Australia is not headed in the right direction to curb its greenhouse gas emissions. Is there anything companies can do themselves to turn this juggernaut around?
In Australia each company must report its greenhouse gas emissions, but in some cases it is voluntary and in others mandatory. The rules for reporting vary, and it is far from clear at the end of the day what is being reported and how accurate it is.
In other countries the situation is very different. Some, such as the European Union, the USA, UK and France, have adopted more comprehensive approaches, as the above link demonstrates.
So what should be reported and how can Australia improve?
How greenhouse gas inventories are produced
“The quality of greenhouse gas (GHG) inventories relies on the integrity of the methodologies used, the completeness of reporting, and the procedures for compilation of data”.
An inventory consists of the annual total greenhouse gas emissions.
There are standardised requirements for reporting national inventories which all industrialised countries must adhere to (see the previous link). Every year countries submit their reports by 15 April.
While the reporting rules are set for everybody, not everybody interprets them, or is always able to implement them, in the same way.
These reports cover the emissions and removals of all direct GHGs: (carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), perfluorocarbons (PFCs), hydrofluorocarbons (HFCs), sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3)) from five sectors (energy; industrial processes and product use; agriculture; land use, land-use change and forestry; and waste).
They cover the period from the base year (usually 1990) to two years before the inventory is due (e.g. the inventories due 15 April 2016 cover emissions and removals for all years from the base year to 2014).
They come in two parts:
- a series of standardised data tables containing mainly quantitative information;
- a report containing transparent and detailed information about the inventory. These include references and sources of information, how the inventory is produced and any changes in methodology from the previous inventory.
There are rigorous rules set out for how the data are to be collected and reported. Everything must be consistent with the 2006 IPCC guidelines. So they can be verified, countries’ estimates of CO2 emissions from fuel combustion must be compared with these guidelines.
In the language of the UNFCCC, these countries are called “Annex I Parties” and include the industrialised countries that were members of the OECD (Organisation for Economic Co-operation and Development) in 1992, plus countries with economies in transition (the EIT Parties), including the Russian Federation, the Baltic States, and several Central and Eastern European States.
People often ask if industrialising countries like China, India and Brazil come under these arrangements. The answer is no: these are called Annex 3 countries. Annex 3 countries have their own guidelines.
Annex 1 countries report at the top level on their primary energy use, which should cover all of the emissions associated with the production of all non-renewable electricity. They may also gather data on their renewable electricity, but this does not need to be reported to the UNFCCC.
How are countries doing?
Climate Action Tracker (CAT) is an independent scientific analysis produced by three research organisations that has been tracking climate action by nations since 2009. They track progress towards the globally agreed aim of holding warming well below 2°C, and pursuing efforts to limit warming to 1.5°C.
Which countries does CAT think it is doing the best? The answer may surprise you: non are exemplary but only Morocco’s approach is compatible with reaching 1.5°C.
Australia and New Zealand are doing about the same as Europe, Kazakhstan, Brazil and Peru: “insufficient” – but certainly better than America, Russia, Turkey, Sudan and Saudi Arabia: “critically insufficient”.
Australia is getting worse because it is propping up the coal industry and “ditching efforts to reduce emissions, ignoring the record uptake of solar PV and storage and other climate action at state level”.
CAT states: “The Australian government has turned its back on global climate action by dismissing the findings of the IPCC Special Report on Global Warming of 1.5°C and announcing it would no longer provide funds to the Green Climate Fund (GCF).
“Australia’s emissions from fossil fuels and industry continue to rise and, based on the most recent quarterly inventory, are now 6 per cent above 2005 levels and increasing at around 1 per cent since 2014.”
At this rate emissions will reach 9 per cent above 2005 levels by 2030, rather than the 15–17 per cent decrease in these emissions required to meet its Paris Agreement target.
The government plans to underwrite a new coal power plant. If all other countries were to follow Australia’s current policy trajectory, global warming could reach up to 4°C.
Any Australian company using grid-based electricity is therefore complicit in the use of coal and their emissions will consequently be higher than they would otherwise be.
Emissions from the building sector
Emissions reporting from the building sector is based upon both the greenhouse gas emissions associated with the materials used and with the in-use phase of the building.
It’s therefore, better to use materials like timber that lock up atmospheric carbon in the building.
Conversion factors are deployed to determine the emissions based on the type of fuel and the way it is treated. For grid electricity, this will result in a figure for emissions dependent upon the local fuel mix that produces the electricity.
All renewable energy is treated as if it does not exist, assumed to have no greenhouse gas emissions associated with it.
Corporate investors and reputation protection
If companies wish to gain a good reputation for being climate friendly, they can opt to have independent accreditation on their emissions from a number of different bodies.
The Corporate GHG Protocol is the gold standard. It is the most widely used and is independently verified by the not-for-profit World Resources Institute.
For investors, it’s important to be aware of the criteria under which such accreditation bodies make their judgements because they are all different.
Investors might ask: has this particular accreditation system been chosen because it treats the company more objectively, or because it is concealing something?
Very recently GHG Protocol announced that many companies inaccurately estimate the climate benefits of their products.
“Corporations are increasingly claiming that their goods and services reduce emissions. But there is a big problem: these avoided emissions claims are often unverifiable or inaccurate.”
Together with the World Business Council for Sustainable Development, the WRI is, therefore, developing new Greenhouse Gas Protocol guidance to help companies and organizations account for greenhouse gas emissions and carbon removals from land use, land use change, bioenergy and related activities in their GHG inventories.
For companies and investors interested in sustainability, and for the UNFCCC, verifiability and transparency are therefore the only keys fit to unlock the truth about whether the world will reduce its greenhouse gas emissions sufficiently to keep civilisation intact.