By Julian Wong Jun.28.2009
In: climate change, information strategies

The Energy and Climate Registry: A New Initiative Toward Carbon Disclosure in Southern China.

A guest post by Lucia Green-Weiskel (pictured right) who describes a groundbreaking initiative in Guangdong to set up a greenhouse gas registry.

For the last 20 years there has been a global effort to quantify and more accurately understand greenhouse gas emissions. China and the United States – which together are responsible for 40 percent of the world’s emissions – have been latecomers to the mostly European-initiated efforts to quantify, standardize, manage and reduce greenhouse gas emissions and energy consumption.

But that is beginning to change as the Chinese government is making clear its own brand of energy-saving strategies.  For instance, China’s energy-efficiency targets are one of the most ambitious and environmentally progressive policies in the world.   However, to meet those targets, China will need to develop a system to quantify energy use.  To the extent that China decides to take action on climate change more directly, it will also have to track greenhouse-gas emissions.   If such monitoring system is to be accepted by the international community as a bona fide action in the context of international climate negotiations, it must be transparent, accurate and reliable, in line with international standards and accompanied by a system of third-party verification.   An online carbon and energy registry will support China’s drive to meet its own energy targets, facilitate bilateral cooperation between China and the US on climate change and support China’s participation in international agreements on carbon reduction. But questions remain about how to implement such a tool, who should administer it and the methodology to use.

Creating a Registry

In response to this need the Innovation Center for Energy and Transportation (iCET) has developed the Energy and Carbon Registry, the first ever, public, government-supported, online registry for carbon emissions and energy consumption reporting system in China. The ECR is a voluntary reporting tool that discloses data to the public to view without cost. The registry is not government mandated although it is government supported. This means that the ECR can act independently and also there is a certain level of flexibility regarding the development of the protocol. The registry is user-friendly and is, where possible, locally operated. This tool is designed to help China reduce the growth rate of carbon emissions and its own goals to do that at home, but also to be able to support opportunities for bi-lateral cooperation between the United States and China as well as international cooperation especially in the context of the lead-up to the Copenhagen conference in December 2009.

The Energy and Climate Registry is a tool that requires voluntary, not mandatory reporting. With voluntary reporting environmentally-aware corporations can work outside of the context of government mandates to set and reach carbon reduction targets. Another benefit of voluntary reporting is that companies can get involved in the protocol development process early on. The ECR protocol drafting process is designed to create opportunities for feedback from multiple stakeholders to deliver a tailored product.

Almost any entity can report. Eligible reporters to the registry include multinational corporations, state-owned enterprises, and private or non-state owned supply clusters as well as municipal governments and non-profit entities. The registry will be usable by all industries. We will begin with telecommunications, manufacturers, energy utility and steel but then move outwards and include municipal areas, parks, university campuses, and NGOs.

This is a new and innovative project but at the same time it is based on a tried and tested precedent -The Climate Registry and the California Climate Action Registry, which together have 500 members including some of the biggest emitters in the United States. The Climate Registry and California Climate Action Registry model is based on The Greenhouse Gas Protocol Initiative, a corporate accounting and reporting standard created by the World Resources Institute and the World Business Council on Sustainable Development. Because many US-based or international corporations have supply chains in China, it is natural to expand this project to China where it will serve as a tool for international corporations and Chinese domestic companies alike.

Guangdong as a Pilot Site

The project will begin in the southeastern province of Guangdong with the intention to eventually expand to a regional or national scale. Guangdong province was selected for the following reasons: First, because of its heavy manufacturing base. Although Guangdong is one of 30 provinces in China it has the largest GDP, which accounts for 12.5% of the nation’s total.  In 2007, Guangdong had the largest share of national exports at 30.3%. Second, Guangdong manufactures many high carbon-intensity of the products: i.e. toys, textiles, petrochemicals, plastics, machinery, electronics and automobiles. Third, there is a heavy reliance on coal for energy (this doesn’t distinguish Guangdong from other provinces in China but is still an important factor in the province’s total energy use.) Fourth, Guangdong has a high population density and high rate of urbanization. Because it is only four meters above sea level, Guangdong province is more vulnerable to sea level rise than any other provinces in China and also more than other places in the world.

April 2009 Registry Launch

On Saturday April 25th, 2009 iCET held a project briefing at the Kempinski Hotel in Beijing to mark the launch of the Energy and Climate Registry. The purpose of the event was to introduce the registry to China and to raise awareness about the value of carbon and energy use reporting. The half-day event Delegates to the April 25th launch of the Energy and Climate Registry in Beijingwas a tremendous success and brought together businesspeople, members of the Chinese and California governments, academics, journalists and members of the public to engage in a stimulating discussion about greenhouse gas reporting in China.

[Pictured right: iCET and Friends at the Energy and Climate Registry Project Launch in Beijing, April 25, 2009.  From left to right: Robyn Camp (The Climate Registry), Laura Ediger (Business for Social Responsibility), Lucia Green-Weiskel (iCET), Dr. Feng An (iCET), Dr. Yang Fuqiang (WWF), Linda  dams (Secretary of Environment, State of California), Robert Jones (Ecolinx Foundation) Robert Earley (iCET), Dr. Yufu Cheng (iCET), Fang Fang (iCET), Margret Kim (California Air Resources Board).]

In the opening panel, California’s Secretary of Environmental Protection, Linda Adams pledged, on behalf of Governor Arnold Schwarzenegger, her support and enthusiasm for the Energy and Climate Registry in China and talked about California’s environmental initiatives including the Governors’ Global Climate Summit hosted by Gov. Schwarzenegger in Los Angeles last November. “During my time here in Beijing I have been asking China’s entrepreneurs to do something important for the environment. I have challenged them to join the new China Energy and Climate Registry,” she said. Ms. Liu Mei of the China National Institute for Standardization (CNIS) then gave a very insightful presentation on China’s efforts to adapt ISO standards as well as the Greenhouse Gas Protocol (GHG Protocol) to a Chinese context. Wen Gang from the CDM Fund talked about credit and accounting methods used in projects under the Kyoto Protocol’s CDM or Clean Development Mechanism in China.

The next panel, “Building Carbon Registries: Measuring, Reporting, Verification and Enforcement,” was moderated by Dr. Yang Fuqiang of the World Wildlife Fund and began with a presentation from California Air Resources Board’s Senior Advisor, Margret Kim about measuring, reporting and verification (MRV). According to the Bali Action Plan, MRV has been established as a “core element” of any climate solution. Kim’s presentation also discussed California’s Assembly Bill 32 for mandatory reductions. She concluded that, “Robust, transparent and cost effective monitoring, reporting and verification underpin emissions trading schemes.” Robyn Camp from The Climate Registry (TCR) and The California Climate Action Registry (CCAR) told audiences members the tale of two registries. She discussed the experiences and lessons learned from the development and implementation of two carbon calculation tools: The Climate Action Registry Reporting Online Tool (CARROT) and The Climate Registry Information System (CRIS) in North America and suggested ways in which similar tools could be developed in China. Laura Ediger from Business for Social Responsibility pointed out that many of the concerns the business community has about joining a registry are unfounded. For example, businesses that worry about the administrative cost of generating accurate data usually find that the benefits of tracking data are greater than the cost. Businesses that worry about unnecessarily revealing information about their operations and/or having that information used against them find that fears about disclosure are often exaggerated, that again benefits outweigh cost and that disclosure leads to stakeholders having more confidence in the company and view it as less a less risky investment. Finally, for those that worry that this type of data sharing will violate privacy and open floodgates for other requests find that instead collaborating with stakeholders holds an opportunity to set beneficial terms in the future.

The Business Case for Corporate Carbon Disclosure

But why would companies operating in China want to disclose their greenhouse gas emissions and energy use to the ECR in the first place? First, this registry allows corporations to promote and publicize a green image and showcase good corporate environmental practices; second, the registry provides opportunities for identifying and then reducing energy costs; and, third, there is an opportunity for early action and for businesses to become leaders in sustainability.

Businesses that act now to reduce energy use will have an advantage if and when legislation or regulations come to pass in China. Of course whether or not this type of legislation is in the pipeline is a big unknown. Corporations that decide to disclose their greenhouse gas emissions now will have an advantage in terms of having already developed the internal capacity to develop an accurate inventory. They may have even used the registry to reduce their energy consumption and will benefit from that if a carbon reduction target is put into place.

To conclude, a China-based Energy and Climate Registry that will quantify energy use and GHG emissions in a measurable, consistent, and verifiable way is the necessary first solid step toward China’s climate change mitigation strategy. A registry will facilitate China’s move toward becoming more transparent, responsible, resource-efficient, energy self-sufficient country that can become a leader in green technology. China stands to gain a lot from this development.

See also:  Lucia Green-Weiskel & Robyn Camp, “Accounting for China’s Carbon,” China Dialogue, June 16, 2009.

Lucia Green-Weiskel works with The Innovation Center for Energy and Transportation (iCET) a professional organization based in Beijing dedicated to mitigating climate change through low-carbon fuels, vehicles and policies. iCET is best known for its work toward bringing vehicle fuel economy and low carbon fuel standards to China.  iCET recently developed a consumer-oriented and user friendly online Environmentally Friendly Vehicle Rating System in China. iCET wrote the segment on transportation policy for the Nicholas Stern Review and has written policy papers for China’s Ministry of the Environmental Protection which recommends that the Ministry create a new and unique office only dedicated to the development and implementation of climate change policy. iCET was founded in 2006 and has offices in Beijing, Los Angeles and New York.

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