[Federal Register Volume 59, Number 104 (Wednesday, June 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13304]
[[Page Unknown]]
[Federal Register: June 1, 1994]
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DEPARTMENT OF ENERGY
Office of Policy, Planning, and Program Evaluation
Guidelines for Voluntary Reporting of Greenhouse Gas Emissions
and Reductions, and Carbon Sequestration
AGENCY: U.S. Department of Energy (DOE).
ACTION: Notice of availability of draft guidelines and request for
comment and notice of public hearing.
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SUMMARY: Pursuant to section 1605(b) of the Energy Policy Act of 1992,
the Department of Energy is developing guidelines for the voluntary
reporting of greenhouse gas emissions, their reduction, and carbon
fixation achieved through any measure. The data will be reported on
forms to be developed by the Energy Information Administration (EIA)
and entered into an EIA database.
The guidelines provide for the voluntary and accurate reporting of
greenhouse gas emissions and reductions, and of carbon sequestration.
The guidelines and supporting materials assist parties in analyzing
activities and determining emissions and reductions and carbon
sequestration in order to voluntarily report this data. EIA will
develop reporting forms consistent with the guidelines. Draft
guidelines and supporting materials are available for public review and
comment.
DATES: Written comments on the draft guidelines and supporting
materials (10 copies) are due on or before August 1, 1994. DOE does not
anticipate extending this date. A public hearing will be held on June
29, 1994, beginning at 8:30 a.m. at the address listed below. If
necessary to accommodate requests to speak, the hearing will continue
on June 30, 1994. Requests to speak must be received by the Department
on or before June 22, 1994.
ADDRESSES: Written comments (10 copies) should be submitted to: U.S.
Department of Energy, Office of Policy, PO-63/VRP NOA, Docket No. PO-
VR-94-101, room 4G-036, 1000 Independence Ave., SW., Washington, DC
20585.
A copy of the draft guidelines and supporting materials may be
obtained by telephone request to (301) 601-8284. Requests to speak at
the hearing should be made by telephone at (301) 601-8284.
The public hearing will be held at The Holiday Inn Capitol, 550 C
Street, SW., Washington, DC 20024. Copies of the transcript of the
public hearing and public comments received will be available for
inspection at the DOE Freedom of Information Reading Room, room 1E-090,
at the address listed above, between the hours of 9 a.m. and 4 p.m.
Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Mr. Elmer Holt at (202) 586-0714.
SUPPLEMENTARY INFORMATION: Under section 1605(b) of the Energy Policy
Act of 1992 (EPAct; Pub. L. 102-486), the Secretary of Energy with the
Energy Information Administration (EIA) is to establish a voluntary
reporting system and database on emissions of greenhouse gases (GHGs),
reductions in emissions of these gases, and carbon fixation. DOE has
consulted with the Environmental Protection Agency in developing the
draft guidelines, as provided under section 1605(c).
The draft guidelines and supporting methodologies provide guidance
on institutional and technical aspects of the voluntary program. They
are presented in discrete parts, as discussed below. DOE requests
comment on all provisions of the draft guidelines and supporting
material.
I. Background
Under section 1605 of the EPAct, two databases related to
greenhouse gases are to be established. These separately address (1)
the inventory of aggregate national totals of greenhouse gas emissions,
and (2) data voluntarily reported on emissions, reductions, and carbon
sequestration.
First, under subsection (a), the Secretary of Energy through EIA
and without any expanded data collection authority is required to
develop an inventory of national aggregate emissions of each greenhouse
gas for each calendar year of the baseline period of 1987 through 1990.
This inventory was published in September, 1993 (``Emissions of
Greenhouse Gases in the United States, 1985-1990;'' DOE/EIA-0573). This
inventory will be updated annually, as required by the legislation.
The voluntary reporting program database is required under
subsection (b) of section 1605, and will consist of voluntarily
reported information on annual greenhouse gas emissions and their
reduction, and carbon sequestration. It is separate from the national
aggregate inventory established and updated under subsection (a).
Because submission of data to the program established under subsection
(b) is voluntary, this database cannot be designed for use as a
comprehensive national greenhouse gas accounting system, and thus may
not serve to provide a statistically accurate representation of
aggregate U.S. greenhouse gas emissions or their reductions.
The Secretary of Energy is required to issue guidelines with
procedures for the accurate voluntary reporting of information on (1)
greenhouse gas emissions on an annual basis for the baseline period
1987 through 1990, and for subsequent calendar years; (2) annual
reductions of greenhouse gases and carbon fixation achieved through any
measures; and (3) reductions in greenhouse gas emissions achieved
voluntarily, or as a result of plant or facility closings, or as a
result of State or Federal requirements.
The guidelines and supporting materials assist those who wish to
report in determining or developing information necessary to report.
EIA will develop and make available forms for voluntary reporting
consistent with the final guidelines, and will develop a database for
the information voluntarily submitted.
II. Public Input Process
The process for public input in developing the draft guidelines
began with a Notice of Inquiry (NOI) in July 1993 (58 FR 40116; July
27, 1993), requesting comment on institutional and technical issues
related to a 1605(b) reporting system. These comments assisted in
developing the focus for discussion at six public workshops held in
November and December of 1993. A summary of workshop sessions and a
copy of all written comments submitted are available for public
inspection in the DOE Freedom of Information Reading Room, listed in
the ADDRESSES section above.
Additional public input to the guidelines is being sought through
the comments requested and the public hearing announced in this notice.
III. Organization of the Draft Guidelines
The draft guidelines and supporting materials, ``Voluntary
Reporting of Greenhouse Gases Under Section 1605(b) of the Energy
Policy Act of 1992: General Guidelines and Sector-Specific Issues and
Reporting Methodologies,'' are presented in eight discrete parts. The
first part, ``General Guidelines,'' provides basic guidance for
reporting under the program. Six parts, ``Sector Specific Issues and
Reporting Methodologies Supporting the General Guidelines'' (or
``supporting materials'') discuss issues particular to specific sector
or activity areas, as indicated: Electricity Supply, Residential and
Commercial Buildings, Industrial, Transportation, Forestry,
Agriculture.
The seventh supporting document, ``Global Warming Potential and
Other Indices for Representing Greenhouse Gas Effects on Climate''
completes the guidelines set.
The public review draft does not include the sector-specific part
on the Agriculture Sector; this document is expected to be available by
the end of June. Notice of its availability for review and comment will
be announced in the Federal Register.
IV. Goals of the Voluntary Reporting Program
The draft guidelines and supporting materials have been developed
to reflect the dual goals of maximizing participation without
compromising the usefulness of the data. These goals reflect public
input received in response to the July 1993 Notice of Inquiry and the
subsequent workshops discussed above.
Achievement of the participation goal will be measured by the
numbers of voluntary reporters and the variety of economic sectors and
activities they represent, and in the quantity of emissions and
reductions and carbon sequestration reported. The draft guidelines and
supporting materials assist participation by minimizing administrative
burden and repetitive submissions among data acquisition programs, and
by providing flexibility for the use of self-generated data with
optional default and prescribed data alternatives.
Usefulness of the data is defined not only by the quality,
quantity, and variety of the data included, but also by its ability to
serve the varied purposes of the program. These purposes include
providing a database of information for entities seeking to reduce
their own greenhouse gas emissions; formal recordation of emissions,
reductions and carbon sequestration achievements for various
objectives; and informing the public debate in future discussions on
national greenhouse gas policy.
V. Summary Description and Discussion
A. What Are The Guidelines?
The guidelines define who may report, what information may be
reported, and considerations in identifying or developing reportable
data. Consistent with the guidelines, EIA will develop reporting forms
for the program, receive submissions and evaluate them for compliance
with the guidelines and reporting instructions, and develop and
maintain the database of information reported.
The guidelines suggest to reporters data identification, collection
and retention needs, and address the use by reporters of information
which may be part of existing recordkeeping systems or standard
business practices. They also provide a framework for analyzing
activities with the goal of developing reportable data. Finally, the
guidelines provide information for comparing emissions of gases on the
basis of their differential greenhouse (radiative forcing) effects
within the climate system. This discussion on differential effects is
provided for information purposes only. The guidelines provide that
data reported be in units of gas emitted or reduced, and not
transformed by any radiative forcing index reported.
B. What is Covered by the Guidelines?
The reporter. The guidelines define ``reporting entity'' flexibly
in order to accommodate total organization and project reporting, as
well as reporting focused on specific activities or on specific sites.
A reporting entity, or ``reporter,'' may be any U.S. organization or
individual that has taken actions which result in emissions, emissions
reductions, or carbon sequestration, and that can define a project and
report physical data in enough detail to quantify results of the
activity. The following may report under the program: any U.S. citizen
or resident alien; any company, organization, or group incorporated
under or recognized by law; and any U.S. Federal, state, or local
governmental entity.
Sector coverage. The guidelines may be used for all economic
sectors. The supporting methodologies provide additional direction for
reporting data on activities in the following sectors: electricity
supply, residential and commercial buildings, transportation,
industrial, forestry, and agriculture.
Size threshold. In order to encourage participation and to capture
small-scale demonstration projects, DOE is not proposing minimum levels
for participating in the reporting program. At the outset of the
program design process, DOE assumed that the program would have a
threshold level of participation to prevent overburdening EIA in
managing a costly, inefficient database.
However, commenters recommended strongly that no threshold levels
be set, in order to avoid unnecessary limitations that might discourage
participation, particularly by those engaging in pilot projects and
innovative approaches. In addition, setting threshold standards for the
broad range of activities--for each gas, each sector, and for all
activities within a sector--would be difficult.
DOE seeks comment on the possible need for a threshold level for
participation. If thresholds are recommended, DOE requests suggestions
for appropriate levels.
Direct and indirect emissions activities. The draft guidelines
address activities that result in either direct or indirect emissions
and reductions of greenhouse gas emissions. Direct greenhouse gas
emissions may result from activities such as fossil fuel combustion and
the venting of methane. DOE acknowledges that a program with
submissions limited to direct emissions, and to activities directly
producing or reducing those emissions, would be more manageable and
transparent than the broad, flexible approach reflected in the draft
guidelines.
The statute, however, provides some examples of activities which
are to be covered which indirectly affect, or may indirectly affect,
emissions or reductions. Among the activities mentioned are the
manufacture of vehicles with reduced greenhouse gas emissions,
appliance efficiency, and energy efficiency measures.
DOE believes that Congress intended that the program cover the
broadest set of activities which impact greenhouse gases, both directly
and indirectly. Thus, the guidelines address both indirect and direct
emissions activities, which will be appropriately distinguished in
submissions. Comment is specifically requested on the proposed approach
which allows reporting emissions and reductions from indirect and
direct emitting activities, with appropriate identification of each.
Multiple party activities. The guidelines permit the reporting of
activities undertaken in association with others. The guidelines
provide suggestions to the parties for assigning the ability to report
among the parties, and ask that the reporter identify others who may
also report the data. Examples of multiple party activities include
utility demand-side management actions, and the manufacture, sale, and
use of more efficient vehicles.
Some commenters urged that the guidelines prohibit ``double
reporting'' of the results of joint activities, in order to prevent the
accounting for the same emissions, reductions or sequestration more
than once. DOE agrees. Thus, while the draft guidelines permit any
party to the activity to report, they require reporters to identify the
other parties to the activity. In addition, the guidelines suggest ways
for reporters to help protect against ``double counting.'' These
methods are based on the nature of the relationship of the parties, and
the comparative ability of the parties to perform adequate project
analysis and to have, or have access to, necessary data. Methods
suggested in the guidelines include contractual agreements.
Comment is specifically requested on the proposed approach on
reporting multiple party activities. In particular, comment is
requested on whether the guidelines and the reporting forms to be
developed by EIA should contain additional protections against double
counting.
Reporting through third parties. In order to increase
participation, particularly of small reporters and small projects, the
draft guidelines permit third party and aggregated reporting, at the
reporter's discretion. For example, a trade association or other
organization may, at the reporter's request, aggregate data from
multiple entities. Such organizations may provide technical or
administrative assistance in reporting, and aggregation of data may
provide some degree of confidentiality of the data. However, third-
party reporters may not be able to record individual achievements in
the detail that individual reporters desire. The draft supporting
documents provide a discussion of third-party reporting as it may apply
in each sector, as well as a discussion of the appropriateness of
third-party reporting for different reporting purposes.
The gases. The draft guidelines cover emissions of the following
greenhouse gases: carbon dioxide, nitrous oxide, methane, and the
halogenated carbon substances. A more comprehensive list of greenhouse
gases would include additional gases, most notably some of the
conventional, or ``criteria,'' pollutants for which emissions data is
collected by EPA and State agencies under various air quality programs.
Because the Act does not provide a definition of ``greenhouse
gases,'' DOE has initially limited the coverage of the guidelines to
those long-lived greenhouse gases specifically mentioned in the
statutory provisions, or inferred to in the statutory language which
provides examples of emissions reductions measures. Consistent with
specific statutory language, the guidelines cover halogenated carbon
substances such as CFCs.
Calculating radiative effects among different gases. The draft
supporting materials for the guidelines provide methods for reporters
to estimate, for their own use, the global warming potential of
greenhouse gases, with a discussion of the radiative forcing system and
the derivation and uncertainties of the estimates. In simplified terms,
radiative forcing is the change in the balance (incoming versus
outgoing) of solar and infra-red radiative energy in the troposphere
(the layer of the atmosphere closest to Earth). Emitted gases have
different direct radiative effects and atmospheric lifetimes. The Act
requires the guidelines to establish procedures for taking into account
these effects.
Because this area of science is complex and evolving, reporting
activity results by any relative index would create an unnecessary
additional burden in an area where few reporters are likely to have
expertise. More importantly, the state of the science in this area is
uncertain and rapidly changing; thus, any calculations performed will
likely need revision. Therefore, while the draft guidelines provide
information necessary for a reporter to perform these calculations, all
data reported to this program will be in units of the gas emitted or
reduced, and will not be transformed in voluntary submissions by any
common radiative forcing index, such as the Global Warming Potential
(GWP) index.
The draft supporting document on GWPs is based on the anticipated
outcome later this year of ongoing international scientific inquiry and
discussions. The Intergovernmental Panel on Climate Change Working
Group I report, entitled ``Second Supplemental Report to the IPCC
Scientific Assessment (1994); Radiative Forcing of the Climate System''
is scheduled to be released in November 1994. This document will
provide the latest current scientific consensus on the issues of
differential radiative activity of greenhouse gases.
The global warming potential supporting document will be finalized
after release of the IPCC report, and will reflect that report. Since
reporting will be by unit of gas emitted, neither the reporting program
nor EIA forms development is dependent on this information. DOE seeks
comment on this approach for assuring consistency with international
scientific consensus and minimizing the immediate need for revision of
guideline material.
Temporal and spatial coverage. The guidelines address reporting
annual emissions for the historic baseline period of 1987 through 1990
(`` historic baseline''), and subsequent years. The guidelines also
cover the reporter's aggregate annual emissions and emissions
reductions from all of its activities. Annual reductions of greenhouse
gases and annual carbon sequestration, by activity and project, are
also covered. Results of activities occurring outside the U.S. are
covered in the same manner as those occurring within the U.S., as
discussed below.
Reporters are encouraged to report and update historic baseline
emissions and to report on an entity-wide (total organization) basis.
The clarity and credibility of data provided by an organization will be
enhanced by the optional submission of comprehensive greenhouse gas
emissions data on the historic baseline and total annual emissions of
the organization. While the guidelines do not require this
comprehensive information to accompany reports of other, more focused
data on projects and activities, reports will be identified within the
database on the basis of the coverage of the submittal.
Causation. The guidelines require that reporters identify the cause
for the activity resulting in greenhouse gas emission reductions.
Section 1605(b) provides that the guidelines cover greenhouse gas
emission reductions achieved as a result of: (1) plant or facility
closings, (2) Federal or state requirements, and (3) voluntary
reductions. Accordingly, the guidelines require reporters to identify,
if appropriate, which of these factors caused the reported emissions
reduction. Reports will identify the causative factor if it falls
within these areas, but will not include any further information.
Comment is specifically requested on the appropriateness of this
limited identification of cause.
International activities. The draft guidelines provide that U.S.
entities may report international activities to which they are a party
if the submission meets the general reporting criteria. The Act is
silent on the reportability of offshore activities to this program.
There is considerable interest in the potential for cooperation
among firms in industrialized countries and governments, firms, or
individuals in less developed countries in sequestering carbon and
reducing global carbon emissions. Reporters are advised that there may
be special difficulties in defining project boundaries, determining an
appropriate reference case, and using appropriate estimation methods
for offshore activities.
The United Nations Framework Convention on Climate Change (FCCC),
Article 4, paragraph 2(A), requires some nations to take measures to
mitigate climate change, and it allows the parties to implement these
measures jointly with other parties. Criteria for ``joint
implementation,'' as this concept is known, will be formally addressed
by FCCC's Conference of the Parties in 1995. Thus, it is impossible at
this time to ensure that guidelines for the voluntary reporting of
actions taken by U.S. entities in other countries will be consistent
with the eventual requirements for joint implementation under the FCCC.
Accordingly, the guidelines may be updated to reflect future decisions
made by the Conference of the Parties.
VI. Relationship of the Voluntary Reporting Program to Other Greenhouse
Gas Initiatives
EPAct, which requires the establishment of the voluntary reporting
program, was enacted on October 24, 1992. It predates several domestic
initiatives designed to respond to the threat of global climate change.
Some of these initiatives refer to the voluntary reporting program as
an associated tool in implementation. This reporting program can be
used to record emissions reductions achieved under a variety of
programs that may result in reducing greenhouse gas emissions or
increasing carbon sequestration, whether as a primary goal or as a
secondary result.
While activities that reduce or avoid greenhouse gas emissions or
sequester carbon under existing programs would be reportable, the
guidelines were not specifically designed to accommodate any particular
program. Although the ability to report beneficial greenhouse gas
impacts of activities may encourage activities under existing programs,
the guidelines were designed to encourage reporting regardless of cause
or motivation for an activity.
The language of section 1605(b)(1)(C) provides that the guidelines
are to address reporting reductions achieved as a result of plant
closings, and Federal and state requirements, in addition to those
which result from voluntary actions. Thus, the guidelines do not limit
submissions based on either the motivation of the parties involved or
on the reason for the activity.
A. The Climate Change Action Plan
A year after passage of the Energy Policy Act of 1992, the
President, with the goal of returning U.S. greenhouse gas emissions to
their 1990 levels by the year 2000, released the Climate Change Action
Plan (CCAP). This plan contains over forty new or expanded initiatives,
most seeking voluntary participation. Three actions under the CCAP--
Climate Challenge, Climate Wise and the U.S. Initiative for Joint
Implementation--specifically refer to participant reporting under
section 1605(b). DOE anticipates that most accomplishments under CCAP
initiatives will be reported under section 1605(b), but reporting is
not limited to these specific activities.
The 1605(b) program is flexibly designed to accommodate broad
participation consistent with the purposes of 1605(b). It was not
designed to meet the accounting goals of any particular program. Some
programs such as Climate Challenge and Climate Wise may need to adopt
supplemental accounting procedures for the purposes of those programs.
The Climate Challenge and Climate Wise programs are designed to
elicit commitments by members of the utility and industrial communities
to take actions which will reduce or avoid greenhouse gas emissions.
While the 1605(b) voluntary reporting program will provide a mechanism
for recording information on those achievements, it does not provide a
mechanism for registering commitments.
DOE is exploring establishment of a separate reporting system for
the pledge portion of the commitment programs. While as yet
undeveloped, that system may look similar to the reporting program and
database established under 1605(b). This similarity, however, should
not be confused as allowing commitments to be reported into the section
1605(b) database; only achievements will be part of this database and
any information system developed for commitments will be distinct.
B. United States Actions Under the United Nations Framework Convention
on Climate Change (FCCC)
Under the FCCC, the United States will be submitting a national
communication which contains a mitigation plan of policies and
measures. While data submitted to the voluntary reporting program may
provide some limited information concerning accomplishments under U.S.
measures, it is not designed to be a primary data source for
communications of the United States under the FCCC.
VII. Discussion of Report Development and Analysis
The Act requires that DOE develop guidelines on procedures for four
reporting categories: baseline emissions for the period 1987 through
1990, annual emissions, emissions reductions, and carbon sequestration
activities. It also requires the procedures to take into account the
differential radiative effects of each gas covered. However, it does
not require that each report include all of these activities or address
radiative effects. The legislation does not require that historic
baseline, annual, or total organization emissions be reported as a
prerequisite to reporting emission reductions or carbon sequestration
project information.
DOE is requesting comment on the guidelines approach, which allows
voluntary reporters to determine how comprehensive their submissions
will be relative to historic baseline, annual and total organization
emissions.
A. Annual and Total Organization Emissions
The guidelines encourage, but do not require, reports of annual
emissions for the historic baseline period 1987-1990, and for
subsequent years. In reporting emissions for this historic baseline
period, the reporter may choose to report annual emissions for each of
these years, or the average of the four years' emissions. Where
adequate data exists (for example, for regulated industries such as
utilities), the inclusion of emissions reports for the period 1987
through 1990, and for each subsequent year, will provide enhanced
clarity to submissions on reductions and carbon sequestration projects.
The guidelines encourage annual emissions reports on a total-
organization basis, covering all greenhouse gas producing activities of
the reporter. However, recognizing that adequate information may not be
available or may be overly burdensome to collect and analyze (in the
case, for example, where an organization has multiple sites and
decentralized management), the guidelines allow emissions reporting on
a project basis. A project is variously defined, at the discretion of
the reporter, as a site, an activity, or a group of activities.
B. Emissions Reduction or Increased Carbon Sequestration Projects
Reports will be accepted on a project-by-project basis as defined
by the reporter. The reporter may credibly define a project at the
entity level, at a subentity level (such as a plant or production
line), at a supra-entity level (including, for example, joint reporting
of the manufacture and use of fuel-efficient vehicles), or at a
specific activity level (such as replacement of equipment). When
defining a project, the entity must consider the amount and accuracy of
available data and possible secondary effects of the project as
described below.
1. Defining the Project
The draft guidelines allow reporters latitude in defining the
project to be reported and in performing analyses to substantiate
claimed emission reductions or carbon sequestration. This latitude
extends to permitting narrow delineation of a reportable activity which
does not reflect the greenhouse gas effects of all of the operations of
the reporter. Some commenters stated that requiring reports to cover
all greenhouse gas emitting activities of the reporter is the only way
to ensure that the program records only ``real'' reductions, that is,
reductions from the entity's total emissions. Other commenters pointed
out that participation in the program would be unnecessarily limited by
the universal imposition of significant data collection and analytic
burdens. In order to achieve the goal of maximum participation, as
discussed above, the draft guidelines allow for a broad choice in
designing the scope of submissions.
Project-level reporting provides maximum flexibility to reporters
based on individual circumstances. Participation is facilitated since
growing entities would be able to report, even though their total
emissions are growing; and parties who do not have or cannot develop
data at the total organization level will be able to report quality
data on an individual project. The focus of the program on individual
achievements is preserved.
DOE acknowledges that the breadth of reporter discretion permitted
could result in some submissions which selectively provide only data on
environmentally beneficial activities, without addressing secondary and
other effects. By providing an analytic framework on project boundary
definition and secondary effects, and in encouraging the submission of
reports showing total organization emissions and emission reductions,
the guidelines seek to minimize inappropriate use of narrow reporting.
DOE specifically seeks comment on whether the proposed degree of
flexibility provided for the scope of reports is appropriate.
2. Reporter's Data Identification, Analysis, and Certification
To encourage voluntary reporting, the guidelines minimize reporting
demands, both in terms of ease and cost of data identification,
collection and analysis. Three strategies have been developed to
accomplish this objective:
(a) Provide that a reporter may use, to the extent possible,
information it already collects for other purposes.
(b) Provide two paths for data analysis and report preparation: the
first with detailed assistance for smaller or less analytically
sophisticated reporters without adequate data or expertise, and the
second with more general guidance for reporters with experience in
analyzing and reporting the type of data sought by this program.
(c) Accept self-certification as an adequate accuracy check for the
current purposes of the program, recommending that reporters consider
retaining records where they may be appropriate for future use.
a. Using existing information. Many reporters, such as utilities
and members of other regulated industries, currently collect data
relevant to this program. This data may be on greenhouse gas emissions
specifically, or activity parameters which can be translated to
emissions. Some reporters collect data for internal purposes, for
example, in order to monitor energy use or expenditures. To minimize
data collection burdens, the guidelines encourage the use of existing
data for submissions.
Data are collected and reported in various industrial and economic
sectors under existing programs at the Federal, state, and local
levels. The following discussion illustrates the types of information
which will be useful for submissions under this program.
Many reports already required of utilities will readily provide
relevant data. These include, for example, specific carbon dioxide
emissions reports from electric utility units affected under the Clean
Air Act acid rain program (40 CFR part 75). Information needed to
estimate emissions of greenhouse gases is reported by all major fossil
fuel electricity generating plants in several reports submitted to EIA,
for example, on EIA Form 767 (fuel use by generating unit) and EIA Form
861 (utilities' net generation and sales to ultimate customers). In
addition, utilities gather relevant data in order to report to public
utility commissions and other state an local bodies.
For the industrial sector, examples of information useful for
reporting include that provided to the Census Bureau via the Census of
Manufactures (CM), the Annual Survey of Manufacturers (ASM), and the
Manufacturing Energy Consumption Survey (MECS). Industrial reporters
may be collecting relevant data pursuant to existing programs such as
the Clean Air Act requirements for halogenated substances, annual
reports to the EPA Toxic Release Inventory System, and state programs
such as California's Directed Inspection/Maintenance Programs. Data
collected for reporting to the Federal Mining Safety and Health
Administration and the Department of Transportation's Office of
Pipeline Safety on methane may also be useful to the reporter.
In the transportation sector, reporters may have information
gathered in planning and compliance activities undertaken for numerous
programs, such as the corporate average fuel economy (CAFE) standards;
EPAct and Clean Air Act mandates for alternative fuel use, employer
carpooling and telecommuting; state-level subsidies for gasohol; and
required fuel use reports by airlines an railroads.
Participants in voluntary programs in both the public and private
sectors are or will be collecting information useful to reporting under
this program. For example, DOE expects that data generated by
participation in many initiatives under the CCAP will be reported under
the EPAct 1605(b) program. Participation in private voluntary programs,
such as trade association energy efficiency programs, will also result
in participants generating data useful to reporting.
Ongoing Federal programs, generally concentrated at DOE and EPA but
also at other agencies, afford participants the opportunity to use data
generated for those programs in reporting under Section 1605(b). Among
these are the Motor Challenge and the Golden Carrot programs. DOE's
Energy Analysis and Diagnostic Center (EADC) energy audits, as well as
independent energy audits, may provide data useful for the additional
purpose of reporting here. EPA's voluntary programs, such as Green
Lights, Natural Gas Star, Energy Star Transformers, and others, will
also provide useful data.
In the forestry sector, participation in tree planting and urban
forestry programs managed by agencies within the U.S. Departments of
Agriculture (USDA), Interior, Transportation, and Defense, as well as
by State forestry agencies, may provide useful data. Extensive physical
data on land use and agricultural practices kept for and by the USDA's
Soil Conservation Service and State agricultural agencies, developed
for other purposes, may be useful in providing data on activities
affecting greenhouse gas emissions and carbon sequestration in the
agriculture sector.
b. Two paths for reporting. Public input into development of the
draft guidelines indicated that at least two categories of reporters
exist. The first includes large utilities and industrial organizations
with extensive data collection programs and the capability to perform
thorough organizational and project-specific analyses of activities and
greenhouse gas and carbon sequestration achievements. The second
category of reporters encompasses smaller entities with adequate
physical information, but needing assistance in transforming this data
into estimates of emissions and reductions or sequestration. To
accommodate both categories of reporters, the guidelines ask reporters
to provide adequate physical data about projects/activities, and
provide two paths for estimating greenhouse gas emissions or carbon
sequestration.
In all cases, submissions will include adequate physical data about
projects; for example, how many and what type of trees were planted at
a location, what quantities of materials were processed, or how many
kilowatt hours were used. This information must be sufficient to derive
a gross estimate of greenhouse gas emissions or carbon sequestration
results.
However, two paths are open to reporters for deriving their
estimates of the effects of reported projects. The first is to develop
the data and methods needed to estimate credibly and accurately project
effects. A variety of tools may be used--such as computer models,
actual measurements, and engineering estimates--based on the
circumstances of the project and the reporter's purpose for reporting.
The second path for reporters is the use of default values to
derive estimates. The guidelines and supporting materials provide, or
give references for, emission factors, stipulated savings, equations,
and other default systems to be used at the option of the reporter.
While the default path is likely to produce conservative estimates
(i.e., underreporting beneficial accomplishments) which are less
precise than those derived from project-specific analyses, it will
enhance the ability of less sophisticated reporters to report.
Identification of the types of tools used in either path will be
part of the report.
c. Certification of submissions. EPAct 1605(b) requires self-
certification of reported data. Consistent with the Act, the guidelines
provide only for self- certification by the reporter of the accuracy of
the submission.
DOE considered the private and public resources necessary for
various types of verification of data submitted. The goal of broad
participation would be adversely affected by imposing upon reporters
additional requirements for certification or verification of submitted
data.
Although the draft guidelines do not go beyond the self-
certification specified in the statute, other verification and
certification parameters may be set by and through other greenhouse gas
programs in which a reporter participates. The reporter may identify
data in its submission that has been verified by a third party. In
addition, reporters may wish to retain auditable data supporting their
reported data, based on the anticipated uses of the data.
VIII. Discussion of the Project Analysis Approach
This section discusses the basic approach of the draft guidelines
for project analysis, and of the sector-specific supporting
methodologies for applying this approach.
A. What the Reporter Must Be Able To Provide
The minimum requirements for reporting the achievements of a
project include the following:
Identifying information about the reporter and the
project.
Sufficient physical data on the project for calculating
emission reductions or carbon sequestration results achieved.
Definition of a reference case against which to measure
reductions.
Identification of the measurement and estimation methods
used.
B. Reporting Emissions
Reporters are encouraged to provide total organization emissions
data when reporting project emission reductions, as well as total
project or activity emissions for the historic baseline period of 1987-
1990 and subsequent years. Comprehensive reporting of all relevant
emissions data will increase the credibility of any emission reduction
reports, by providing a complete picture of the reporter's activities.
Reporters have the flexibility to determine and identify
organization-wide reporting boundaries. The rationale for the
boundaries they draw will depend, in part, upon the reasons the
reporter is preparing and submitting information. If reporters are able
to report emissions for their entire organization, they are encouraged
to do so. Reporters do not need to report total organization emissions
in order to report emission reduction and carbon sequestration
projects. DOE recognizes, however, that reporting total emissions for a
specific industrial plant, for example, may be more consistent with
specific emissions reduction project elements of the report, and based
on more readily available data than would a report on the
organization's total emissions.
C. Reporting Emission Reductions or Carbon Sequestration: Project
Analysis
Accurate and credible reporting under the EPAct 1605(b) program
depends upon performing good project analysis. Entities may report
emission reductions and carbon sequestration for projects which they
define and for which they develop a basis of emissions with and without
the project. The guidelines do not provide rigid rules for such an
analysis, but provide general methodologies and considerations for use
by the reporter, as discussed below.
After defining the project to report, a reporter will need to
address three elements of project analysis: (1) Establishment of the
reference case (the basis for comparison with the project); (2)
definition of the project and reference case boundaries; and (3)
estimation of emissions for the reference case and the project.
These elements are interdependent. For example, the selection of a
reference case will depend upon both how widely the project boundaries
are drawn and what data are available to measure or estimate emissions.
The extent of the reporter's analytic efforts will be based on the
purposes for reporting.
Defining the project to be reported. A project may consist of only
one activity, undertaken for its projected cost savings (such as a
relighting project) or as a pilot project (such as an experimental
process change); several activities, perhaps as parts of an energy
efficiency program (these may include activities, such as materials
processing, outside the organization); or all emission-producing
activities for the organization. The definition of a project depends on
factors such as how clearly the reporter draws the boundaries, how
credibly it defines a basis for comparison, and how well it can measure
or estimate the effects of the activities.
Step 1. Establishing the reference case. A pivotal consideration in
establishing project boundaries is how well the reporter can establish
a reference case--that is, an emission level against which to measure
the effects of a project. A reference case is often referred to as the
``but for'' scenario, as in, ``but for this project, emissions would
have been * * *.'' Two possible ways to finish this sentence are: (1)
``* * * the same as a previous year'' (the basic, or historic,
reference case), or (2) ``* * * different than any previous year'' (the
modified reference case, which is adjusted from historic data or
projected). Each of these cases is discussed below.
Basic (or ``historic''). Emissions from within the project boundary
may be compared with the corresponding level for some previous year(s);
for example, the 1987 to 1990 period, the year(s) just prior to
commencement of the project, or some intervening year more indicative
of normal operations. The reference case may be defined as the average
annual emissions during some multiyear period or the highest or lowest
annual emissions during that time. Alternatively, a single reporting
year (e.g., 1990) could be chosen by the reporter as the reference case
year.
Modified (or ``projected''). Even in the absence of the project,
emissions levels may differ from past levels, for example due to growth
or decline in output and changed operations. In this case, the
reference case might be extrapolated with the use of models from past
trends and external data to determine what emissions ``would have
been'' but for the project in the year in which the project's effects
are being measured. Adjustments may involve estimating the emissions
per unit of production using historic or current-year data and
adjusting for growth by multiplying this rate by the rate of production
in the year reported.
Under the guidelines, reporters may choose between these approaches
depending on the reporter's purpose for reporting. For many purposes, a
basic reference case using an average of emissions for the years 1987
to 1990 or the annual emissions in the year before the reported year
may be more appropriate than a modified reference case.
In analyzing activities of a new entity or added capacity of an
existing organization, extra care in constructing a reference case is
necessary. Use of industry standards or of the alternatives actually
considered during planning for the new capacity will increase
credibility of the reference case. Another approach is the use of a
unit-production (or unit of service) reference case. For example, if an
entity is adding capacity in order to increase production or service to
customers, it may calculate emissions per unit or customer and show
reductions based on this common standard.
Step 2. Defining project and reference case effects. The second
major step in project analysis is identifying the types of effects the
project had. The project may be primarily designed to reduce greenhouse
gas emissions or increase carbon sequestration. It will, however, have
both expected and unanticipated secondary effects. The reporter will
need to address both primary and secondary effects in analyzing the
project for reporting.
Primary effects. These are the obvious, immediate, direct and
intended effects of the project, resulting in direct and indirect
emissions and carbon sequestration. For example, the primary effect of
an electricity conservation project is the reduction of electricity use
and of the carbon dioxide emissions associated with the electricity
generation avoided. The primary effect of a tree planting program is
the sequestration of carbon.
Secondary effects. These are the more subtle, indirect,
consequential, and perhaps unintended effects of projects. They may be
positive (augmenting the primary effects) or negative
(counterproductive to primary effects). Secondary effects may be large,
in some cases as large as the primary effects, and include activity
shifting, outsourcing, shifting emissions to different points of the
life cycle, and offsetting emission reductions by residual market
demand.
The guidelines ask the reporter to clearly state the primary effect
of the project and identify any significant secondary effects. If the
entity is quantifying the emission reductions or carbon sequestration
associated with the project, the entity should try to quantify the
secondary effects, particularly those that amount to ten percent or
more of the primary effects. DOE recognizes that quantifying the
effects of a project can be difficult. However, the credibility of
emission reduction or carbon sequestration reports may be impaired if
negative secondary effects rose, or appeared capable of rising, thereby
offsetting a significant portion of the reported primary effects.
Ultimately, the reporter must choose the balance between increased
analysis cost and increased thoroughness of the analysis, depending
upon the reasons for reporting.
Step 3. Quantifying reference case and project effects. The
guidelines provide reporters with a wide range of options for
identifying input data and defining methods for quantifying the
project's impact on emissions or carbon sequestration. The types of
data and methods used will be reported.
First, the guidelines recognize three types of data: physical,
default, and measured/engineering.
Physical data. This is information that describes the activities
involved in a project. For example, how many exit lights were replaced?
What was the power requirement of the old and the new lights? How many
hectares of which species of tree were planted?
Default Data. This is information provided in the guidelines and
supporting methodologies to assist reporters in evaluating the effects
of projects. While using default data will ease reporting for many
reporters, it is generally conservative, and may not provide the
reporter's desired precision. There are two types of default data:
Emissions Factors. These are factors that allow reporters to
convert information about a change in energy use to an estimated change
in greenhouse gas emissions. Emissions factors for direct emissions are
more precise than for indirect emissions. For example, the change in
direct emissions of carbon dioxide from a reduction in methane
combustion is essentially constant, regardless of when or where the
change takes place. Other emission factors, particularly those for
indirect emissions, are less precise. For example, the draft guidelines
provide emissions factors for electricity on a state-by-state basis.
However, the effect that a specific change in electricity consumption
has on emissions will vary by location within the state, the time of
day, and the season in which a change occurs. Generally, the draft
guidelines and supporting documents contain relatively conservative
figures for indirect emissions factors.
Stipulated Factors. These are factors that allow reporters to
convert physical data about projects into estimates of changes in
energy use, greenhouse gas emissions or carbon sequestration. The
guidelines provide this information for a few types of projects where
the scope and nature of the project can be clearly defined and the
effects on emissions predicted with relative certainty. For example,
the guidelines provide stipulated factors for converting physical data
about tree planting into estimates of carbon sequestration. They also
provide stipulated factors for converting information about certain
energy-efficiency projects into estimates of fuel savings. These
estimates can be combined with default emissions factors to estimate
reductions in greenhouse gas emissions.
Reporter-Generated Data. This is information developed by the
reporter and used in estimating the effects of the reporter's projects.
There are two types of reporter-generated data.
Measured Data. These are data on emissions operating parameters
collected directly from the project or a control group, that a reporter
can use in estimating project accomplishments.
Engineering Data. These are data that reporters derive from sources
such as engineering manuals, manufacturer's equipment specifications,
surveys, academic literature, and professional judgment.
Standard Project. These are projects for which the draft guidelines
provide the procedures and information necessary to transform physical
data into emissions reductions or carbon sequestration results, relying
entirely on physical and default data. A few types of projects can be
described through standard project reports; these are identified in the
sector-specific methodologies supporting the guidelines. Reporters must
recognize that, since the default values used are conservative, the
precision of their report is lessened. However, for reporters who do
not have direct project measurements or experience in estimation
methods, standard project methodologies will allow them to quantify the
effects of these activities.
Reporter-Defined Project. These are projects that use physical and
reporter-generated data, possibly in combination with default data, to
estimate the accomplishments of the project. For this type of project,
reporters will need to be able to clearly indicate the sources of all
data, and in the case of reporter-generated data, how it was measured
or derived. For reporter-defined projects, the principles and guidance
are provided in the sector specific methodologies supporting the
guidelines.
Estimation of reportable effects of most reporter-defined projects
will require gathering basic data, and using it to derive the levels of
project and reference case emissions. This may involve relatively
simple calculations or complex modeling.
The guidelines suggest recording the nature of the calculations or
the type/name of the model used.
In some instances, identified in the sector-specific supporting
methodologies, it may not be possible to estimate emissions for both
the project and the reference case. In these cases, it may be necessary
for the reporter to measure the emission reductions or operating
parameters directly.
IX. Significant Issues
DOE requests comment on all issues raised by the draft guidelines
and supporting materials and calls particular attention to several
significant issues. Commenters are requested to consider the impact of
any alternative approach they suggest on the goals of encouraging broad
participation and generating useful data.
(1) Is the scope of the guidelines with respect to emissions of the
gases and substances specified appropriate?
(2) Should threshold reporting levels of emissions or carbon
sequestration be set? If so, at what levels and why?
(3) Do the guidelines appropriately address and distinguish between
direct and indirect emissions of the applicable gases? Are there
additional ways which can address the statutory references to
reportability of activities which result in direct emissions and those
that result in indirect emissions?
(4) In order to report an emissions reduction or carbon
sequestration project, should reporters be required to report
comprehensive data on their historic (1987-1990) emissions? On their
organization's total greenhouse gas emissions? From all activities in
the year covered by the project report?
(5) What categories of data derivation should be identified (e.g.,
measurement, engineering estimate) as appropriate to achieve the dual
goals of the program?
(6) Is the approach to reporting activities taken in association
with others appropriate for minimizing double counting while
encouraging participation?
(7) How should activities outside the U.S. be handled by the
reporting program?
(8) Is the information and approach provided on different radiative
activity of gases appropriate? Should DOE delay finalizing this portion
of the guidelines until completion of the current international
deliberations?
X. Administrative Requirements
A. Regulatory Review
DOE has concluded that this is not a significant regulatory action
because it does not meet the criteria which define such actions under
Executive Order 12866, 58 FR 51735, and is therefore not subject to
regulatory review. Accordingly, the Office of Management and Budget
(OMB) has informed DOE that no clearance of the draft guidelines and
supporting materials is required.
B. Issues Under the Paperwork Reduction Act
In addition to providing information to parties which wish to
participate in voluntary reporting, the guidelines and supporting
materials provide direction to EIA in developing the reporting forms
and database for the program. Separate administrative requirements
apply to the development of EIA reporting forms, which will proceed
after DOE finalizes the guidelines.
Any information collection requirements proposed in EIA forms for
the voluntary reporting program are subject to the Paperwork Reduction
Act, 44 U.S.C. 3501 et seq., and will be submitted to the Office of
Management and Budget for review and approval of paperwork
requirements. Because the reporting forms developed by EIA will be
necessary for participation in the program and must be consistent with
the guidelines, the draft guidelines and supporting materials may
involve issues relevant to subsequent review of the forms for paperwork
requirements. Comments on any paperwork issues identified by the draft
guidelines and supporting materials are requested.
XI. Opportunities for Public Comment
A. Public Hearing Procedures
A public hearing on the draft guidelines and supporting documents
will be held at the time and place indicated in the DATES and ADDRESSES
sections above. Any person who has an interest in the draft guidelines
may request the opportunity to make an oral presentation. DOE reserves
the right to cancel the second day of the hearing if scheduled requests
to speak can be accommodated in the first day. All requests to speak
should be made by telephone at the number listed in the ADDRESSES
section.
DOE reserves the right to schedule speaker presentations, and to
establish procedures governing the conduct of the hearing. The length
of each presentation may be limited to 5 minutes, or longer based on
the number of persons requesting an opportunity to speak. Ten copies of
the speaker's statement should be submitted at the hearing.
A DOE official will preside at the hearing. The hearing will be a
legislative-type hearing; speakers will not be sworn in nor cross-
examined. Further procedural rules needed for the proper conduct of the
hearing will be announced by the presiding officer. A transcript of the
hearing will be made and will be available for public inspection as
indicated in the ADDRESSES section above.
B. Written Comments
Interested persons are invited to submit comments on the draft
guidelines and sector-specific issues and methodologies, and on the
questions presented in this notice.
Ten copies should be submitted to the address indicated in the
ADDRESSES section above, and must be received by the date indicated in
the DATES section of this notice. All written comments received will be
available for public inspection in the DOE Freedom of Information
Office Reading Room at the address provided at the beginning of this
notice.
Pursuant to provisions of 10 CFR 1004.11, any person submitting
information which that person believes to be confidential information
and which may be exempt by law from public disclosure should submit one
complete copy of the document as well as two copies from which the
information claimed to be confidential has been deleted. DOE reserves
the right to determine the confidential status of the information and
to treat it according to its determination.
Issued in Washington, DC, on May 26, 1994.
Susan F. Tierney,
Assistant Secretary, Office of Policy, Planning, and Program
Evaluation.
[FR Doc. 94-13304 Filed 5-31-94; 8:45 am]
BILLING CODE 6450-01-P
