North American Jurisdictions Coalesce Around the Climate Registry's Carbon Reporting Standards
The non-profit Climate Registry is developing a greenhouse gas emissions measurement protocol that is as transparent as it is accurate and is capable of supporting potentially mandatory greenhouse gas emission mitigation practices for its members and reporters. To better understand the value of quantifying and reporting emissions according to a uniform accounting standard, VerdeXchange News spoke with Diane Wittenberg, who served as the president of the California Climate Action Registry before becoming the first executive director of the newly formed Climate Registry.
VerdeX: What market and climate change need does the Climate Registry serve?
Wittenberg: The Climate Registry is a coalition of U.S. states, Canadian provinces, Mexican states, and Indian tribes who have come together to support a single greenhouse gas reporting and accounting standard. You can look at a parallel in financial accounting standards.
The problem that needs to be solved is consistency in the very simple underpinnings and infrastructure of measuring carbon emissions. If one state measures one way and another measures another way, they don’t trust one another’s data. Companies have really pushed them hard to have consistent reporting, and the federal government hasn’t been leading that effort, so the states have come into the void and provided their own leadership.
VerdeX: If a few states like Texas and Alaska hold out, does that make the Climate Registry’s common standard less valuable?
Wittenberg: States and provinces are still joining the Registry. We started in May 2007 with 31 states and provinces. Today we’re up to 55, and we’ll continue to grow in terms of the jurisdiction. If you look at the reporters, we have companies headquartered in many states that report to the Climate Registry. It’s all the same reporting from their point of view. Once there’s a standard, you report to that standard.
VerdeX: What reasons are given by the states that have not yet joined the registry?
Wittenberg: Different states and provinces have different reasons. The governor of Indiana says he doesn’t believe in climate change, so his state is not a member. The Dakotas and Nebraska sort of say, “We’re just not too interested in this particular issue; it’s not our issue.” The coal states and the oil states don’t want to be in a leadership position on this policy. And then there are other states and provinces that are still in the process of joining.
VerdeX: Is there an expectation that most of our states, the Canadian provinces, and North American tribes will eventually join the Registry?
Wittenberg: All 13 provinces of Canada have said they’re going to join. We have about eight or nine so far. I think we have 39 states, and there are several other states that are interested in joining. And then there’s going to be action at the federal government level. We have six border states in Mexico that have joined the Registry.
VerdeX: What are the Climate Registry’s models, besides the California Climate Action Registry? Were there other jurisdictional efforts to establish a common reporting standard that encouraged and shaped the way the Climate Registry is proceeding?
Wittenberg: The California Registry really stood alone as a model. It was a non-profit created by California law back in 2000. It was a party that people didn’t think anyone would come to because it was very rigorous yet still voluntary. But it has been successful, and companies have seen the value of joining it.
Other regions around the country said, “We want to have our own registries,” and the Energy Foundation brought us all together. The Climate Registry was formed in short order after those discussions.
VerdeX: Who wrote and modeled the protocols for the Climate Registry? Are they the same or are they different from the California Climate Registry?
Wittenberg: The World Resources Institute in Washington, D.C., and the World Council on Sustainable Business Development in Geneva put together a global GHG protocol in the ‘90s. When the California Registry started, we took those standards and operationalized them so you could actually report specifically to them—we brought down the overarching principles to 10,000 feet instead of 50,000. And then when the Climate Registry started, with all the states participating, we modified the California protocols for the Climate Registry.
VerdeX: When the Climate Registry reports at the end of this year, how many actual reporters do you expect will have submitted their numbers to you?
Wittenberg: By the end of this year, I expect we’ll have several hundred to 1,000 reporters. In some ways, that’s significant in that they’ll be big emitters: big electricity companies, big oil and gas companies, cement companies, and manufacturers. On the other hand, that’s a small number compared to all the companies not yet reporting. But the reporters are the leaders, and they will influence policy in this area at the federal level.
VerdeX: Will the public sector also be reporting to the Registry?
Wittenberg: The public sector—state agencies and cities—also will be reporting to the Climate Registry. In California, all the state agencies report to the California Registry. The state of Utah, by way of example, has signed up to the Climate Registry.
VerdeX: So, reporting to the Registry is voluntary, as it was in California. Does relying on a voluntary system of reporting cause issues or problems in achieving a single, reliable standard of reporting greenhouse gas emissions?
Wittenberg: You can never expect 100 percent or 90 percent participation on a voluntary basis. So, the value of the Climate Registry is to set standards that policymakers can use as their infrastructure for regulatory policy. The Climate Registry will also support mandatory state and regional reporting programs through the same database.
The Western Climate Initiative, which is eight states in the West who are uniting to do a cap-and-trade program, will use the Climate Registry as the database to collect that data and track the emissions and reductions.
VerdeX: Might your reporters reasonably expect that the Registry’s voluntary program is a precursor to a mandatory program? If so, what’s the time span you envision for a mandatory reporting program to be in place?
Wittenberg: Usually, voluntary programs are precursors to mandatory programs. California already has a mandatory reduction law, and the reporting was based on the California protocol. The Western Climate Initiative will have the structure of its mandatory reporting program announced this fall. The U.S. EPA and other states are on different timelines. The Northeast states already have a regulatory program for all the power plants. The U.S. EPA is under Congressional mandate to have a draft of a mandatory reporting rule out by this September. The mandatory train is steaming right down the track.
VerdeX: How is awareness of the “train steaming down the track” affecting the behavior of the Registry’s reporters?
Wittenberg: There are a lot more reporters today to a voluntary system than there would have been two years ago, because they see the same reality that I just described. If they voluntarily report, they get several advantages. One, they protect the baselines. If they’re reporting through the Registry and they reduce their emissions for various reasons before there’s a regulatory need to do that, they can protect those early reductions. That’s important.
Two, they’re just learning how to play the game. You don’t want to be mandated to report something when you’ve never done it before.
Three, if you know what you’re doing, you shape policy. So, the companies that follow the Registry protocols and report and are experts in how to do that will have a seat at the table with policymakers because they know what they’re talking about.
VerdeX: California clearly is moving toward a mandatory reporting process—driven by AB 32’s mandates. How should our readers connect the dots between the work of the California Climate Registry, AB 32, the U.S. EPA, and future reporting protocols?
Wittenberg: Just from this window of reporting, AB 32 references the California Climate Action Registry, and CARB works very closely with the California Registry to make sure the reporting protocols grew organically from what the Registry already had. The same is true for the other states as they look at mandatory reporting. They look at the Climate Registry Protocol—how do you calculate the emissions, what are the sources, how do you define boundaries, how do you define ownership, the equity share, operational control, and financial control? All those decisions have to be made. There’s not a right or wrong; they just all have to be approached in the same way.
And we work with U.S. EPA. They commented on our protocol. We took many of their suggestions. We’re narrowing down how greenhouse gases are reported. So, the boring data work—what are the emissions, and how do we know if we’ve reduced them —will be done. Various policy solutions then can be built on top of that data collection.
VerdeX: The Climate Action Registry recently announced the first two projects to use CCAR protocol for voluntary carbon reduction. How successful have these two projects—the Garcia River National in Mendocino County and in the Van Eck National Forest in Humboldt County—been?
Wittenberg: Those projects were for the California Climate Action Registry, which is really turning to offset protocols. One of their offset protocols is, how do you measure carbon sequestration? Again, the trick with any offset is that it has to be additional. These forests met those additional criteria and they sequestered additional carbon above a business-as-usual case, about 200,000 tons of carbon a year. And there’s more forest in the pipeline. The California Registry forestry protocols have become the model for the nation.
All offsets for carbon reduction projects have to be real, measurable, and additional. Additional means that it wouldn’t have happened except that you’re doing it as an offset. That’s one of the hardest things to measure, because usually, we all have more than one reason for doing any one thing. You have to define what additional is. The protocols do that, and these forests are managed by land trusts and they’ve gone over and above any regulatory requirements or standard practices in forestry.
VerdeX: If forestry protocols have been modeled successfully, what commodity is next?
Wittenberg: It’s happening in landfills. It’s happening in methane capture on farms. It’s happening in tillage practices in farms. We’re looking at wetlands restoration as additional, beyond regulatory. Boiler replacement, potentially. There are lots of opportunities to reduce carbon over and above whatever regulatory requirements there are.
VerdeX: If I am a business person reading this interview about the Climate Registry and the evolution of mandates to report carbon emissions, and I’m concerned about a movement toward mandatory standards for measuring one’s carbon footprint, what should I do first?
Wittenberg: A carbon-constrained economy will be pervasive. The first emissions regulation will come out against the big emitters like electric power, oil and gas, cement, and aluminum. But the whole manufacturing chain will be affected. Companies are already asking through their supply chains, “What is the carbon footprint of making this pencil, this paper, this transmission wire?” Wal-Mart requires the carbon content of every product that it puts on its shelves.
You’re going to have to know those answers, so you might as well start now, when you have a little time. Look at what your own carbon footprint is, how you can reduce it, and how you can be more attractive to your customers.
We have members of the Climate Registry that have one office and one car. Any business that wants to be a member is welcome. Our protocols are online at www.theclimateregistry.org. Anybody could take them and follow them without even joining the Climate Registry, because again, we’re trying to drive to consistency and an international model.
VerdeX: What practical marketplace change is the Climate Registry making?
Wittenberg: The old business of managing what you measure, in the first place, makes a difference. You’d be surprised how many companies have said, “Once we got our carbon footprint, we saw all sorts of ways we could reduce our carbon that we hadn’t realized.”
A company that measures its carbon and knows where its sources are is then faced with a policy solution like AB 32. Their carbon footprint is a tool that helps them analyze a proposed law —do I need to go DefCon 1, or can I live with this? I think that is part of the acceptance and the political process of AB 32. There were lots of hand-raisers for what helped AB 32 pass, but I think a comfort level from reporting to the Registry was one sliver of that. That’s happening in other states as well.
VerdeX: Cap and trade is a likely outcome of AB 32. What is the context of the discussions taking place worldwide and in California regarding cap and trade?
Wittenberg: Cap and trade is just one of the tools in the portfolio of how to manage carbon. It’s not cap-and-trade or command and control. There has to be some of each. That’s how California is moving forward; that’s how the world is moving forward. The first thing you need in a cap is a baseline so you know what the cap is. That’s how the Registry fits in.
There was an initial problem with the emissions trading system in Europe: they just started with a cap, without determining the proper baseline. So the companies negotiate caps, which meant the market was long. When people realized that there were more allocations than the companies needed, the market crashed.
But, the market bounced back right away. It is a commodities market, which tends to have highs and lows anyway. The European carbon market has been relatively steady since that crash in May. To be fair, the fact that the market was long was compounded by that information leaking out rather than being publicly announced. Market-makers were able to take advantage of it.
VerdeX: Lastly, in May, the California Climate Action Registry is hosting its annual conference in San Diego, called “Navigating the Carbon World.” VerdeXchange and IDG are hosting the GreenXchange Xpo in early October. What do conference registrants derive from participating in events such as these two? What’s the learning curve, and what will be on the agenda of either that’s important for people to pay attention to?
Wittenberg: Carbon is a new and emerging field. It’s really exciting. People are thinking of new ideas, doing new things. We’re all lucky to be involved in carbon at this point in time, because you get to exercise thought leadership and try solutions. Ten years from now, everything will be implementing to make sure that it works, but right now, there’s a lot of theories. How do you know what somebody else’s ideas are or what’s working unless you go to conferences like these and exchange those ideas? •••