Carbon Standards and Non-nation-state Actors
For some commentators the proliferation of carbon standards is an inevitable and normal feature of any new area of activity; as a director of a leading international carbon-offset organisation commented: “It is a wild-west market. It is an emergent market. But it has to be and you have to let it emerge and the strongest standard survive because if you put something in which is ill-informed, you curtail the natural growth and the process of evolution. It is almost like when the Internet came out... there are all these competing standards for browsers and protocols etc. and just the best ones evolved.” (Interview, Chief Operating Officer, voluntary offset organisation, October 2007).
This demonstrates an expectation that over time (in the voluntary offset market at least) a few market-leading standards will begin to dominate – a process akin to survival of the fittest. However, for others there is deep concern that having too many competing standards has a detrimental effect, and that active steps should be taken to resolve the situation. For example, another interviewee (again referring to a growth in the number of voluntary offset standards) stressed that “... these standards, we need to nail them down… different standards don’t work. We need one internationally recognised standard… this is a global market and it needs some kind of global accepted standard.” (Sales Manager, voluntary offset organisation, July 2007).
A carbon standard with particular relevance for the oil and gas industry is the market-leading GHG Protocol developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).5
The GHG Protocol is the most widely used
international accounting tool to help governments and business leaders understand, quantify and manage GHG emissions. The Tyndall corporate case study research identified the GHG Protocol as being used by the majority of oil and gas companies. Indeed, large oil and gas companies such as BP and Shell were heavily involved in the initial consultation and preparation of the GHG Protocol in the late 1990s. Oil and gas companies currently using the GHG protocol include BP (US), Norsk Hydro (Norway), Shell Canada and Suncor (US).6
Another carbon standard currently under consultation that is likely to have relevance for oil and gas corporations is the Climate Disclosure Standards Board Reporting Framework.7
This initiative is
distinctive in its ambition to have climate change reporting integrated into a company’s main annual financial report. The Climate Disclosure Standards Board – a consortium of seven business and environmental organisations convened at the 2007 Annual Meeting of the World Economic Forum – is advocating greater involvement of accountants and financial directors in climate change reporting, viewing the financial arena as a more logical ‘home’ for climate change reporting activities than the engineering and operational side of businesses.
Conclusion – Opportunities and Challenges from Voluntary ‘Parallel’ Climate Change Initiatives
Opportunities
There is evidence from the Tyndall case studies that establishing voluntary climate change reduction targets has benefits for an organisation, including creating space for institutional learning, generating enthusiasm and facilitating further sector-wide action. For instance, motivations for climate target-setting in London, Los Angeles, Mexico City and Melbourne have included the realisation of their own vulnerability to the adverse effects of climate change, as well as leadership and business opportunities. Setting targets is also always a competitive statement for cities, especially when they are able to set higher targets than their national governments or other comparable cities.
Challenges
The GHG
Protocol is the longest-established international carbon standard. The first edition was published in 2001 (with a second, current, edition in 2004), and it serves as a foundation and provides an overarching framework for other more detailed, sector-specific standards. The GHG Protocol is aimed primarily at businesses, although it is relevant to governments and non-governmental organisations, many of whom now use it to structure their GHG emissions inventory and management (including, for example, the Regional GHG Initiative [RGGI] in the US, the GHG Emission Information System in South Korea and the WRI in the US).6
Another international climate change standard – the International Organization for Standardization (ISO) 14064 – adopted the GHG Protocol’s Corporate Standard as its basis in 2006. Subsequently, the ISO, WRI and WBCSD signed an agreement in late 2007 to jointly promote both global standards: ISO 14064 and the GHG Protocol. The two standards are designed to be complementary and to be used alongside each other.
1. Okereke C, et al., Global Environ Change, 2009; in press. 2. Lovell H, Available at: www.tyndall.ac.uk/publications/ briefing_notes/bn24.pdf
3. Thottathil SE, Tyndall Centre for Climate Change Research and the University of Oxford, 2007.
The main challenge to arise from the growth in the number of corporate and other types of climate change initiatives has been inconsistencies in carbon measurement. These inconsistencies have the potential to undermine the credibility and environmental effectiveness of climate change initiatives. For instance, in the Tyndall database of non-state-actor emission pledges, attempts to quantify the cumulative contribution of voluntary reductions were constrained by the poor quality of data available. It was found to be difficult to calculate emissions reductions due to the differing baselines used for recording data (not always knowing when the commitment is due by, how or where it will be made or how it will be recorded when it has been achieved). It was also a challenge to separate individual commitments from those required by the state under the Kyoto Protocol. Unfortunately, the problems we experienced in developing a workable database of non-state-actor emission reduction pledges are indicative of more widespread complexity and confusion about carbon reporting and accounting. ■
Acknowledgements
We wish to thank the Tyndall Centre for funding this research, and Professor Diana Liverman for directing and supervising the project (Programme 1.4). We also wish to thank all those who kindly participated in the research – especially the case study organisations – for their time and valuable input.
4. Hamilton K, et al., Ecosystem Marketplace and New Carbon Finance, 2009.
5. WBCSD and WRI, Available at: www.ghgprotocol.org/ files/ghg-protocol-revised.pdf
6. Available at: www.ghgprotocol.org/standards/corporate-
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standard/users-of-the-corporate-standard#corporate (accessed 11 August 2009).
7. Available at: www.cdsb-global.org/index.php?page=draft- reporting-framework
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