Perspectives on Community-Scale GHG Accounting

Our sun; it is a chaotic system of many different types of energies interacting with one another and the surrounding environment. The same could be said of the emissions-generating processes of a city. When our scientists at NASA study the inner workings of the sun, they don’t just look at it head on. Many of the processes they’re interested in are are only observable on some narrow band of the electromagnetic spectrum and masked by the most easily observable visible light. In order to answer all the different types of questions about the sun, they use a variety of sensors or lenses. Again, there is a parallel to observing the emissions-generating processes in cities. The lenses we have generally take the form of protocols, though not all perspectives have been formalized in that way.

As has been noted previously by Erickson and Morganstern, each perspective tells us something important, but they are not necessarily tailored to support decision making. As cities continue to lead the world in terms of ambition for addressing climate change, more emphasis should be placed on considerations for the questions that each lens is designed to answer and ensuring that practitioners have the capacity to interpret the results that come from each way of looking at city emissions performance.

 

 

Targets and Goals

Above is rough schematic of the different lenses that are in practice today and the part of the spectrum they are generally tuned to view. The perspective taken in a greenhouse gas inventory is critical for the way that a city approaches defining and meeting its emissions-reduction target. Currently, there are a number of cities with various types of “Net” goals: Carbon neutrality, 100% renewable energy, Zero Waste, and other types of goals all require the concept of Net Reductions and thus, a form of credit to make up the difference for any remaining emissions that can be hard to eliminate.

Net reductions allow some cities to embrace ambitious goals with a relatively uncertain path to achieving them and thus provide an important function to maintaining high ambition. Other cities are stuck in limited perspectives that only recognize the impact that they can have on physical sources within the city boundary. Faced with the pressure of ever growing populations, these cities have a tendency to express their targets and other goals in terms of intensity. Intensity-based goals are useful in some circumstances, but if they are based on a strict geographic view of a city, they provide a limited view on how cities can embrace development in ways that can drive net reductions in global emissions when assessed from a wider-angle perspective.

There will continue to be a range of types of goals, which is necessary to accommodate the range of community typologies that exists. What is missing is more clear discussions on how different accounting perspectives can facilitate decisions on how goals are expressed and the kind of reduction strategies that fit well within that perspective.

Regardless of the type of goal, if credits are to be a significant component of how cities will achieve their goals, wider-angle perspectives are needed to understand the function and impact of cities that do not begin and end at their jurisdictional boundary. This is especially true as our urbanized areas continue to develop out into continuous regions of interacting communities. From a regional perspective, different types of opportunities for reductions become apparent. The excellent work by Chris Jones and Dan Kamen at the Energy and Resources Group at UC Berkeley illustrate the point in terms of intensity.

Wide-Angle Views: Regional and Consumption-Based Accounting

Suburban communities surrounding urban centers offer the biggest opportunities for reductions, but also the biggest opportunities for growth in emissions if the economic centers continue to drive sprawling growth patterns outside their boundaries. Viewing regional performance in this way provides an opportunity for the considering new types of credits for meeting “net”-type goals. Why not credit new, high-efficiency development in a core city or transit-oriented node city for those activities’ ability to “capture” the development pressures of the region and ensure that the growth is accommodated at the lowest emissions intensity? Although bringing more activities within the geographic/political accounting domain may cause an increase in local emissions of a particular city, the performance of the region improves and greater emissions are avoided.

Another type of wide-angle view is the consumption-based emissions inventory. Consumption-based accounting provides the most complete representation of the emissions footprint of all the activities within a community. However, the scale at which the calculations are made limit how well they can inform decision making. For example, the activity data for a consumption-based inventory is something like total expenditures on food or “white goods”. At this level of resolution, it is difficult to recognize the potential of any strategies beyond simply reducing consumption. The coarseness of data creates challenges for downscaling to inform community decisions and provides no ability to differentiate among the emissions intensity of consumption choices within broad categories of spending, such as trends towards local production or preferences within classes of goods such as organic vs conventional food, goods produced with clean energy or those that are part of circular material flows.

Making consumption accounting more informative for personal and policy choices requires doing geographic inventories at a finer resolution, but it also needs to be done in ways that emphasize processes — rather than political boundaries — and industry classifications.

A shift to benchmarking the emissions intensity of local production processes will need some mechanism for drawing connections between the community supply chain emissions of business activity to a geographic inventory. In doing so, cities will have the information needed to showcase the global benefits of economic development that is:

  • Powered by clean energy
  • Organized efficiently with smart logistics
  • Supportive of other local businesses with shortened and circular supply chains
  • Driven to excellence as the means of getting ahead in a carbon-constrained world.

On Credits

While recognizing that different lenses are needed to answer different questions, there remains a few challenges in how the concept of credits works with current community-scale accounting. When ICLEI USA developed the U.S. Community Protocol, we did not include a concept of Scopes in that accounting framework. At that time, Scopes was a concept that had particular meaning within the corporate accounting space to handle issues of double counting between organizations where ownership or control was the defining characteristic.

We believed then, as we do now, that the emissions attributable to a city are not owned by “a city” or the local government in particular. There are countless activities that are included in emissions inventories that local government has no control over. As the composition of our atmosphere and a stable climate represent a type of global commons, the emissions from a community also are a type of commons with shared responsibility between the local government who has control and responsibility for the efficiency of the built environment and transportation systems available in a community, as well as private individuals and businesses that reside within the political boundary. Increasingly however, the emissions reductions achieved by individuals and businesses that reside in a particular geography are privatized and traded by any number of mechanisms. What does that mean for a commons-based understanding of community performance? Many of those mechanisms carry exclusive legal right to the reductions. Does that mean that the community loses a claim to those reductions? Below is a quick summary of a few of these types of transactions. There are surely more.

 

 

The solution to this dilemma so far has been to require dual reporting of both geographic and market-based approaches that highlight the transactions. However, there are few if any examples of attempts to quantify and debit an outbound emissions reduction (double negative) in order to raise an inventory figure to a hypothetical higher value. I believe this is more due to a lack of awareness of the outgoing credits from a community than a conscious attempt to skew the accounting in a community’s favor. That said, the drive to engage in any market-based accounting is clearly driven by a desire to recognize inbound credits.

Maybe this doesn’t matter. After all, there are no rules for what will “count” when a city claims to have met carbon neutrality or even more modest goals. Who would be the arbiter of such claims and what are the consequences of failing to meet a target? There aren’t too many tangible downsides for cities claiming to meet voluntary targets on the basis of a partial accounting of market transactions.

Where this disconnect might matter a great deal more is in a forum like NAZCA, where we may suddenly realize that the reductions pledged by cities and those by the private sector overlap a great deal. While there are protections against this type of double claiming among exchanges between private entities, the structures just don’t exist for addressing the conflict between public and private accounting systems. An increasing number of practitioners from within local government are concerned about this and anyone concerned about the trajectory towards hitting global reduction goals should be as well.

What Next?

In summary, we’re now in a situation where significant time is spent on assessing cities in ways that don’t recognize their potential to drive lower emissions vis-a-vis a regional optimization of the spatial distribution of jobs, housing, and material flows or their potential for driving global emissions reductions by on-shoring production where it can be done the cleanest and with the highest potential for circular material flows. Those are the types of actions that will create transformational change leading to thriving low-carbon cities.

Instead, we have an approach that is a hybrid of national and corporate accounting that fails to concede that cities are neither of those things. It recognizes a place for crediting mechanisms but only really addresses how to account for those few types where data is relatively easy to obtain, mostly where credits or clean energy attributes are being purchased. Until all these transactions happen on the blockchain, a complete accounting of the bi-directional flow of credits is not possible in the way that it is for a corporate inventory. Moreover, if those are the only kind of credits that are recognized for community-scale goal achievement, the end result will be cities that function much like they do today, except on paper. Finally, while we have a several broad types of community accounting lenses, there is little common understanding of what types of decisions are best informed by each approach, leading many to see them in competition with one another rather than complimenting.

How do we improve the situation?

One first step is an expansion of the U.S. Community Protocol scoping guide to help practitioners better identify the right lens to meet the goals of the community.

Second, we need better wide-angle lenses that allow for regional, interconnected communities to think better about how they perform as a whole and achieve maximum location efficiency for jobs and housing.

Third, we need lenses that are tuned to look at processes as opposed to sectors and ones that reveal high-performance production regardless of the size of a local point source associated with the process.

Fourth, we need to be tapping the wondrous array of new sensor technologies and torrents of IOT data that have the potential to actually measure performance of our cities as opposed to modeling them.

Finally, there needs to be a more systematic examination of how credits apply to the performance of cities to identify what it would take to fully reveal how these flow between private entities on a geographic basis. Perhaps there also needs to be a more explicit type of commons credit defined for actions that reduce or avoid regional emissions by planning better or global emissions by cleaning production processes or by developing and exporting the best policies and other ideas to drive reductions elsewhere as some cities hope to do.

These are some very broad improvements we’d like to address in the next update to the U.S. Community Protocol. It will be a big lift, coupled with methodology and reference data updates that are also needed, but we can at least begin the dialog on these issues. I’m looking forward to hearing from other practitioners to hear what resonates, other trouble spots you’ve encountered, and solutions to some of these challenges that are likely already underway.

Image Credits:
NASA/SDO/Goddard Space Flight Center

Mike Steinhoff is ICLEI USA’s Technical Director and lead the development of several tools, including the Climate and Air Pollution Planning Assistant (CAPPA), ADAPT, The Green Business Challenge Web App, and most recently, ClearPath, in addition to developing the accounting frameworks and protocols for local emissions management.

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