Five Winds International L.P.

Greenhouse Gas Emissions: A Systems Approach

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Engineers have an important role to fulfil as the focus of climate change discussions shifts from policy to implementation. We need to promote rigorous, proven tools and methods that use a systems perspective.

Climate change is here to stay. Business leaders at the 2000 World Economic Forum voted global climate change as the most pressing issue confronting the world’s business community. The development of the Kyoto Protocol in 1997 signaled that climate change is firmly established on the public, government and business agenda. The political commitment of some countries (particularly the United States) to ratify the Protocol may be in doubt, but there is a strong commitment in all industrialized countries to reap the economic benefits of improved energy efficiency and reduced greenhouse gas (GHG) emissions.

Climate change is likely to create substantial risks and opportunities for businesses with assets and operations directly affected by the weather, for example insurance, agriculture, forest products, fisheries and tourism. However, the impact of climate change on almost all businesses is that, to meet international environmental commitments, governments are in the process of implementing policies and measures that will increase the price of fossil fuel-based energy and affect the entire structure of world energy markets. These climate change regulations will reduce the value of some assets (e.g. inefficient truck fleets and commercial buildings) and increase the value of others (e.g. energy-efficient technologies and products and replacements or substitutions for carbon-intensive energy sources).

Although the detailed rules for implementing the Kyoto Protocol are still being finalized, one clear need is for credibility and rigour in measuring, verifying and obtaining credit for GHG emission reductions. To manage the risk of climate change and to take advantage of the opportunities, accurate and credible reporting of emissions is crucial. First is the need to understand whether national governments are meeting the emissions reduction targets agreed to in the Protocol. This process involves national inventories for six GHGs from 180 different sectors and subsectors of the economy.

Secondly, within the Kyoto Protocol there are three “flexibility mechanisms” to enable countries to reduce their emissions. These mechanisms enable countries to achieve their targets through transferring
or trading emission reductions. To be accepted by policy makers, and by the market for emissions trading, these mechanisms must be based on accurate and credible measurement of emission reductions.
Finally, as decision-makers in government and industry begin evaluating technology and policy options for GHG mitigation, there must be a credible means for evaluating their emission-reducing potential.

For example, if a national government decided to provide tax subsidies to less carbon- intensive energy sources, a credible means of measuring emissions for the various alternatives would be needed.
National inventories are large complex data sets based on macro-level models of economic activity, but the latter two situations require more specific modeling and measurement of individual projects,
technologies or actions. The systems analysis framework described in the international standard ISO 14040 and elaborated in the full series of ISO life-cycle-assessment standards proves an excellent starting
point for supporting GHG measurement for these applications.

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