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Report On Carbon Footprints
Report On Carbon Footprints
Report On Carbon Footprints
by
Munish Arora
November 2010
Table of Contents
INDEX PAGE NO.
CHAPTER 1 : INTRODUCTION
1.1 Global warming 1
1.2 Effect on temperature 1
CHAPTER 2 : LITERATURE SURVEY
2.1 Carbon footprint
2.1.1 Types of carbon footprints 3
2.1.2 Greenhouse gas emission classification 4
6
2.1.3 Breakdown of a carbon footprint
2.2 Why calculate a carbon footprint ? 7
2.3 Calculating a carbon footprint 8
2.4 Develop and implement a carbon management strategy 13
2.5 Glossary 13
2.6 Carbon credits 18
2.6.1 Background 18
2.6.2 How buying carbon credits can reduce emissions
19
2.6.3 Credits versus taxes
19
2.6.4 Additionality and Its Importance
20
2.6.5 Carbon credit in India
20
CHAPTER 4 : CONCLUSION 21
CHAPTER 4 : REFERENCES 22
1. INTRODUCTION
Climate change is increasingly recognised as a major challenge. It is widely accepted that the
greenhouse gas emissions caused by humans are having a negative impact on the environment.
The most important greenhouse gas, arising from human activity, is carbon dioxide (CO2).1
Virtually all human activities cause the CO2 emissions that lead to climate change and give rise
to the term Global Warming. Global warming is the name given by the scientists for the gradual
increase in temperature of the Earth’s surface that has worsened since the industrial revolution.
By using electricity generated from fossil fuel power stations, burning gas for heating or driving
a petrol or diesel car, every person is responsible for CO2 emissions2,3. These products and
services may also cause emissions of other greenhouse gases.
For the last 40 years it has been observed that there is a large departure of temperature from the
value it was before. Figure 1 4 shows this significant change very well for northern hemisphere.
Figure 1
Figure 2 shows the departure of temperature from 1961 to 1990 globally and the difference is
much significan5.
Figure 2
This clearly shows that the global warming resulted out in the form of rise in temperature in the
past years and it continuously producing adverse effects on nature.
The total set of greenhouse gas emissions caused directly and indirectly by an individual,
organisation, event or product is commonly called their carbon footprint1 Establishing the
carbon footprint of an organisation can be the first step in a programme to reduce the emissions it
causes.
2.LITERATURE SURVEY
Figure 3
Figure 35 very well classifies the greenhouse gases emissions into three categories. The various
categories are:
i. Direct emissions that result from activities the organisation controls
ii. Indirect emissions from the use of electricity
iii. Indirect emissions from products and services
Figure 3
Most commonly, direct emissions will result from combustion of fuels which produce CO 2
emissions, for example the gas used to provide hot water for the workspace. In addition, some
organisations will directly emit other greenhouse gases. For example, the manufacture of some
chemicals produces methane (CH4) and the use of fertilizer leads to nitrous oxide (N2O)
emissions.
Workplaces generally use electricity for lighting and equipment. Electricity generation comes
from a range of sources, including nuclear and renewables. However, in the UK around 75% is
produced through the combustion of fossil fuels. Although the organisation is not directly in
control of the emissions, by purchasing the electricity it is indirectly responsible for the release
of CO2.
Each product or service that is purchased by an organization is responsible for emissions. So the
way the organization uses products and services affects its carbon footprint. For example, a
company that manufactures a product is indirectly responsible for the carbon that is emitted in
the preparation and transport of the raw materials. Downstream emissions from the use and
disposal of products can also be indirectly attributed to the organisation.
It is clear, therefore, that producing a full footprint covering all three types of emissions can be
quite a complex task. A further complexity in understanding published footprints is that they are
rarely comparable for the following reasons:
• Despite emerging international standards not all organisations follow the same approach
to calculating their footprint or classify their emissions in the same way
• Some footprints are expressed on a time period basis, such as the footprints of an individual or
company which are typically measured annually. Others are expressed on a unit basis, such as
per event or product purchased
• Carbon footprints are typically calculated to include all greenhouse gases and are expressed in
tonnes of CO2 equivalent (tCO2e). However, others calculate the footprint to include CO2 only
and express the footprint in tCO2 (tonnes of CO2).
The reasons for needing a carbon footprint will determine which approach is the most
appropriate. In some cases it may be possible to do a basic footprint – in others a much more
rigorous process will be required.
Figure 4 showing a chart which is very well helpful in understanding of the footprints in daily
routine7 Like, this charts shows the role of each and every human activity and its corresponding
carbon footprint. The major role is played by coal and oil gas, Recreation and leisure, electricity
and private transport.
Calculating an organisation’s carbon footprint can be an effective tool for ongoing energy and
environmental management. If this is the main reason that an organisation requires a carbon
footprint, it is generally enough to understand and quantify the key emissions sources through a
basic process, typically including gas, electricity and transport. This approach is relatively quick
and straightforward.
Having quantified the emissions, opportunities for reduction can be identified and prioritized,
focusing on the areas of greatest savings potential.
Organisations increasingly want to calculate their carbon footprint in detail for public disclosure
in a variety of contexts:
• For CSR or marketing purposes
• To fulfill requests from business or retail customers, or from investors
• To ascertain what level of emissions they need to offset in order to become ‘carbon neutral’.
For these purposes, a more robust approach is needed, covering the full range of emissions for
which the organisation is responsible. It may also be appropriate for the calculation to be
independently verified to ensure that the methodology has been correctly used and that the
results are accurate.
For most organisations, calculation of a basic carbon footprint is a fairly quick exercise. A basic
footprint is likely to cover direct emissions and emissions from electricity as these are the
simplest to manage, but exclude some of the indirect emissions14,3
There are usually a handful of major emissions sources that must be quantified, including:
• Onsite fuel usage
• Onsite electricity usage
• Use of transport which you own.
To get the key information to calculate a basic carbon footprint, collect data from all utility
meters and record the distances travelled by the organisation’s vehicles. Convert the fuel,
electricity and transport consumption figures to CO2 by using the standard emissions factors,
which are published by Defra and reproduced on the Carbon Trust website, together with advice
on how to undertake the calculation.
When calculating a basic carbon footprint it is common to exclude sources of indirect emissions
which your organization does not control, for example emissions from waste, from the supply
chain or from employee travel on public transport or airlines.
Once the basic carbon footprint has been established, it is then possible to take steps to manage
the emissions:
• Set and agree efficiency or emissions reduction targets
• Identify likely opportunities for efficiency or emissions reduction
• Prioritise the opportunities, based on environmental or financial criteria
• Take action to implement the opportunities
• Monitor the performance of the actions taken and improve as necessary.
Accurate calculation of your carbon footprint requires a more detailed approach and may require
specialist advice.
The five steps below show a systematic approach, suitable for producing an accurate carbon
footprint6,11
i. Define the methodology
ii. Specify the boundary and scope of coverage
iii. Collect emissions data and calculate the footprint
iv. Verify results (optional)
v. Disclose the footprint (optional).
For a footprint to be accurate there must be a consistent approach, which is why it is important to
define the organisation’s methodology from the outset. This also ensures that when issues arise
they can be dealt with systematically. A consistent methodology is particularly important in a
large organisation which depends on many individuals to help collect and interpret data. Some
organisations choose to define their own approach for carbon footprinting. However, it is usually
quicker and better to use a methodology that is already widely accepted and understood. The
results may be seen to be more credible, and can be compared with other organizations using the
same methodology.
One commonly used methodology is the GHG Protocol produced by the World Resources
Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). This
methodology provides detailed guidance on corporate emissions reporting and is available free of
charge online. A more recent standard from the International Organization for Standardization,
ISO 14064, also provides guidance on corporate footprint calculation and emissions reporting. It
builds on many of the concepts introduced by the GHG Protocol; both provide explanations of
the steps covered here.
Be clear about which set of emissions will be quantified. This is commonly referred to as
defining your ‘boundary’. Common issues include:
• Treatment of emissions from wholly or partially owned subsidiaries
• Treatment of emissions from leased assets, such as from a van which is leased from a hire
company.
Specifying a boundary means to consider a particular area for the calculation of the carbon foot
prints. As figure 5 shows the different boundary line for a particular part to be taken under
consideration. It gives a confined area for the calculation of carbon foot print as like carbon
footprint for the whole oraganisation, for a few processes, for the cradle used etc.
Figure 5
It is usual to define the boundary to include the full range of emissions that the organisation
controls directly and this is likely to include subsidiaries and leased assets. Established
methodologies such as the GHG Protocol provide rules for allocation of the emissions to the
organisation.
Having defined the boundary, consider what types of emissions will be included. Keep the
following points in mind
• CO2 only or all greenhouse gases?
• Direct emissions from fuel use onsite and from transport?
• Direct emissions from manufacturing processes onsite?
• Emissions from the electricity the organisation purchased?
• Emissions from the organisation’s supply chain and other activities for which the operation is
indirectly responsible, such as outsourced activities or manufacture and transport of raw
materials, by another company, which your organisation then uses?
The GHG Protocol and ISO 14064 discussed above provide helpful guidance and accepted
standards on these questions. It is common to report all directly controlled emissions and
emissions from electricity in full. Emissions from indirect sources, such as the supply chain, are
more complex to define and are usually treated as optional reporting items. However, where
indirect sources contribute very large amounts of emissions it may be important to include them
– a lot will depend on the purpose of reporting the carbon footprint.
Whatever the approach taken to the organisational boundary and inclusion of emissions sources,
it is important to document the decision transparently.
The accuracy of the footprint relies on correct data and may include collecting information on:
• Onsite fuel consumption
• Owned transport utilisation
• Emissions from chemical reactions in manufacturing processes or from land use or agricultural
activities
• Electricity consumption
• Employee travel by air, rail and in vehicles not owned by the organisation
• Suppliers’ emissions.
For gas and electricity, collect consumption data in MWh or kWh. Data for other fuels can be
collected in a variety of units, for example, kWh, MJ, Litres and so on. For transport emissions it
may be necessary to estimate the total fuel consumption based on the mileage of the vehicles and
fuel economy assumptions. Data on energy consumption can be translated into equivalent CO 2
emissions data using standard emissions factors, which are reproduced on the Carbon Trust
website. For other emissions sources, more complex calculations may be required. Emissions of
other greenhouse gases must be translated into equivalent emissions data in tCO2e, using the
global warming potential available from the Carbon Trust.
Before collecting the data, decide what level of accuracy is required, and how much margin for
error is acceptable.
Having a carbon footprint verified by a third party, such as a consultancy or accountancy firm
can lend credibility to an organisation’s claims. Verification typically involves analysis of the
methodology, data collection techniques and the calculation process that was used.
Different levels of assurance or verification of your results are available. Greater levels of
assurance or verification are more onerous and expensive to achieve, but provide greater
confidence in the results.
Whether the footprint is disclosed in advertising material, a report or other collateral, ensure that
the data is presented transparently, providing full information about the process followed and
what the information means.
Make the following information available:
• The methodology
• What boundary conditions were set and which types of emissions are included and excluded.
• The data collection techniques, including what level of accuracy was achieved and any
assumptions or estimates that were required.
• The level of verification of the results provided by independent third parties.
This robust approach to calculating a carbon footprint should give enough information to be able
to report it with confidence.
Calculating a carbon footprint is only the beginning of carbon management. There is little point
in establishing a carbon footprint unless the organisation then acts to reduce emissions and
improve efficiency. Carbon footprinting can be a useful exercise as part of a complete
environmental management system 2 reduce direct emissions.
2.5 Glossary
Assurance
The process of an independent third party checking the methodology, data and calculation
processes to ensure that they are robust6,8
Carbon neutral
Commonly accepted terminology for something having net zero emissions (for example, an
organisation or product). As the organisation or product will typically have caused some
greenhouse gas emissions, it is usually necessary to use carbon offsets to achieve neutrality.
Carbon offsets are emissions reductions that have been made elsewhere and which are then sold
to the entity that seeks to reduce its impact. In order to become carbon neutral it is important to
have a very accurate calculation of the amount of emissions which need to be offset – requiring
calculation of a carbon footprint.
The most important greenhouse gas. CO2 emissions result from the combustion of fuel, from
land use changes and from some industrial processes. CO2 emissions are limited by the Kyoto
protocol.
There are six main greenhouse gases which cause climate change and are limited by the Kyoto
protocol. Each gas has a different global warming potential. For simplicity of reporting, the mass
of each gas emitted is commonly translated into a carbon dioxide equivalent (CO2e) amount so
that the total impact from all sources can be summed to one figure. The total set of greenhouse
gas emissions caused by an individual or organisation, event or product. It should be expressed
in carbon dioxide equivalent (CO2e).
When calculating emissions from energy use it is common to know what quantity of energy was
used, either in kWh or by volume or mass of input material. Emissions factors enable a
conversion to be made from the input measure of energy to the amount of carbon dioxide
emissions that will result.
Greenhouse gases
Greenhouse gases are those which contribute to the greenhouse effect when present in the
atmosphere. Six greenhouse gases are regulated by the Kyoto Protocol, as they are emitted in
significant quantities by human activities and contribute to climate change. The six regulated
gases are
Carbon dioxide (CO2),
Methane (CH4),
Nitrous oxide (N2O),
Hydrofluorocarbons (HFCs),
Perfluorocarbons (PFCs)
Sulphur hexafluoride (SF6).
Emissions of greenhouse gases are commonly converted into carbon dioxide equivalent (CO2e)
based on their 100 year global warming potential. This allows a single figure for the total impact
of all emissions sources to be produced in one standard unit. Conversion factors of greenhouse
gas to CO2e are calculated by the IPCC and Defra publish guidance on which set of conversion
factors to use.
Reporting Standards
The protocol covers project emissions reporting and corporate emissions reporting. The
corporate emissions reporting standard provides a methodology for calculation of a carbon
footprint. The protocol was developed by the World Resources Institute and the World Business
Council for Sustainable Development8.
Kyoto Protocol
The goalof this protocol is “stabilization of greenhouse gas concentrations in the atmosphere at
a level that would prevent dangerous anthropogenic interference with the climate system.“
It includes 4 greenhouse gases4.
• Carbon dioxide
• Methane
• Nitrous oxide
• Sulphur hexafluoride
and two groups of gases
• Hydrofluorocarbons
• Perfluorocarbons
Its aim is average reduction of 5.2% from 1990 levels by the year 2012.
The Kyoto Protocol provides three mechanisms for the countries to acquire greenhouse gas
reduction credits:
• International Emissions Trading (IET)
• Clean Development Mechanism (CDM)
• Joint Implementation (JI )
Countries can trade in the international carbon credit market to cover their shortfall in
allowances.
Countries with surplus credits can sell them to countries with quantified emission limitation and
reduction commitments under the Kyoto Protocol.
Developed countries that have exceeded the levels can either cut down emissions, or borrow or
buy carbon credits from developing countries.
A developed country can 'sponsor' a greenhouse gas reduction project in a developing country
where the cost of greenhouse gas reduction project activities is usually much lower, but the
atmospheric effect is globally equivalent.
The amount of emission reduction depends on the emissions that would have occurred without
the project minus the emissions of the project. The construction of such a hypothetical scenario is
known as the baseline of the project. The baseline may be estimated through reference to
emissions from similar activities and technologies in the same country or other countries, or to
actual emissions prior to project implementation.The developed country would be given Carbon
Credits for meeting its emission reduction targets, while the developing country would receive
the capital investment and clean technology or beneficial change in land use.
A developed country with relatively high costs of domestic greenhouse reduction would set up a
project in another developed country.
ISO 14064
ISO 14064 is an international standard for corporate emissions reporting. It builds on the
approach outlined in the Greenhouse Gas Protocol. Objectives of ISO 14064 6 .
• Consistency and transparency
• systematic development & maintenance of GHG inventories
An emissions reduction, commonly resulting from a project undertaken in the developing world,
which has been sold to compensate for emissions elsewhere. Offsets are commonly used to net
off corporate emissions so that an organization can claim to be carbon neutral.
Verification
The process of independent third party checking of a carbon footprint calculation and statement
by the third party that the results are accurate.
Carbon credits are a key component of national and international emissions trading schemes that
have been implemented to mitigate global warming. They provide a way to reduce greenhouse
effect emissions on an industrial scale by capping total annual emissions and letting the market
assign a monetary value to any shortfall through trading. Credits can be used to finance carbon
reduction schemes between trading partners and around the world. There are also many
companies that sell carbon credits to commercial and individual customers who are interested in
lowering their carbon footprint on a voluntary basis 15,16
2.6.1 Background
Burning of fossil fuels is a major source of industrial greenhouse gas emissions, especially for
power, cement, steel, textile, fertilizer and many other industries which rely on fossil fuels (coal,
electricity derived from coal, natural gas and oil). The major greenhouse gases emitted by these
industries are carbon dioxide, methane, nitrous oxide, hydrofluorocarbons etc, all of which have
not yet been completely proven to increase the atmosphere's ability to trap infrared energy and
thus affect the climate. The concept of carbon credits came into existence as a result of
increasing awareness of the need for controlling emissions.
Carbon credits create a market for reducing greenhouse emissions by giving a monetary value to
the cost of polluting the air. Emissions become an internal cost of doing business and are visible
on the balance sheet alongside raw materials and other liabilities or assets. By way of example,
consider a business that owns a factory putting out 100,000 tonnes of greenhouse gas emissions
in a year. So the factory is given a quota of say 80,000 tonnes per year,17 The factory either
reduces its emissions to 80,000 tonnes or is required to purchase carbon credits to offset the
excess. One seller might be a company that will offer to offset emissions through a project in the
developing world, such as recovering methane from a swine farm to feed a power station that
previously would use fossil fuel. So although the factory continues to emit gases, it would pay
another group to reduce the equivalent of 20,000 tonnes of carbon dioxide emissions from the
atmosphere for that year.
Another seller may have already invested in new low-emission machinery and have a surplus of
allowances as a result. The factory could make up for its emissions by buying 20,000 tonnes of
allowances from them. The cost of the seller's new machinery would be subsidized by the sale of
allowances. Both the buyer and the seller would submit accounts for their emissions to prove that
their allowances were met correctly. It is the hole process of buying carbon credit.
By treating emissions as a market (commodity) it becomes easier for business to understand and
manage their activities, while economists and traders can attempt to predict future pricing using
well understood market theories. Thus the main advantages of a tradable carbon credit over a
carbon tax are: the price is more likely to be perceived as fair by those paying it, as the cost of
carbon is set by the market, and not by politicians. Investors in credits have more control over
their own costs.9 the flexible mechanisms of the Kyoto Protocol ensure that all investment goes
into genuine sustainable carbon reduction schemes, through its internationally-agreed validation
process.
It is also important for any carbon credit (offset) to prove a concept called additionality.
Additionality is a term used by Kyoto's Clean Development Mechanism to describe the fact that
a carbon dioxide reduction project (carbon project) would not have occurred had it not been for
concern for the mitigation of climate change. More succinctly, a project that has proven
additionality is a beyond-business-as-usual project. The Kyoto Protocol, an international
agreement between more than 170 countries, The mechanism adopted was similar to the
successful US Acid Rain Program to reduce some industrial pollutants17
According the World Resources Institute/World Business Council for Sustainable Development
(WRI/WBCSD) : "GHG emission trading programs operate by capping the emissions of a fixed
number of individual facilities or sources15.
The idea is to achieve a zero net increase in GHG emissions, because each tone of increased
emissions is 'offset' by project-based GHG reductions. The difficulty is that many projects that
reduce GHG emissions (relative to historical levels) would happen regardless of the existence of
a GHG program and without any concern for climate change mitigation. If a project 'would have
happened anyway,' then issuing offset credits for its GHG reductions will actually allow a
positive net increase in GHG emissions, undermining the emissions target of the GHG program.
Additionality is thus critical to the success and integrity of GHG programs that recognize
project-based GHG reductions."
At last count in March 2006, India had 310 ‘eco-friendly’ projects awaiting approval. Once
cleared, these projects can fetch about Rs 29,000 crore 16 in the next seven years. India’s carbon
credit market is growing, as many players (industries) are adopting the Clean Development
Mechanism (CDM). Elaborating on ‘global emission trading’ Panigrahi added, “For instance, US
accounts for 30 per cent of global emissions, while India makes for three per cent. Now, India
can transfer part of its allowed emissions to developed countries. For this, India must first adopt
CDM and accrue carbon credits. One carbon credit or Certified Emission Reductions (CERs) is
equivalent to one tonne of emission reduced.”
4. CONCLUSION
It can be concluded that carbon footprints as well as carbon credits carries an importance in our
daily life and produces a significant effect. So everyone should realize its effect and should try to
protect the nature from its adverse effects. The carbon credit business is a rapidly changing
business, and people should be aware that market rates, protocols, and registration programs can
change quickly. There are many companies involved in carbon credit trading, and a few have
been active in brokering credits for agricultural projects.
5. REFERENCES
9. C. C. Pertsova: Chapter 1, pp. 1–11. Nova Science Publishers, Inc, Hauppauge NY, USA.
15. http://en.wikipedia.org/wiki/Carbon_credit/.
16. Carbon credit. William Collins Sons & Co. Ltd/Harper Collins Publishers. 2009.
http://dictionary.reference.com/browse /carbon+credit..