This document discusses greenhouse gas accounting for land-based sectors. It covers accounting for national inventories, emissions trading schemes, offset projects, and life cycle assessments. Key points include that accounting methods must balance accuracy and cost while providing the right incentives. For offset projects, abatement must be additional, measurable, permanent, and avoid leakage. Uncertainty can be addressed through discounting estimates or modeling average carbon stocks over the long term. The goal is to reward intentional actions that reduce emissions on average.

1. Greenhouse Gas Accounting
for the land-based sector
Annette Cowie, Richard Eckard, Sandra Eady

2. Inventory
 UNFCCC reporting
 Kyoto Protocol Accounts

3. Emissions trading
 Mandatory:
 European, NZ Emissions trading schemes
 NSW GGAS
Offset projects
 International:
 Kyoto Protocol Clean Development
Mechanism
 Voluntary Carbon Standard etc
 Australia:
 National Carbon Offset Standard
 Carbon Farming Initiative

4. Life cycle assessment – Carbon
footprint

5. International context
 Inventory reporting  GHG accounting
 UNFCCC  Kyoto Protocol
 All countries  Annex I countries
Sectoral boundaries
National scale
IPCC Guidelines
Emissions and removals

6. Industry context
 Offsets  LCA
 CFI etc  Carbon labels
 Businesses  Products or
organisations
Cradle to grave boundaries
Farm scale
Scheme Guidelines, Standards
Emissions reduction, removal enhancement

7. Inventory: What matters?
Purpose: Assess contribution,
compliance
• Conservative
• Consistent
• Reflect anthropogenic drivers
• Accurate?

8. National carbon accounting system
Inventory

9. LCA/Carbon footprint: What matters?
Purpose: Inform consumers, compare
products, identify opportunities for
mitigation
• Consistent
• Right incentive
• Accurate

10. Pip Brock, I&I NSW, preliminary data for
illustrative purposes only

12. Offset projects: What matters?
Purpose: Quantify abatement, ensure integrity

13. Biochar system Reference system
Fossil
Biomass Biomass
energy/carbon
residue residue source
Extraction
Transport
Transport Transport
Pyrolysis to
biochar and
syngas Conversion to
Composting
energy carrier
Distribution of Distribution of
Distribution of Distribution of compost energy carrier
biochar energy carrier
Fertiliser
manufacture
Distribution of
fertiliser
Soil Energy service Soil Energy service
amendment (heat, electricity) amendment (heat, electricity)

14. Carbon Farming Initiative
National Carbon Offset Standard
Commence July 2011
Abatement activities generate credits for
trade in
 Domestic voluntary market
 International voluntary and compliance
markets

15. Carbon Farming Initiative
Possible projects
 Kyoto sinks: reforestation
 Kyoto emissions reduction: eg landfill,
manure management, livestock methane,
nitrous oxide from fertiliser
 Non-Kyoto activities#: eg soil carbon
management, avoided deforestation,
savanna burning
#Excluded from Australia‟s Kyoto Protocol accounts

16. Offset projects: What matters?
CFI Integrity standards: Offset projects must be
 Additional
 Measurable and Verifiable
 Permanent
 Conservative
 Internationally consistent
 Supported by peer-reviewed science
And must avoid leakage
 Assessed by Domestic Offsets Integrity Committee

17. Additionality
Is it new abatement?
(“Abatement should be “additional” to “business-as-
usual” if it used to offset emissions”)
 Required by legislation?
 Common practice?
 “Positive list”

18. Is it measurable?

19. Reforestation/ revegetation

20. Counting carbon in trees
 Carbon makes up 50% of tree biomass
 Predict carbon from allometric relationships
10
Heaton PF
Ourimbah NF
log Above-ground biomass (kg)
9
Wabby NF
8 Mckenzie NF
Myall Lakes NF
7 Hills PF
Tooloom PF
6 Hannam Vale PF
5
4
3
2
1
0
0 1 2 3 4 5
Log dbh(cm)

21. Soil carbon management
 cropland management
 grazing management
 organic amendments: eg
biochar

22. Soil carbon measurement
No-till

23. Nitrous oxide emissions from soil
 Legumes in rotation
 Timing of fertiliser application
 Slow release
fertilisers, nitrification inhibitors

24. Methane from ruminant livestock
 Herd management
 Pasture composition
 Dietary supplements
Reflector
 Breeding for net feed efficiency
Wind
Reflector
FTIR

25. Quantifying abatement
Do we need to monitor it?
Balance accuracy against transaction costs
• Cost-effective accounting
– Based on calibrated models (informed by baseline
measurement?)
• Credit based on modelled estimate rather than
measured impact of practice

27. Is it verifiable?
 Verification based on implementing land management
practice rather than measured abatement

28. Is it permanent abatement?
 “abatement should represent a permanent
reduction in CO2 in the atmosphere”
NSW GGAS forestry offset:
 “100 year rule”
 Registration on title: forest carbon rights,
restriction on use
Kyoto CDM: temporary credits
CFI:
 Aggregation (pooling) across properties
 Risk of reversal buffer

29. Are „life cycle‟ emissions
considered?
 Emissions due to fossil fuel use, indirect (fertiliser,
herbicide), and non-CO2 greenhouse gases should be
included
 Increased soil N, by fertiliser, legumes or some
organic amendments, will increase N2O - C credit for
offset activities should be discounted for estimated
increase in N2O

30. Are there offsite impacts?
(Leakage)
 Biomass depleted at another site?
 Increased livestock numbers elsewhere?
 Increased emissions offsite, attributable to
the project, should be included

31. Dealing with uncertainty
 Eg GGAS: discount for uncertainty “70% rule”
Can only trade quantity for which 70% probability
that actual sequestration exceeds traded C
9
8
7
6
Probability
5
4
3
2
1
0
0.5 1 1.5 2 2.5 3 3.5
Estimated Carbon Stock Values ('000 tonnes)

32. Dealing with uncertainty
 Eg GGAS: discount for uncertainty “70% rule”
Can only trade quantity for which 70% probability
that actual sequestration exceeds traded C
9
8
70% of estimated values
are greater than 1,700.
7
6
Probability
5
4
3
2
1
0
0.5 1 1.5 2 2.5 3 3.5
Estimated Carbon Stock Values ('000 tonnes)

33. Will it be an effective incentive?
 Sufficiently attractive to encourage
participation?
 Costs vs returns
 Record keeping
 “Monitoring”
 Reporting
 Audit
 Long term liability

34. „Factoring-Out‟
 Kyoto Protocol accounting:
Intention to “factor-out” direct human-
induced changes from changes due
to indirect human-induced and
natural effects
 Give credit/debit for intentional
actions

35. Average carbon stocks approach
 Credit/debit based on long term modelled
average
 No monitoring
 Minimises transaction costs
 Rewards actions that give benefit, on average
 Rewards all equally
 Avoids need to “pay back” for natural
fluctuations or trends

36. Conclusion
 GHG accounting for Inventory, Offsets and LCA have
different purposes, use similar data and methods but give
different results due to different boundaries
 Appropriate methods are a compromise between accuracy
and cost; must provide the right incentive and preserve
environmental integrity
 Need for better understanding of uncertainty, better models of
processes eg methane, nitrous oxide

37. Accounting for offsets:
 Accept dynamic system
 Manage risk of impermanence
 Assign credit/debit for intentional actions
 Reward action, modelled estimate, not measured abatement
 Include whole system, all emissions, including off-site
 Combination of baseline measurement and modelling may be
optimal for quantification
 Certainty and absolute accuracy not required
 Minimise transaction costs so encourage participation, to
maximise abatement