate,
scenario are both useful when estimating policy scenario
so they should be used where relevant and feasible.
values. For more information on historical data, see
To estimate policy scenario values for each parameter Section 8.4.4.
affected by the policy or action, users should consider a
variety of factors (described in more detail below), such as: Timing of effects
Policy scenario values over time depend on the timing of
•• Historical trends and expected values
expected effects. There may be a delay between when the
in the baseline scenario
policy or action is implemented and when effects begin to
•• Timing of effects

100 Policy and Action Standard

CHAPTER 9 Estimating GHG Effects Ex-­A nte

Estimate effects
occur. Effects may also occur before policy implementation In addition to estimating and reporting the full effects of
begins because of early action taken in anticipation of the the policy or action over the GHG assessment period,
policy or action. users may separately estimate and report GHG effects
over any other time periods that are relevant. For
Users should consider whether the policy or action is designed
example, if the GHG assessment period is 2015–40,
to operate indefinitely or is limited in duration (defined in
users may separately estimate and report GHG effects
Chapter 5). Users should assume that a policy or action will
over the periods 2015–20, 2015–30, and 2015–40.
operate indefinitely unless an end date is explicitly embedded
in the design of the policy or action, despite inherent
Barriers to policy implementation or effectiveness
uncertainty over whether it will eventually be discontinued. If
The policy scenario values should represent the values
the policy or action is limited in duration, the GHG assessment
most likely to occur in the presence of the policy or
period may include some GHG effects that occur during the
action, which depend on assumptions related to policy
policy implementation period and some GHG effects that
implementation and effectiveness. Depending on what
occur after the policy implementation period.
is considered most likely in an individual context, users
Users should also consider whether and how the should either (1) estimate the maximum effects of the
implementation of the policy or action is expected to policy or action if full implementation and enforcement is
change over the GHG assessment period. Examples most likely or (2) discount the maximum effects based on
include tax instruments where the tax rate increases expected limitations in policy implementation, enforcement,
over time, performance standards where the level or effectiveness that would prevent the policy or action
of stringency increases over time, or regulations or from achieving its maximum potential.2 Users should apply
emissions trading programs with multiple distinct phases. conservative assumptions if there is uncertainty about
the extent of policy implementation and effectiveness.

101

Policy interactions values and policy scenario emissions. Users should
The policy or action assessed may interact with implemented estimate the total net effect of all policies included in the
or adopted policies and actions included in the baseline baseline scenario on each parameter in the emissions
scenario. To accurately estimate policy scenario parameter estimation methods. For guidance on assessing policy
values, policy scenario emissions, and the GHG effects of the interactions, see Appendix B.
policy or action, users should determine whether the policy
or action assessed interacts with any policies included in the Sensitivity of parameters to assumptions
baseline scenario (either in reinforcing or overlapping ways). Users should use sensitivity analysis to understand the
range of possible values of various parameters and
If there are no interactions with other policies or actions
determine which scenario is most likely. Users should
included in the baseline scenario, the policy or action
also understand the range of uncertainty associated with
assessed will have the full range of effects expected. If the
various parameters. For more information on assessing
policy or action assessed has a reinforcing effect with policies
uncertainty and sensitivity analysis, see Chapter 12.
in the baseline scenario, the policy or action assessed will
have a greater range of positive effects than expected. See Table 9.2 for an example of reporting parameter values
However, if the policy or action overlaps with policies in and assumptions.
the baseline scenario, the positive effect of the policy or
Users may refer to model documentation that explains
action will be reduced. In an extreme case where the
the methodologies and algorithms embedded in a model,
policy or action assessed overlaps completely with policies
whether the model was subjected to peer review, and why
included in the baseline scenario, the policy or action would
the selected model was chosen for use in the assessment.
have no GHG effects relative to the baseline scenario.
See Box 9.2 for a case study of developing assumptions for
If interactions with policies included in the baseline scenario
a baseline scenario and policy scenario.
exist, users should estimate the magnitude of the policy
interactions when estimating policy scenario parameter

Table 9.2 Example of reporting parameter values and assumptions used to estimate ex-ante policy scenario
emissions for a home insulation subsidy

Policy scenario value(s) applied Methodology and assumptions
Parameter over the GHG assessment period to estimate value(s) Data source(s)

Values calculated based on 30%
Natural anticipated uptake of the insulation subsidy Peer-reviewed
gas used 1,000,000 MMBtu/year from 2010–14; starting in 2015 and remaining constant literature:
for space 910,000 MMBtu/year from 2015–25 through 2025; and 30% energy use Author (Year).
heating reduction per home with insulation (based Title. Publication.
on previous studies of similar policies)

Natural
gas Same value as in baseline scenario since National energy
55 kg CO2e/MMBtu (constant)
emission the policy does not affect this parameter statistical agency
factor

102 Policy and Action Standard

Figure 9. it was assumed overall annual policy effect amounts to 95 Mt CO2 in 2020 that world market prices will come down considerably so and 138 Mt CO2 in 2050 (see Figure 9. with wind power increasing the most dramatically. scenario was estimated using assumptions from a research and Nuclear Safety. and IFNE 2012). To calculate the that PV will be cost-­effective and therefore will be installed GHG effect of the policy. the additional electricity would have been scenario assumptions for renewable electricity generation. The main purpose Germany (DLR. and renewable electricity generation (excluding wind in order feed-­in tariffs for renewable electricity generation. The policy German Ministry of the Environment.7). it was assumed that in the absence even without feed-­in tariffs. with a different scale. All of the policy is to promote renewable electricity generation. Figure 9. electricity generators to the power grid.V. Fraunhofer IWES. CHAPTER 9 Estimating GHG Effects Ex-­A nte Estimate effects Box 9. The the 2010 level through 2020. to show the same scale as Figure 9. For PV electricity.6 presents the policy scenario assumptions for renewable electricity For the baseline scenario. except for photovoltaic (PV) electricity. produced by the fossil generation mix. After 2020.2 Developing assumptions for the baseline scenario and policy scenario for the German Renewable Energy Act Öko-­Institut e. Figure 9. it The difference in electricity generation between the baseline was assumed that electricity generation would remain at and policy scenarios represents the effect of the policy.4 Baseline scenario assumptions for renewable electricity generation 70  Hydro Electricity generation (TWh) 60  Wind 50 PV 40 Biomass 30 Geothermal 20 10 0 2010 2015 2020 2025 2030 2035 2040 2045 2050 103 .4). renewable sources are expected to increase in the policy The EEG involves mandatory connection of renewable scenario.4 presents the baseline of the EEG. Nature Conservation. it was assumed there would be generation (including wind). carried out an ex-­ante assessment of the study on the long-­term development of renewables in Renewable Energy Act (EEG) in Germany. preferential access of Figure 9. The assumed fossil generation mix (746 g CO2/kWh in 2020 and 519 g CO2/kWh The policy scenario represents the development of additional in 2050) was taken from recent modeling exercises for the renewable electricity generation under the EEG. no further increase in renewable electricity absent the EEG.5 presents the policy scenario assumptions for renewable electricity (over fossil and nuclear electricity).

 Renewable energy .Box 9. GHG effect of policy (Mt CO2) Baseline scenario (TWh) Policy scenario (TWh) 104 Policy and Action Standard .6 Policy scenario assumptions for renewable electricity generation (including wind) 300 Electricity generation (TWh) 250  Hydro 200  Wind 150 PV 100 Biomass 50 Geothermal 0 2010 2015 2020 2025 2030 2035 2040 2045 2050 Figure 9.2 Developing assumptions for the baseline scenario and policy scenario for the German Renewable Energy Act (continued) Figure 9.7 The estimated GHG effect of the policy.5 Policy scenario assumptions for renewable electricity generation (excluding wind) 70 Electricity generation (TWh) 60  Hydro 50  PV 40 Biomass 30 Geothermal 20 10 0 2010 2015 2020 2025 2030 2035 2040 2045 2050 Figure 9. 2010–50 500 160 Electricity generation (TWh) - 140 Policy effect (Mt CO2) 400 - 120 300 - 100 - 80 200 - 60 - 40 100 - 20 0 0 2010 2015 2020 2025 2030 2035 2040 2045 2050  Renewable energy .

then sink category separately. Subtract total baseline emissions from total policy period. Estimate baseline emissions from each source/sink Users shall estimate policy scenario emissions and category (Chapter 8) removals over the GHG assessment period for each source/ 2. For each source/sink category. subtract baseline in the boundary. CHAPTER 9 Estimating GHG Effects Ex-­A nte Estimate effects 9. by following these steps: sum across source/sink categories to estimate the total change (–5. estimate total GHG effect of the policy or action After estimating policy scenario emissions for each source Alternatively. Aggregate baseline emissions across all source/sink emissions. –4.000 t CO2e).6 Estimate the GHG effect for an example. Estimate baseline emissions from each source/sink across all categories of sources and sinks included in the category (Chapter 8) GHG assessment boundary to estimate total policy scenario 2.000 t CO2e. the GHG effect of the policy or action for each source/ greenhouse gases. When categories to estimate total baseline emissions (Chapter 8) aggregating across sources and sinks. if feasible based on the method used.1). scenario emissions for each source/sink category included then subtract the two to estimate the total change in the GHG assessment boundary (see Equation 9. Estimate policy scenario emissions for each source/sink sink category and greenhouse gas included in the GHG category assessment boundary. users should address 3. Equation 9. See Table 9.1 Estimating the GHG effect of the policy or action Total net change in GHG emissions resulting from the policy or action (t CO2e) = Total net policy scenario emissions (t CO2e) – Total net baseline scenario emissions (t CO2e) Note: “Net” refers to the aggregation of emissions and removals. or GHG effects in the GHG assessment sink category boundary that have not been estimated shall be disclosed. and described qualitatively. 4. or •• Estimate the GHG effect for each source/sink category Users should estimate the GHG effect for each source/ (–2.000 t CO2e) or action by subtracting baseline emissions from policy and total baseline emissions (75. In this example. “Total” refers to the aggregation of emissions and removals across all sources and sinks included in the GHG assessment boundary.5 Estimate policy scenario emissions 1. based on the GHG effects included 3. sinks. Estimate policy scenario emissions for each source/sink any possible overlaps or interactions between sources category and sinks to avoid over-­or underestimation of total policy 4. a user has two options: of the policy or action Finally. users should aggregate policy scenario emissions 1. users may follow these steps: and sink. +1. sink categories to estimate total policy scenario Users shall report total annual and cumulative policy emissions scenario emissions and removals over the GHG assessment 5. Any sources. Users shall apply the same GWP values emissions from policy scenario emissions to estimate used to estimate baseline emissions. 105 .000 t CO2e). (–5.3 9. if feasible based on the method used. scenario emissions to estimate the total GHG effect of the policy or action Both approaches yield the same result.000 t CO2e). Aggregate policy scenario emissions across all source/ scenario emissions.000 t CO2e.000 t CO2e). users shall estimate the GHG effect of the policy •• Estimate total policy scenario emissions (70. Aggregate GHG effects across all source/sink categories to justified.

000 t CO2e +1. separately from total out-­of-­jurisdiction GHG effects (the net change in GHG emissions and removals that occurs outside of the jurisdiction’s geopolitical boundary). both annually and cumulatively over the GHG assessment period.000 t CO2e emissions Note: The table provides data for one year in the GHG assessment period.000 t CO2e 50.000 t CO2e -5. Users should report the GHG effect of the policy or action as a range of likely values.000 t CO2e from electricity use power plants Reduced emissions Residential natural gas from home natural 16. because of uncertain baseline assumptions or uncertain policy interactions). Users shall report the total in-­jurisdiction GHG effects (the total net change in GHG emissions and removals that occurs within the implementing jurisdiction’s geopolitical boundary). See Chapter 12 for guidance on uncertainty and sensitivity analysis.000 t CO2e 20. or by category of source or sink.000 t CO2e 5. in tonnes of carbon dioxide equivalent. where relevant and feasible. when uncertainty is high (for example.000 t CO2e combustion gas use Increased emissions Insulation from insulation manufacturing 6.000 t CO2e -4.Table 9.000 t CO2e production processes Total emissions / Total change in 70. if relevant and feasible. rather than as a single estimate.3 Example of estimating the GHG effect of a home insulation subsidy GHG effect Affected Policy scenario Baseline included sources emissions emissions Change Fossil fuel combustion Reduced emissions in grid-connected 48. Users should separately estimate and report the change in GHG emissions/removals resulting from each individual GHG effect included in the GHG assessment boundary. by source or sink. Users shall report the estimated total net change in GHG emissions and removals resulting from the policy/action or package of policies/actions.000 t CO2e 75.000 t CO2e -2. 106 Policy and Action Standard .3 Users may also separately report by type of effect.

4 based on the qualitative likelihood that each effect will occur. unlikely. depending on whether the possible effect happens emissions and GHG effects of the policy or action by or does not happen. Under rather than assuming either 0 t CO2e or 10. or very unlikely to occur. Depending on how into the estimation of ex-­ante policy scenario emissions. If probabilities are unknown. users may multiply each the probability values used. In Chapter 7. very unlikely) likelihood and probability (optional) where relevant and feasible. possible. all estimate is useful to approximate the expected outcome. Nevertheless. Each GHG effect of the policy or action included in the Where likelihood is difficult to estimate. In the example above. likely.3.1 Separate reporting based on category (very likely. likely.4 for a case study of calculating the GHG effect of a policy ex-­ante. Users of this approach should disclose the individual effects and their assumed probabilities. the ex-­ante based on the likelihood that each effect will occur. effects are included and weighted by their probability. users may choose to estimate policy scenario CO2e. Carlo simulation in which a range of outcomes is predicted Users following this approach should clearly disclose that the based on the magnitude and probability of the individual results represent a probability-­adjusted estimate and report effects. For assessment may include effects that are possible.000 t CO2e × Likely 75% 50% = 5. Chapter 12). unlikely. the probability-­adjusted estimate (or expected value) for that effect would be 10.000 t CO2e will not actually occur. For example. If unlikely or very unlikely effects are included in the assessment. users categorize potential effects analysis around key parameters (further described in based on whether they are very likely. or 10. CHAPTER 9 Estimating GHG Effects Ex-­A nte Estimate effects 9. the GHG assessment boundary is defined. See Box 9. if a Likelihood Default probability value potential effect is considered “possible” and it would reduce Very likely 100% emissions by 10. more information.4 Default probability values effect. In this approach. the estimated probability-­adjusted Very unlikely 0% estimate of 5. see Box 9.000 t separately.3 Estimating policy scenario emissions based on likelihood of effects occurring In addition to reporting unlikely and very unlikely effects the actual outcome will either be 0 t CO2e. users should use the default probability values in Table 9.000 t CO2e. users should report the estimated GHG effects resulting from those effects separately from the results based on very likely. and possible effects. possible. likely. Users should separately report effects by each likelihood Box 9. estimated GHG effect by its expected probability to calculate a probability-­adjusted estimate (or expected value) for each Table 9. or very unlikely to occur as a result of the policy or action assessed. Possible 50% Users and stakeholders should be aware that this approach Unlikely 25% may yield a predicted outcome that will not actually happen. As a simpler approach.000 t CO2e.000 t CO2e the most robust approach. 107 . a probability-­adjusted estimating a probability-­adjusted sum. users may report assessment may vary in the likelihood that it will actually a range of values for a given effect based on sensitivity occur.6. users may develop a Monte when the probability of either outcome is only 50 percent. Instead. Users may additionally incorporate probability unlikely.

= 8. The electricity commercial buildings in 2020 = [8. but one parameter value was changed.8 Estimated GHG effect of the program. calculation of baseline emissions.000 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 108 Policy and Action Standard .000 3. power plants for consumption in the residential and Installed PV capacity in Tunisia [184.000 5.5.096 GWh The number and capacity of PV systems expected to be See Figure 9.294 GWh] production of the PV systems in Tunisia. see Box 8. that aims to promote and support 20 percent of all new installed PV systems in Tunisia.000.Box 9. strategic study on the development of renewable energies in Figure 9. The estimated To estimate ex-­ante policy scenario emissions from one of the GHG effect is the difference between policy scenario affected sources—­the production of electricity by conventional emissions and baseline emissions.8 for a graph of the program’s estimated installed over the period 2014–30 were derived from a GHG effect. and commercial buildings with low-­voltage grid connections.000  Policy scenario emissions  Baseline emissions 2.390 GWh] produced by PV systems was calculated by multiplying Policy scenario electricity consumption in residential and the amount of kWp installed PV capacity by the specific commercial buildings in 2020 = [8.000 t CO2e 4.000 kWp] × commercial buildings sector—­the same emissions estimation specific energy production of PV systems in Tunisia method used to estimate baseline emissions (in Box 8.000.000 1.400. For information on the program’s future contribution to mitigation at the national level.000.000.5) [1.000 kWh = 294 GWh] consumption of electricity in buildings was reduced by the amount of electric energy expected to be produced by future Baseline electricity consumption in residential and photovoltaic systems expected to be installed.000. This the installation of photovoltaic (PV) systems in residential value is not expected to change significantly in the future. The specific energy production is an launched by the National Agency for Energy Conservation empirical value based on annual on-­site measurements of (ANME) of Tunisia in 2010.600 kWh/kWp] = Electric energy produced by was applied. The PV systems [294. 2010–30 7. The following equation was used to estimate electricity The objective of the ex-­ante assessment was to estimate the production from PV systems in 2020. Tunisia made by ANME.000 6.390 GWh .000.4 Calculating the GHG effect ex-­ante of Tunisia’s PROSOL Elec program PROSOL Elec is a renewable energy support program.000.

CHAPTER 9 Estimating GHG Effects Ex-­A nte

Estimate effects
Endnotes
1. New methods should not be used to estimate total emissions from
source/sink categories, since the emissions estimation method
used to estimate baseline emissions should also be used to
estimate policy scenario emissions.
2. Barua, Fransen, and Wood 2014 provides a framework
for considering factors that may influence effective policy
implementation in more detail.
3. An individual effect can be separately estimated and reported if
it influences distinct sources/sinks within the GHG assessment
boundary that are not influenced by the other effects being
estimated. In this case, the change in emissions/removals from the
source/sink is equal to the change resulting from that GHG effect.
If multiple effects influence the same source/sink, the combined
effect can be estimated, but not the individual effects.

109

10 Monitoring Performance over Time

Estimate effects
T
his chapter provides guidance on monitoring the performance of a policy or action
during the policy implementation period and on collecting data to estimate GHG
effects ex-­post. Users that estimate GHG effects ex-­ante without monitoring
performance may skip this chapter and proceed to Chapter 12.

Figure 10.1 Overview of steps for monitoring performance over time

Define key Define
Define policy Create a Monitor
performance parameters
monitoring monitoring parameters
indicators for ex-post
period plan over time
(Section 10.1) assessment
(Section 10.3) (Section 10.4) (Section 10.5)
(Section 10.2)

Checklist of accounting requirements (for users monitoring performance)

Section Accounting requirements

Define key performance • Define the key performance indicators that will be used to track performance of the
indicators (Section 10.1) policy or action over time.

Define parameters for ex-post • For users planning to carry out an ex-post assessment: Define the parameters necessary
assessment (Section 10.2) to estimate ex-post policy scenario emissions and ex-post baseline scenario emissions.

Create a monitoring plan • Create a plan for monitoring key performance indicators (and parameters for ex-post
(Section 10.4) assessment, if relevant).

Monitor parameters over time
• Monitor each of the parameters over time in accordance with the monitoring plan.
(Section 10.5)

Note: Reporting requirements are listed in Chapter 14.

111

the availability of rather than after the policy has been designed and existing data. If progress is not on can be either absolute (such as the number of homes track. •• To monitor implementation progress: Monitor trends in key performance indicators to understand For additional guidance on collecting data. based on the type of policy or during the policy design phase (before implementation). type of indicator.­GHG effects. depending on objectives. see Appendix A. users should define key performance metrics that indicate the performance of a policy or action. monitoring can inform corrective action. be monitored during the policy implementation period. Parameter intermediate effects associated with the policy or action. Key performance indicators are Where relevant. Users monitoring indicators is not sufficient to estimate the effect may also define indicators to track non. Tables 10. track performance of the policy or action over time.1 Define key performance indicators ex-­post assessment of GHG effects Users that monitor performance shall define the key performance indicators that will be used to Users may monitor data to fulfill one or both functions. and the cost of collecting new data. implemented. Doing so ensures that the data needed to assess the effectiveness of the policy are collected. insulated) or intensity-­based (such as g CO2e/km). Indicators by tracking trends in key indicators. action. activities. users need to Users shall report the key performance indicators selected collect data on a broader range of parameters.Monitoring performance during the policy implementation The monitoring plan should be informed by the ex-­post period serves two related functions: estimation method that will be used in order to ensure that the proper data are collected (see Chapter 11).1 112 Policy and Action Standard . while onerous than estimating GHG effects and can provide intermediate effects and non-­GHG effects are most a low-­cost way of understanding policy effectiveness relevant for monitoring policy or action effects. However. Inputs and activities are most relevant Monitoring key performance indicators is generally less for monitoring policy or action implementation.3 provide examples of activity and intermediate effect indicators. the requirements of stakeholders. is a broader term meaning any type of data (such as activity Table 10. users should develop the monitoring plan policy or action in question. To estimate GHG effects ex-­post. of a policy. The selection of the indicators should be tailored to the Where possible. and such as tracking changes in targeted outcomes. whether the policy or action is on track and being implemented as planned •• To estimate GHG effects: Collect the data needed for 10.2 and 10. which should and the rationale for their selection.1 provides definitions and examples of each data or emission factors) needed to estimate emissions. indicators in terms of the relevant inputs.

total subsidies provided procurement. CHAPTER 10 Monitoring Performance over Time Estimate effects Table 10.1 Types of key performance indicators for monitoring performance Indicator Examples for a home types Definitions insulation subsidy program Resources that go into implementing a policy or action. In other frameworks. Activities implements the policy or action). number of contractors selected for retrofit program installation through open bidding process) Source: Adapted from Barua. K. such as permitting. or economic Non-GHG conditions other than GHG emissions or climate change Household disposable income from effects mitigation that result from the policy or action energy savings (see Appendix C for examples) Source: Adapted from W. such Money spent to implement Inputs as financing the subsidy program Administrative activities involved in implementing the policy or action (undertaken by the authority or entity that Number of energy audits carried out.2 Examples of activity indicators for various policies Examples of policies Examples of activity indicators Quantity of long-term contracts with renewable energy power generators established. Kellogg Foundation 2004. or compliance and enforcement Amount of insulation purchased and Intermediate Changes in behavior. CH4. amount of natural gas and electricity consumed in homes Changes in greenhouse gas emissions by sources or removals Reduced CO2. Notes: GHG effects are typically not monitored directly but instead are estimated based on changes in various other parameters. intermediate effects are called “outcomes” and GHG effects and non-GHG effects are called “impacts. 113 . and Wood 2014. or practices that installed by consumers. processes. Renewable portfolio standard number of renewable energy certificates (RECs) issued Number of emission certificates issued per year. number of vehicle manufacturers Fuel economy standard from which information on cars sold is collected by the government Subsidy for home insulation Amount of subsidies issued Energy efficiency standards Number of appliance standards and reporting templates published. social. number of for appliances appliance manufacturers from which information on sold appliances is collected Government buildings Number of retrofit projects procured (for example. technology.” Table 10. and N2O GHG effects by sinks that result from the intermediate effects of the policy emissions from reduced natural gas or action and electricity use Changes in relevant environmental. licensing. Fransen. fraction of homes effects result from the policy or action that have insulation.

4. bus. train. Waste management regulation tonnes of waste sent to incineration facilities Landfill gas management incentive Tonnes of methane captured and flared or used Sustainable agriculture policies Soil carbon content. Users planning to carry out an ex-­post assessment shall see Table 10. data may be most appropriate for sectors with a large If relevant. where bottom-­ parameters needed for ex-­post assessment and intermediate up data collection at the facility level is feasible. tonnes of waste sent to recycling facilities. users should monitor the parameters in the ex-­ante number of diffuse emitting sources. The selection availability. private car. bicycle) Tonnes of waste sent to landfills. to determine the extent to which the original assumptions in Table 10. tonnes of synthetic fertilizers applied. coal. since the availability of data informs the selection Bottom-­up data may be most appropriate for sectors with of methods. crop yields Afforestation/reforestation policies Area of forest replanted by type Grants for replacing kerosene lamps Number of renewable lamps sold. natural gas) Passenger-kilometers traveled by mode (such as subway. market share of renewable lamps. There may be overlap between power generation or cement production). quantification methods used. and the selection of methods defines the data a relatively small. 114 Policy and Action Standard . including collection is not feasible or where top-­down data are more data related to other policies and actions and non-­policy drivers. and data bottom-­up and top-­down estimation methods. sector. volume of with renewable lamps kerosene used for domestic lighting Subsidy for building retrofits Number of buildings retrofitted. Bottom-­up and top-­down data Users should first define the methods needed for ex-­post Both bottom-­up and top-­down data may be used.2 Define parameters needed The parameters needed for ex-­post assessment vary by for ex-­post assessment type of policy or action and sector. where bottom-­up data baseline estimation method defined in Chapter 8. the baseline scenario remain valid or need to be recalculated.5 provides examples of both types of data.2 for definitions of bottom-­up and of methods and identification of data sources is an iterative top-­down data. For selected examples. See Chapter 11 for a description of various or action. and either assessment in order to identify the parameters that should may be most appropriate depending on the type of policy be monitored. finite set of emitting sources (such as that need to be collected.Table 10. process. define the parameters necessary to estimate ex-­post policy scenario emissions and ex-­post baseline scenario emissions. See Section 3.3 Examples of intermediate effect indicators for various policies Examples of policies Examples of intermediate effect indicators Renewable portfolio standard Total electricity generation by source (such as wind. accurate and complete. energy use per building Information campaign to encourage Household energy use (sample of households or average use) home energy conservation 10. solar. Top-­down effect indicators used for monitoring performance. Public transit policies taxi.

direct metering) Energy efficiency program in the • Emission factor from grid electricity commercial buildings sector • Gross floor area of building units • Solar panels produced each year Solar power incentives • Capacity of solar power installed • Electricity generated from solar power • Number of electric vehicles (quarterly) Electric vehicle subsidy • Passenger figures (monthly) • Vehicle-kilometers traveled (monthly) Emissions trading system • Facility-level monitoring of emissions data from covered facilities Information campaign to • Surveys of a representative sample of households to collect data such as: encourage energy savings awareness of the campaign. by fuel/energy type commercial • Example data source: annual building surveys or • Example data source: city statistics from city buildings reporting requirements utilities or energy agencies 115 . by fuel type by transport mode and vehicle type • Example data source: city statistics • Percentage of trips taken every year by each Transportation mode of transportation. and household energy use over time Table 10. actions taken as a result of the campaign. household income. waste diversion rate of waste • Example data source: waste management • Location of disposal sites companies (private) or agencies (public) • Example data source: city statistics • Aggregate fuel and electricity consumed Residential and • Building-level energy use by fuel/energy type by all buildings in a city.4 Examples of parameters to be monitored by policy/action type Examples of policies Selected examples of parameters to be monitored • Electricity use (annual. quantity • Method of disposal (incineration. length of each trip by mode. gross quantity of municipal • Incineration: incineration rate by type Waste solid waste. CHAPTER 10 Monitoring Performance over Time Estimate effects Table 10.5 Examples of bottom-up and top-down data by sector Sector Examples of bottom-up data Examples of top-down data • Distance traveled (vehicle-kilometers traveled) • Total fuel sold in a city. number of trips taken by mode per year • Example data source: annual household surveys and/or transportation models • Quantity of waste collected by type. household in the residential sector size. landfill) of recyclables collected by type. quantity of • Landfill: tonnage by depths of landfill compost collected.

the •• Units of measure longer the time series of data that is collected. users should develop the monitoring plan during policy or action are assessed (defined in Chapter 7).10.1 Example of policy monitoring period for a biofuels policy A biofuels policy is implemented over the 10-­year period to collect baseline data and monitor pre-­p olicy trends prior 2010–19. The GHG assessment period is the time the necessary data are collected and analyzed. and GHG assessment period Years 2005–09 2010–14 2015–19 2020–24 2025–29 2030–34 Policy implementation period Policy monitoring period GHG assessment period (ex-ante) 116 Policy and Action Standard . level of uncertainty in any measurements or for an example of a policy monitoring period. A monitoring plan is important to ensure that in Chapter 5). For each of the key performance indicators or parameters.4 Create a monitoring plan monitoring period Users shall create a plan for monitoring key performance The policy implementation period is the time period indicators (and parameters for ex-­post assessment. users the policy monitoring period should include the should describe the following elements in a monitoring plan: policy implementation period. See Box 10. or more robust the assessment will be. modeled.3 Define the policy 10. The GHG assessment period (ex-­ante) continues to 2010.2 use change. how this uncertainty will be accounted for •• Sampling procedures (if applicable) •• Whether data are verified. rather than after the policy has been designed and implemented. estimates. The policy monitoring period begins in 2005 illustrates the various periods. The policy monitoring period is the time period over which the policy or action is monitored. but where possible it •• Measurement or data collection methods should also include pre-­p olicy monitoring of relevant •• Sources of data (either existing data sources or additional activities prior to the implementation of the policy data collected specifically to monitor indicators) and post-­p olicy monitoring of relevant activities after •• Monitoring frequency the policy implementation period. if during which the policy or action is in effect (defined relevant). Figure 10. In general. the policy design phase (before implementation). and if so. Figure 10. policy monitoring period. calculated. Where period over which GHG effects resulting from the possible.2 Example of policy implementation period. verification procedures used Box 10.1 estimated. It continues through the policy implementation until 15 years after the policy implementation period ends period and ends in 2024 in order to monitor any post-­ to account for long-­lasting GHG effects resulting from land-­ policy effects between 2020 and 2024. the •• Whether data are measured. At a minimum.

It may therefore be •• Databases. or annually. as measured by the key performance collected. Users The accuracy of measurement or data collection approaches shall report the performance of the policy or action depends on the instruments used. See Box 10. Estimated data (in the context of monitoring) refers to proxy data or other data sources used to fill data gaps in the absence of more accurate or representative data sources. and reporting outcomes of the policy or action may not be realized data on monitored parameters for some time after implementation. Calculated data refers more specifically to data calculated by multiplying activity data by an emission factor. The appropriate frequency of monitoring should be determined based on the needs of decision makers and stakeholders. and whether the performance of the policy Users shall report the sources of data used.5 Monitor the parameters over time time data will be archived Users shall monitor each of the parameters over •• Any other relevant information time in accordance with the monitoring plan. indicators. CHAPTER 10 Monitoring Performance over Time Estimate effects data refers to data derived from quantitative models.2 for a case study of developing a monitoring plan. or software systems to be used for necessary to monitor some indicators over different time collecting and managing periods than for others. calculated. and the rigor of the quality control measures. Bottom-­up monitoring methods may involve collecting data from representative samples of individual facilities or other sources. report whether the assumptions on key parameters Measured data refers to direct measurement. directly measuring emissions from a smokestack. In contrast. tools. collating. In general. such as models representing emissions processes from landfills or livestock. document the differences and take the monitoring results into account when updating the ex-­ante estimates Measurement or data collection methods or when estimating GHG effects ex-­post. users should collect data with as high a frequency as is feasible and appropriate in the context of objectives. •• Procedures for internal auditing. quality assurance (QA). also report any calculation assumptions and uncertainties If monitoring indicates that the assumptions used in the related to the data. storing. such as monthly. For example. data on the outputs and •• Methods for generating. users should collection and Chapter 12 for guidance on uncertainty. and quality control (QC) •• Record keeping and internal documentation procedures needed for QA/QC. See Appendix A for guidance on data ex-­ante assessment are no longer valid. including length of 10. such as within the ex-­ante assessment remain valid. quarterly. Frequency of monitoring Users may monitor indicators at various frequencies. data on •• Competencies required and any training needed to inputs are typically available immediately following policy ensure personnel have necessary skills implementation. and may depend on the type and roles and responsibilities of relevant personnel of indicators and data availability. rather than from all affected facilities or sources. or estimated. following •• Entity(ies) or person(s) responsible for monitoring activities the principle of relevance. Modeled 117 . Users shall Data may be measured. modeled. the quality of data over time. Users should or action is on track relative to expectations.

contained in the monitoring plan. The objective of on a regular basis. and reduced fossil fuel buildings—­including solar water heaters (SWH) and solar subsidies for the Tunisian government. reduced NAMA includes a solar program for commercial and residential household expenditure for energy. collection.6 provides examples of information quality assurance. internal auditing. and the entities responsible for data procedures for sampled on-­site verifications. The plan identifies key performance indicators. to inform corrective actions if needed. such as improving information management A monitoring plan was included as part of the NAMA design. wall. and Ecofys carried out an ex-­ante assessment the NAMA is intended to achieve both GHG and various of the nationally appropriate mitigation action (NAMA) for sustainable development benefits. data sources. The jobs and companies in the energy technology sector. monitoring plan. The plan includes indicators Table 10. (Low uncertainty) created) glazing) and m2 Collected by energy For existing dwellings: counsellors. since Tunisia. and developing monitoring frequency. historical annual electricity Measured feed into ANME Energy bills Annual and primary thermal energy (Low uncertainty) information consumption (kWh/m2) system through electronic application file For new dwellings: Collected by Sampled metering annual electricity and Measured for 50 ANME control on 50 new primary thermal energy Annual dwellings and estimated officers to build dwellings and survey consumption (kWh/m2) of verification for the rest a baseline to assess energy dwellings that do not apply (Medium uncertainty) scenario for profile (baseline) to the program new dwellings 118 Policy and Action Standard . The NAMA includes GHG emission reductions in order to attract and facilitate provisions to strengthen monitoring capacity to implement the international support for the NAMA. calculated.6 Examples of information contained in the Tunisia energy conservation NAMA monitoring plan Measured. systems. such as creation of skilled energy conservation in the building sector in Tunisia. and quality control. Indicator or parameter Monitoring or estimated (and Responsible (and unit) Source of data frequency uncertainty) entity GHG impact of thermal insulation Number of houses ANME information insulated and insulated Measured system (to be Annual ANME area by type (roof. establishing new electronic information systems.Box 10. Table 10. and to the assessment was to estimate and report the expected assess the impacts of the NAMA ex-­post. photovoltaic (PV) energy—­and a thermal insulation program Monitoring will be used to track the performance of the NAMA for existing and new residential buildings. Alcor. improving data collection and coordination.2 Developing a monitoring plan for the Tunisian NAMA for energy conservation in the building sector The National Agency for Energy Conservation (ANME) of related to both GHG effects and non-­GHG effects.

energy prices and (Low uncertainty) natural gas. 119 . charcoal) Endnote 1.6 Examples of information contained in the Tunisia energy conservation NAMA monitoring plan (continued) Measured.2 Developing a monitoring plan for the Tunisian NAMA for energy conservation in the building sector (continued) Table 10. CHAPTER 10 Monitoring Performance over Time Estimate effects Box 10. Indicator or parameter Monitoring or estimated (and Responsible (and unit) Source of data frequency uncertainty) entity GHG impact of thermal insulation (continued) Sampled metering on Control officers 100 new and existing For new and existing carry out on-site dwellings and survey Measured for 100 dwellings: final electricity verification. Barua. and Wood 2014 provides additional guidance on selecting input and activity indicators. feed to assess energy dwellings and estimated savings and primary Annual information into profiles’ changes for the rest thermal energy savings Promo-isol+ (including possible (Medium uncertainty) (kWh/m2) information rebound effect) after system first year of operation Energy intensity of buildings: annual electricity and ANME information primary thermal energy Every 5 years To be determined ANME system consumption (kWh/year) per m2 and per dwellings Job creation Number of employees in ANME accreditation new and existing companies system and Measured Annual ANME that provide energy services human resources (Low uncertainty) for buildings department Creation of new companies Number of new ANME accreditation companies created to system and Measured Annual ANME provide energy services human resources (Low uncertainty) for buildings department Saved energy costs for end users and saved energy subsidies for the Tunisian government (Energy savings by GHG ex-post source from GHG ex-post assessment and Measured and assessment) × (Energy ANME sources on Annual calculated ANME prices for electricity. calculated. subsidies kerosene. Fransen. wood. LPG.

11 Estimating GHG Effects Ex-­Post .

6) Checklist of accounting requirements (for users carrying out ex-post assessment) Section Accounting requirements • Estimate policy scenario emissions and removals over the GHG assessment period Estimate policy scenario for each source/sink category and greenhouse gas included in the GHG assessment emissions (Section 11.1 Overview of steps for estimating GHG effects ex-post Update baseline emissions or Select an ex-post Select a desired ex-ante assessment assessment method level of accuracy (if applicable) (Section 11. In this chapter.4) boundary. • Apply the same GWP values used to estimate baseline emissions.5) (Section 11. 121 . Note: Reporting requirements are listed in Chapter 14.2) (Section 11. • Estimate the GHG effect of the policy or action by subtracting baseline emissions Estimate the GHG effect of the from policy scenario emissions for each source/sink category included in the GHG policy or action (Section 11.4) making (optional) (Section 11. Estimate effects T his chapter describes how to estimate the GHG effects that have occurred as a result of the policy or action (ex-­post assessment). Figure 11.5) assessment boundary.1) Additional steps Estimate the GHG effect Estimate policy scenario to inform decision of the policy or action emissions (Section 11. users estimate the GHG effect of the policy or action by comparing observed policy scenario emissions (based on monitored data) to ex-­post baseline scenario emissions (described in Chapter 8). The GHG effect of the policy or action (ex-­post) is estimated by subtracting baseline emissions from policy scenario emissions. Users that choose only to estimate GHG effects ex-­ante may skip this chapter and proceed to Chapter 12.3) (Section 11.

see Appendix B.2. 11. 11. as well as possible ex-­post. change in emissions resulting from the policy or action.1 Update baseline emissions or The baseline scenario should also be recalculated to include ex-­ante assessment (if applicable) updates to all non-­policy drivers based on their observed Figure 11. Any Users should select either top-­down.2 Ex-post assessment may be used by replacing the forecasted parameter values (ex-­ante) with observed parameter values (ex-­post) in Net GHG emissions* (Mt CO2e) the ex-­post estimation. not affected by the policy or action being assessed. Ex-­post estimation methods are classified undertaken. or interactions between the policy or action being assessed integrated top-­down/bottom-­up methods based on a and the policies or actions included in the baseline scenario combination of factors. Users shall report any •• Data availability. See Section 8. Alternatively users may apply a different methodology than was used in the ex-­ante assessment. Users Users carrying out an ex-­post assessment may either do not need to calculate emissions from sources and sinks estimate ex-­post policy scenario emissions before or after that remain constant between the baseline scenario and estimating ex-­post baseline emissions. such as: should be taken into account. each assessment will likely yield GHG (ob t polic action serv y different estimates of the GHG effects of the policy. 2010 2015 Note: * From sources and sinks in the GHG assessment boundary.3 for a list of non-­policy which are forecasted based on assumptions. For guidance on assessing policy interactions. Users should choose the approach that yields e scenario Ex-post baselin the most accurate results. If an ex-­ante assessment for the policy or action was carried out prior to the ex-­post assessment. if they are during the time the policy or action was implemented. In contrast to ex-­ante policy scenario emissions. If both an ex-­ante and ex-­post GHG effect assessment are carried out for the same policy or action Historical Ex-p of policy/ os at different points in time. Both top-­down and bottom-­up methods implementation of the policy or action being assessed and can be carried out under either the scenario method or (2) after the implementation of the policy/action being the comparison group method (described in Chapter 8). and potential interactions with other policies and actions and resolution of data available (which may dictate the use whether and how policy interactions were estimated. For all other policies or actions with a significant effect on definitions of bottom-­up and top-­down methods and data. quality. since they do not contribute to the Chapter 8 for more information on the sequence of steps. the same method Figure 11.2 in the policy scenario.2 Select an ex-­post assessment method This section provides a list of ex-­post assessment methods Baseline emissions (as described in Chapter 8) should that users may use to estimate the GHG effects of a policy be recalculated every time an ex-­post assessment is or action ex-­post. emissions that were implemented both (1) prior to the see Section 3. ex-­post policy drivers that should be considered in the baseline scenario scenario emissions are observed based on data collected if they are exogenous to the assessment—­that is. assessed but prior to the ex-­post GHG assessment. free rider effects. quantity. including the type. The ex-­post baseline scenario should include into two bottom-­up methods and top-­down methods. See Table 8.2 provides an illustration of estimating GHG effects values over the GHG assessment period. of either bottom-­up or top-­down data) 122 Policy and Action Standard . bottom-­up. since emissions ed e scena (ex-post) mis ri sion o the observed (ex-­post) parameter values will likely differ s) from assumptions forecasted in the ex-­ante scenario.

CHAPTER 11 Estimating GHG Effects Ex-­Post

Estimate effects
•• Type of policy and sector (which may determine In general, the emissions estimation method used to
whether bottom-­up or top-­down data and methods are estimate baseline emissions for each source/sink included in
more relevant and accurate) the GHG assessment boundary should be used to estimate
•• Number of interacting policies and actions (typically top-­ policy scenario emissions for each source/sink. However,
down methods are more appropriate when there are a in specific cases highlighted in Table 11.1, this may not be
large number of interacting policies) necessary. For example, if direct monitoring of emissions
•• Number of actors influenced by the policy (typically top-­ is used to measure GHG emissions in the policy scenario,
down methods are more appropriate when there are a consistency with the baseline emissions estimation method
large of number of affected actors) (based on forecasted activity data) is not necessary.
•• Capacity, resources, and level of expertise available to
carry out the methods
11.3 Select a desired level of accuracy
Table 11.1 lists a variety of ex-­post assessment methods
Table 11.2 outlines a range of methodological options
that may be used. The list is not exhaustive, and users may
that may be used for ex-­post assessment. When selecting
classify methods differently depending on the individual
methods to estimate GHG effects ex-­post, users should
context. Users may also use a combination of approaches
consider objectives, the level of accuracy needed to meet
listed in Table 11.1.
stated objectives, the availability and quality of relevant
data, the accessibility of methods, and capacity/resources
for the assessment.

123

Table 11.1 Ex-post assessment methods

Method Description

Bottom-up methods

Parameter values in the policy scenario are determined through data collected from affected
Collection of data from participants, sources, or other affected actors. Data collection methods may include direct
affected participants/ monitoring of emissions (such as continuous emissions monitoring systems), monitoring of
sources/other affected parameters (such as metering of energy consumption), collecting expenditure or billing data
actors (such as purchase records), or sampling methods. Activity data are combined with emission
factors to estimate policy scenario emissions.

Parameter values in the policy scenario are estimated using engineering models that
represent the emissions or parameter values that would result from the use of a particular
Engineering estimates equipment, building, vehicle, or other unit, based on assumptions about how the unit is used.
Uncertainty may arise if the way a unit is used in practice differs from the manufacturing
design specifications.

The change in parameter values or emissions (rather than the policy scenario value of
parameters or emissions) is estimated using previously estimated effects of similar policies
or actions. This involves collecting data on the number of actions taken (such as the number
of building that install insulation) and applying default values for the estimated change in
GHG emissions or other relevant parameter per action taken (such as the average reduction
in energy use per building that installs insulation). The deemed estimate may be based on
published studies, equipment specifications, surveys, or other methods. Deemed estimates
Deemed estimates are used as a lower-cost method for policies or actions that are homogenous across policy
contexts, such that deemed estimates from other contexts are representative of the policy or
action being assessed. Deemed estimates can be complemented by sampling the affected
participants or sources to determine whether the deemed estimates are sufficiently accurate
and representative. In this approach, the change is estimated directly, without subtracting
baseline scenario emissions from policy scenario emissions. Baseline emissions may be
estimated as a subsequent step by adding/subtracting the deemed estimates from observed
policy scenario emissions.

Methods that can be bottom-up or top-down depending on the context

Parameter values in the policy scenario are estimated using stock models, market statistics, and/
or surveys to measure diffusion, uptake, or stock turnover. This is typically used for equipment,
vehicles, or other units that are consumed or purchased over time. When conducting a stock
Stock modeling
modeling analysis, users should consider whether the uptake or purchasing indicators measure
replacement of equipment (and the type of equipment that is being replaced) or whether the
total usage of units is increasing.

Parameter values in the policy scenario are estimated using indicators that reflect the share of
specific equipment or changes in activities in the market, often for end-use consumption that
results in GHG emissions. In contrast to stock modeling, users may have limited data on the stock
Diffusion indicators of new equipment or other units in the asessment boundary, but may have data on indicators of
use. If indicators are monitored and there are no other drivers, this method is bottom up. Users
may also conduct a regression analysis to identify the effect of the policy, in which case the
method is considered top down.

124 Policy and Action Standard

CHAPTER 11 Estimating GHG Effects Ex-­Post

Estimate effects
Table 11.1 Ex-post assessment methods (continued)

Method Description

Top-down methods

Parameter values in the policy scenario are estimated using sector or subsector activity changes.
In this case, the user may have limited or no information on end use or stock statistics, but
Monitoring of indicators may have information on changes in relevant indicators for a sector (such as tranportation or
buildings) or subsector (such as space heating in buildings). Policy scenario parameter values
should be compared to baseline parameter values to estimate the change.

The change in parameter values and/or emissions (rather than the policy scenario value of
parameters or emissions) is estimated by using econometric models, regression analysis,
extended modeling such as input/output analysis with price elasticities, or computable general
equilibrium models. These types of models may be most appropriate for fiscal policies, such as
Economic modeling taxes or subsidies. Economic models may specify that a dependent variable (GHG emissions or
energy use) is a function of various independent variables, such as the policy being assessed,
other policies, and various non-policy drivers, such as prices, price elasticities of fuels, economic
activity, weather, and population. By doing so, models can control for various factors that affect
emissions other than the policy assessed.

Source: Adapted from Eichhammer et al. 2008.

Table 11.2 Range of methodological options for ex-post assessment

Interactions with
policies included in the
Level of accuracy Emissions estimation method baseline scenario Sources of data

Lower Lower accuracy methods
(such as Tier 1 methods in the Few significant interacting
International default values
IPCC Guidelines for National policies assessed
Greenhouse Gas Inventories)

Most significant interacting
Intermediate accuracy methods National average values
policies assessed

Higher accuracy methods (such
All significant interacting Jurisdiction- or source-
as Tier 3 methods in the IPCC
policies assessed specific data
Higher Guidelines)

Source: Adapted from AEA et al. 2009.

125

Estimate policy scenario emissions for each source/ Users shall apply the same GWP values used to estimate sink category baseline emissions. Aggregate GHG effects across all source/sink categories Users should then update the effects identified in the causal to estimate total GHG effect of the policy or action chain based on observed data before estimating each GHG Alternatively. 4. subtract baseline include assessing the degree of policy implementation emissions from policy scenario emissions to estimate to ensure that the policy or action was implemented as the GHG effect of the policy or action for each source/ planned. users scenario emissions for each source/sink category included shall estimate policy scenario emissions and removals over in the GHG assessment boundary. in tonnes of carbon dioxide (including any models) used equivalent. category (Chapter 8) 2.4 Estimate policy scenario emissions 11. This may 3. including assessing the extent of enforcement and sink category noncompliance. and 5. To do so. Estimate baseline emissions from each source/sink surveys with consumers or businesses affected by the policy category (Chapter 8) or action. If feasible based on the method used. Estimate policy scenario emissions for each source/sink Users should assess whether the effects identified in category the causal chain (Chapter 6) actually occurred.1. See Table 9.3 for and removals over the GHG assessment period. and assumptions Users shall report the total in-­jurisdiction GHG effects If users are not able to report a data source.11. justified. Aggregate baseline emissions across all source/sink the conditions are similar enough for valid comparisons. categories to estimate total baseline emissions (Chapter 8) 3. For each source/sink category. Estimate baseline emissions from each source/sink in Chapter 10. GWP values. if relevant. while Users shall estimate the GHG effect of the policy or others lead directly to an estimate of the GHG effect of the action by subtracting baseline emissions from policy policy or action.5 Estimate the GHG effect Some ex-­post assessment methods outlined in Table 11. the GHG assessment period for each source/sink category Users should estimate the GHG effect for each source/ and greenhouse gas included in the GHG assessment sink category separately. emission factors. Any sources. or greenhouse 4. or use results from similar policy assessments. occurs within the implementing jurisdiction’s geopolitical boundary). To estimate certain effects—­such as spillover effects or rebound effects—­users may find it useful to conduct 1.2 with data collected 1. Aggregate policy scenario emissions across all source/ gases in the GHG assessment boundary that have sink categories to estimate total policy scenario emissions not been estimated shall be disclosed. feasible based on the method used Users shall report the estimated total net change in GHG •• The methodology used to estimate policy scenario emissions and removals resulting from the policy/action emissions. by following these steps: boundary. data. users may follow these steps: effect. users should apply the ex-­post assessment method from Section 11. including the emissions estimation method(s) or package of policies/actions.1 of the policy or action lead to an estimate of policy scenario emissions. sinks. See Equation 11. Subtract total baseline emissions from total policy described qualitatively. both annually and cumulatively over the GHG •• All sources of data for key parameters. if 2. scenario emissions to estimate the total GHG effect of Users shall report the following: the policy or action •• Total annual and cumulative policy scenario emissions Both approaches yield the same result. including activity assessment period. if an example. users shall (the total net change in GHG emissions and removals that justify why the source is not reported. separately from total out-­of-­jurisdiction GHG 126 Policy and Action Standard .

when uncertainty is high (for example. where relevant and feasible. estimate. 127 . rather than as a single boundary). effects (the net change in GHG emissions and removals Users should report the GHG effect of the policy or that occurs outside of the jurisdiction’s geopolitical action as a range of likely values. GHG effect included in the GHG assessment boundary. “Net” refers to the aggregation of emissions and removals. “Total” refers to the aggregation of emissions and removals across all sources and sinks included in the GHG assessment boundary. because of uncertain baseline assumptions or uncertain policy Users should separately estimate and report the change interactions). if relevant and feasible. or by category of of a policy ex-­post and Box 11.2 for a case study comparing source or sink. See Chapter 12 for guidance on uncertainty in GHG emissions/removals resulting from each individual and sensitivity analysis. ex-­post and ex-­ante results.1 Users may also separately See Box 11. CHAPTER 11 Estimating GHG Effects Ex-­Post Estimate effects Equation 11.1 Estimating the GHG effect of the policy or action Total net change in GHG emissions resulting from the policy or action (t CO2e) = Total net policy scenario emissions (t CO2e) – Total net baseline scenario emissions (t CO2e)* Notes: * Taking into account policy interactions. by source or sink.1 for a case study of calculating the GHG effect report by type of effect.

1 Calculating the GHG effect ex-­post for Tunisia’s PROSOL Elec program The National Agency for Energy Conservation (ANME) from the PROSOL Elec program subsidies and interrelated of Tunisia—­together with the Deutsche Gesellschaft für bank credits. that aims to promote calculation of baseline emissions.Box 11.039 GWh calculated by multiplying the amount of kWp-­installed PV capacity by the specific production of PV systems in Tunisia. operational were derived from an ANME database. but the impact of the The number and capacity of PV systems installed and policy is designed to increase each year from 2010 to 2020. The objective of the ex-­post assessment was to assess the program’s progress to date.8 for a graph of the estimated GHG effect of the database is a complete and reliable data source. launched by ANME in 2010. and ex-­ante assessment of the PROSOL Elec program The following equation was used to calculate electricity in Tunisia.000 kWh affected sources—­production of electricity by conventional = 0. Since the policy was launched in 2010. except commercial buildings in 2010 = [5. Installed PV capacity in Tunisia [145 kWp] × specific energy production of PV systems in Tunisia [1. installation has to be registered in this database to benefit 128 Policy and Action Standard .039 GWh – 0.5. For details on the program.5). connections. as every PV program over the period 2010–30. PROSOL Elec is a renewable energy support produced by PV systems in 2010. the impact of the policy to date in 2010 is relatively small. The and support the installation of photovoltaic (PV) systems in estimated GHG effect is the difference between policy residential and commercial buildings with low-­voltage grid scenario emissions and baseline emissions.039 GWh] that the consumption of electricity in buildings was reduced Policy scenario electricity consumption in residential and by the electric energy produced by photovoltaic systems commercial buildings in 2010 = [5. The specific energy production is an empirical Internationale Zusammenarbeit (GIZ) GmbH. see Box 8. with support value based on annual on-­site measurements of 20 percent from ALCOR Consulting—­c arried out a combined ex-­post of all new installed PV systems in Tunisia.23 GWh] already installed. The electricity produced by PV systems is = 5. The See Figure 9.600 kWh/kWp] = Estimating ex-­post policy scenario emissions from one of the electric energy produced by PV systems [232.23 GWh] power plants for consumption in the residential and commercial buildings sector—­applied the same equation Baseline electricity consumption in residential and used to estimate baseline emissions (in Box 8.

8 percent.09 Mt CO2e (relative government literature. CHAPTER 11 Estimating GHG Effects Ex-­Post Estimate effects Box 11. the ex-­post assessment would have removals. these The ex-­ante baseline scenario was established from initiatives only reduced emissions by 1.62 Mt CO2e reductions from 2006.50 Ex-ante baseline scenario 13. Without the ex-­post demand and resulting GHG emissions in the mining sector baseline scenario.09 Mt CO2e 9. the South African government published the Mining activities (and the resulting emissions) also declined Energy Efficiency Accord. an assessment would have shown that were expected to rise at an annual rate of 2. which stated that in 2005.50 emissions Net GHG emissions (Mt CO2e) 12. As part of the assessment. extremely variable over the period from 2006 to 2013.53 Mt CO2e 11. energy to the ex-­post baseline scenario). the ex-­post results shown that initiatives implemented as a result of the accord from 2013 were compared to the ex-­ante estimated reduced GHG emissions in the mining sector by 2. reduction of 15 percent in the mining sector by 2015 ex-­post baseline scenario emissions in 2013 were the same (relative to the projected mining sector energy use in 2015).50 Ex-ante policy scenario emissions resulting from 10.50 = 1.00 Ex-post policy policy in 2013 scenario = 1. the mining sector was on track to meet the policy without However. Figure 11.00 Ex-ante net change in GHG 12.3 highlights the importance of developing a African mining sector to comply with the Energy Efficiency credible ex-­post baseline scenario.00 Ex-post net change in GHG 10. which calls for an energy demand dramatically as a result of the global recession. In fact. (relative to the ex-­ante baseline scenario).3 Comparison of ex-post and ex-ante results from a policy 13. as the expected emissions under the ex-­ante policy scenario Promethium Carbon carried out an ex-­post assessment of for 2013.50 2006 2007 2008 2009 2010 2011 2012 2013 129 . the energy efficiency policies implemented in the South Figure 11. energy having to implement any GHG reducing initiatives. As a result. as seen in the ex-­post baseline scenario.00 resulting from Ex-post baseline policy in 2013 scenario 11. If the ex-­ante baseline Accord in order to determine their effectiveness and to scenario had been used instead of developing an ex-­post estimate the resulting change in GHG emissions and baseline scenario. when in demand and GHG emissions in the mining sector were fact additional activities were needed.2 Comparison of ex-­post and ex-­ante results for energy efficiency policies in the South African mining sector In 2005.

emissions and removals over the GHG assessment period. These include: For example. such as weather variations. emissions from home heating decline in both Each step is explained below. If data are normalized. the effectiveness of a building insulation program in reducing emissions from home heating depends •• Normalizing results on weather conditions.6. Non-­normalized results shall be reported so decision making (optional) that the ex-­post GHG assessment reflects actual changes in In addition to estimating the GHG effect of the policy or action. It may program. hours of operation for commercial buildings. the baseline scenario and the policy scenario.6 Additional steps to inform methods used. Users may normalize the results by estimating the GHG effect that would 11. users may take additional steps to help inform decision making. levels. be useful if the objective is to compare policy effectiveness In addition to weather conditions. data for a building insulation by removing fluctuations not influenced by the policy or program could also be normalized for changes in occupancy action. in order to determine the user’s objectives. or the users shall separately report normalized results from 130 Policy and Action Standard . •• Combining ex-­ante and ex-­post assessments In this case. If one year in the GHG assessment •• Harmonizing top-­down and bottom-­up assessments period is warmer than another year. non-­normalized results and shall report the normalization 11. rather Users may separately normalize data. the GHG effect of the •• Comparing the GHG effects of policies to the GHG inventory policy in the warm year is reduced compared to a colder year •• Applying decomposition analysis because less heating energy is needed in the warmer year. depending on the than actual weather conditions. isolated from statistical fluctuations in weather.1 Normalizing results have been achieved under average weather conditions. Normalization is a process to make GHG effect achieved “in principle” as a result of the insulation conditions from different time periods comparable.

131 .6.4 Normalization with respect to weather conditions 4. CHAPTER 11 Estimating GHG Effects Ex-­Post Estimate effects impacts of economic or business cycles. if such changes 11.5 1.0 t CO2 per dwelling 2.6. A comparison can out both methods in parallel. and actions to the GHG inventory If feasible. If both methods are used.0 0. users should also compare the results of the See Box 11. Figure 11. only either a top-­down or bottom-­up are reflected in the inventory (as a result of the policy or assessment is carried out. ex-­post GHG assessment to the annual GHG emissions inventory for the relevant jurisdiction(s) or organization(s) 11.3 for an example of normalizing results. The figure shows that the average decrease in CO2 emissions per dwelling evolves rather uniformly over the time period (see blue line). This is typically only assessments to the extent possible to compare and possible with top-­down indicators or a combination of control for the differences between the methods.3 Comparing the GHG effects of policies occur during the policy implementation period.8 for more information on the relationship with GHG inventories.0 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012  CO2 emissions from space heating per dwelling  CO2 emissions from space heating with climatic corrections Source: Odyssee-­Mure 2014. Box 11. Typically. the effect shall report a description of differences between results of individual policies and actions may not be visible in from top-­down and bottom-­up methods (if applicable).5 0. especially if a policy or action avoids emissions relative to a baseline scenario but does not lead to absolute reductions in emissions.4 shows the impact of normalizing for weather conditions for an example from a German space heating policy.2 H armonizing top-­down and to understand any differences in the reported GHG bottom-­up assessments effects based on a GHG assessment (as a result of the Both top-­down methods and bottom-­up methods have policy or action) and the changes in GHG emissions that limitations. but in individual years the change in CO2 emissions per dwelling can vary significantly as a result of weather variations (see green line). See Section 1. Users bottom-­up and top-­down methods. However. it is possible to carry action as well as many other factors).5 2. However. also be a useful quality control measure to evaluate the users should harmonize the bottom-­up and top-­down reliability of the GHG assessment.0 3. the GHG inventory.3 Example of normalizing results for a German space heating policy Figure 11.5 3.0 1.

6. which can be individually tracked in blue). transportation emissions orange). The comparison of top-­d own and bottom-­ efficiency (Btu per m 2) × GHG intensity of energy up methods resulted in an unexplained difference (in (t CO2e per Btu). a broader assessment of changes in emissions in a sector Energy use for heating in the European Union increased or jurisdiction.11.to single-family homes Increase in home size Increase in home temperatures in winter Improved building regulations Subsidies for retrofits Subsidies for boiler substitution Promotion of solar collectors Other policies Unexplained difference 2004: Final energy use for heating (EU15) 0 50 100 150 200 250 Change in energy use (Mtoe) Source: Adapted from EMEEES 2009. Figure 11.5 Example of decomposition analysis for residential energy consumption in the European Union from 1990–2004 1990: Final energy use for heating (EU15) Increase in number of dwellings Shift from multi. which may result from uncertainties in some can be disaggregated into parameters that can be of the assumptions or from data quality limitations. over the period 1990–2004 (shown in gray).5 provides an example of understanding the or jurisdictional GHG inventory) over time. residential energy use can be divided into its policy drivers (shown in teal). But the policies reduced constituent parameters as follows: Number of houses energy use (shown in blue) compared to the baseline × average size of houses (m 2 per house) × energy scenario. fuel efficiency (liters of fuel consumed per km) × GHG to understand the various factors that lead to changes intensity of fuels (t CO2e per liter). Through changes in residential energy consumption that result decomposition analysis. For have increased even more as a result of various non-­ example. where relevant. energy use would to understand why emissions change over time. in overall GHG emissions (as demonstrated in a sectoral Figure 11. a policy assessment can feed into from the policies assessed rather than from other factors.4 Decomposition analysis individually tracked as follows: Distance traveled (km) × Users may apply a decomposition analysis. despite Decomposition analysis is a method to subdivide emissions the policies implemented during the period (shown into individual drivers. 132 Policy and Action Standard . Similarly. In the baseline scenario.

An individual effect can be separately estimated and reported if and ex-­post assessments it influences distinct sources/sinks within the GHG assessment In addition to the monitoring of performance indicators boundary that are not influenced by the other effects being described in Chapter 10. the change in emissions/removals from may be combined in a “rolling monitoring” approach. In this case. and the GHG reductions that have been achieved (ex-­post) compared to the ex-­ante estimates. ex-­post assessment.6. rolling monitoring can demonstrate the GHG reductions that have been initiated up to a certain date (through ex-­ante assessment). 133 . the projection provided by the ex-­ante effect. the assessment is continuously overwritten with the results from combined effect can be estimated but not the individual effects. By combining ex-­ ante and ex-­post data. ex-­ante and ex-­post monitoring estimated. which allows for a comparison of the original expectations and the final result. the source/sink is equal to the change resulting from that GHG Under this approach. CHAPTER 11 Estimating GHG Effects Ex-­Post Estimate effects Endnote 11. the GHG reductions that have been achieved up to a certain date (through ex-­ post assessment). If multiple effects influence the same source/sink.5 Combining ex-­ante 1.

12 Assessing Uncertainty .

as well as guidance on sensitivity analysis. Note: Reporting requirements are listed in Chapter 14.6) (Section 12. and estimating GHG effects ex-­post (Chapter 11). Estimate effects T his chapter provides an overview of concepts and procedures for evaluating sources of uncertainty in a GHG assessment. analysis analysis analysis and range of approaches (Section 12.2). This chapter is relevant to estimating baseline emissions (Chapter 8). monitoring performance over time (Chapter 10).4) assessment. types of Sensitivity uncertainty uncertainty uncertainty (Section 12. 135 . Figure 12. either quantitatively assessment (Section 12. • Conduct a sensitivity analysis for key parameters and assumptions in the Sensitivity analysis (Section 12.1).1) or qualitatively.4) (Section 12.3) Checklist of accounting requirements in this chapter Section Accounting requirements Introduction to uncertainty • Assess the uncertainty of the results of the GHG assessment.1 Overview of steps in the chapter Review introduction Qualitative Quantitative (Section 12. estimating GHG effects ex-­ante (Chapter 9).5) (Section 12.

Users should identify and track key uncertainty sources throughout the assessment process. including and managing uncertainty is most effective when done qualitative descriptions of uncertainty sources and during. to fit the conditions of the activity. See Figure 5. to inform how the information measure of the uncertainty of the assessment results. histograms. Uncertainty can be reported in many ways. Users should also use an appropriate number assessment of significant figures depending on the uncertainty of the Understanding uncertainty can be crucial for properly results.1 also gives greater clarity and transparency to stakeholders. possible. scenario uncertainty. if applicable. which should be used. it can typically be represented as a Reporting uncertainty probability distribution of possible values that include the Reporting information about uncertainty helps users chosen value used in the assessment. either quantitatively or qualitatively.1 Introduction to uncertainty of values. such as error bars. or the way the data was modeled reduced. As explained Parameter uncertainty in Chapter 4. Table 12. rather than after.4). Individual parameter and stakeholders assess the accuracy and uncertainty uncertainties can be combined to provide a quantitative of the reported results. but once uncertainty can no longer be practically inaccurate approximation. the assessment process. users should undertake a sensitivity consider reporting a range of values rather than a single analysis for key parameters (described in Section 12. to avoid overstating the precision of the results. quantitative representations. users should choices on the results. Quantitative uncertainty 12. Users may choose a qualitative and/or quantitative approach to uncertainty assessment.3 for an example of reporting a range 136 Policy and Action Standard . accuracy should be pursued as far as Parameter uncertainty may arise from measurement errors. and/or qualify the sources of uncertainty in a GHG If feasible. Reporting quantitative uncertainty estimates be evaluated and reported in different ways. Identifying and documenting sources of quantitative uncertainty information in the report. users should present both qualitative and assessment. such as the selection Users should report the range of possible outcomes based of baseline assumptions. summarizes each type of uncertainty.2 Types of uncertainty assessment can provide more robust results than Uncertainty is divided into three categories: parameter qualitative assessment and help users better prioritize data uncertainty. When uncertainty is high. GHG assessment. but they can to uncertainty. and model uncertainty. interpreting GHG assessment results. assessing. conservative estimates should be used. value. estimate or qualitative description of the uncertainty of the results. in future revisions of the assessment. Scenario uncertainty is created when multiple methodological choices are available. If parameter uncertainty can be determined. Users uncertainty can help users improve assessment quality should also describe their efforts to reduce uncertainty and increase the level of confidence in the results. Identifying.12. and probability density functions. The use of a standard reduces on different parameter values (representing upper and scenario uncertainty by constraining choices users may make lower bounds of plausible values) to indicate the level in their methodology. To identify the influence of these of uncertainty. as well as the range of results from sensitivity Scenario uncertainty analysis for key parameters and assumptions. improvement efforts on the sources that contribute most The categories are not mutually exclusive. Users should provide as Users shall assess the uncertainty of the results of the complete a disclosure of uncertainty information as possible. Uncertainty Users should make a thorough yet practical effort to assessment refers to a systematic procedure to quantify communicate key sources of uncertainty in the results. Users shall report a quantitative may be represented in the form of a probability distribution. Understanding uncertainty can help users understand whether to apply conservative assumptions.

models can including qualitative and quantitative approaches. application of the model beyond the domain for Users should select an approach based on the objectives which model predictions are known to be valid. or other approaches. the level of accuracy needed to meet should acknowledge model uncertainties and state model stated objectives. and capacity/resources. comparing the projections the emissions estimation method(s) or quantify the uncertainty of alternative models. CHAPTER 12 Assessing Uncertainty Estimate effects Model uncertainty 12. Table 12. For cases where quantitative uncertainty is Table 12. magnitude of model uncertainty. data availability. users uncertainty by comparing model results with independent may not be able to quantify the uncertainty of all parameters in data for purposes of verification. If feasible. Users should quantify the uncertainty for all parameters for which it is feasible.2 introduce uncertainty when used for extrapolation—­ outlines a range of approaches for assessing uncertainty.3 Range of approaches Simplifying the real world into a numeric model always Various approaches are available to assess uncertainty.2 Range of approaches for assessing uncertainty Extent of sensitivity Method of assessing Parameters and assumptions assessed Level of rigor analysis uncertainty for uncertainty Lower Few key parameters and Few key parameters and assumptions Qualitative assumptions analyzed assessed Many key parameters and Quantitative: Single Many key parameters and assumptions assumptions analyzed parameter uncertainty assessed All key parameters and Quantitative: Propagated All key parameters and assumptions Higher assumptions analyzed parameter uncertainty assessed 137 . or algorithms to • Model limitations reflect the real world Table 12. For example.1 Types of uncertainties Types of uncertainty Description Possible sources of uncertainty Uncertainty regarding whether a parameter • Activity data Parameter uncertainty value used in the assessment accurately • Emission factors represents the true value of a parameter • Global warming potential (GWP) values • Methodological choices • Selection of baseline scenario and Variation in calculated emissions due to Scenario uncertainty estimation of baseline emissions methodological choices • Selection of policy scenario and estimation of policy scenario emission Limitations in the ability of modeling Model uncertainty approaches. equations. introduces some inaccuracies. that is. limitations qualitatively. using expert judgment regarding the of the total estimated change in GHG emissions and removals. Users of the assessment. users may estimate model Depending on the methods used and data availability.

variations in the sensitivity analysis should at least cover those that are highly variable or most likely to significantly a range of +10 percent and -10 percent (unless this range is impact assessment results. Table 12. but they should be varied results to changes in those parameters. over the period 2014–20. MEPS is a national policy that intends to gradually eliminate incandescent light bulbs from the market and reduce energy consumption from residential lighting. Key parameters are rule.not possible to calculate. users should adjust the sensitivity analysis. See Box 12.3 Estimated values for replacement rate used for policy scenario estimation 2014 2015 2016 2017 2018 2019 2020 0% 37% 64% 74% 84% 94% 95% 138 Policy and Action Standard . 9. Through the assessment.1 for a case study of carrying out a To conduct a sensitivity analysis. Users should identify these not deemed reasonable under the specific circumstances). value of key parameters to determine the impact of such Box 12.000 t CO2e on a cumulative basis.1 Sensitivity analysis for Chile’s Program for Minimum Efficiency Performance Standards for residential lighting The Climate Change Office of Chile’s Ministry of Environment—­together with the Energy Efficiency Department of the Ministry of Energy—­carried out an ex-­ante assessment (according to the Policy and Action Standard) of the Program for Minimum Efficiency Performance Standards for residential lighting (MEPS). users should conduct sensitivity analyses for key parameters. the policy was estimated to reduce CO2 emissions by 247. One key parameter in the assessment is the estimated replacement rate—­the percentage of households that replace incandescent light bulbs with efficient lamps each year. Users should consider and to explore model sensitivities to inputs. Not all parameters analysis involves varying the parameters (or combinations need to be subjected to both negative and positive of parameters) to understand the sensitivity of the overall variations of the same magnitude.3 presents the assumed values for the replacement rate over the GHG assessment period. The analysts made assumptions about the replacement rate each year based on a combination of national statistics and expert judgment. A sensitivity reasonable variations in parameter values. Table 12.730.4 Sensitivity analysis Sensitivity analysis is a useful tool to understand differences resulting from methodological choices and assumptions variations on the overall results. which is less data-­and time-­intensive than quantitative uncertainty assessment. parameters in Chapters 8.000 t CO2e per year (on average). Past trends may Users shall conduct a sensitivity analysis for key parameters be a guide to determine the reasonable range. and 11. or 1. In addition to estimating or describing uncertainty. uncertainty should be assessed and described qualitatively. 12. based on what is considered reasonable. As a general and assumptions in the assessment. Users shall report the method or approach used to assess uncertainty.

000 t CO2e or as low as 1. and also highly sensitive to assumptions about hours of lamp use.000 -1.000 t CO2e.000 -865.4 S  ensitivity analysis for ex ante results over GHG assessment period (2014–20): Activity data variation considered Activity data variation assessed Sensitivity Replacement Hours of Grid emission Housing units scenarios rate lamp use factor Primary scenario 0% 0% 0% 0% Alternative scenario 1 +50% +20% +50% +15% Alternative scenario 2 -50% -20% -50% -15% Table 12. 139 .5 Sensitivity analysis for ex ante results over the period of assessment (2014–20): Cumulative results for different scenarios GHG emission variation (t CO2e) Sensitivity Replacement Hours of Grid emission Housing units scenarios rate lamp use factor Primary scenario -1. or as low as 50 percent of the assumed value in a given year (see Table 12.730.000 The results confirm that the assessment is highly sensitive to assumptions about the replacement rate. a range of likely values was defined. In the case of the replacement rate.080.000 -1.730. the variation can lead to estimated GHG reductions as high as 2. The analysis also included three other key parameters: number of houses. hours of daily lamp use. For the replacement rate.000 -1. CHAPTER 12 Assessing Uncertainty Estimate effects Box 12.080.000 -1.730. Table 12.000 -1.000 -1. Table 12. it was assumed that the value could be as high as 150 percent.000 -2.037. Chile can use these results to prioritize future data collection efforts to reduce uncertainty of future assessments and improve understanding of how consumers are likely to respond to the program. and grid emission factors.553.4).470.5 shows the sensitivity of the overall results to the variation in each key parameter.595.000 -1.000 Alternative scenario 2 -1.000 Alternative scenario 1 -2.989. For each parameter. As a result. conservative assumptions were used and a sensitivity analysis was carried out to define overall sensitivity of estimates of emissions impact to variations in the assumed replacement rate.037.823.1 Sensitivity analysis for Chile’s Program for Minimum Efficiency Performance Standards for residential lighting (continued) The assumed replacement rate was expected to be a high source of uncertainty in the assessment.730.

or low. Evidence confidence. medium.2 and scenarios should be aggregated to provide a level of confidence for the overall assessment. amount. Medium-­quality evidence The confidence level of individual parameters. if feasible. This step may in this section is distinct from statistical confidence not be applicable if there is only one source available. quality. medium. and low agreement means that most or result. (The qualitative confidence level described of the sources had different conclusions.2 depicts summary statements the quantity and quality of evidence and can be defined in for evidence and agreement and their relationship with overall terms of being robust. quality. where confidence increases as evidence should be considered robust when there is a large quantity and agreement increase. integrating both refers to the sources available for determining a parameter the evaluation of evidence and the degree of agreement value. or limited. As a rule of thumb. The level of agreement means that all sources had the same conclusion. Evidence should be assessed with regard to both in one metric. Evidence should be considered considered very high.12. 140 Policy and Action Standard . The degree of agreement can be defined on (1) the quantity and quality of evidence and (2) in terms of high. The level of confidence can be of high-­quality evidence. the evidence found should quality evidence. high the degree of agreement of the evidence. evidence the user’s judgment about the result.2 Summary statements for evidence and agreement and their relationship with confidence High High agreement High agreement High agreement Confidence scale Limited Evidence Medium Evidence Robust Evidence Agreement Medium agreement Medium agreement Medium agreement Limited Evidence Medium Evidence Robust Evidence Low agreement Low agreement Low agreement Limited Evidence Medium evidence Robust Evidence Low Evidence (type.5 Qualitative uncertainty analysis1 The degree of agreement is a measure of the consensus To qualitatively assess uncertainty. Evidence should be considered limited be sourced from multiple credible. Figure 12. and should not be interpreted in statistical terms. users should or consistency across available sources for a parameter characterize the level of confidence of the results based value or result. to principles of research quality.) A level of confidence provides a qualitative synthesis of When characterizing parameter uncertainty. independent institutions. In medium when there is a medium quantity of medium-­ the best case (high confidence). confidence is a metric that can be expressed qualitatively medium agreement means that some sources had the to express certainty in the validity of a parameter value same conclusion. when there is a small quantity of low-­quality evidence. consistency) Source: Adapted from IPCC 2010. medium. Low-­quality evidence shows deficiencies in adhering and the reasons for their presentation should be explained. low. Presentation of findings with “low” and “very low” High-­quality evidence adheres to principles of research confidence should be reserved for areas of major concern. models. high. and very low. Figure 12. is a mix of high-­quality and low-­quality evidence.

Good Practice Guidance and Uncertainty include the following: Management in National Greenhouse Gas Inventories.” In Overview which may be a combination of measured data. “Uncertainties.” estimated.ecoinvent. “GHG Protocol Guidance on •• Expert judgment (based on as much data as available) Uncertainty Assessment in GHG Inventories and •• Other approaches Calculating Statistical Parameter Uncertainty.org.” Accessible at http://www. Chap. reflecting Users should collect appropriate information to estimate the combined uncertainty of the various parameters.” In Guidelines for parameters (from IPCC 2006 or other literature) National Greenhouse Gas Inventories. for each parameter. 2003. Approaches to combine •• WRI/WBCSD. The input parameters are varied at random Propagated parameter uncertainty is the combined effect but restricted by the given uncertainty distribution of each parameter’s uncertainty on the total result. 2011. 1.org/support/documents-­and-­files. •• Error propagation equations: An analytical method ghgprotocol. 10. 1. Ecoinvent Database. Approaches of quantifying single parameter uncertainty •• IPCC. •• Pedigree matrix approach (based on qualitative data Aggregating Statistical Parameter Uncertainty in GHG quality indicators) Inventories: Calculation Worksheets. Accessible at http:// www.or.ghgprotocol. estimates •• WRI/WBCSD. then value. This section is adapted from IPCC 2010. CHAPTER 12 Assessing Uncertainty Estimate effects 12. 2006. “Uncertainty.6 Quantitative uncertainty analysis •• Monte Carlo simulation: A form of random sampling Quantitative uncertainty analysis should be undertaken used for uncertainty analysis that shows the range of where feasible to characterize the uncertainty of key likely results based on the range of values for each parameters. Version 3.ghgprotocol. Accessible at http:// •• Survey of experts to generate upper-­and lower-­bound www. used to combine the uncertainty associated with individual parameters from a single scenario. 3. and expert judgment.iges. Chap. “Quantitative Inventory Uncertainty. Accessible at http://www. overall uncertainty as well as source-­/sink-­specific estimates of uncertainty at a specified confidence level Further references (preferably 95%). various methods for quantifying uncertainty may be used. Vol.ipcc-­nggip. distributions. 2003. 141 . In order to perform Monte Carlo simulation. 2013. Users should use the best available estimates. 2011.org. Equations involve estimates of the mean and standard deviation Endnotes of each input.ghgprotocol. •• Probability distributions from commercial databases •• World Resources Institute (WRI) and World Business •• Uncertainty factors for parameters reported in literature Council for Sustainable Development (WBCSD).jp/public/ standard deviations) gp/english. 2.org. 2000. Estimates of uncertainty should be made for parameter and probabilities associated with each individual parameters (single parameter uncertainty). model outputs. •• Measured uncertainty approach (represented by Accessible at http://www. Since it may not be practical to measure For guidance on the methods outlined in this section. see uncertainty of every source or sink category in a single the references below. •• Default uncertainty estimates for specific activities or •• IPCC. estimates for the entire assessment. they may be combined to provide uncertainty Accessible at http://www. Repeated calculations produce a distribution of the predicted output values. published and Methodology: Data Quality Guideline for the information. Uncertainty Assessment Template uncertainties include the following: for Product GHG Inventories. way.org. •• Ecoinvent. Once the uncertainties of single parameters have been •• WRI/WBCSD. Adapted from DFID 2014. aggregated to source and sink categories as well as to the input parameters must be specified as uncertainty assessment as a whole (propagated parameter uncertainty).

13 Verification .

the requirements of a regulation. •• Validation: Provides assurance of ex-­ante estimates before or during the implementation of a policy or action The verification process evaluates whether the •• Verification: Provides assurance of ex-­post estimates requirements of the standard have been met. while to a policy or action has been estimated and reported 143 . is the process for assessing the level of assurance. respectively. iterative process that provides feedback. the term “verification” assumptions have been applied. The terminology differs.1 Introduction Assurance is the level of confidence that the information according to the requirements of the Policy and Action reported is relevant. verification may be required or beneficial. To Assurance can be provided for both ex-­ante and ex-­post provide assurance. and without material misstatements. Verification should be is used to include both verification and validation. To meet This chapter provides an overview of the process for some objectives (such as external reporting or attracting providing assurance that the reported GHG effect of finance). Verification considering whether to do so. to pursue depending on individual objectives. a cooperative. verifying the results of the GHG assessment is useful for providing the implementing entity and relevant stakeholders with confidence in the results. Users should decide whether and what type of verification allowing users to improve accounting practices. Verify T his chapter provides guidance on verification. a program. or good practice guidance. by either validating or verifying the change in and systematic verification process for the assessment of GHG emissions. consistent. Users that choose not to verify the results may skip this chapter. While verification is not a requirement of this standard. It is relevant to users planning for verification or transparent. whether during or after the implementation of a policy or action the GHG accounting and reporting principles have been followed. Standard. 13. verifiers follow a documented rigorous assessments. complete. and whether reasonable methods and For the purposes of this standard. accurate. for example the approach in both cases is essentially the same. a standard. but the reported information against agreed criteria.

GHG reduction goal Verification is related to quality assurance (QA) and •• Enhanced internal accounting and reporting practices quality control (QC). and verification. if so. 13. and and in its relative contribution toward meeting a broader the opinion issued by the verifier. Users should use any combination of (such as data collection. the type of verification (first party or effectiveness of a policy or action after implementation third party). For additional guidance on QA/QC and knowledge transfer within the organization or and verification. •• Improved efficiency in planning or implementing further “Quality Assurance/Quality Control and Verification. 1.3 Key concepts •• Increased confidence in the reported information Table 13.” mitigation policies and actions •• Increased confidence in the results reported by other entities using the Policy and Action Standard. depending on individual objectives internal reporting systems). 6. estimation methods. Vol. and QC. implementation of the policy or action 144 Policy and Action Standard .meet other objectives (such as internal decision making) •• Increased confidence in the reported progress of a verification may not be necessary. Users should have the results •• Greater stakeholder trust in the reported results of the GHG assessment verified where feasible. the relevant competencies of the verifier(s).2 Benefits of verification promoting a credible representation of the relative Obtaining assurance is valuable for reporting entities and efforts undertaken by different entities participating in a others who make decisions informed by the estimated GHG collective goal effects of a policy or action. Chap. and facilitation of learning and circumstances.1 includes definitions of key concepts related to as a basis for GHG mitigation strategies before assurance and verification. Verification can provide a variety of benefits. policy or action in meeting its expected outcome during implementation Users shall report whether the GHG assessment results •• Increased confidence in the reported performance and were verified and. QA. see the IPCC Guidelines for National jurisdiction Greenhouse Gas Inventories (2006). including the following: 13.

Discrepancies are differences between reported information by the user and information that could result from the proper application of the Policy and Action Standard’s requirements and guidance. occurs when individual or aggregate Materiality errors. omissions. A materiality threshold is the quantitative level of material discrepancy above which an assertion is considered in nonconformity with a standard. The assertion is presented to the verifier performing assurance. standards • Examples: ISO 14064-3 Specification with Guidance for the Validation and Verification of Greenhouse Gas Assertions. and enforcing authorities. estimation methods and documentation used to calculate changes in emissions and that support the subject matter of the reporting entity’s assertion. Data sources. supplemented by our entity-specific Verify policies and methodologies described in the policy assessment report. A material discrepancy. Central to a verifier’s activities is the assessment of the risks of material discrepancies in the change in GHG emissions reported by the user. If the verifier determines that a conclusion cannot be opinion expressed. The change is calculated in conformity with the GHG Protocol Policy and Action Standard. Requirements and guidance of the Policy and Action Standard against which the reported policy or Policy and Action action results will be evaluated. implementing. Standard criteria • Example: Table 3. internal audit reports on the performance of the policy or action. the opinion should cite the reason. or materiality. documents prepared by an independent party and/or the reporting entity. Evidence • Examples: Physical observations on the implementation of the policy or action. interview with the planning. The process that results in an assurance opinion on whether an assertion is in conformity with the Policy Verification and Action Standard’s requirements. See Section 13. regulation.” Assessment An assessment report. documents all required accounting steps and reporting report requirements. • Example of an assertion: “The estimated greenhouse gas effect of the policy relative to the most Assertion likely baseline scenario is a reduction of 2 million tonnes of CO2e.4. Evidence should be sufficient in quantity and appropriate in quality.2 in Chapter 3. which determine how the assurance process and the Assurance verification steps are performed to be able to formulate an assurance opinion. Standards or requirements used by verifiers. See Table 13.3 for examples of assurance opinions. The type of Subject matter verification performed will determine which subject matter(s) should be assessed. CHAPTER 13 Verification Table 13. which summarizes the requirements of the standard. UNFCCC Clean Development Mechanism Validation and Verification Standard. or benchmark. and misrepresentations have an impact on the estimated change in GHG emissions significant enough that it could influence the user’s decisions. The results of the verification of the reporting entity’s assertion regarding the estimated change in GHG Assurance emissions resulting from the policy or action. such as policy evaluation reports.1 Key concepts Concept Description and examples A statement by the reporting entity on the results of a policy or action. The GHG assessment results and supporting information included in the assessment report. completed by the user. 145 .

A list of the main steps. The verifier be done by a partner organization or by the party receiving needs to check that the information reported meets the the data.13. rather than by an internal or independent party.6 Levels of assurance action effects over time The level of assurance refers to the degree of confidence •• The assessment of uncertainty that stakeholders can have in the reported GHG assessment •• The assessment report results. accredited third-party verification verification body 146 Policy and Action Standard .2). the verifier assesses whether all and it can be a worthwhile learning experience prior to the requirements of the standard are met. To verify similar procedures and processes. Verification could also the standard constitutes a subject matter. and assumptions •• The treatment of policy interactions •• The data collection and monitoring of the policy or 13. requirements and that the methods and assumptions Inherently. implementing and reporting on a policy or action.4 Subject matter relevant to the 13.2 Types of verification Type of verification Description Internal verification performed by independent person(s) from within the reporting entity. First-­party verification from a policy or action in conformity with the Policy can also provide confidence in the reliability of those results. Each step in commissioning third-­party verification. There are two levels of assurance: limited and reasonable. third-­party verification offers a higher degree used are reasonable. Both first-­and third-­party verifiers should follow matter assessed in the assurance process. Third-party • Examples: independent accounting. Assurance performed by person(s) from an independent entity. promotion of an entity •• The causal chain and list of all potential effects official conditional on performance. Third-­party verification that these results represent a true and fair account of is likely to increase the credibility of the reported policy or the change in GHG emissions and removals resulting action results to external stakeholders. pending renewal of funding for a policy or action in Chapter 3 for the full list. Entities receiving first-­ •• The baseline methodology and assumptions party verification should report how potential conflicts of •• The ex-­ante and/or ex-­post assessment methodology interest were avoided during the verification process. involved in the estimation of GHG effects independence may include allegiance to an employing required by the standard is included below.5 Types of verification Policy and Action Standard Either first-­or third-­party verifiers may be used (see Table The GHG assessment results are the ultimate subject 13. Limited assurance provides a “negative opinion” that no Table 13. or subject of objectivity and independence. or political pressure considered in the assessment and other conflicts of interest between the reporting •• The definition of the GHG assessment boundary around entity and the verifier. engineering or policy analysis organization. These threats should be assessed significant effects throughout the verification process. See Table 3. First-party • Example: person(s) from a different department in an organization not involved in the process of verification planning. The thoroughness with which the assurance evidence is obtained is less rigorous in limited assurance. and Action Standard.2 entity. Typical threats to matters. based on reported performance.

8. For example. Table 13. The highest level of assurance other information that can be provided is a reasonable level of assurance. •• Assurance and verification experience •• Knowledge of. and experience in. 13. GHG assessment 13. and conclusions on the final performance and effectiveness misrepresentations of a policy or action through ex-­post assessment.” Positive opinion Reasonable • Example: “In our opinion the reporting entity’s assertion that the policy’s change in GHG emissions assurance from the baseline scenario is a reduction of 2 million tonnes CO2e is fairly stated. including quality gives examples of limited and reasonable assurance control procedures opinions. The following sections the assurance opinion credibility. Reasonable assurance provides a •• Ability to assess internal information systems “positive opinion” that all assertions are valid. wants to or methodological decisions could have a material obtain confidence that a policy or action is likely to achieve impact on the estimated effect of the policy or action its expected GHG effect ex-­ante. and the professional will determine the rigor of the verification process and the skepticism required to challenge data.8 Verification process Many elements have to be considered as part of the systematic process for providing assurance that an assertion 13. including baseline and policy The timing of verification depends on the subject matter scenario development and needs of the entity. and is in conformity with the GHG Protocol Policy and Action Standard. as well and inform a potential course adjustment.3 Levels of assurance Assurance opinion Nature of opinion Negative opinion • Example: “Based on our verification. methods. The level of assurance requested by the user •• Credibility. Alternatively. CHAPTER 13 Verification errors were detected. the an interim or final report to provide a progress update selected modeling approach and assumptions. or it can offer as the magnitude of potential errors. omissions. independence.” 147 . A competent describe the main elements of the verification process. verification can be •• Knowledge of the reporting entity’s activities performed before the implementation of a policy or action •• Technical expertise to determine whether any technical when the user.1 Timing of the verification process for policies and actions. This Table 13. verifier has the following characteristics: assuming that the entity has already selected a suitable type and a level of assurance and identified a competent verifier. in all material respects. we are not aware of any material modifications that should be Limited assurance made to the entity’s assertion that the policy’s change in GHG emissions from the baseline scenario is a reduction of 2 million tonnes of CO2e and is in conformity with the GHG Protocol Policy and Action Standard. and amount of evidence required. assurance •• Ability to assess the emission sources and sinks can be performed before an entity’s public release of included in the GHG assessment boundary. Absolute assurance is typically not provided since it is not Verify feasible to test 100 percent of the inputs to the assessment.7 Competencies of verifiers of a reported change in GHG emissions is in conformity Selecting a competent verifier is important to give with the Policy and Action Standard. as part of its planning activities.3 for gathering and reporting data.

decisions and supporting rationales.8. Verification: This step requires carrying out the verification activities as planned in the schedule. the reporting entity main steps in a schedule include the collection and should ensure that the following are prepared analysis of evidence as well as the appraisal of the and made available to the verifier: evidence against the standard’s criteria. It identifies the level and objectives of the of implementation of the policy or action. The the assertion of a change in GHG emissions. process through the use of a data management plan is helpful for ensuring that the assurance evidence is available. and information most likely to affect the •• Identifying issues that require further elaboration. whether performed whether adequate justification for the selected by a first-­or third-­party verifier who provides limited or choice has been provided reasonable assurance. The Prior to initiating verification. by evidence methods. data sources •• Where multiple methodological choices. when necessary. and assumptions: This step requires identifying GHG emissions from the 13. The type used for estimating the change in GHG emissions. internal evaluations and performance provided. determining The systematic process of verification. and peer reviews). The verification •• The entity’s written assertion on the estimated change process generally includes the following steps: in GHG emissions and removals resulting from the •• Determining whether the requirements in the policy or action standard are correctly interpreted by the user and •• The completed assessment report and a referenced whether the assessment is in conformance with the description of the tools and methods used requirements •• Access to sufficient and appropriate evidence (such •• Assessing the relevance. Identifying data. transparency. methods. so that the verification materials to be verified). used are clearly disclosed along with references and sources as well as whether justifications are provided 1. as baseline data. considered. the type of policy or action entity relevant to the policy or action are also identified. or analysis or action. consistency. completeness. equations. or the release assurance. as well as the assumptions and methods evidence the verifier needs is easily accessible. 3. Planning and scoping: Planning involves the (where required) that are reasonable and supported prioritization of effort by the verifier toward the data. features several steps that are •• Checking whether all the assumptions and data common to all approaches. Maintaining documentation of the GHG assessment and internal audits.8. the materiality threshold.3 Steps of verification or parameters are available to the user. reported change in GHG emissions from a policy research. is useful in improving the estimation of the change in and the activities and schedule the verifier plans to GHG emissions. the subject matter and the level of assurance selected. The time required for implement to assess the GHG assertion against the verification depends on the nature and complexity of standard’s principles and requirements. If of evidence and documentation requested by the verifier applicable. omissions. and accuracy of the data/information interim reports.2 Preparing for verification sources and sinks included in the baseline and policy Preparing for verification is a matter of ensuring that the scenario. as well as the reliability and credibility of reports. 2.allows for any material issues to be corrected before the and magnitude of potential errors. 13. and the type and level of assurance being such as quality control and quality assurance activities sought. and release of the assurance opinion (or revised opinion) and misrepresentations in the GHG assertion. the criteria and scope (subject matter and date of the assessment report. In practice the verifier assesses the risks 148 Policy and Action Standard . The work assurance plan is structured around the assurance should be initiated long enough before the planned date standards. the internal controls and systems of the depends on the subject matter.

As part of their opinion. Depending on the level of assurance and materiality threshold agreed. including details on any discrepancies sample measurements (if applicable). verifiers should report the following: •• A description of the studied policy or action •• A reference to the reporting entity’s assertion included in the GHG assessment report •• A description of the assurance process •• A list of the Policy and Action Standard’s principles and requirements •• A description of the reporting entity’s and verifier’s responsibilities •• Whether the verification was performed by a first or third party •• The verification standard used to perform the verification. verifications should consider the with Guidance for the Validation and Verification of following activities: Greenhouse Gas Assertions •• Interviewing relevant stakeholders and experts •• How any potential conflicts of interest were avoided •• Reviewing relevant documents. the verifier assesses if the information reported by the entity is in conformity with the standard’s criteria or if there is any material discrepancy in the information reported. Verify 5. preferably noted or issues encountered in performing the focusing on issues deemed material verification •• Other standard auditing techniques and procedures •• Practical modifications to help rectify any discrepancies 149 . including available in the case of first-­party assurance assessment reports or studies of other similar •• A summary of the work performed policies or actions •• The level of assurance achieved (limited or •• Cross-­checking information provided by the reasonable) or a statement as to why an opinion assessment entity with independent sources other cannot be expressed than those used (for example. the nature of which depends on the level of assurance agreed (see Table 13. Forming and reporting an assurance opinion: The verifier next forms an assurance opinion.3). if set research) •• Any additional details regarding the verifier’s •• Site visits to observe monitoring systems and take conclusion. Assessing materiality: This consists in determining if the verification findings support the entity’s assertion on the change in GHG emissions from its policy or action. CHAPTER 13 Verification 4. through independent •• The materiality threshold. for example ISO 14064–3: Specification To complete these steps.

14 Reporting .

and if so. the difference between the •• Whether the assessment applies to an individual policy/ baseline scenario and the policy scenario). and if a package.e. both annually and which individual policies and actions are included in the cumulatively over the GHG assessment period package •• Total in-­jurisdiction GHG effects (the total net change •• The objective(s) and the intended audience of the GHG in GHG emissions and removals that occurs within assessment the implementing jurisdiction’s geopolitical boundary). in tonnes action or a package of policies/actions. 14. This chapter also lists optional reporting information that users should report. if assessments relevant and feasible 151 ..ghgprotocol. Users shall report the following information about the an ex-­post assessment. •• The year the assessment was developed separately from total out-­of-­jurisdiction GHG effects (the •• Whether the reported assessment is an update of a net change in GHG emissions and removals that occurs previous assessment. links to any previous outside of the jurisdiction’s geopolitical boundary). if relevant. or a combined ex-­ante and GHG assessment and the estimated change in GHG ex-­post assessment emissions and removals resulting from the policy or action: •• The GHG assessment period •• The estimated total net change in GHG emissions and •• The title of the policy or action (or package of policies/ removals resulting from the policy/action or package actions) assessed of policies/actions (i. A sample reporting template is available at www.org/ policy-­a nd-­a ction-­s tandard.1 Required information •• Whether the GHG assessment is an ex-­ante assessment. Report T his chapter provides reporting requirements explaining what information shall be publicly reported in order for a GHG assessment report to be in conformance with the GHG Protocol Policy and Action Standard. of carbon dioxide equivalent.

Users shall report the following information about the Estimating Baseline Emissions policy or action assessed and the methodology used to (Chapter 8) estimate changes in GHG emissions and removals resulting •• A description of the baseline scenario (i. the date of implementation. emission factors. actions. with justification for their exclusion policy drivers that affect each parameter •• The approach used to determine the significance of •• All sources of data used for key parameters. or each parameter is assumed to be static or dynamic. if implemented). •• A list of policies. with justification for their exclusion associated with the GHG effects of the policy or action •• The baseline values for key parameters (such as activity •• A causal chain data. and the date feasible based on the method used of completion (if applicable) •• The methodology and assumptions used to estimate •• The implementing entity or entities baseline emissions. which planned policies are included (Chapter 6) •• A list of non-­policy drivers included in the baseline •• A list of all potential GHG effects of the policy/action that scenario were considered in the assessment •• Any relevant non-­policy drivers excluded from the •• A list of all source/sink categories and greenhouse gases baseline scenario.. with the policy or action assessed justification for their exclusion •• Whether the baseline scenario includes any planned Identifying Effects and Mapping the Causal Chain policies and if so. and assumptions •• Any potential interactions with other policies and actions and whether and how policy interactions were estimated •• Any sources. sinks. including whether •• Any potential GHG effects.e. GWP values. the primary sectors. a description from the policy or action: of the events or conditions most likely to occur in the absence of the policy or action) and justification for why Defining the Policy or Action it is considered the most likely scenario (Chapter 5) •• Total annual and cumulative baseline scenario emissions •• The status of the policy or action (planned. including GHG effects activity data. source/sink categories. baseline scenario and the greenhouse gases targeted (if applicable) •• Any implemented or adopted policies. emission factors. or •• Other related policies or actions that may interact with projects excluded from the baseline scenario. or and removals over the GHG assessment period. and a qualitative description of those sources. and projects included in the subsectors. and greenhouse gases excluded from the GHG assessment assumptions regarding other policies/actions and non-­ boundary. and GWP values) in the baseline emissions estimation method(s) Defining the GHG Assessment Boundary •• The methodology and assumptions used to estimate (Chapter 7) baseline values for key parameters. or gases 152 Policy and Action Standard . with justification. including the emissions estimation •• The objective(s) of the policy or action method(s) (including any models) used •• The type of policy or action •• Justification for the choice of whether to develop new •• A description of the specific interventions included in baseline assumptions and data or to use published the policy or action baseline assumptions and data •• The geographic coverage. actions. sinks. and emission source/sink categories targeted. or greenhouse gases in the GHG assessment boundary that have not been estimated in the baseline scenario. adopted.

with justification. CHAPTER 14 Reporting Estimating GHG Effects Ex-­Ante Estimating GHG Effects Ex-­Post (Chapter 9) (Chapter 11) •• A description of the policy scenario (i. or greenhouse gases in the GHG •• All sources of data used for key parameters. a description •• Total annual and cumulative policy scenario emissions of the events or conditions most likely to occur in the and removals over the GHG assessment period. sinks. and opinion issued by the verifier whether the performance of the policy or action is on track relative to expectations •• Whether the assumptions on key parameters within the ex-­ante assessment remain valid 153 . if presence of the policy or action) feasible based on the method used •• Total annual and cumulative policy scenario emissions •• The methodology and assumptions used to estimate and removals over the GHG assessment period. emission factors. GWP values. the relevant competencies of the verifier(s). sinks. •• The performance of the policy or action over time. and assumptions estimation method(s) (including any models) used •• Any potential interactions with other policies and actions •• The policy scenario values for key parameters (such as and whether and how policy interactions were estimated activity data. the type of verification (first party or third party). including •• Description of differences between results from top-­ whether each parameter is assumed to be static down and bottom-­up methods (if applicable) or dynamic •• Any sources. emission factors. the normalized results separately emissions estimation method(s) reported from the non-­normalized results. including assessment boundary that have not been estimated in activity data. and uncertainty of the results a qualitative description of the change to those sources. or gases parameters and assumptions •• The method or approach used to assess uncertainty Monitoring Performance over Time (Chapter 10) Verification •• The key performance indicators selected and the (Chapter 13) rationale for their selection •• Whether the GHG assessment results were verified. and the policy scenario. and the •• The methodology and assumptions used to estimate normalization methods used policy scenario values for key parameters. and •• The sources of indicator data if so. and a qualitative assumptions description of the change to those sources. greenhouse gases. and the as measured by the key performance indicators. GWP values. •• The range of results from sensitivity analysis for key sinks. or gases •• Any potential interactions with other policies and actions and whether and how policy interactions were estimated Assessing Uncertainty •• Any sources. including activity policy scenario emissions. and GWP values) in the •• If data are normalized. or GHG effects (Chapter 12) in the GHG assessment boundary that have not been •• A quantitative estimate or qualitative description of the estimated in the policy scenario. emission factors. policy scenario emissions.. including the emissions if feasible based on the method used estimation method(s) (including any models) used Report •• The methodology and assumptions used to estimate •• All sources of data for key parameters.e. with justification. including the emissions data. sinks.

rather than a single estimate. or by source or sink category and the methodologies used to quantify costs •• A probability-­adjusted estimate (or expected value) •• Any limitations in the assessment not described elsewhere of the net changes in GHG emissions and removals •• Other relevant information resulting from the policy or action. possible. where relevant: •• The net change in GHG emissions and the net change in •• Any possible double counting of GHG reductions by GHG removals. separately reported by likelihood category (very likely. and any practices or •• Net changes in GHG emissions and removals. in-­jurisdiction GHG effects effects. when uncertainty is high (for example. short-­term effects. action. very unlikely) •• Annual or cumulative GHG effects over time periods other than the GHG assessment period •• Trends in key performance indicators used to monitor performance. unintended effects. likely.e. out-­of-­jurisdiction effects.2 Optional information Users should report.. because of uncertain baseline assumptions or uncertain policy interactions) •• Net changes in GHG emissions and removals resulting from likely effects. separately reported in tonnes of carbon other parties that may claim GHG reductions from dioxide equivalent the same policies or actions. such as the change in key performance indicators since the last reporting period •• The GHG inventory of the jurisdiction or organization implementing the policy or action •• Historical GHG emissions of the jurisdiction or organization implementing the policy or action •• GHG mitigation goal(s) of the jurisdiction or organization implementing the policy or action •• The contribution of the assessed policy or action toward the jurisdiction’s or organization’s GHG mitigation goal •• Any potential overlaps with other policies and actions 154 Policy and Action Standard . reported action.14. and the methodologies used to estimate non-­ intended effects. with disclosure that the results represent a probability-­adjusted estimate •• A range of likely values for the net change in GHG emissions and removals. reported precautions used to avoid double counting separately by individual greenhouse gas •• A description of non-­GHG effects of the policy or •• Net changes in GHG emissions and removals. •• Cost and/or cost-­effectiveness of the policy or action and long-­term effects). estimates of non-­GHG effects of the policy or separately by individual effect. by type of effect (i. separately reported from net changes in GHG emissions and removals resulting from unlikely effects •• Net changes in GHG emissions and removals. unlikely.

.

Appendix A Guidance on Collecting Data T his appendix provides general guidance on data collection and is relevant to Chapters 8. Users should collect data of sufficient quality to ensure that the GHG assessment appropriately reflects A. 10. For each parameter A. Developing a GHG assessment of a policy or action is for those effects determined to be most significant when typically a data-­intensive process. and 11. In general. and industry associations) 156 Policy and Action Standard . 9. government statistics. assessment depends on the quality of the data used to develop it.1 Prioritize data collection efforts needed to estimate effects of policies or actions.1 for descriptions of each data type. 9. including activity data and emission factors (see Chapters 8–11).1 Primary and secondary data Type of data Description Data collected from specific sources or sinks affected by the policy or action (for example. collecting data. More specific information on the data required for specific steps in the GHG assessment is provided in Chapters 8. entity. 10.1 for an overview of the process for data availability. Users should prioritize data collection efforts on the GHG users may use either primary data or secondary data. users should collect higher quality data Figure A.2 Select data actual changes in GHG emissions and removals resulting After prioritizing GHG effects. See Figure A. literature studies. The quality of the GHG defining the GHG assessment boundary (see Chapter 7). both internal and external to the reporting level of accuracy needed to meet those objectives. effects expected to have the most significant impact on total See Table A. Secondary data data from published databases. results. fuel use Primary data measured at a specific facility) Data that is not collected from specific sources or sinks affected by the policy or action (for example. GHG emissions calculation methods require a variety of parameters. users should select data from the policy or action and serves the decision-­making based on the objectives of the assessment and the needs of users.1 Iterative process for collecting data Prioritize data Improve data collection Select data Collect data Fill data gaps quality over efforts time Table A. and 11. and the quality of available data.

The estimated savings per home can Users may use any combination of primary and be based on either primary data (measured changes in secondary data. time. mass balance. most policy or action. stoichiometry. or peer-­reviewed. accurate. engineering models. users should choose conservative When using secondary data sources. emission provided by national governments. purchase records. In some cases. sources of data used. GWP values. top-­ (Chapter 11). When uncertainty exists. If sampling is of homes insulated (primary data) and multiply that not possible. In some of homes) or secondary data (average estimates of cases. but may also be relevant when developing down secondary data may be more reliable. complete. lower quality than the available secondary data for a Primary data is most relevant to monitoring performance during given activity (for example.8). direct monitoring. if a user is carrying out an ex-­post assessment by sampling a subset of homes affected by the program to of a home insulation subsidy using the deemed estimate verify whether the actual energy savings are similar to the approach. when defining the GHG assessment boundary in assess policy effectiveness Chapter 7) and prioritize efforts in primary data collection 157 . primary data may not be available or may be of energy savings based on similar. energy savings. Both types of data Primary data may be obtained through meter readings. users should prioritize values. Appendix A Guidance on Collecting Data For example. In general.2). secondary data used should be representative of the policy or action being assessed. including activity data.8). if data are collected using policy implementation (Chapter 10) and ex-­post assessment unreliable measurement methods). and most reliable (see Table 8. Users are required to document and report all databases and publications that are internationally recognized. the representativeness of secondary data can be determined Table A. utility bills. users should select secondary data based on number by energy savings per home to determine total data quality indicators (see Table 8. and assumptions (see Chapter 14). and baseline scenarios and ex-­ante policy scenarios derived based complete than bottom-­up primary data (for example. or other methods for Users should select data that are the most representative obtaining data from specific sources and sinks affected by the in terms of technology. previous studies). For the example described above. Any factors. have advantages and disadvantages (see Table A. which may be primary or secondary. users should collect high-­ energy use for each home or a representative sample quality primary data for high-­priority effects. and geography. policies and actions with national scope where national statistics are accurate and complete).2 Advantages and disadvantages of primary data and secondary data Type of data Advantages Disadvantages • May be costly • Provides better representation of the policy’s specific effects Primary data • May be difficult to verify • Enables more accurate assessment of policy effectiveness the quality of primary data • Enables estimation when primary data is unavailable or of insufficient quality • Data may not be • Can be useful for estimating GHG effects for minor sources representative of the policy or effects or action’s specific effects Secondary data • Can be more cost-effective and easier to collect • May limit the ability to • Can be used to estimate the relative magnitude of various effects accurately quantify and (for example. for on historical data. the user may collect data on the number estimated savings based on secondary data.

Users should choose emission factors that post). users should provide a judgment on the overall quality of the analysis. By understanding the data required for each a change in electricity consumption or generation. It is also useful are most appropriate and representative for the individual to consider the data required across all steps in the context. and after implementation (if applicable). These changes should be documented. Data may be collected before a policy or action is implemented. who has compiled the data. or See Table A. The precise data that will need to be collected depends on the policy in question. temporally. 158 Policy and Action Standard . users can best ensure a consistent approach should apply marginal emission factors. This should include details of any modifications or corrections that have been made to the data. Users should choose emission factors that subsidy program.4 Data collection procedures Procedures Description The processes that have been followed to compile the data should be clearly described. during Collecting data on emission factors implementation. Data processing the removal of outliers and any other adjustments. national. This may include a Data compilation description of how the data is compiled. This Quality assurance / may require a subjective assessment.3 Collect data See Table A. subnational. and technologically representative of the activity being estimated. When estimating the GHG effect resulting from standard.3 for an example for a hypothetical insulation source-­specific. For key data sources or data sets. and the method being followed. are the most geographically. the stage in the process (such Users may use either marginal emission factors or average as defining the baseline or estimating GHG effects ex-­ emission factors.3 Examples of data to be collected by stage Stage Purpose Examples of data to be collected Amount and type of insulation installed prior to Pre-policy Informs the baseline scenario the policy Policy Amount and type of insulation installed during Indicates ongoing performance of policy implementation each year of policy implementation Amount and type of insulation installed over Post-policy Informs the estimate of the policy impact ex-post lifetime of the policy Table A.A. and where the data is stored. Established QA/QC procedures should be clearly followed. Emission factors can be global. Unlike data sources and data collection mechanisms. Table A. users step. but the aim is to provide an indication of the overall quality of the data quality control and the main uncertainties.4 for a description of various data collection Data collection should be viewed in the context of procedures. The steps taken to further process the data should be clearly described. which are generally to data collection and make the best use of existing more accurate than average emission factors. the overall policy assessment process. including the cleaning of data sets. along with a brief justification for any key decisions.

Proxy data used in the assessment should be marginal emission factors are not available in a given region.ipcc-­nggip.or.average emission factors (which represent aggregated total A.org.4 Fill data gaps emissions associated with producing electricity from all If data of sufficient quality are not available. Use of average emission factors should be used. •• CDM databases and the CDM “Tool to Calculate the 2. and guidelines Collecting data. see IPCC 2006: •• IPCC. Available at www. reports.iges.ghgprotocol. Chapter 2. Proxy data are data from marginal emission factors reflect the emissions profile of a similar activity that is used as a stand-­in for the given a select subset of electricity generation facilities based on activity. Emission Factor for an Electricity System”3 (if applicable) 3.unfccc. Guidelines for National Greenhouse Gas Inventories Volume 1. users should calculation tools and guidance2 replace lower quality data with higher quality data as it •• The GHG Protocol for Project Accounting and the becomes available. Available at www. For Sources of emission factors include the following: additional guidance on filling data gaps. proxy data should be reported and justified as part of the description of data sources used (see Chapter 14). related GHG Protocol Guidelines for Quantifying GHG Reductions from Grid-­Connected Electricity Projects Endnotes (if applicable) 1. and improving data •• Emission factors contained in the GHG Protocol quality is an iterative process.5 Improve data quality over time inventories. Over time. Available at http://cdm. 159 . may be used to fill data gaps.” (2006) •• IPCC.int/methodologies/ PAmethodologies/tools/am-­tool–07-­v2.pdf/.jp/EFDB/. strongly correlated with the relevant parameter. such as similar data from other geographic their role in the dispatch order of the system. proxy data sources of supply divided by the total amount of electricity). assessing data quality. If appropriate regions. Emission Factor Database1 •• Country-­specific emission factors from national A. “Approaches to Data Collection.

baseline scenario may interact with each other. Guidance on each case is provided below. This appendix is relevant to multiple chapters in the standard where policy interactions may arise. environmental. users should estimate following cases: the policy interactions when estimating baseline emissions. Section 5. see Chapter 8.” See Chapter 5. Section 5. 9. 8. For individual or package of policies/actions example.) Multiple consists of interacting policies policies may affect the same parameter either directly (such As described in Chapter 8. or on GHG emissions. by taking into account the net impact of all the policies 1. including Chapters 5.4. Chapter 8: Estimating baseline emissions when the policies and actions to produce total effects that differ baseline scenario consists of multiple interacting policies from the sum of the individual effects of each individual 3.3. Section 8. Understanding policy interactions is an important policies or packages of policies (ex-­ante or ex-­post) step toward accurately estimating the GHG effects of a policy or action. The policies and actions included in the social system). 160 Policy and Action Standard . Optional step: Allocating GHG effects to individual baseline scenario. between policies included in the policies within a policy package.4. Optional step: Aggregating GHG effects across multiple package. For more background information and examples 4. for the source “residential natural gas emissions. Case 2: Estimating baseline emissions (For more information on emissions estimation methods when the baseline scenario and parameters. An individual policy or action may interact with other 2. If the policies Policy interactions should be considered or addressed in the are likely to interact with each other. package interact (ex-­ante or ex-­post) or within a set of policies or actions that is assessed as a 6. Policies and actions can interact in either overlapping when the policy or action assessed interacts with or reinforcing ways or can be independent of each policies included in the baseline scenario other. Chapter 11: Estimating GHG effects ex-­post when the of policy interactions. see Chapter 5.Appendix B Guidance on Assessing Policy Interactions T his appendix provides guidance on assessing policy interactions when estimating the GHG effects of policies and actions. when policies within the baseline scenario and the policy or action being assessed. and 11.3. Chapter 9: Estimating ex-­ante policy scenario emissions policy. policy or action assessed interacts with policies included in the baseline scenario Interactions can occur between policies included in the 5. Section 8. “natural gas use” is a parameter. the emissions estimation method may be: “GHG emissions (t CO2e) = natural gas use (MMBtu) × emission factor (t CO2e/MMBtu). the baseline as a natural gas tax and a natural gas subsidy that both affect scenario should include all currently implemented or natural gas use) or indirectly (such as two policies that have adopted policies and actions that have a significant effect systemic effects on a broader economic. Policies may interact with each other if they affect the same parameter(s) in the emissions estimation method(s) Case 1: Deciding whether to assess an for a source or sink in the GHG assessment boundary. Chapter 5: Deciding whether to assess an individual included in the baseline scenario on all the emissions policy/action or a package of policies/actions sources/sinks included in the GHG assessment boundary.” In this case.

4). 9. the matrix using the symbols in the key in Figure B. (For descriptions and examples of each type of interaction. This set represents values: First. users Reinforcing +++ major/++ moderate/+ minor interaction should make a qualitative determination of whether the Uncertain U net interaction of policies is likely to be independent. the combination of both policies. or 11 may automatically three categories: major.1 Generic example of a policy interaction parameter value. 161 . Significant interactions to be estimated (highlighted in teal) overlapping. See Figure Policy 2 + + N/A B. such as consumers or Based on the combination of interaction type businesses. and policies on each parameter: Users should estimate determining whether the net effect is overlapping or the collective. users should manually estimate and relevant experts. or minor.1 in interacting policies (that are either moderate or Chapter 5). develop Policies Policy 1 Policy 2 Policy 3 Policy N a policy interaction matrix for each parameter influenced by multiple policies. For each matrix. users should narrow the list of interactions sink in the GHG assessment boundary: to those that are either overlapping or reinforcing and either moderate or major. another policy. major and either reinforcing or overlapping) on each parameter in the emissions estimation method for For each combination of policies in the matrix. Appendix B Guidance on Assessing Policy Interactions To do this. users should fill out policy. For each parameter. matrix for one parameter 2. users should follow three steps for each source/ Finally. Some models selected to estimate also categorize the general magnitude of interaction into emissions in Chapters 8. moderate. If users cannot determine the type and/ incorporate the interaction effects between policies on or magnitude of the interaction. each axis of the matrix should contain all policies in the list of Source: Adapted from Boonekamp and Faberi 2012. If using simpler should be based on expert judgment.3). or consultations with automatically. + + + N/A and Figure B. to understand whether the actors made a (independent. reinforcing) and magnitude decision to implement a particular action based on one estimate (major. Develop a list of policies influencing parameter should also be retained in the list. see Section 5. identify all parameters in the emissions (potentially) significant interactions that should be estimation method(s) for each source/sink (see Section estimated in Step 3. Users may also need to carry categorized as “uncertain. users should the source/sink. policies (identified in Step 1). overlapping. 0 U N/A each relevant parameter. develop a list of policies included in the baseline scenario that may influence the Figure B. Uncertain interactions 1. such that each cell in the Key: matrix represents a pair of potentially interacting policies. The assessment calculate interactions between policies. Develop a policy interaction matrix: Next. or reinforcing with respect to the parameter. Estimate the combined effects of interacting can have both overlapping and reinforcing effects. the interaction should be the various parameters. moderate. Independent 0 Overlapping - - - ­major/- - moderate/- minor interaction For each combination of policies in the matrix. published studies of models where interaction effects are not calculated similar combinations of policies/actions.2 for an illustrative example for a specific parameter. minor).1 for a generic example of a policy interaction matrix Policy 3 . A separate matrix should be developed for Policy N - - . A policy interaction matrix is a Policy 1 N/A visual way to understand the interactions between combinations of policies identified in Step 1.” out surveys of affected actors. 8. Any combination of policies 3.1. combined effect of all significant reinforcing may require detailed analysis (see Box 5.

then the net GHG effect emissions when the policy or action of the policy/action will be more than if it were assessed assessed interacts with policies without considering interactions with baseline policies.1 for a case study of assessing policy interactions. N/A standards Key: Independent 0 Overlapping - - - ­major/- - moderate/- minor interaction Reinforcing +++ major/++ moderate/+ minor interaction Uncertain U Significant interactions to be estimated (highlighted in teal) or neither policy. N/A Energy labeling + + . effects (either reinforcing or overlapping effects) between policies included in the baseline scenario and the policy or The incremental effect of the policy/action being action being assessed are attributed to the policy or action assessed relative to other policies/actions included in the being assessed. Conversely. if the interaction effect between the policy/ action being assessed and the policies included in the Case 3: Estimating ex-­ante policy scenario baseline scenario is net reinforcing. Any interaction in the list of policies in the policy interaction matrix. If the interaction between the policy/action policies but not the policy or action assessed (and being assessed and the policies included in the baseline hence does not include any interactions between other scenario is net overlapping. users should follow the same three steps outlined As mentioned in Chapter 11. included in the baseline scenario As described in Chapter 9. the policy or action (or package for Case 2 above.4. This results from the methodology itself baseline scenario is attributed to the policy/action being because the baseline scenario includes other implemented assessed. . then the net GHG effect of 162 Policy and Action Standard . without considering interactions with baseline policies.2 Illustrative example of a policy interaction matrix for a specific parameter: natural gas used in space heating Insulation Natural Energy Energy efficiency Policies subsidy gas tax labeling standards Insulation subsidy N/A Natural gas tax - . To in the baseline scenario do so. In some cases the necessary data may the policy/action will be less than if it were assessed not be available and expert judgment may be necessary. the policy or See Box B.Figure B. Section 9. with the addition of including the policy/ of policies/actions) being assessed ex-­post may interact with action (or package of policies/actions) being assessed policies included in the baseline scenario. Users should estimate policy scenario emissions taking into account the net impact Case 4: Estimating GHG effects ex-­post of any significant interactions between the policy/action when the policy or action assessed assessed (or package of policies/actions assessed) and interacts with policies included the various policies included in the baseline scenario. N/A Energy efficiency - - . action assessed may interact with the policies included in the baseline scenario. - .

See Figure B. an energy model. Assessing policy environmental strategy for sustainable urban mobility in the AMVA. combined effect of the two policies together was similar to the sum of the individual effects of the two policies had they been CAI assessed the policies both individually and as a package.0 (million tonnes) CO2 emissions 4. The assessment of the interaction focused on to improve vehicle technologies. CAI then estimated emissions trips from private cars and motorcycles and increase trips by under four scenarios: the baseline scenario where neither bicycle. and a policy scenario where both policies are modes of transport. policy. CAI developed a table Alternatives Planning System (LEAP).5 4. As a result. The Valle de Aburra (AMVA) in Antioquia. Both policies affect policy is implemented. CAI found that the policies were considered likely.0 3. interactions between the two implemented together. a policy scenario where only Policy 2 is technology and the second by shifting toward less-emitting implemented. The implemented on their own.3 Estimating emissions and policy interactions for the Air Quality Management Plan 5. a policy scenario where only Policy 1 emissions from urban transport—the first by improving vehicle is implemented. The policies affected two common sources: cars and The plan consists of two transportation policies: (1) regulations motorcycles. and public transportation. using (Table B. walking.1 Types of vehicles affected by each policy Policies Cars Taxis Buses Bus rapid transit Trucks Motorcycles Policy 1: Improve X X X X vehicle technology Policy 2: Incentives X X X to reduce trips Figure B. The assessment was performed with the Long-Range Energy To help understand the interactions.5 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023  Baseline Policy 2 Policy 1 Policy 1+2 163 . Colombia. metropolitan authority was interested in the individual impact of Table B. The objectives authority was also interested in the total impact of both policies were to evaluate the GHG impact of the transportation measures when implemented together to understand how effective the in the plan and inform the development of an integrated policies would be when implemented together.1) to identify the types of vehicles affected by each information from the latest emissions inventory developed locally. Appendix B Guidance on Assessing Policy Interactions Box B. interactions was necessary to accomplish these objectives. and (2) incentives to reduce these two common sources.1 Assessing policy interactions for an air quality management plan in Colombia The Clean Air Institute (CAI) carried out an ex-ante assessment of each policy in order to understand whether each was effective the Air Quality Management Plan of the Area Metropolitana del and should continue to be supported and implemented.3.

Instead. see Box B. The policy being assessed is When baseline emissions are subtracted from policy the information campaign. The individually.2 Example of estimating policy interactions ex-­post In contrast. the interaction effects are automatically included in the baseline scenario. Box B. the labels known to users. assuming 200 t CO2e that the policy would have achieved on its the other policies were not implemented. or neither policy. assuming all the policies will 300 t CO2e) is attributed to the information campaign.500 t CO2e to determine the individual effects of each policy or action and the information campaign alone would have reduced within that package. policy in the specific context and policy environment in both policies taken together. Therefore. For an example scenario emissions reflect the combined effect of both of estimating policy interactions ex-­post. which it was implemented. The results should estimate baseline emissions based on the scenario will only be meaningful in the jurisdiction where the policy in which the labeling program existed but the information was implemented. the sum of the GHG effects of the policies within the package individually would be the same as the GHG effects from the combination of policies. by estimating the estimated GHG effect of 500 t CO2e is greater than the GHG effects of each policy or action separately. what types of appliances consumers actually Attributing interaction effects to the policy or action purchased—­but do not reveal whether the purchases were assessed yields an accurate estimate of the effects of the a result of the labeling program. a GHG reduction of 1. rather than as a package. since the appliance-­related emissions decreased by 2. be implemented.implemented policies and the policy or action assessed). The energy labeling program is scenario emissions. both policies together. the individual policies within a policy information campaign. The GHG effect of the information relative effect of each policy with respect to the others. The (observed) policy attributed to the policy or action assessed. when policies within the package interact (ex-­ante or ex-­post) Assume that the survey finds that the labeling program Users that assess a package of policies/actions may want alone would have reduced emissions by 1. campaign did not. because the interaction effect (a reinforcing effect of relative effect of each policy. To estimate the own. in generalizing the results to other jurisdictions.000 t CO2e.2. The relative effect of each policy can be estimated through survey methods in which a sample of consumers is asked whether their appliance purchasing Case 5: Allocating GHG effects between decisions were influenced by the labeling program. results will be misleading if applied to another jurisdiction To estimate the effect of the information campaign.500 t CO2e would have users should not allocate the total GHG effect among the occurred as a result of the implementation of the labeling various policies in the package. Users should exercise caution In the observed policy scenario (with both policies in effect). to determine the program alone. users with a different combination of policies in effect. package. in the baseline interactions may exist between those policies and actions. If the policies are completely independent of each other. 164 Policy and Action Standard . If any overlapping or reinforcing emissions by 200 t CO2e. scenario. the information campaign. users should carry out new assessments of each policy individually and include all other policies in the baseline scenario. the (observed) policy scenario includes other implemented policies as well as the policy or action Two policies are in effect: (1) an energy labeling program assessed (and hence includes interactions between other for appliances and (2) an information campaign that makes implemented policies and the policy or action assessed). campaign is the difference between policy scenario users should carry out new assessments of each policy emissions and baseline emissions (500 t CO2e). or neither policy. policies—­that is.

users should consider assessing the policies as GHG effects should not be directly aggregated across a package to estimate the total net effect of all of the policies or actions if any overlapping or reinforcing policies. assumptions.3. because they do not affect the same sources or sinks) or the interactions between them have been accounted for. This alternative approach is explained in Box B.3. In this case. Users not In general. GHG effects may be directly aggregated across aggregating results ex-­p ost should follow the guidance in policies or actions if: Chapter 11 rather than following the approach in Box B. and data sources are otherwise comparable. •• They are independent of each other (for example. if not been accounted for. and •• The baseline scenario for each policy being aggregated includes only policies implemented before that policy was implemented. •• The methods. rather than assessing them individually and interactions between the policies being aggregated have then summing the results. users should overestimate or underestimate the GHG effects resulting estimate the GHG effects of each policy using a different from the combination of policies. Appendix B Guidance on Assessing Policy Interactions Case 6: Aggregating GHG effects To aggregate GHG effects across two or more interacting across policies or actions policies. the sum would either assessing a policy package is not possible. approach than the approach explained in Chapter 11. For ex-­p ost assessments. 165 .

B. and total the same set of sources. Policy B is implemented in 2004. All three policies affect to double counting of interactions between the policies. and policy includes all other policies that are implemented during Policy C are three policies implemented sequentially: Policy the GHG assessment period. and C GHG effect (Policy C) 2002 2004 2006 2012 166 Policy and Action Standard . aggregation of results would lead and Policy C is implemented in 2006. implemented before that policy was implemented (rather • The baseline scenario for Policy B includes Policy A but than including all policies that were implemented at the not Policy C. • The emissions estimation method used for each scenario If this approach is applied consistently to all policies being is the same. the sum estimated results would be different from the actual combined of individual GHG effects from A. B. If each policy includes all the other A is implemented in 2002. and policies being aggregated that were introduced later in time. time the assessment was carried out). In any monitoring period.Box B.4 Aggregating GHG effects across policies Scenario without Policy A. B.4 illustrates a situation in which aggregation of GHG across policies ex-­post because the baseline scenario for each effects across policies may be valid.3 Approach for estimating GHG effects ex-­post to enable aggregation across policies The approach in Chapter 11 does not enable valid aggregation Figure B. ex-­post assessments of multiple policies may be aggregated to estimate the total GHG effects (assuming the methodologies are comparable). The baseline scenario • The baseline scenario for Policy C includes both Policy A for each policy being aggregated should exclude other and Policy B. the baseline scenario for • The baseline scenario for Policy A includes neither Policy B each policy being aggregated should include only policies nor Policy C. B. Policy B. or C Net GHG emissions (Mt CO2e) Scenario with Policy A GHG effect (Policy A) Scenario with Policy A and B GHG effect GHG effect (Policy B) (Policy A+B+C) Scenario with Policy A. Figure B. Policy A. aggregated. policies in its baseline scenario. and C if: To aggregate results ex-­post. and C will equal the effect of all policies being implemented together. combined GHG effects from A.

and water scarcity • Loss of top soil • Ozone depletion • Loss or degradation of natural resources • Waste • Energy use • Public health • Road safety • Quality of life • Walkability Social effects • Gender equality • Access to energy. Users may choose included in the GHG assessment boundary (Chapter 7). policymakers will decide which policies to implement and how to evaluate their effectiveness within a broader context that also takes into account various impacts in addition to greenhouse gas emissions. lead. sources will vary by type of non-­GHG effect. For example. sulfur • Biodiversity/wildlife loss dioxide (SO2). users should use computable general effects while developing the causal chain (Chapter 6) and equilibrium or other economic models.1 Examples of non-GHG effects Category Examples of non-GHG effects • Air quality and air pollution (such as particular • Toxic chemical/pollutants matter. carbon monoxide (CO). as Table C.2. by subtracting baseline values for the non-­GHG effect (in Table C. and environmental impacts. water pollution. GHG effects may be monitored over time (Chapter 10). nitrogen oxides (NOx). fuel poverty • Traffic congestion • Stakeholder participation in policy-making processes • Household income • Employment and job creation • Poverty reduction • Productivity (such as agricultural yield) • New business/investment opportunities Economic • Prices of goods and services (such as decreased • Energy security/independence effects energy prices) • Imports and exports • Cost savings (such as decreased fuel costs) • Inflation • Overall economic activity (such as GDP) • Budget surplus/deficit 167 . economic. Indicators related to non-­ range of social. rather than quantitatively estimating them.Appendix C Examples of Non-­GHG Effects T his standard is designed to inform policy development through estimation of GHG effects. Quantification methods and data relevant depending on the objectives of a given assessment. or trade. and • Loss or degradation of ecosystem services Environmental mercury) • Deforestation and forest degradation effects • Water quality. Any non-­GHG effects may be identified alongside GHG employment. ozone. The to identify and qualitatively describe the non-­GHG effects of non-­GHG effects of policies and actions may be estimated a policy or action.1 provides a list of non-­GHG effects that may be illustrated in Box 10. to estimate macroeconomic effects such as effects on GDP. In practice. thermal comfort. Non-­GHG effects are any effects of a policy or action other Chapter 8) from policy scenario values for the non-­GHG than changes in GHG emissions and may include a wide effect (in Chapters 9 or 11).

CEA compares the effectiveness of a policy to its costs and therefore requires two parameters: a measure For further guidance on CBA and GHG abatement cost of effectiveness and a measure of costs. See Table D. implementation (to inform policy development ex-­ante) The results of CEA can be presented using GHG abatement or outcomes after implementation (to track performance cost curves (sometimes called marginal abatement cost ex-­post). given multiple objectives (such as various environmental. Some steps are common to both methods. CBA. After implementing this standard to case. not only in terms of their GHG effects but also curves. In practice. mitigation option (as estimated ex-­ante by using the Policy and Action Standard) •• The cost per tonne of CO2e reduced for each mitigation D. users help policymakers prioritize mitigation options based on cost: can optionally apply CEA.1 for a summary of the three approaches. or MAC curves). it does not require that all benefits be quantified in monetary terms. and therefore requires two (or more) parameters: measure(s) of benefits and measure(s) of costs.2 Process for carrying out support methods that can be used: cost-­effectiveness cost-­effectiveness analysis analysis (CEA). In either to GHG emissions. This step may be useful in ex-­ante through a broader assessment of benefits and costs. These methods allow policymakers and Table D.1 Comparison of methods option and the total cost of each mitigation option Cost-­effectiveness analysis. This GHG effect represents the (or “abatement”) potential of various mitigation options effectiveness of the policy in reducing emissions. 168 Policy and Action Standard . policymakers will decide which policies to implement and how to evaluate their effectiveness within a broader context that also takes into account costs and a wider set of benefits. the following information is represented graphically to estimate the total net GHG effect of a policy or action. or MCA to the same policy •• The GHG reduction potential (in t CO2e) of each or action. cost-­benefit analysis (CBA). assessment to inform decision making in terms of selecting By following the steps in this standard. but. social. which relative to a baseline scenario.Appendix D Cost-­Effectiveness and Cost-­Benefit Analysis T his standard is designed to help inform policy development through estimation of GHG effects (see Chapter 2). and •• The GHG reduction potential (in t CO2e) and total cost multicriteria analysis can be useful tools for policy across all mitigation options evaluation. the benefits of a policy to its costs. CBA compares curves. GHG abatement cost curves is a fundamental input into any CEA. and multicriteria and cost-­benefit analysis analysis (MCA). users determine the policies and actions among a set of policy options. cost-­benefit analysis. unlike CBA.2 describes the process for carrying out CEA analysts to evaluate and compare various options before and CBA. see the references below. CBA. or MCA related can be presented as either a histogram or a curve. Multicriteria analysis (MCA) compares alternative policy options. A GHG total net change in GHG emissions and removals caused abatement cost curve presents the cost and GHG reduction by a policy or action. and economic objectives). This appendix describes various cost analysis and decision D.

users should make a reasonable effort to identify and estimate those that are most significant. Costs may include only the costs of implementing the policy (such as financial expenditures for policy implementation and compliance or costs of installing technology). Users should define a time period that is sufficient to capture significant costs and benefits of the program. Even though all costs and benefits cannot be known for certain. 169 . Identify scope of the analysis CEA and CBA involve assessment of the impact of the policy on society as a whole. such as in a country or a city. Appendix D Cost-Effectiveness and Cost-Benefit Analysis Table D. CBA should include a wide range of social. as well as cost reductions associated with policies (such as reduced energy costs from increased energy efficiency). subjective assumptions benefits using a single (MCA) given multiple objectives about how to monetize non- unit of measure economic benefits Table D. and action to determine whether its total underestimate non- economic benefits) benefits to society exceed its costs economic benefits Incorporates a wide set of Does not allow Multicriteria To compare policy options and variables. and environmental costs and benefits. which should be consistent with the GHG assessment period defined in Chapter 7. or to analyze a single policy or discount rates. Identify and estimate costs Identify and estimate costs and benefits The next step is to identify costs (and benefits) over the selected time period. can environmental. does not require comparison of costs and analysis determine the most preferred option.2 Overview of steps in cost-effectiveness analysis and cost-benefit analysis Step Cost-effectiveness analysis Cost-benefit analysis 1. in the analysis. Users should include all members of the relevant society. 2.1 Summary of methods Method Purpose Advantages Disadvantages To compare policy options to determine Simple method to compare Does not consider which is most effective in achieving policy effectiveness based on wider benefits of the Cost- a single desired outcome for a given GHG emissions reduced per policy/action other than effectiveness level of cost (such as GHG reduced per unit of money spent a single measure of analysis (CEA) dollar). See Appendix C for potential non-GHG costs and benefits that may be included. economic. or which option achieves a given Useful when benefits cannot effectiveness (such as objective for the least cost be calculated or are uncertain GHG reduction) To compare policy options to determine Difficult to monetize Assesses broader benefits which has the greatest net benefit to non-economic of a policy beyond a single society (the difference between their benefits and Cost-benefit measure of effectiveness total social benefits and total social determine appropriate analysis (CBA) (which may include costs). or may also include the broader costs to other members of society (such as increased prices for goods and services or decreases in economic activity and income). social.

the result as follows: of the CBA is represented as the net present value (NPV) of all cost effectiveness = benefits and costs. V Y = Value in a particular year. Social discount rates can vary widely (for example. 4. n = analysis period 170 Policy and Action Standard . Thus. Calculate present values for costs (and benefits) In economic theory. VY PV = (1+r)t Where PV = present value. n = analysis period B = benefits.2 Overview of steps in cost-effectiveness analysis and cost-benefit analysis (continued) Step Cost-effectiveness analysis Cost-benefit analysis 3. from 0% to over 10%). For GHG-related analyses. Once present values for costs and benefits are calculated. See Box D. representing the net social benefit: PV(c) = NPV = PV(B) – PV(C) effectiveness n ∑▒ Ct n n ▒ Bt ∑▒ Ct t =0 (1+r) t NPV = ∑ t =0 (1+r)t t =0 (1+r)t net reduction in t CO2e C = costs. In this standard. it is assumed value of non-economic impacts can be represented by the value that the single measure of effectiveness is that individuals are willing to pay to preserve or avoid damages. r = discount rate. which reflects a society’s relative valuation of today’s well-being versus well-being in the future. Calculate cost-effectiveness Calculate net present value CEA results in a ratio of costs to effectiveness. which they forego when receiving the same amount of money in the future.Table D. Present value is calculated as follows. the total net change in GHG emissions and However. subjective. t = year. CBA is dependent on the assumption that the effectiveness. depending on how they address equity concerns with respect to future generations. and t =number of years from present. both CEA and CBA typically convert monetary values to their present value (or their equivalent value at the beginning of the policy or action) by using a discount rate. refer to ADB 2007). environmental impacts that may not have an explicit economic CEA typically involves only one measure of or monetary value. since individuals can earn a return on investment on money they possess today. users should use a social discount rate. uncertain. among other considerations not accounted for in national interest rates or typical discount rates. t = year. the benefits of avoiding climate change impacts. 5. monetary impacts in the future are worth less to individuals than resources available today. or removals resulting from the policy or action controversial to monetize. Quantify effectiveness Quantify and monetize benefits CBA involves quantifying a broader set of benefits and then assigning Effectiveness is a measure of the quantifiable a monetary value as a proxy to represent benefits for social and outcome central to the program’s objectives. C = costs. (For more information on social discount rates. some benefits may be intangible.1 for information on monetizing (as quantified by applying this standard).

including the marginal benefits that society gains by avoiding an monetary or non-­monetary units. see the following references. The SCC often includes changes social objectives may be measured using non-­monetary in agriculture. For The use of SCC in a CBA can be valuable for decision further guidance on MCA. and the choice of a discount be assigned monetary values. also feed into the process of conducting an MCA. MCA can be especially useful when significant of potential catastrophes in the future to be fed into a CBA environmental and social impacts exist and cannot readily can be difficult to determine. a set of criteria for impacts and significant regional variation pose a challenge comparing the options. Appendix D Cost-Effectiveness and Cost-Benefit Analysis Box D.3 Multicriteria analysis climate change impacts Multicriteria analysis is a method for comparing alternative policy options and determining the most preferred option. For example. The timing options. making as long as uncertainties are acknowledged. property. MCA involves uncertainty about the timing and severity of climate change establishing a given set of options. while economic costs and benefits may be ser­v ices in its derivation. such as various environmental. human health. and can be quantitative additional ton of CO2e emitted. The social cost of carbon (SCC) is a concept used to social. and a method for ranking the for quantifying damages from climate change. A CEA and/or CBA can rate for SCC calculations results in widely ranging estimates. and economic objectives. given multiple objectives. 171 . The SCC reflects objective can be measured in various units. expressed in the form of or qualitative. Indicators related to each monetize climate change impacts. measured using monetary indicators.1 Monetizing the benefits of avoiding D. various environmental and annual monetized costs. While it is a useful concept. and ecosystem indicators.

Social Cost of Carbon for Regulatory Impact Analysis •• Department for Environment. Hatry. in the Choice of Social Discount Rate for Cost-­ “Marginal Abatement Cost (MAC) Curve.” Available at https://www.gov.” Economics and Research http://www.homepages. 2014. Series No. Harry P. “Real Interest Rates. “Technical Support Document: government-­policy.” Accessible at Benefit Analysis: A Survey. 2007. •• World Bank. 2010. Kee. at http://www. Edited by Joseph •• Kesicki.worldbank.org/docs/ Effectiveness and Cost-­Benefit Analysis. Food. 2013.adb. Pathways to a Low-­ HM Treasury Green Book on Appraisal and Evaluation in Carbon Economy: Version 2 of the Global Greenhouse Central Government.epa. Accessible •• Food and Agriculture Organization of the United Nations. 3rd ed. “Multi-­criteria Analysis: A central-­governent. 2014. DC: World Bank. and Kathryn E. Practical Program Evaluation. 94. 172 Policy and Action Standard . •• World Bank. under Executive Order 12866. Accessible at http://www.4 Further references Related to cost-­benefit analysis and cost-­effectiveness analysis: Related to GHG abatement cost curves: •• Asian Development Bank.” Accessible at http:// United Kingdom. “Valuation of Energy Use and Greenhouse MACC. 2009. and James E. Wholey.gov. •• HM Treasury.INR. “Use of Multi-­criteria Analysis in www.nl/docs/library/report/2011/o11017.uk/government/ •• Department for Communities and Local Government.gov/oms/climate/regulations/scc-­t sd. publications/the-­green-­book-­appraisal-­and. and Rural Affairs. Accessible at http://elibrary. The Green Book: Related to multicriteria analysis: Appraisal and Evaluation in Central Government. for Policy Making—­E xpert-­Based vs. 2003. Manual. the Netherlands.worldbank. “Theory and Practice •• Energy Research Centre.uk/ Gas Abatement Cost Curve.pdf.1596/1813–9450–4639.­criteria-­analysis-­manual-­for-­making-­ United States.uk/government/ •• Interagency Working Group on Social Cost of Carbon.” In Handbook of up/easypol/906/ex-­act_MACC_116EN. Department Working Paper. Curves. 2008.” Accessible at https://www.org/content/ workingpaper/10.gov.pdf. Stephanie R.” Accessible at http://www. the Economic Appraisal of Climate Smart Agriculture •• Cellini. Social Discount Rates for Nine Latin defra.. 2010.htm.” London: UCL Energy Institute.org/indicator/FR. American Countries.ecn.RINR. 2010. Washington. Gas (GHG) Emissions: Supplementary Guidance to the •• McKinsey & Company.pdf.uk/environment/airquality/mcda/index.uk/~ucft347/Kesicki_ Kingdom. United Kingdom. Accessible at •• Department for Energy and Climate Change. government/publications/valuation-­of-­energy-­use-­and-­ mckinsey.pdf. thinking/greenhouse_gas_abatement_cost_curves.pdf. “Using Marginal Abatement Cost Curves to Realize WP094. Accessible at https://www.” Accessible at http://data. Air Quality Policy: A Report. Newcomer. United http://www. Fabian.D.­evaluation-­in-­ United Kingdom.ac. 2009.ucl. 2011. “Cost-­ Policy Options. publications/multi. Model-­Derived San Francisco: Jossey-­Bass.com/client_ser ­vice/sustainability/latest_ greenhouse-­gas-­emissions-­for-­appraisal.” Accessible at http://www.org/sites/default/files/pub/2007/ 2012.fao.gov. “Marginal Abatement Cost Curves S.

forestry. and other land use IEA International Energy Agency AMVA Area Metropolitana del Valle de IGES Institute for Global Environmental Strategies Aburra (Antioquia.Abbreviations and Acronyms AFOLU agriculture. land-­use change. Colombia) IPCC Intergovernmental Panel on Climate Change ANME National Agency for Energy kg kilogram Conservation (Tunisia) km kilometer BAU business as usual kWh kilowatt-­hour Btu British thermal unit kWp kilowatt-­peak CAI Clean Air Institute LEAP Long-­Range Energy Alternatives CBA cost-­benefit analysis Planning System CDM Clean Development Mechanism LEDS low emissions development strategy CEA cost-­effectiveness analysis LPG liquefied petroleum gas CH4 methane LULUCF land use. and forestry CO carbon monoxide MAC marginal abatement cost CO2 carbon dioxide MCA multicriteria analysis CO2e carbon dioxide equivalent MMBtu 1 million Btu EE energy efficiency MSW municipal solid waste EEG Renewable Energy Act (Germany) Mt million tonnes EJ exajoule Mtce million tonnes of coal equivalent ETS emissions trading system Mt CO2e million tonnes of carbon dioxide equivalent FAO Food and Agriculture Organization NAMA nationally appropriate mitigation action of the United Nations NF3 nitrogen trifluoride g grams NGO non-­governmental organization GDP gross domestic product NH3 ammonia GHG greenhouse gas NMVOC non-­methane volatile organic compound GIZ Gesellschaft für Internationale Zusammenarbeit (German Corporation NOX nitrogen oxide for International Cooperation) N2O nitrous oxide GWP global warming potential OECD Organisation for Economic Co-­ HCFC hydrochlorofluorocarbon operation and Development HFC hydrofluorocarbon PFC perfluorocarbon 173 .

and deployment UNDP United Nations Development Programme REC renewable energy certificate UNFCCC United Nations Framework Convention on Climate Change SCC social cost of carbon WBCSD World Business Council for SEI Stockholm Environment Institute Sustainable Development SF6 sulfur hexafluoride WRI World Resources Institute SO2 sulfur dioxide 174 Policy and Action Standard .PV photovoltaic SWH solar water heater QA quality assurance t tonne (metric ton) QC quality control T&D transmission and distribution RD&D research. development.

Adopted policies and actions Policies and actions for which an official government decision has been made and there is a clear commitment to proceed with implementation but that have not yet been implemented. the absolute value of 5 is 5. removals. project. Baseline scenario A reference case that represents the events or conditions most likely to occur in the absence of the policy or action (or package of policies or actions) being assessed. and biomass. It is used to evaluate different greenhouse gases against a common basis. or entity. Bottom-­up methods Methods (such as engineering models) that calculate or model the change in GHG emissions for each source. distance traveled. or entities to determine the total change in GHG emissions. entity. For example. or collected (for example. or storage associated with a baseline scenario. procurement. Black carbon A climate forcing agent formed through the incomplete combustion of fossil fuels. the administrative activities involved in implementing the policy or action (undertaken by the authority or entity that implements the policy or action).” Activities When used as a type of indicator. Causal chain 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. Examples of activity data include kilowatt-­hours of electricity used. Action See “policy or action. Calculated data Data calculated by multiplying activity data by an emission factor. 175 . Bottom-­up data Data that are measured. licensing. or compliance and enforcement. projects. or project level.Glossary Absolute value The non-­negative value of a number without regard to its sign. quantity of fuel used. Activity data A quantitative measure of a level of activity that results in GHG emissions. and the absolute value of -5 is also 5. facility. calculating emissions by multiplying natural gas consumption data by a natural gas emission factor. For example. Activity data is multiplied by an emissions factor to derive the GHG emissions associated with a process or an operation. monitored. Baseline value The value of a parameter in the baseline scenario. expressed in terms of the GWP of one unit of carbon dioxide. Examples include energy audits and provision of subsidies. hours equipment is operated. using a measuring device such as a fuel meter) at the source. and floor area of a building. then aggregate across all sources. output of a process. such as permitting. CO2 equivalent (CO2e) The universal unit of measurement to indicate the global warming potential (GWP) of each greenhouse gas. biofuel. Baseline emissions An estimate of GHG emissions.

Emissions The release of greenhouse gases into the atmosphere. Ex-­ante baseline scenario A forward-­looking baseline scenario. 176 Policy and Action Standard . An emissions estimation method is comprised of parameters. kg CO2e emitted per liter of fuel consumed. economic growth is a driver of increased energy consumption. GHG See greenhouse gas. GHG assessment period The time period over which GHG effects resulting from the policy or action are assessed. GHG effects. Ex-­ante assessment The process of estimating expected future GHG effects of policies and actions.Drivers Socioeconomic or other conditions or other policies/actions that influence the level of emissions or removals. GHG assessment The estimation of changes in GHG emissions and removals resulting from a policy or action. proxy data or other data sources used to fill data gaps in the absence of more accurate or representative data sources. and non-­GHG effects. Dynamic A descriptor for a parameter (such as an emission factor) that changes over time. algorithm. Free rider effect Participants in a policy or program who would have implemented the technologies. or other drivers that affect emissions). practices. a simple emissions estimation method is the following equation: GHG emissions = emission factor × activity data. or processes associated with the policy or program in the absence of the policy or program. Ex-­post baseline scenario A backward-­looking baseline scenario that is established during or after implementation of the policy or action. For example. Expert judgment A carefully considered. well-­documented qualitative or quantitative judgment made in the absence of unequivocal observational evidence by a person or persons who have a demonstrable expertise in the given field (IPCC 2006). Drivers that affect emissions activities are divided into two types other policies or actions and non-­policy drivers. Emissions estimation method An equation. economic activity. and greenhouse gases that are included in the assessment. Effects Changes that result from a policy or action. For example. if relevant). in addition to historical data. typically established prior to implementation of the policy or action. For example. or model that quantitatively estimates GHG emissions. either ex-­ante or ex-­post. See intermediate effects. Emission factor A factor that converts activity data into GHG emissions data. Ex-­post assessment The process of estimating historical GHG effects of policies and actions. sources and sinks. GHG assessment boundary The scope of the assessment in terms of the range of GHG effects (and non-­GHG effects. based on forecasts of external drivers (such as projected changes in population. Estimated data In the context of monitoring.

employment. Key performance indicator A metric that indicates the performance of a policy or action. (c) financial resources have been allocated. such that the combined effect of implementing the policies together is equal to the sum of the individual effects of implementing them separately. Glossary GHG effects Changes in GHG emissions by sources and removals by sinks that result from a policy or action. 177 . hydrofluorocarbons (HFCs). Independent policies Policies that do not interact with each other. Jurisdiction The geographic area within which an entity’s (such as a government’s) authority is exercised. resulting from the policy or action. or (d) human resources have been mobilized. processes. such as tracking changes in targeted outcomes. Intermediate effects Changes in behavior. nitrous oxide (N2O). such as extraction and production of energy and materials. (b) one or more voluntary agreements have been established and are in force. Inputs Resources that go into implementing a policy or action. technology. For example. that differ from the sum of the individual effects had they been implemented separately. Implemented policies Policies and actions that are currently in effect. the quantity of wind power generated in a country may be used as an indicator for a production tax credit for wind power. sulfur hexafluoride (SF6). or practices that result from a policy or action. Interacting policies Policies that produce total effects. Life-­c ycle effects Changes in upstream and downstream activities. methane (CH4). such as a city boundary or national boundary. Macroeconomic effects Changes in macroeconomic conditions—­such as GDP. In-­jurisdiction effects Effects that occur inside the geopolitical boundary over which the implementing entity has authority. Global warming potential A factor describing the radiative forcing impact (degree of harm to the atmosphere) (GWP) of one unit of a given GHG relative to one unit of CO2. Intended effects Effects that are intentional based on the original objectives of the policy or action. and nitrogen trifluoride (NF3). based on the amount of time between implementation of the policy and the effect. Indicator See key performance indicator. such as financing. income. GHGs are the seven gases covered by the UNFCCC: carbon dioxide (CO2). perfluorocarbons (PFCs). as evidenced by one or more of the and actions following: (a) relevant legislation or regulation is in force. Leakage An increase in emissions outside the jurisdictional boundary that results from a policy or action implemented within that jurisdiction. or effects in sectors not targeted by the policy. or structural changes in economic sectors—­resulting from the policy or action. Market effects Changes in supply and demand or changes in prices resulting from the policy or action. Greenhouse gas (GHG) For the purposes of this standard. when implemented together. Long-­term effects Effects that are more distant in time.

such as models representing emissions processes from landfills or livestock. Non-­GHG effects Changes in environmental. air quality. Net GHG emissions The aggregation of GHG emissions (positive emissions) and removals (negative emissions). or algorithms to reflect the real world. energy prices and weather are non-­policy drivers that affect demand for air conditioning or heating. that are expected to affect the emissions sources and sinks included in the GHG assessment boundary. such as weather variations. equations. such as changes in economic activity. 178 Policy and Action Standard . public health. Other policies or actions Policies. Non-­policy drivers Conditions other than policies and actions. Modeled data Data derived from quantitative models. or economic conditions other than GHG emissions or climate change mitigation that result from a policy or action. such as socioeconomic factors and market forces. and projects—­other than the policy or action being assessed—­that are expected to affect the emissions sources and sinks included in the GHG assessment boundary. actions. Normalization A process to make conditions from different time periods comparable. Model uncertainty Uncertainty resulting from limitations in the ability of modeling approaches. For example.Measured data Direct measurement. and energy security. such as directly measuring emissions from a smokestack. employment. social. which may be used to compare policy effectiveness by removing fluctuations not influenced by the policy or action.

regulations. The latter are sometimes referred to as counteracting policies. “emissions per kWh of electricity” and “quantity of electricity supplied” are both parameters in the equation “0. This includes both policies that have the same or complementary goals (such as national and subnational energy efficiency standards for appliances). or other entity. Parameter A variable such as activity data or an emission factor that is part of an emissions estimation method. taxes.5 kg CO2e/kWh of electricity × 100 kWh of electricity supplied = 50 kg CO2e. Policy or action An intervention taken or mandated by a government. Parameter value The value of a parameter. or practices. Policy implementation period The time period during which the policy or action is in effect. studies. The policy scenario is the same as the baseline scenario except that it includes the policy or action (or package of policies/actions) being assessed. and incentives. and standards. Policy scenario A scenario that represents the events or conditions most likely to occur in the presence of the policy or action (or package of policies or actions) being assessed. 0. subsidies.” Parameter uncertainty Uncertainty regarding whether a parameter value used in the assessment accurately represents the true value of a parameter.5 is a parameter value for the parameter “emissions per kWh of electricity. or evaluations) that has been subject to independent evaluation by experts in the same field prior to publication. For example. information instruments. implementation of new technologies. processes. Glossary Out-­of-­jurisdiction effects Effects that occur outside the geopolitical boundary over which the implementing entity has authority. This may include pre-­policy monitoring and post-­policy monitoring in addition to monitoring during the policy implementation period. Propagated parameter The combined effect of each parameter’s uncertainty on the total result. 179 . as well as policies that have different or opposing goals (such as a fuel tax and a fuel subsidy). Overlapping policies Policies that interact with each other and that. uncertainty Proxy data Data from a similar process or activity that are used as a stand-­in for the given process or activity. For example. voluntary agreements. and public or private sector financing and investment. among others. have a combined effect less than the sum of their individual effects when implemented separately. when implemented together. Policy scenario emissions An estimate of GHG emissions and removals associated with the policy scenario. Policy monitoring period The time over which the policy is monitored. institution. such as a city boundary or national boundary. Planned policies and actions Policy or action options that are under discussion and have a realistic chance of being adopted and implemented in the future but that have not yet been adopted or implemented. which may include laws. charges.” Peer-­reviewed Literature (such as articles.

or mechanism that increases storage or removals of greenhouse gases from the atmosphere. Top-­down data Macro-­level statistics collected at the jurisdiction or sector level. or effects that amplify the result but are not directly driven by the policy or action being assessed (also called multiplier effects). activity. based on the amount of time between implementation of the policy and the effect. population. or fuel prices. or mechanism that releases a greenhouse gas into the atmosphere. Regression analysis A statistical method for estimating the relationships among variables (in particular. Source Any process. such as selection of baseline scenarios. 180 Policy and Action Standard . when implemented together. lack of compliance or enforcement. Static A descriptor for a parameter (such as an emission factor) that does not change over time. Removal Removal of GHG emissions from the atmosphere through sequestration or absorption. such as energy use. Unintended effects Effects that are unintentional based on the original objectives of the policy or action. or lack of transparency. activity. Sink Any process. Qualitative definition: A general term that refers to the lack of certainty in data and methodology choices.Rebound effect Marginal increases in energy-­using activities or behavior resulting from energy efficiency improvements. Top-­down methods Methods (such as econometric models or regression analysis) that use statistical methods to calculate or model changes in GHG emissions. effects on behavior once a policy is announced but before it is implemented. Trade effects Changes in imports and exports resulting from the policy or action. The method involves varying the parameters to understand the sensitivity of the overall results to changes in those parameters. GDP. the relationship between a dependent variable and one or more independent variables). Scenario uncertainty Variation in calculated emissions resulting from methodological choices. Sensitivity analysis A method to understand differences resulting from methodological choices and assumptions and to explore model sensitivities to inputs. have a combined effect greater than the sum of their individual effects when implemented separately. Unintended effects may include a variety of effects. such as rebound effects. and effects on members of society not targeted by the policy or action. Short-­term effects Effects that are nearer in time. incomplete data on sources and sinks. such as when CO2 is absorbed by biogenic materials during photosynthesis. such as the application of non-­representative factors or methods. Quantitative definition: Measurement that characterizes the dispersion of values that could reasonably be attributed to a parameter. Uncertainty 1. Reinforcing policies Policies that interact with each other and that. 2. Spillover effect Out-­of-­jurisdiction effects that reduce emissions outside the jurisdictional boundary.

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Aalborg University Clare Breidenich. The Climate Registry Akira Shibata. Raihan Uddin Ahmed. Ricardo-­AEA Jacob Krog Soebygaard. Climate Policy Initiative and Development Policy Karen Laughlin. Brazil and Energy Efficiency. Abt Associates Development Company Limited Robert Dornau. Current Future Matthew Brander. Clean Air Institute Gregory Briner. University of Edinburgh Wolfgang Eichhammer. World Bank Technical Working Group members Jannick Schmidt. United Nations Climate Change Secretariat Hilda Martínez. Federal pour le Développement University of Rio de Janeiro Colin Hughes. Organisation for Economic Derik Broekhoff.Contributors Technical Working Group members: Chapter leads Michael Van Brunt. ICF International Ian Williams. Infrastructure Jette Findsen. Conservation Council SA James Harries. United States Environmental Protection Agency Internationale Zusammenarbeit (GIZ) GmbH Jon Sottong. State of Rio de Janeiro. Ricardo-­AEA Marion Vieweg. Institute for Transportation Stephen Roe. Scottish Government and Energy Efficiency. United States Agency for Louis Bockel. Fraunhofer ISI Gary Kleiman. Chile Juan Pablo Orjuela. Institute for Transportation Stacey Davis. Tim Kelly. Center for Neighborhood Technology Manpreet Singh. Climate Policy Initiative Jacob Mason.. Ltd. Institute for Transportation Jeff Deason. Department of Climate Change Walter Figueiredo De Simoni. KPMG Doug Huxley. Verified Carbon Standard Rachel Steele. Ecofys Justin Felt. Institut de Recherche William Wills. EMBARQ Mexico Sylvie Marchand. DuPont Matt Sommerville. Climate Action Reserve Co-­operation and Development (OECD) Peggy Kellen. Deutsche Gesellschaft für Matt Clouse. Osaka Gas Co. LMI Joanne Green. Ricardo-­AEA Jessica Allen. Siemens Ken Xie. Tetra Tech Julia Larkin. Ltd. TecMarket Works Todd Krieger. Center for Climate and Energy Solutions (C2ES) Ramiro Alberto Rios. CentroClima. ICF International Taryn Fransen. Independent Sanjay Mande. Danish Energy Agency David Lerpiniere. United States Department of State Manu Maudgal. Clean Air Institute Jenny Mager. CH2M HILL Julia Kalloz. World Resources Institute 184 Policy and Action Standard . Department of Climate Change Michael Young. EMBARQ Mexico Jennifer Leisch. Carbonflow Martial Bernoux. Australia Nick Hall. Center for Clean Air Policy and Development Policy Sara Moarif. United States Environmental Protection Agency Joe Indvik. Covanta Energy Daniel Forster. Australia Patric Reiff. ICF International Jerry Seager. ABPS Infrastructure Advisory Pvt. Food and Agriculture International Development (USAID) Organization of the United Nations Kate Larsen. Thomson Reuters Point Carbon Cynthia Menéndez. Ministry of Environment. The Center for Climate Strategies and Development Policy Jen McGraw. University of Southampton Diana Pape.

Greater London Authority Joanne Green. Belhaouane. ALCOR Consulting Luis Roberto Chacón. Ministry of Environment. Ministry of Environment. Belgian Federal Public Ser­vice. Ministry of Environmental Protection. Ministry of Environmental Protection. Mahindra World City Developers Ltd. Clean Air Institute Yuqing Ariel Yu. Deutsche Gesellschaft für Development Company Limited Internationale Zusammenarbeit (GIZ) GmbH Sandip Keswani. University of Cape Town Food Chain Safety and Environment Leah Davis. Ecofys Ronnie Cohen. ECONOTEC 185 . Contributors Pilot testers Mohamed H. Israel Francis Altdorfer. Chile Elizabeth Sara Ramírez. Infrastructure Jonas Bleckmann. EMA Imed Thabet. Ecofys Meike Sophie Siemens. Ramiro Barrios. KPMG Internationale Zusammenarbeit (GIZ) GmbH Vishal Bhavsar. Energy Research Centre. KPMG Torsten Greis. IGES Juan Pablo Orjuela. Clean Air Institute Raihan Uddin Ahmed. ECONOTEC Gil Proaktor. ALCOR Consulting Anthony Dane. DNV GL Andrés Pirazzoli. Deutsche Gesellschaft für Manpreet Singh. Greater London Authority Magdalena Fandiño. Chile Nadine Braun. Clean Air Institute Michael Doust. Ministry of Energy. Israel Aurélie Draguet. DNV GL Hernán Sepúlveda. Chile Caroline de Vit. Health. Claire Collin.

Thonburi. POCH Ambiental S. China Michael Doust. Xiang Gao. NDRC. Amcor Ltd. Samuel Neaman Institute.S. GIZ Mexico Courtney Smith. AS Management & Consulting Sàrl Zhu Songli.A. Ignacio Rebolledo. C40 Cities Climate Leadership Group Carolina Dubeux. Haifa. Universidad Pontificia Bolivariana María Victoria Toro. Amcor Ltd. Michael Lazarus. Promethium Carbon Miriam Lev-­On. Thailand Luis Roberto Chacón. ECN of Technology. World Resources Institute/Duke University Reviewers Stefanie Giese-­Bogdan. NDRC. Mexico Peter Erickson. Stockholm Environment Institute—­U. 3M Nimisha Pandey. Trade.S. Japan 186 Policy and Action Standard . California Air Resources Board Miriam Faulwetter. and Industry. Secretary of Environment and Natural Resources (SEMARNAT). GIZ Mexico Liao Cuiping. Federal University of Rio de Janeiro Ryan McCarthy.A. World Resources Institute Kemen Austin. Israel Perry Lev-­On. King Mongkut’s University Lachlan Cameron. World Resources Institute Jingjing Zhu. Stockholm Environment Institute—­U. Israel Soffia Alarcón Díaz. VITO Ranping Song. Mexico Carlos Vázquez. Jack Faucett Associates Internationale Zusammenarbeit (GIZ) GmbH Siriluk Chiakakorn. Toshiko Chiba. María Luz Farah. Tokyo Metropolitan Government Yu Wang. Cortes.Pilot testers (continued) Mouna Besbes. Tsinghua University Diana Marcela Quinceno. Energy Research Institute. Harmke Immink. Secretary of Environment and Natural Resources (SEMARNAT). Resources Institute (TERI).V. Colombia Leilani L. Ministry of Economy. California Air Resources Board Emily Castro Prieto. National Agency for Energy Conservation of Tunisia Ralph Harthan. Green to Go. Samuel Neaman Institute. Haifa. Universidad Pontificia Bolivariana Tom Dauwe. Climate Change Commission. Deutsche Gesellschaft für Scott Williamson. National Agency for Energy Conservation of Tunisia/UNDP Zied Ferjani. India Gerald Rebitzer. Philippines Wei Zeng. China Eros Artuso. EMA Koji Ina. Oeko-­Institut e. Hubei University of Technology Sebastian Wienges. Technion. Technion. POCH Ambiental S. Chinese Academy of Sciences Arturo Bernal Márquez. The Energy and Fabio Peyer. Energy Research Institute.

Chain Safety. Klaus Oppermann. Sindicatum Sustainable Resources Aileen Carrigan. Japan Nate Aden. and the United Commission. Nippon Kaiji Kentei Quality Assurance Ltd. NCASI Martina Bosi. VALUE2020 Davida Wood.A. World Resources Institute Peng Li. Germany). United Nations Michael Obeiter. and the World Bank. Ministry of Environmental Protection. Egypt Jennifer Morgan. Building. Wuppertal Institute Funders This standard development process was generously Global Environment Facility (GEF). World Resources Institute Gareth Phillips. Siemens AG. Overseas Environmental Suphachol Suphachalasai. the Inter-­American Development Bank. and Nuclear Limited. Kumba Iron Ore Additional support was provided by the Ministry of Foreign Limited. the Tokyo Metropolitan Government. PPC Limited. World Resources Institute Massamba Thioye. World Resources Institute Climate Change Secretariat Janet Ranganathan. South Pole Group Kevin Kennedy. the Israel Safety based on a decision of the German Bundestag. Nature Conservation. for supporting the pilot testing of the standard: Alcoa the United States Agency for International Development Foundation. Contributors Reviewers (continued) Abdelrhani Boucham. United States Department of State Ranping Song. Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. United Nations Development Anjali Mahendra. World Resources Institute Kimberly Todd. German Federal Ministry for the Environment. the 187 . World Resources Institute Kai-­Uwe Schmidt. Morocco Sameer Akbar.. and Nuclear Safety (BMUB). UNDP LECB Project Manager. Low Emission Capacity Building Project (European Affairs of the Netherlands. Ministry of Environment. World Resources Institute Ingo Puhl. Food (USAID). UPS Foundation. Government of Australia. Health. World Bank Takayoshi Sonoda. Ltd. Verified Carbon Standard Timon Wehnert. Belgian Federal Public Ser­vice. POCH Ambiental S. Nature Conservation. World Resources Institute Alexia Kelly. World Resources Institute Samir Tantawi. World Resources Institute Mariela Ramos. Government of Kingdom Department of Energy and Climate Change. Building. the Strategic Climate Institutions Programme (SCIP). World Bank Kazuyoshi Sasaki. Gold Fields Limited. the supported by the German Federal Ministry for the Greater London Authority. World Bank Brad Upton. World Resources Institute Alban Fournier. Harmony Gold Mining Company Environment. World Resources Institute Programme (UNDP) Kristin Meek. Juan-­Carlos Altamirano. WRI would also like to thank the following funders the United Nations Development Programme (UNDP). and Environment. SinoCarbon Innovation & Investment Co. Wee Kean Fong. World Bank Cooperation Center. World Bank Einar Telnes. Norad Rama Reddy.

Andrei has been developed through an inclusive multistakeholder was the environmental representative from the Costa Rican process involving experts from businesses. Neither WRI nor other individuals who contributed to this standard assume responsibility for any consequences or damages resulting directly or indirectly from its use in the preparation of reports or program specifications or the use of reported data based on the standard. a member of to promote best practice GHG accounting and reporting.Disclaimer Dedication The GHG Protocol Policy and Action Standard is designed This standard is dedicated to Andrei Bourrouet. and formerly the Viceminister of governmental organizations (NGOs). It the Advisory Committee. and Telecommunications. 188 Policy and Action Standard . publication of reports or program specifications based fully or partially on this standard is the full responsibility of those producing them. Ministry of Environment. governments. Energy. the preparation and policymaking in Costa Rica and internationally. non-­ Institute of Electricity. While WRI encourages use of the Policy and Action Andrei devoted his career to furthering climate change Standard by all relevant organizations. who passed away in 2013. and Energy and Environmental Management at the Costa Rican others convened by the World Resources Institute (WRI).

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