Project Title: Greenhouse Gas Emissions Trading and the Transport Sector
Principal Investigator: Daniel Sperling
Institute of Transportation Studies
University of California, Davis
Davis, CA 95616
Tel: (530) 752-6548
Fax: (530) 752-6572
Email: dsperling@ucdavis.edu
Funded by a UCTC Year 1999-2000 Research Grant
The Kyoto Protocol created two mechanisms
through which greenhouse gas emission reductions from specific projects around
the world could earn credits: Joint Implementation (JI) and the Clean
Development Mechanism (CDM). These, in addition to greenhouse gas emissions
trading between Annex I Parties to the Kyoto Protocol, comprise the flexibility
mechanisms in the treaty. Although the United States is no longer Party to the
Protocol, the methods outlined here for estimating counterfactual baselines for
transport sector projects to reduce greenhouse gas emissions remain relevant.
These methods can be used to estimate baselines for any entity that would like
to do a project to reduce greenhouse gas emissions from the transport sector
and be able to evaluate the environmental effectiveness of the project.
In order to ascertain the tons of greenhouse
gas emissions that a project avoids, reduces or sequesters, it is necessary to
have a baseline that estimates what the emissions would have been in the
absence of the project. Baseline development for potential projects to reduce
emissions from stationary sources has been and continues to be examined by a
number of organisations, including the International Energy Agency. There is
little other published work on the topic of mobile source baselines for CDM and
JI projects. This project is a first attempt to explore the issues surrounding
estimation of greenhouse gas emission baselines for potential JI and CDM
projects in the transport sector. As such, its scope is kept broad, leaving the
field open for future research and discussion.
Over the past three decades, carbon dioxide
emissions from transport have risen faster than those from other sectors. The
share of worldwide carbon dioxide emissions that come from the transport sector
has grown from 19.3 percent in 1971 to 22.7 percent in 1997 (IEA 2000a).
Projections of future transport emissions are not encouraging. Under the
reference scenario in the World Energy Outlook, emissions of carbon dioxide
from transport are projected to grow at an average rate of 2.4 percent each
year for the next twenty years. This growth rate is faster than that of any
other end-use sector (IEA 2000b).
Reasons for this include the close connections between the transport
sector and practically every other part of the global economy, the fact that
transport policy is focussed on other problems (i.e. traffic congestion), and
the lack of well-developed options for alternative fuel use in the sector.
There are five basic ways that greenhouse gas
emissions from the transport sector can be reduced:
·
vehicle
efficiency improvement,
·
fuel
switching,
·
mode
switching,
·
travel
and freight movement reduction, and
·
improvement
in capacity utilisation.
Action in any of these areas could be taken
specifically to reduce greenhouse gas emissions, but difficulties in
quantifying the emissions reduced, particularly for some types of projects, are
sizeable.
A baseline is an estimated projection of the
greenhouse gas emissions that would have
occurred if a project were not implemented. To calculate the credits that a
CDM or JI project earns, post-project emissions are subtracted from this
baseline. A baseline need not be tied to a specific project. Instead, a
standardised, or “multi-project” baseline could be established for a subsector
of transport in a particular location. Once a baseline exists, any project or
set of projects to reduce greenhouse gas emissions in that subsector can use
the baseline. In fact, the baseline development process may serve as a tool to
help assess which project or projects would be most cost effective to implement
in a given situation.
Unfortunately, there are a number of obstacles
to accurate baseline development. These include:
·
difficulty
and expense of data collection due to the dispersed nature of mobile sources;
·
institutional
incapability to handle either baseline development or project implementation
(or both); and
·
high
uncertainty of emissions forecasts.
Some of these obstacles are specific to the
transport sector, while others also apply to developing baselines for JI/CDM
projects in other sectors.
These obstacles lead some observers to conclude that transport sector projects should be excluded from project-based mechanisms. However, given the projections for extremely high growth in transport-related greenhouse gas emissions, it seems particularly important to use whatever incentives might be available to promote potential emission reduction efforts – and for such programs to start sooner rather than later. Furthermore, overcoming these obstacles, while difficult, does not necessarily present an insurmountable problem. Many can be addressed – either eliminated or reduced – through the creation of standardized baseline methodologies and data collection techniques.
The main purpose of this project is to identify
opportunities to standardise baselines in the transport sector. The discussion
here clearly focuses on ways that this can be done within the current framework
of the Kyoto Protocol. However, the baseline work done for this report is not specific to this
framework and could be used whenever there is a need for projections of
greenhouse gas emissions from the transport sector.
Baseline standardization is important for two reasons. First, standardization of baselines can streamline the baseline development process, reducing the often-significant cost of creating the baseline. Second, standardized baselines are relatively transparent, making it more difficult for project participants to “game” the system to earn undeserved credits (Ellis and Bosi 1999).
This report outlines two types of baselines
that could be used for transport CDM and JI projects: subsector baselines and
regional baselines. Subsector technical baselines are estimated using base year
emissions data along with projections of future emissions based on
technological parameters of the relevant part of the transport sector. This
type of baseline is expected to be used most for fuel efficiency and fuel
switching projects. Subsector historical baselines are estimated by continuing
existing emissions and other relevant trends forward. These baselines may be
used for any project that mainly touches only one subsector of transport.
Regional baselines are most appropriate when a
project is expected to generate significant secondary effects in many transport
subsectors or if a project is implemented as part of a package of policies and
investments to reduce greenhouse gas emissions from the transport sector in a
region. The advantage of regional baselines is that they take the entire local
transport sector into account, reducing concern about secondary emissions
effects of projects. Their disadvantage is that, since they are so broad, it
may be difficult to say with certainty whether a project reduced emissions from
a regional baseline. As such, it is expected that only very large projects will
be able to use regional baselines for credit calculation.
From a practical point of view, high
uncertainty both in baseline determination (given the inherent hypothetical
nature of baselines) and in projections of the emission reduction impact of a
project is likely to be the largest obstacle to CDM and JI project
implementation in the transport sector. To date, while many initiatives
to reduce the greenhouse gas impact of the transport sector have been put into
place, few studies have had accurate baseline data or have kept sufficient
track of sector changes to monitor the specific effects of projects, and few
transport-sector AIJ projects are underway. With additional work on transport
baselines, these shortcomings could be remedied, and a greater level of
certainty attached to the mitigation effect of specific project-based
activities.
Future work to encourage
action to reduce greenhouse gas emissions from the transport sector should
focus on two simultaneous efforts. The first is to begin investing in projects
that have potential near term benefits (i.e. alternative technology fleet projects
and policy actions to promote mass transit) while implementing programs to
collect and maintain accurate records. The second is to continue research in this area using the experience of
implemented projects so that future project participants will have the
information they need to make good decisions about moving toward a sustainable
transportation future.
References:
Ellis, Jane and Martina
Bosi, October 1999, “Options for project emission baselines,” Organisation for
Economic Co-operation and Development and International Energy Agency, Paris.
International Energy Agency
(IEA), 2000a, The Road From Kyoto:
Current CO2 and Transport Policies in the IEA, Paris.
International Energy Agency
(IEA), 2000b, World Energy Outlook,
Paris.
Products and
Activities:
Deborah
Salon, “An Initial View on Methodologies for Emission Baselines: Case Study on
Transport,” International Energy Agency Information Paper, October 2001.
Available on the Internet at www.iea.org/envissu/Cdmtran.pdf.
D. Sperling, "Toward Effective Transportation Policy,"
Innovative Policy Solutions to Global Climate Change, Pew Center on Global
Climate Change and Royal Institute of International Affairs, Washington, D.C.,
26 April 2000.
D. Sperling, “Urban Transport and Climate Change,” International Symposium on Urban Transport and the Environment, Tokyo, Japan, February 24, 2003
D. Salon, Participated in Roskilde Workshop on baseline estimation in the transport sector, May 2001.
D. Salon, Tokyo Workshop on CDM/JI projects in the transport sector, March 2003.
D. Sperling, “Measuring Sustainable Transport in Development Countries, Transportation Research Board Annual Meeting, Wash DC, Jan 13, 2003
D. Sperling, COP 6B, Kyoto Protocol Conference Negotiations,
Bonn, Germany, July 20, 2001 (featured presentation at side event).
D. Sperling, Energy Roundtable, Aspen, Colorado, September 28,
2000 (evening keynote)
D. Sperling, Toward a Greener Road Vehicle: Innovation Paths for
Sustainability, Workshop at Aston University, Aston Business School, June
29-30, 2000 (kick-off presentation)
D. Sperling Innovative Policy Solutions to Global
Climate Change, Pew Center
on Global Climate Change and Royal Institute of International Affairs,
Washington, D.C., 26 April 2000
Acknowledgements:
The work completed for this project was done in conjunction with the Energy and Environment Division of the International Energy Agency.