Hello and welcome. In this session, we’re going to talk about carbon calculations, and explain what MRV procedures are, what emission calculation methods are based on, what scope they have, what “climate-compatible” means, and finally, what the point of these emission calculations is. So first of all, MRVs: measuring, reporting, and verification procedures. What are they? MRVs are a set of processes and procedures that allow us to gather and report data on greenhouse gases and verify them. These MRV procedures were put in place by the United Nations Framework Convention on Climate Change, the UNFCCC, after the 2010 summit in Cancun. All countries in the North currently provide the relevant information in this format, and it is being expanded to all other countries. MRV data have to be produced every four years with an update every two years. They’re based on the method developed by the IPCC to measure greenhouse gas emissions, and they containan inventory of the six most important gases at this stage: carbon dioxide, methane, nitrous oxide, and the fluoroderivatives (HFC, PFC, SFC). They are produced by the energy sector, industrial processes, the use of solvents, agriculture, waste, the use of lands and forests. MRV procedures are the reference point and trigger for national climate policies. Their publication is key to confidence and transparency in international negotiations, where everyone needs to know what everyone else is doing. They can also affect the awarding of financing. The application of these MRVs has to be audited by independent experts. We should note one point, which is that the international sea transport sector and the international air transport sector fall outside of the MRVs, as these emissions are counted only in national water and airspace. In these international sectors, the regulation of sea and air transport emissions is still being discussed, and it’s a very significant issue. The second point of this session: the basis for calculations of greenhouse gas emissions. First of all, we don’t measure emissions with a sensor. In fact, they’re estimated by calculation methods. The “carbon footprint” method was developed in France by the French Environment and Energy Management Agency (ADEME), and it inspired the relevant international ISO standards and the Greenhouse Gases Protocol, developed by the think tank WRI and the WBCSD. Numerous organisations throughout the world calculate carbon footprints with methods whose reliability varies but which all have the same basis. We can also calculate the carbon footprint of a country, a territory, a project, a company or an individual: the methodological basis is the same. This is what we’ll look at. How is this footprint calculated? It’s calculated by multiplying, for every activity in question, a quantity, for example, the number of kilometres travelled, kilowatt-hours consumed, etc. This quantity is multiplied by the emissions factor of this activity. Activity data are physical data – kilometres travelled, kilowatt hours consumed – but they have to be multiplied by an emissions factor. What’s that? Greenhouse gases have a global warming potential that depends on the gas, but which can be equated to carbon dioxide, which is the reference point. A given activity’s “emissions factor” is the average amount of greenhouse gases generated by a “unit” of this activity, expressed in CO2 equivalence. To take an example, a car that travels for one kilometre emits CO2 from the combustion of its fuel, diesel or petrol. The emissions factor depends on the model of the car and the fuel. Roughly, it’s between 80 and 300 grams of CO2 per km depending on the model. Another example: the emissions factor for electricity depends of course on the energy mix used to produce the electricity – it’s the carbon emissions for one kilowatt-hour of electricity. This mix varies from country to country. The more coal is used to produce this electricity, the higher the emissions factor is. Next in line are oil and gas, because coal emits more CO2 per unit of energy than oil, which in turn emits more than gas. Likewise, the more hydropower, nuclear power, and renewable energies are used to produce this electricity, the lower the emissions factor will be, as these sources have low carbon emissions. Roughly, just to give you a rough estimate, the emissions factor varies between 80 and 800 grams per kWh of electricity. To summarise this, the carbon footprint is the sum of these products: for each action involved in the carbon footprint, we multiply the activity data by its emissions factor. 300 km travelled by car multiplied by 150 grams equals 45 kg of CO2; 2 MWh of electricity consumed at a rate of 100 grams per kWh, equals 200 kg of CO2, etc. The emissions factors are set by specialised bodies, like the ADEME in France, which I mentioned earlier. They’re available in public or private databases. Data about activities are collected on a case-by-case basis for the entity and year in question. Now I’m going to talk about a third point, which is how these greenhouse gas emissions consolidated in a carbon footprint are divided. They’re divided into “scopes”: scope 1, scope 2, scope 3. Recall, first of all, that carbon footprints take into account all activities needed for the entity in question, regardless of any de jure considerations. If the company needs paper, the paper is included even if it has no print shop or paper mill. So what is included? Energy consumption for the procedures for heating or other needs is included. The use of transportation for goods and people, the purchase of materials or other objects, the goods is included, equipment disposal is included, and waste management. For the entire entity in question, whether it’s a corporation, an adminstration, a product, a territory, a person, etc., direct on-site emissions are included, as are the indirect emissions that are needed for that activity or created by that activity, created either by suppliers, employees, or customers. Evaluations are made using questionnaires, expert estimates and activity data, how many km, tonnes of cement, how much paper, how many kWh. Once we have this information from activity data, we multiply it on spreadsheets by the corresponding emissions factor. Then all these data can be added by choosing one of the three following levels. Scopes 1 and 2 are the direct scopes, energy, electricity and heat. The energy directly consumed on site is scope 1. Scope 2 is the energy from electricity or heat networks whose greenhouse gas emissions are a bit farther away than those on site. Next, scope 3 is all other greenhouse gas emissions. So that’s how a carbon footprint is calculated. Now that we understand what the measurement instruments and methods are, we can answer the following question: what is a climate-compatible project? Now, the AFD, French Development Agency has developed a method for systematically measuring the greenhouse gas emissions created by a given project, for example, by an infrastructure project as well as the greenhouse gas emissions saved by this project. The AFD has also helped, within IDFC, the club of development banks, in setting the definition of what a climate asset is: it’s an asset that contributes to reducing greenhouse gas emissions. The method evaluates the emissions caused and prevented over the length of the project, from its first proposal to the end of its life or its dismantling. For example, a motorway’s emissions come first from its construction, the energy used by the equipment; from the production of the asphalt, the mixtures; from the operation of the motorway, its maintenance, the tollbooths, if there are any; and of course, the emissions from the vehicles that use it. So you see, it’s extremely complete. And now, to calculate the emissions prevented by carrying out a project, what do we do? A comparison is used: what would happen if the project didn’t exist? That’s compared to the project under study, the alternative project. Next, we calculate the footprint, and that lets us see whether the project in question reduces greenhouse gas emissions or not. Now let’s talk about the challenges of carbon calculations. First challenge: measuring a project’s carbon impact that makes it possible to direct money and means toward projects that contribute the most to decarbonising our economy. It also makes it possible to set thresholds and standards for intervention. We could, for example, refuse to finance projects from a certain emissions threshold, but we need to set it. We could set climate fund contribution goals. That’s what a financial insitution can do. The AFD has done so and has reached its goal of 50% climate co-benefit financing in 2014 and 2015. That also makes it possible for capital investors and debt investors to measure the carbon footprint of their portfolios. Several institutional investors want to publish their carbon footprints and their reduction efforts. For instance, we could mention the 2015 “Montreal Pledge” and the “Portfolio Decarbonization Coalition.” In France, article 173 of the Energy Transition Act, passed in 2015, requires institutional investors to publish their carbon footprints. Another challenge, at country level, the information in the MRVs are the basis for climate negotiations. But the fact that they’re public also has a point: it makes it possible to do many studies, such as the one illustrated by the following graph. This graph, which links a country’s carbon intensity to its level of development, let’s us challenge a widely accepted idea, namely that the more developed a country is, the higher its carbon intensity is. Thank you. Today we’ve seen all the points related to calculating carbon and its challenges. See you next time!
