Greenhouse Gas (GHG) Monitoring,
Reporting and Registries
Pierre Boileau
Greenhouse Gas Division
Presentation for the Kyoto Mechanisms
Seminar for the Manitoba Business Sector
Outline of Presentation

Background and Context
 What are the Kyoto Rules for Trading and how do Entities
participate?

Current GHG Reporting
 National
Inventory
 Voluntary Challenge and Registry

Reporting Implications of the Kyoto Protocol
 National System / National Registry
 Domestic Reporting Commitments
 Large Emitters System under Covenants/DET
2
Background
and
Context
3
Background

The Kyoto Protocol and Marrakech Accords established a
framework for the international emissions trading market
 Created 4 types of units (AAUs, ERUs, CERs, & RMUs)
 Set rules for the treatment of these units in 6 types of Registry
transactions (issuance, transfer, acquisition, cancellation, retirement and
carryover)

This framework determines three key characteristics of the
international emissions trading market (transfer and acquisition
between Registries)
 Who can trade
 When trading for each unit starts and ends
 How much of each unit can be traded

And has secondary implications for transactions outside that
market (eg. Forward transactions)
4
Who Can Trade
Parties
To be eligible to trade (transfer or acquire), an Annex 1 Party must first:
1.



Ratify the Protocol
Establish its initial assigned amount
Establish a national system to estimate emissions by sources and removals by
sinks
Establish a national registry to track and account for units

To continue to be eligible to trade, An an Annex 1 Party must





Submit annual emissions inventory of acceptable quality (NIR)
Submit annual sinks inventory (NIR)
Submit annual assigned amount report (NIR)
Expedited procedure to reinstate eligibility if lost
Entities

Must be authorized to trade by an eligible Party
5
When Trading Can Occur
Two issues determine when trading occurs :
I) When the (authorizing) Party is eligible to trade first commitment period
units
From: 1 January, 2008 at the latest
 Following review of pre commitment period report (submitted no later
than 1 January, 2007)
To: 24 July, 2015
 Final day of the true-up period
II) When the unit being traded is issued
CERs: 2003? onwards
AAUs: January 1, 2008 at the latest
ERUs: January 1, 2008 onwards
RMUs: April, 2011 (Annual Accounting); April, 2015 (Commitment Period
Accounting)
6
How Much Can be Traded
Quantity restrictions imposed by Marrakech Accords limited
to:
Throughout trading period
i) Maintenance of the Commitment Period Reserve

Lower of 90% of initial allocation or 100% of 5 times latest inventory

Transfers and cancelled units affect compliance with reserve level
End of trading period
ii) Cap on net acquisitions of sinks CERs

1% of 1990 emissions times 5
iii) Caps on Carry Over

AAUs (no cap); ERUs and CERs (2.5% of initial allocation); RMUs
(0%)
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Implications for Market Participants
•Spot transactions (involving transfers between
Registry accounts) should be undertaken in a
manner consistent with the Marrakech framework:
– To avoid risk of transaction termination or invalidation of
units involved
– Parties responsible for accounting quality and legal entity
participation
•Forward transactions should be mindful of the
Marrakech framework
–
Minimize cases of delivery default
8
Looking Ahead
This is just a starting point. Some issues for further
consideration include:
• What tools are available to maximize the consistency of
forward transactions with the Marrakech framework?
• How will transaction structure be affected by the elaboration
of detailed technical and function specifications for
registries and the transaction log?
• How will transaction structure be affected by Parties’
implementation of the provisions of Marrakech Accords,
particularly within the context of domestic emissions
trading?
9
What Does this Mean
Domestically?
10
Current GHG Reporting

Canada’s National GHG Inventory
 Developed by Environment Canada
 Adheres to International Methodologies (IPCC) & International
Reporting Guidelines (UNFCCC).
 Generally top down inventory, with limited point source
information.

Voluntary Challenge & Registry
 Industry/Government Partnership
 Designed to promote voluntary GHG reductions
 Acting as registry for BPI (6 projects) & GERT (4 projects)
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The National Greenhouse Gas Inventory
How it is prepared - Responsibilities and Procedural Arrangements
Natural Resources
Canada
Energy Forecasting
Division
Emissions Data &
Energy Analysis
Energy & Greenhouse
Gas Forecast
Statistics Canada
Energy & Other Activity Data
Natural Resources Canada
Activity Data
Industry
Industries &
Association’s
Activity Data,
Research & Information
Mandatory Facility
Reporting
(Other Groups)
Specialty Surveys &
Research
Specific Emissions Data
Inventory Agency
GHG Verification Centre
•Develops emission
estimation methods &
emission and removal
estimates.
•Prepares, publishes
& reports National
Inventory, Fact
Sheets, and GHG
Indicators
Develops standards &
protocols for
estimating and
verifying domestic
greenhouse gas
emission reductions
and provides
outreach services for
the GHG Division.
PRODUCTS
Specialty Emissions Expertise
INPUTS
Consulting Groups
Exchange
Greenhouse Gas Division
Agriculture Canada
Agriculture Research Data
Some Emissions & Removals
Environment
Canada
National Greenhouse
Gas Inventory
•National Inventory Report (NIR)
•Trends Fact Sheets & GHG Indicators
•UNFCCC & IPCC Monitoring &
Reporting Guidelines
Review
(NPRI) (MOE)
Additional Peer Review
VCR
Facilitate Participant Reporting
•Environmental and Industry Stakeholders
•Federal/Provincial Colleagues (NAICC-cc and NAICC-A)
•Federal Departments (NRCan; AgCan, Industry Canada)
12
Reporting Implications of the
Kyoto Protocol
13
Monitoring, & Reporting under the Kyoto Protocol
(Articles 5 & 7)
Kyoto requires that by January 1, 2007 Parties meet international
guidelines related to :
• The National Inventory System (Article 5.1) - the institutional
arrangements necessary to estimate, verify and report emissions and
removals of greenhouse gases
• The National Registry (Article 7.4) – the electronic database to account
for transaction of Kyoto credits
• The Annual Inventory Report – (Article 7.1) the reporting of all
information required to assess compliance with the target
Compliance with these guidelines is mandatory to:
• establish an emissions allowance (initial assigned amount)
• participate in the Kyoto Mechanisms
• Avoid a third-party “adjustment” to our emissions estimate
14
Monitoring & Reporting under the Kyoto Protocol
(Articles 5, & 7)
International Requirements
•
Each Party must establish a National System and National Registry
• Single entity must be designated Inventory Agency with overall
responsibility for the National Inventory
• Annual National Inventory Report – Must include:
•
•
•
•
•
•
•
Description of National System/Institutional Structure
Detailed sectoral trends analysis
QA/QC activities – Key Sources
Quantified Uncertainties,
National Registry information (AAUs, CERs, ERUs, RMUs),
Details on forest and agriculture carbon stocks, and
Information on activities undertaken to minimize adverse impacts on
developing countries.
Domestic Requirements
• Reporting requirements related to Large Emitters System
• Linkages of Large Emitters System to National Inventory
15
Domestic Reporting Commitments

Canada Gazette (January 4, 2003) provided an
explanatory note related to reporting on GHGs. It stated
that:

The Government of Canada is committed to requiring
reporting of GHGs, beginning with reporting on 2004
emissions,



Reporting will be mandatory,
Suitable provisions for facility level reporting will be included
and
The Government would consult with stakeholders on detailed
reporting requirements arising from the Climate Change
Implementation Plan.
16
Large Emitters System
Reporting Implications


Climate Change Plan envisages a large industrial emitters
system with Covenants/DET
Mandatory Reporting will be required under the system.
Reporting Objectives



Reporting should link with the National GHG Inventory to ensure
reductions are included
Reporting requirements related to emissions, covenants, trades
and the national GHG inventory should be consistent with
international methodologies, protocols and standards.
Where possible, facility/company level information should be
publicly available
17
UNFCCC & KYOTO REPORTING
Kyoto Implications
Current Inventory System
Information
Gathering
NATIONAL
(Including
GHG
INVENTORY
NPRI/CIPEC/SC)
Centre
SYSTEM
Inventory
(EC -
Review
Verification
National
Registry
Single Entity with
Overall Responsibility)
Trends
Analysis
Linkages with
IET/CDM/JI
Good Practice
Guidance
• QA/QC
•
Methodologies
• Research
• Verification
•
•
Uncertainty Analysis
Central Archive
National
Inventory
Report
Trends Analysis
DC Impacts
DTR
Large
Industrial
Reporting on
Emitters
( +GPG)
CERs
,
AAUs
,
RMUs
Articles 3.3 & 3.4
/
ERUs
(Sinks)
Domestic
Initiatives &
ISO
Standards
18
The GHG Verification Centre


Established to assist domestic initiatives with GHG
calculation methodologies and verification
Activities over the last 1½ years:
 Developed calculation protocols for
stationary
fuel combustion (entity GHG inventory)
landfill gas (GHG emission reduction project)
capture and geologic storage of CO2 (project)
 Begun development of GHG verifier training course
in
consultation with SCC, CICA, CEAs
 Providing technical assistance via email and phone
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In Summary




Canada negotiated flexible allowance and credit trading
rules that allow entities to participate;
International framework requires rigour in GHG
calculations at the National and Entity level for
participating in trading;
National GHG Inventory moving towards expanded
reporting and verification that will include reporting of
information on National Registry;
GHG Verification Centre developing products to assist
entities and projects with GHG calculations that are
consistent with international requirements.
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