ClimatePULSE: Municipalities and Carbon Markets (Part 2)

CC_logo_small.jpgLast week, ClimatePULSE looked at some of the complexities specific to municipal climate change mitigation projects and at some of the typical difficulties that municipal project leaders experience in generating credits from their projects. The conclusion was that municipalities and their projects can generate credits in numerous ways, but only if there is clear municipal ownership of the reductions and if those emissions can be accounted for in a very detailed and accurate way. This week, the discussion will focus on how municipalities can put this conclusion into practice to generate credits for the carbon market.
The key to ensuring municipal ownership of the GHG reduction is in understanding the types of sources of municipal GHG emissions. Municipal GHG emissions, like those of any other organization, include numerous sources of direct and indirect emissions from within and beyond the geopolitical boundaries of the municipality. However, unlike the majority of other (especially private sector) organizations, emissions related to actions within the boundaries of the municipality can fall into more than one category: they may be corporate/government or community emissions.

GHG reducing projects that deal with corporate emissions are much more likely to have clear municipal ownership of the reductions, and thus are the ones upon which municipalities looking to enter the carbon market should focus. Fortunately, a municipality’s corporate emissions are generally also those for which it is easier to account for in a very detailed and accurate way.
For example, an energy efficiency project in a municipally-owned building (e.g., the local swimming pool and recreation center) can be contrasted with a municipal energy efficiency program encouraging home retrofits. For the home retrofits it is far from clear whether the municipality has ownership of the reductions (i.e., because despite the municipal incentives, the reductions occurred in privately owned buildings and were likely paid for in large part by the homeowners). A municipal government is also unlikely to have access to detailed data for all participants in a community emissions-reducing project (e.g., electricity and fuel use data for all the houses in the program).
Conversely, the municipality owns the pool and recreation center, so its emissions are corporate emissions and there is a clear municipal title to any reductions. The municipality can also easily obtain detailed information about these corporate emissions (e.g., electricity and fuel use from pool utility invoices). It could even potentially obtain additional information (about building occupancy from the turnstiles at the entrance, or about heating and cooling system down time from maintenance records) to further substantiate the GHG reduction claim.
Such projects’ GHG reductions, once properly quantified and verified by a third party, could be used to generate credits that can be sold on the voluntary market – a market that some estimates say has more than doubled in size in the last year alone. These projects also have the additional benefits of demonstrating leadership on the part of the municipal government and of encouraging transformative lifestyle change in citizens.