![](media/image1.wmf){width="7.286111111111111in"
height="1.2347222222222223in"}

June 5, 2002

Office of Policy and International Affairs\
Office of Electricity and Natural Gas Analysis, PI-23

Attention: Voluntary Reporting Comments

US Department of Energy

Forrestal Building, Room 7H-034\
1000 Independence Avenue SW\
Washington, DC 20585

Subject: **Voluntary Reporting Comments**

Thank you for this opportunity to provide comments and suggestions for
improvements to the current Voluntary Reporting of Greenhouse Gases
program. Our comments follow.

A comprehensive system to track and manage greenhouse gas emissions is
needed in the US. Such a system would have three parts. The first part
would be a comprehensive inventory of greenhouse gas emissions from all
sources compiled annually. The inventory would include emissions from
all sectors (industrial, commercial, residential, transportation, etc.)
and from all activities (fossil fuel burning, deforestation, industrial
processes, waste decomposition, etc.). The second part of the system
would be a comprehensive greenhouse gas emission reporting system. This
would be a mandatory system, with all major emitters required to report
entity-wide greenhouse gas emissions annually. The data collected would
be included in the comprehensive emission inventory and would be used to
track emissions and emission reductions from major sources. The third
part of the system would be an emission reduction registry. It could be
voluntary or mandatory. The 1605(b) reporting system, with some
modifications, could serve as the emission reduction registry.

How should the 1605(b) registry be modified to enhance accuracy,
reliability and verifiability? The following are some suggested
improvements and discussions of some registry issues.

# Verification and Third Party Audit Standards

Third party verification would go a long way toward improving the
accuracy and reliability of the reported emission reductions. Third
party verification may be optional for a voluntary registry, but is
mandatory for transferable credits or for meeting future emission
reduction requirements.

# Level of Reporting

Under the emission reporting part of the system, entities will report
emissions for all of their emission sources at all of their facilities,
at least in the US. Within this broad context, entities may then report
emission reductions at any level (project, facility, entity-wide), but
only entity-wide emission reductions should be considered for
transferable credits (outside the company) or protection against penalty
under future climate policy.

# Time Frame of Data Reported

If we continue to use 1990 as the accepted baseline for GHG reduction
goals, as specified in the UNFCCC and Kyoto Protocol, then reporters
should be allowed to report emission reductions back to 1991. As we get
further from 1991, the problem of having accurate emissions and activity
data back that far becomes more difficult. It might make more sense to
adopt 2000 as the new baseline year.

# Reporting Entity Definition

Reporting entity should continue to be broadly defined, as it currently
is in the 1605(b) registry. We want to encourage as many entities as
possible to reduce and report emissions.

# Indirect Emissions

We want to encourage actions taken to reduce indirect emissions, such as
energy efficiency measures. These indirect emission reductions must be
determined using proven and accurate methods for measuring the reduced
energy use and the best available information on specific emissions from
the energy reduced in order to calculate the emission reduction.

One way to avoid double counting of indirect emission reductions is to
require that the emission reduction be reported only by the entity
taking the action to reduce energy use and emissions, and to prohibit
any claims to emission reductions by the electric utility whose direct
emissions decreased because of actions taken by others. In this example,
the electric utility reports its entity-wide emissions each year. If its
emissions decrease from the previous year, the utility would not be
allowed to register an emission reduction unless it has taken a
documented action to reduce its own emissions. If an electric utility's
emissions just happen to decrease from one year to the next without the
utility taking any action to reduce emissions, then it should not be
allowed to register the emission reduction.

# Reporting Joint Activities

For joint activities, the parties must agree on each one's share of the
emission reduction prior to reporting. The written agreement must be
submitted by each partner with the reporting forms.

# Avoided Emissions

Avoiding emissions is to be encouraged, especially by using renewable
energy sources. The considerations are similar to those for indirect
emissions. The avoided fossil energy use must be determined and properly
translated into avoided emissions using appropriate emission factors and
calculation techniques. The potential for double counting of emission
reductions is high, but could be minimized in the same way as is
discussed for indirect emission reductions above.

# Baselines

The goal for greenhouse gases is to reduce them below historical levels
in order to control or eliminate potential adverse impacts of climate
change. From this perspective, the historical baseline (or historical
reference case) is the baseline we want to use, and the other baselines
don't really work. The modified reference case allows emissions to grow,
although they may be lower than they otherwise might have been. The same
applies to using emission rates or intensities (emissions per unit
output). The emission rate may decrease while the emissions increase.
However, allowing the reporting of reductions in emission rates
encourages efficiency improvements, which is something we want to do.
For a voluntary registry where no emission reductions are required, all
of these baselines may be allowed, but some of the baselines may not be
valid when emission reductions are mandated in the future.

Also, flexibility should be allowed in the selection of baseline years,
since each source will have unique circumstances regarding timing of
emission reductions, availability of activity data, etc. The chosen
baseline period must be representative of emissions prior to reducing
emissions.

# Transferable Credits and Transferring Ownership of Reductions

If reductions will be transferred or become transferable credits, the
emission reduction must be entity-wide and verified by an impartial
third party. The reductions must be airtight, and ownership must be well
established.

# Confidentiality of Reported Data

The accuracy and integrity of reported emissions and registered emission
reductions are very important, so the system should be as transparent as
possible. Any use of confidentiality provisions should be very limited.

[Measurement and Estimation Techniques]{.underline}

Because of the wide diversity of emission sources and potential
reduction measures, a wide range of measurement and estimation
techniques must be available to reporters. However, to the extent
possible, sources should use the same protocols so emissions can be
easily compared. For major emission categories, such as combustion, it
may be a good idea to prescribe estimation techniques.

Thanks again for the opportunity for us to provide comments.

Sincerely,

Eric C. Mosher, Climate Change Specialist