us-public-sector-protocol_final_oct13

The Greenhouse Gas Protocol
for the U.S. Public Sector
Interpreting the Corporate Standard

for U.S. Public Sector Organizations
WORLD
RESOURCES
INSTITUTE
GHG Protocol Team Authors
Stephen Russell
Mary Sotos
LMI Team Authors

Virginia Bostock
Michael Canes
Emil Dzuray
Robert Hardison
Rachael Jonassen
Julia Kalloz
Snapper Poche
Core Advisors
Peggy Foran, The Climate Registry
Jill Gravender, The Climate Registry
Matthew Gray, U.S. Department of Energy
Verena Radulovic, U.S. EPA Climate Leaders
John Sottong, U.S. EPA Climate Leaders
Bella Tonkonogy, U.S. EPA Climate Leaders
Table of Contents
Introduction 2
Chapter 1 GHG Accounting and Reporting Principles S T A N D A R D G U I D A N C E 8
Chapter 2 Organizational Goals and Inventory Design G U I D A N C E 12
Chapter 3 Setting Organizational Boundaries S T A N D A R D G U I D A N C E 16
Chapter 4 Setting Operational Boundaries S T A N D A R D G U I D A N C E 24
Chapter 5 Tracking Emissions Over Time S T A N D A R D G U I D A N C E 36
Chapter 6 Identifying and Calculating GHG Emissions G U I D A N C E 44
Chapter 7 Managing Inventory Quality G U I D A N C E 54
Chapter 8 Reporting GHG Emissions S T A N D A R D G U I D A N C E 64
Chapter 9 Verification of GHG Emissions G U I D A N C E 70
Chapter 10 Setting GHG Targets G U I D A N C E 76
Appendix A Overview of GHG Programs 88
Appendix B Equity Share Consolidation Approach 90
Appendix C Accounting for Sequestered Atmospheric Carbon 92
Appendix D Accounting for Indirect Emissions from Purchased Electricity 94
Appendix E Public Operations and Scopes 96
Appendix F Accounting for Indirect Emissions Reductions 97
Acronyms 98
Glossary 99
References 106
Contributors 107
Introduction
The Greenhouse Gas Protocol Initiative
T he Greenhouse Gas Protocol Initiative was launched in 1998 with the mission
of developing internationally accepted greenhouse gas (GHG) accounting
and reporting standards and to promote their broad adoption. Designed as a multi-
stakeholder partnership of businesses, non-governmental organizations (NGOs), and
governments, it was convened by the World Resources Institute (WRI), a U.S.-based
environmental NGO, and the World Business Council for Sustainable Development
(WBCSD), a Geneva-based coalition of international companies.
2
INTRODUCTION 3
The GHG Protocol Corporate Standard

BOX 1.1 Programs and Specifications based on
The cornerstone document of the GHG Protocol Initiative
the GHG Protocol Corporate Standard
is the revised edition of the GHG Protocol Corporate
Accounting and Reporting Standard (Corporate Standard, Voluntary GHG reporting programs
2004), which provides a step-by-step guide for quantifying • American College and University President’s
and reporting GHG emissions. Climate Commitment
Published first in 2001 and revised in 2004, the Corporate • The Climate Registry
Standard has been widely accepted and adopted around the
• Global Reporting Initiative
globe by businesses, NGOs, and governments (see Box 1.1
and Appendix A). Widespread adoption of the Corporate • EIA 1605b
Standard is attributable to the fact that it is robust,
• The World Wildlife Fund Climate Savers
practical, and builds on the experience and expertise of
numerous practitioners. The Corporate Standard was • ICLEI (Local Governments for Sustainability)
designed to be program and policy neutral, allowing
• Carbon Disclosure Project
users the flexibility to adapt the core methodology and
concepts to specific accounting and reporting needs. To • Brazil GHG Protocol Program
provide guidance on how to build GHG policies,
• China Energy and Carbon Registry
reporting programs1, and tools based on the concepts of
the Corporate Standard, the GHG Protocol Initiative • Mexico GHG Program
developed two accompanying documents:
• Philippine GHG Accounting and Reporting Program
• Measuring to Manage: A Guide to Designing GHG
• India GHG Inventory Program
Accounting and Reporting Programs (2007), and
• South Korea Greenhouse Gas Emission Information System
• Designing a Customized Greenhouse Gas Calculation
(GEI)
Tool (2007).
Industry associations with sector-specific protocols
• The International Aluminum Institute
Why a GHG Protocol for the U.S. Public Sector?
• International Council of Forest and Paper Associations
Government organizations worldwide have identified
the need to start tracking and managing their GHG • International Iron and Steel Institute
emissions, both to demonstrate environmental leader-
• World Business Council on Sustainable Development
ship and to prepare for future reporting policies and
Cement Sustainability Initiative
regulations. While the Corporate Standard provides the
basic means by which any type of organization can • International Petroleum Industry Environmental
create a GHG inventory, many public organizations Conservation Association
have sought tailored guidance to interpret the
ISO 14064
Corporate Standard specifically for the public sector
context, especially when coordinating GHG reporting
requirements across multiple government organiza-
accounting and reporting, acknowledging the ways
tions. All stakeholders benefit from accounting and
decision-making approaches and priorities differ in
reporting GHG emissions in a way that makes it easier
the public sector versus private sector (e.g., greater
to calculate, track, and compare progress over time.
public accountability and freedom of information
In the United States, public sector activities often
requirements) and providing examples of best prac-
involve shared resources between multiple organiza-
tices. For governments that already monitor and
tions and leasing arrangements for buildings, vehicles,
report energy use and other environmental metrics,
and land that can pose challenges attributing owner-
GHG emissions reporting represents a new and inte-
ship or control of GHG emissions. Public
grative performance indicator.
organizations have asked for case studies reflecting
the experiences and challenges of public sector GHG
Introduction
Interpreting the Corporate Standard How This Protocol Was Developed

As reflected in its title, The GHG Protocol for the U.S. Public To engage the public sector and provide a robust interpre-
Sector: Interpreting the Corporate Standard for U.S. Public tation of the Corporate Standard principles, in 2008 WRI
Sector Organizations does not include substantively new or partnered with the LMI. LMI is a not-for-profit consulting
different accounting or reporting requirements from the company that primarily serves U.S. government organiza-
Corporate Standard and does not constitute a separate or tions. Throughout this process, LMI worked with the
different “standard.” Instead, it interprets the content and Department of Energy Federal Energy Management
structure of the Corporate Standard for the context of the Program and EPA Climate Leaders to ensure that this
public sector. It is referred to interchangeably in this docu- protocol could function as the background for U.S.
ment as the U.S. Public Sector Protocol. Federal government GHG reporting requirements related
to Executive Order 13514. (See Chapter 2 for a descrip-
Much of the text in the U.S. Public Sector Protocol is taken
tion of this policy.)
from the Corporate Standard, but most chapters and
diagrams include modifications in wording, examples, or Like the Corporate Standard, this protocol was developed
structure in order to improve clarity and applicability to through a multi-stakeholder process. The U.S. Public Sector
the public sector. Protocol involved the input of over 60 experienced public
sector managers, technical experts, and consultants across
a range of organizations (see the Contributors section).
F O C U S O N T H E U N I T E D S T AT E S Several government organizations also “road tested” the
The structure and responsibilities of the public sector vary protocol, including many U.S. federal agencies whose
widely across countries and the time and resources participation was coordinated by LMI and the Department
available for the development of this protocol did not of Energy.
permit a comprehensive engagement with public organi-
zations and other stakeholders worldwide. The recent
emergence of GHG reporting programs and policies for
government organizations in the United States further Who Should Use This Protocol?
elevated the priority of this region. Therefore, this U.S. The “public sector” is a broad term that includes any
Public Sector Protocol was developed primarily for U.S. organization owned, controlled or operated by the govern-
government organizations. However, since it is based on ment, including government agencies, school systems,
the internationally accepted Corporate Standard, it quasi-governmental organizations and utilities, as well as
should have applicability to governments worldwide. public-private partnerships. This protocol is applicable to
all levels of government in the United States, including
federal, state, regional, and municipal/city government.
Objectives of the U.S. Public Sector Protocol The protocol will help managers of organizations at all
This U.S. Public Sector Protocol was designed with the government levels design and develop a GHG inventory.
following objectives in mind: Policymakers developing new regulations and organiza-
• To help public organizations prepare a GHG inventory tion-level GHG management strategies can also look to
that represents a true and fair account of their the case studies highlighting successes in implementing
emissions, through the use of standardized approaches and administering GHG management programs. For
organizations that have already created GHG inventories
• To simplify the process and reduce the costs of through voluntary or mandatory programs that are based
compiling a GHG inventory on the Corporate Standard, this protocol can provide
• To provide public sector organizations with information useful background information and clarify the rationale
for use in building an effective strategy to manage and behind key accounting issues. (See Appendix A for a list of
reduce GHG emissions existing programs).
• To support voluntary and mandatory GHG reporting For the purposes of this document, the terms “entity,”
“agency,” and “organization” are used interchangeably,
• To increase consistency and transparency in GHG although they may represent specific organizational types
accounting and reporting among public sector organi- and relationships within a given jurisdictional context.
zations and GHG programs.
4 INTRODUCTION
INTRODUCTION 5
Relationship to GHG Programs

The U.S. Public Sector Protocol’s consistency with the
Corporate Standard ensures that it maintains compatibility
with most recognized reporting programs and registries.
The Corporate Standard was designed to provide a
common, flexible framework defining the key concepts
and processes. It does not specify technical details such as
calculation methods, emission factors, reporting formats
or verification requirements. Many voluntary reporting
programs and registries have adapted and customized the
Corporate Standard to serve as the basis for their
reporting protocols and procedures, usually pairing them
with specific calculation tools and reporting templates to
ensure that members’ reports are accurate and consistent.
Mandatory reporting requirements for government organi-

zations will likely specify details that are left open in this
protocol, such as which specific scope 3 emission cate-
gories, if any, should be included; fiscal year versus
calendar year reporting; centralized vs. decentralized data
calculation; and GHG emission targets. The Corporate
Standard and U.S. Public Sector Protocol are considered
“program- and policy-neutral” in that they allow these
technical policy decisions to be made by GHG programs.
L O C A L G O V E R N M E N T O P E R AT I O N S ( L G O ) P R O T O C O L
The Local Government Operations (LGO) Protocol
provides a flexible framework focused on serving the
needs of local government organizations. The LGO
Protocol was drafted jointly by the Climate Registry,
What This Protocol Includes
ICLEI (Local Governments for Sustainability), California
This is a stand-alone protocol that provides standards and
Climate Action Registry, and the California Air Resources
guidance for U.S. public organizations. It contains all the
Board, and reflects the compiled best practices and
same accounting standards as the Corporate Standard, but
insights of a broad stakeholder process. These partner
features updates in wording and format, consolidation of
programs have based their individual reporting protocols
key points for the public sector, and additional case
and the LGO Protocol on the Corporate Standard, and
studies, graphs, and tables. It covers the accounting and
each has directed its local government members to report
reporting of the six GHGs regulated by the Kyoto
based on the LGO Protocol. The LGO Protocol includes
Protocol— carbon dioxide (CO2), methane (CH4), nitrous
calculation procedures and appendices detailing how each
oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons
partner’s reporting requirements differ (emission factors,
(PFCs), and sulfur hexafluoride (SF6).
verification requirements, etc.). Because of its compati-
bility with both the Corporate Standard and this U.S. Public Although this protocol is designed to develop a verifiable
Sector Protocol, local government bodies should consult inventory, it does not provide a standard for conducting
the LGO Protocol for accounting guidance that is tailored verification. This protocol should not be used to quantify
to cities, counties, and municipalities. the reductions associated with GHG mitigation projects.
The Project Protocol provides guidance for this purpose.
(See “What This Protocol Does Not Include” below.)
Introduction
F O R M AT: S T A N D A R D S A N D G U I D A N C E • The Land Use, Land-Use Change, and Forestry Guidance

Most chapters are divided into “standards” and “guid- (2006)
ance” sections, with the “standard” sections conveying
• Guidelines for Quantifying GHG Reductions from Grid-
the required elements for each inventory component, and
Connected Electricity Projects (2007).
the “guidance” sections elaborating on how the public
sector context influences the types of choices that organi- C O M M U N I T Y- L E V E L I N V E N T O R I E S
zations might face when implementing this component. Community-level inventories focus on emissions from all
sectors within a geographically-defined community,
Some chapters only feature a “guidance” section, with
including electricity generation, transportation, land-use
no “standard” section: these chapters address aspects
change, etc. Many public sector leaders are being called
of inventory development for which this protocol does
upon to create these geographically-defined inventories for
not specify required elements, but instead offers recom-
their regions in order to identify larger sectoral emissions
mended approaches.
trends that can guide reduction priorities and policies.
Specifically, these “guidance” chapters address how to This type of inventory is based on boundaries, assumptions
define the goals for inventory design (Chapter 2), how to and methodologies which are significantly different from
identify and calculate emissions (Chapter 6), how to estab- those referenced and utilized in the U.S. Public Sector
lish an inventory quality management system (Chapter 7), Protocol and the Corporate Standard, which only track
how to prepare for and structure inventory verification emissions sources that a given entity owns or controls.
(Chapter 9), and how to set a GHG target (Chapter 10). For example, a county government organization may
prepare a GHG inventory of its own operations and
also conduct an inventory reflecting the county’s resi-
T E R M I N O L O G Y : S H A L L , S H O U L D , A N D M AY dential power use, energy generation, transportation,
The term “shall” is used in this protocol to indicate what etc. Guidelines for community-wide inventories are
is required in order for a GHG inventory to be in confor- available through programs such as ICLEI (Local
mance with the U.S. Public Sector Protocol; it does not Governments for Sustainability).2
convey a statutory requirement. The term “should” is used
to indicate a recommendation, but not a requirement. The
term “may” is used to indicate an option that is permis- N AT I O N A L I N V E N T O R I E S
sible or allowable. National-level (country) GHG inventories represent
emissions from all sectors within a country, including
electricity generation, transportation, land-use change,
What This Protocol Does Not Include etc. These inventories are usually compiled via a top-down
There are other types of GHG accounting and/or reporting exercise using national economic data for the purposes of
beyond the “organizational” or “entity-wide” invento- the United Nations Framework Convention on Climate
ries outlined in this protocol and the Corporate Standard. Change process. See IPCC (2006) for best practices on
These include project-level accounting, community-level national inventories.
inventories, and national inventories. This protocol does
not provide guidance on these methodologies.
Reporting in Accordance with the
GHG Protocol for the U.S. Public Sector
P R O J E C T- L E V E L A C C O U N T I N G This protocol focuses on designing and developing
The GHG Protocol Initiative developed The GHG Protocol a GHG inventory, including the accounting and
for Project Accounting (Project Protocol) in 2005 to serve reporting of emissions. It does not require emissions
as a guide for quantifying the reductions and avoided information to be reported to LMI, WRI, WBCSD,
emissions from GHG mitigation projects such as renew- or any other organization. When regulatory require-
able energy generation projects; landfill methane gas ments are not consistent with the U.S. Public Sector
capture; land-use, land-use change and forestry, etc. The Protocol, the organization’s report must describe the
following two supplements to the Project Protocol provide variances and the reasons for them.
methodologies for specific types of projects:
6 INTRODUCTION
INTRODUCTION 7
GHG Calculation Tools • What is the difference between direct and

For many public organizations, the calculation methods indirect emissions and why does it matter? C H A P T E R 4
and tools used to complete a GHG inventory may be
• Which indirect emissions should I report? C H A P T E R 4
selected at a technical management level and/or inte-
grated into existing environmental reporting mechanisms. • How do I account for leased buildings
This U.S. Public Sector Protocol does not require the use of and vehicles? CHAPTER 4
any particular calculation tool, but does require that all
• How do I account for contracted or
methods, procedures, and tools utilized in completing a
outsourced operations? CHAPTER 4
GHG report are transparently detailed. Additionally, when
a comprehensive tool does not exist, estimates and thor- • What is a base year and why do I need one?
ough documentation of the assumptions and shortcomings CHAPTER 5
of those estimates are required.
• My emissions changed with alterations
To complement its published standards, WRI offers a to the organization’s structure. How do
number of calculation tools for free on the GHG Protocol I account for these changes? CHAPTER 5
Initiative website (www.ghgprotocol.org). These provide
• How do I identify and calculate my
step-by-step guidance and electronic worksheets to help
organization’s emission sources? CHAPTER 6
users calculate GHG emissions from specific sources or
sectors. The cross-sector tools calculate emissions from • What kinds of tools are there to help me
sources common to many sectors and operations, calculate emissions? CHAPTER 6
including transportation, electricity consumption,
• What data collection activities and
stationary combustion, and refrigerant use. (Most public
data management issues do my facilities
sector emissions fall within these cross-sector sources).
have to deal with? CHAPTER 6
The sector-specific tools calculate emissions from special-
ized industrial processes such as aluminum, cement, or • What determines the quality and credibility
paper and pulp production. All of these tools are consis- of my emissions information? CHAPTER 7
tent with those proposed by the Intergovernmental Panel
• What information should be included
on Climate Change (IPCC) for compilation of emissions at
in a GHG emissions report? CHAPTER 8
the national level (IPCC, 2006). They are designed to be
user-friendly for non-technical staff and to increase the • What data must be available to obtain
accuracy of emissions data at an organization level. external verification of the inventory? CHAPTER 9
• What is involved in setting an emissions

target and how do I report performance
Frequently Asked Questions
in relation to my target? CHAPTER 10
Below is a list of frequently asked questions, with
directions to the relevant chapters:
• What are the principles that underpin a

GHG inventory? CHAPTER 1
• What goals should I consider when setting

out to account for and report emissions? C H A P T E R 2
• How do I set an organizational boundary

that determines which operations or facilities NOTES
1
GHG program is a generic term used to refer to any voluntary or mandatory
are included in the inventory? CHAPTER 3 international, national, sub-national government or non-governmental
authority that registers, certifies, or regulates GHG emissions or removals.
• How do I deal with complex organizational
2
structures and shared GHG emissions ownership? See Ch. 3.2.2 on community-level GHG inventories in International Local
Government GHG Emissions Analysis Protocol (IEAP) v. 1.0, ICLEI (Local
CHAPTER 3 Governments for Sustainability), 2009.
1 GHG Accounting and Reporting Principles
D
R
A
D
N
A
T
S
A s with financial accounting and reporting, generally accepted green-
house gas (GHG) accounting principles are intended to underpin and
guide GHG accounting and reporting to ensure that the information represents a
faithful, true, and fair account of an organization’s GHG emissions. These princi-
ples also permit data to be accurately compared from year to year and across
multiple entities. This is particularly critical for departments or sub-organizations
rolling up or aggregating their inventories to higher organizational units
(division, bureau, etc.)
S T A N D A R D
G U I D A N C E
8
CHAPTER 1 GHG Accounting and Reporting Principles 9
GHG accounting and reporting practices are evolving and are new to many
organizations. However, the following principles established by the Corporate
Standard and applicable to this U.S. Public Sector Protocol are derived in part
from generally accepted financial accounting and reporting principles. They
reflect the outcome of a collaborative process involving stakeholders from a
wide range of technical, environmental, and accounting disciplines. These
are not legal definitions, but are the principles on which specific reporting
policies or choices should be based.
GHG accounting and reporting shall be based on the following principles:
R E L E VA N C E Ensure the GHG inventory appropriately reflects the GHG emissions of the organization and
serves the decision-making needs of users—both internal and external to the organization.
COMPLETENESS Account for and report on all GHG emission sources and activities within the chosen inven-
tory boundary. Disclose and justify any specific exclusions.
CONSISTENCY Use consistent methodologies to allow for meaningful comparisons of emissions over time.
Transparently document any changes to the data, inventory boundary, methods, or any other
relevant factors in the time series.
TRANSPARENCY Address all relevant issues in a factual and coherent manner, based on a clear audit trail.
Disclose any relevant assumptions and make appropriate references to the accounting and
calculation methodologies and data sources used.
S
ACCURACY Ensure that the quantification of GHG emissions is systematically neither over nor under
actual emissions, as far as can be judged, and that uncertainties are reduced as far as practi-
cable. Achieve sufficient accuracy to enable users to make decisions with reasonable
T
assurance as to the integrity of the reported information.
A
N
D
A
R
D
GHG Accounting and Reporting Principles
T
E
he application of these principles will ensure that the • Operational context: Understanding the nature of
GHG inventory constitutes a faithful, true, and fair activities, geographic locations, sector(s), purposes
representation of an organization’s GHG emissions. of information, and users of information.
C
Their primary function is to guide the implementation

More information on defining an appropriate inventory
of the U.S. Public Sector Protocol, particularly when the
boundary is provided in Chapters 2 (Inventory Goals),
application of the standards to specific issues or situa-
N
3 (Organizational Boundaries), and 4 (Operational

tions is ambiguous.
Boundaries).
There may be situations in which certain principles such
A
as accuracy and completeness are in tension with each

other: for example, when a lack of accurate data Completeness
impedes the creation of a complete inventory. In these All relevant emissions sources within the chosen inventory
D
situations, the other principles such as relevance and boundary need to be accounted for so that a comprehen-
transparency provide the context in which those choices sive and meaningful inventory is compiled. In practice, a
I
can be made: i.e., how relevant is the lack of specific lack of data or the cost of gathering it may be a limiting
data in relation to the entire inventory? Documenting factor. Sometimes it is tempting to define a minimum
all information with transparency also ensures that the emissions accounting threshold (often referred to as a de
U
decisions an organization makes are clear to managers, minimis threshold), specifying that a small source or
verifiers and other stakeholders. group of sources not exceeding a certain size can be
G
omitted from the inventory. Technically, such a threshold

These principles have been repeated in most voluntary
simply means that the total emissions listed in the final
GHG reporting program protocols, including those for
inventory represent a predefined underestimate. Although
The Climate Registry, ICLEI (Local Governments for
it appears useful in theory, and multiple established GHG
Sustainability), and the Global Reporting Initiative. These
programs allow for de minimis thresholds, the practical
programs may add other specific requirements to these
implementation of such a threshold is not compatible with
principles and terms.
the completeness principle. In order to utilize a de
minimis threshold, the emissions from a particular source
or activity would have to be quantified to ensure they
Relevance
were under the threshold. But once emissions are quanti-
For a public organization’s GHG report to be relevant
fied, most of the benefit of having a threshold is lost.
means that it contains the information that users—both
internal and external to the organization—need for their However, many GHG reporting programs such as The
decision making. An important aspect of relevance is the Climate Registry have modified the de minimis concept so
selection of an appropriate inventory boundary or the that rather than omitting certain sources from an inven-
selection of which activities should be accounted for and tory that fall beneath a defined threshold, reporting
reported in an organization’s GHG inventory. This selec- organizations may apply a “simplified estimation
tion should reflect the substance and nature of the methodology” or “alternate methodology” to calculate
organization’s responsibilities and sphere of control, not the emissions from these sources. This type of approach
merely its legal form. Relevance may also be dictated by can reduce the reporting burden for sources for which
regulatory requirements that stipulate the information to data are difficult to locate or use, while still achieving the
be included or the reporting frequency. The choice of the requirement of a complete inventory.
inventory boundary is dependent on the characteristics of
In the context of verification, a “materiality threshold” is
the organization, the intended purpose of information,
often used to determine whether an error or omission is a
and the needs of the users. When choosing the inventory
material discrepancy or not—that is, whether it signifi-
boundary, a number of factors should be considered:
cantly impacts the final emissions reported in the
• Organizational structures: Determining which activi- inventory. This is not the same as a de minimis threshold
ties an organization owns, controls or operates for defining a complete inventory. For cases where certain
emissions have been excluded, or estimated imprecisely
• Operational boundaries: Identifying on-site and off-
(e.g., due to insufficient data), it is important that this is
site activities, shared facilities, processes, and services
transparently documented and justified. Verifiers can
10 CHAPTER 1
CHAPTER 1 GHG Accounting and Reporting Principles 11
determine the potential impact and relevance of the analyzed in a way that enables internal reviewers and
exclusion, or imprecision, on the overall inventory report. external verifiers to confirm its credibility. Specific
exclusions or inclusions need to be clearly identified and
More information on completeness is provided in
justified, assumptions disclosed, and appropriate refer-
Chapters 7 (Managing Inventory Quality) and 9
ences provided for the methodologies applied and the
(Verification of GHG Emissions).
data sources used. The information should be sufficient
to enable a third party to derive the same results if
provided with the same source data. A transparent
Consistency
report will provide a clear understanding of the issues in
Users of GHG information will want to track and
the context of the reporting organization and a mean-
compare GHG emissions information over time in order
G
ingful assessment of performance. An independent
to identify trends and to assess progress towards stated
external verification is a good way of ensuring trans-
targets and objectives. The consistent application of
parency and determining that an appropriate audit trail
accounting approaches, inventory boundary, and calcula-
U
has been established and documentation provided.
tion methodologies is essential to producing GHG
emissions data that can be compared internally over time More information on transparency is provided in
as well as externally with inventories from other Chapters 8 (Reporting Emissions) and 9 (Verification I
reporting organizations. If there are changes in the inven- of GHG Emissions).
tory boundary, methods, data, or any other factors
D
affecting emission estimates, they need to be transpar-

ently justified, documented, and disclosed. Accuracy
A
Data should be sufficiently accurate to enable intended

More information on consistency is provided in
users to make decisions with reasonable assurance that
Chapters 5 (Tracking Emissions Over Time) and 8
the reported information is credible. GHG measurements,
(Reporting Emissions).
N
estimates, or calculations should be systematically

neither over nor under the actual emissions value, as far
as can be judged, and uncertainties should be reduced as
C
Transparency
far as practicable. Reporting on measures taken to ensure
Transparency relates to the degree to which information
accuracy in the accounting of emissions can help promote
on the processes, procedures, assumptions, and limita-
E
credibility while enhancing transparency.

tions of the GHG inventory are disclosed in a clear,
factual, neutral, and understandable manner based on More information on accuracy is provided in Chapter 7
clear documentation and archived data (i.e., an audit (Managing Inventory Quality).
trail). Information needs to be recorded, compiled, and
2 Public Sector Goals and Inventory Design
E
C
N
A
D
I
U
G
What goals should I consider when setting out to account

for and report GHG emissions?
P ublic organizations at the local, state, regional or federal level
generally want their GHG inventory to be capable of serving multiple
goals. Identifying these goals from the outset will ensure that the inventory
provides information for both current and future purposes. It will also assist in
determining at what organizational level to conduct an inventory—i.e., at a
division, bureau, agency, or multi-agency level.
G U I D A N C E
12
CHAPTER 2 Public Sector Goals and Inventory Design 13
The U.S. Public Sector Protocol has been designed as a

BOX 2.1 Organizational goals
comprehensive GHG accounting and reporting frame-
served by GHG inventories
work to provide the informational building blocks
capable of serving most organizational goals (see Demonstrating leadership
Box 2.1). The inventory data collected according to the • Voluntary public reporting of GHG emissions and setting
U.S. Public Sector Protocol can be aggregated and disag- GHG reduction targets
gregated for various organizational and operational
• Participation in voluntary GHG reporting programs
boundaries and for different geographic scales (facility,
(e.g., The Climate Registry)
field office, bureau, state, country, etc.).
• Green procurement policies (e.g., EPA’s Environmentally
Public sector managers should be aware that certain
Preferable Purchasing program)
facilities and sub-units within their organizations may
already be collecting, managing, and reporting energy Managing GHG risks and identifying reduction opportunities
data and other information that is essential for GHG • Managing risks associated with GHG constraints
accounting. For example, U.S. federal agencies track in the future
and report energy and fuel use through Environmental
• Identifying cost effective GHG and energy reduction
Management Systems (EMS) or comprehensive plan-
opportunities
ning mechanisms that facilitate data gathering,
quality checking, and reporting. It is important that • Setting GHG targets, measuring and reporting progress
such existing efforts be leveraged to maximize effi-
Complying with mandatory reporting requirements
cient reporting and to avoid duplication of effort,
overlaps, gaps, or conflicts in reporting requirements. • Meeting local, regional, or national mandatory reporting
The guidance sections of Chapters 3 and 4 provide requirements for facility or entity-wide reporting
additional information on how to design an inventory (e.g., executive orders)
for different goals and uses.
• Preparing for upcoming regulation and policies
Gaining relevant GHG inventory experience to inform public

Demonstrating Leadership policy design
G
As concerns over climate change grow, stakeholders
• Building experience that allows informed participation
such as citizens and civic organizations are increas-
in policy-making and standards development
U
ingly calling for greater disclosure of GHG
information by both private companies and govern- • Developing in-house technical expertise to assist
ment operations. In response, a growing number of other organizations
I
public sector organizations are demonstrating leader-
• Acting as a demonstration laboratory for citizens and
ship and “walking the talk” by tracking and reporting
other organizations
their performance across a wide range of environ-
D
mental issues, including GHG emissions. (See case

study below on the Virginia Municipal League.) U.S. Public Sector Protocol will usually be compatible
with most requirements, particularly for programs
A
Voluntary reporting programs are often the means that are based upon the Corporate Standard. However,
by which government organizations commit to since the accounting guidelines for many voluntary
N
reporting and reducing their GHG emissions. Such programs are periodically updated, organizations
programs can ensure accountability, provide a plat- planning to participate are advised to contact the
form for public reporting, and usually offer technical program administrator to check the current require-
C
assistance in developing the inventory and setting ments. Appendix A provides an overview of GHG
voluntary targets. Most voluntary programs require programs—many of which are based on the Corporate
the reporting of direct emissions from operations Standard and therefore consistent with the U.S. Public
E
(including all six Kyoto GHGs), as well as indirect Sector Protocol.

emissions from purchased electricity, heat and steam.
A GHG inventory prepared in accordance with the
Public Sector Goals and Inventory Design
E
Virginia Municipal League: Indeed, an organization’s indirect emissions can be

The Green Government Challenge numerically the most significant within their inventory
(see Chapter 4 for an explanation of indirect emissions).
C
The Virginia Municipal League (VML) is a statewide, nonprofit,

Accounting for emissions can help identify the most
nonpartisan association of city, town, and county governments estab-
effective reduction opportunities that drive increased
lished in 1905 to improve and assist local governments through
N
materials and energy efficiency, as well as identify

legislative advocacy, research, education, and other services. The
zero or low emission products and services. This in
Green Government Challenge, the cornerstone of the VML’s Go Green
turn can reduce operating costs, enable more effective
Initiative (www.gogreenva.org), inspired 41 local governments in
A
use of limited organizational budgets, and help distin-

2008 to implement specific environmental policies and practical
guish the organization as a leader in an increasingly
actions that reduce GHG emissions. Current registration for the 2009
environmentally conscious society.
D
program includes 65 local governments. One of the 30 action items

city governments can take is to conduct a GHG inventory of govern-
ment operations. For each action item, points are awarded with a
Complying with Mandatory
I
total possible score of 200. Members achieve VML-Certified Green

Reporting Requirements
Government status by accumulating a minimum of 100 points. Such
Some government organizations have had experience
U
regional initiatives can strengthen the impact of individual govern-

with mandatory GHG emissions reporting for specific
ments’ demonstrations of leadership.
facilities (e.g., for energy generators above a certain
G
threshold size). However, government authorities at

In addition, organizations may demonstrate leadership various levels have increasingly set policies that require
by committing to environmentally preferable procure- GHG reporting for a wider variety of government activi-
ment policies impacting GHG emissions along the ties. These policies may take the form of executive
supply chain. U.S. programs such as the EPA orders (EOs), which are policy directives issued by exec-
Environmentally Preferable Purchasing program or utive bodies usually intended to manage operations
ENERGY STAR can leverage the purchasing power within the government. For example, EO 13514 sets
of government organizations to drive GHG reductions energy and water use reduction goals for federal opera-
in their supply chains and support the development tions (see the Executive Order case study below), EO
of new markets for zero or low GHG-intensive goods S-20-04 sets energy efficiency goals for California state
and services. buildings, and EO 07-126 obligates Florida’s state
government to reduce GHG emissions.1
Managing GHG Risks Executive Order 13514: Federal Leadership

and Identifying Reduction Opportunities in Environmental Performance
What gets measured gets managed. Compiling a GHG
inventory improves a public sector organization’s On October 5, 2009, President Obama signed an executive order
understanding of its emissions profile and the opportu- requiring federal agencies to conduct annual GHG inventories of their
nities to reduce emissions and save money. It also operations and set reduction goals, in addition to tracking and
provides an indication of potential liability or “expo- reducing water, energy, and petroleum use. The GHG inventory
sure.” An organization’s GHG exposure is increasingly reporting requirements were designed according to the framework in
becoming a management issue in light of heightened this U.S. Public Sector Protocol. According to the order, each federal
scrutiny by the public and the emergence of environ- agency has to set their own reduction targets, expressed as a reduction
mental regulations and policies designed to reduce in absolute emissions by 2020 compared to the agency’s estimated
GHG emissions. Such policies may apply directly to an emissions from 2008. The agencies have created separate targets for
organization’s operations, but can also have impacts each scope. The aggregate of 35 agencies’ goals for scope 1 and
throughout the organization’s supply chain (i.e., its scope 2 collectively represent a 28% reduction, with scope 3 reduction
purchased goods and services). A limited focus on an targets to be announced at a later date.
organization’s direct emissions may miss GHG risks
See Executive Order No. 13514, 74 Fed. Reg. 52117 (Oct. 9, 2009),
and reduction opportunities, and lead to a misinterpre-
available at http://www.gpo.gov/fdsys/pkg/DCPD-200900783/pdf/
tation of the organization’s actual GHG exposure.
DCPD-200900783.pdf
14 CHAPTER 2
CHAPTER 2 Public Sector Goals and Inventory Design 15
North Carolina Department of Natural voluntary reporting programs (see North Carolina case
Resources: Building Support and Capacity study below). Some government organizations with
policy-making authority may find themselves in the posi-
With a mission to manage the state’s natural resources and regulate tion of actually crafting GHG policies and regulations,
its air and water quality, the North Carolina Department of and in-house experience with GHG inventories may help
Environment and Natural Resources (DENR) represents environ- in creating constructive and effective rules. Private firms
mental leadership in the state. In 2006, the DENR participated in a as well as individual citizens may also find it unfair for a
state-wide climate action initiative to examine the state’s GHG emis- public organization to impose regulations for GHG
sions and reduction options. This process brought together reporting if the public sector itself is not participating.
stakeholders from different sectors (called the Climate Action Plan
Furthermore, by creating a GHG inventory or partici-
Advisory Group) to assess the state’s opportunities for reducing its
pating in a voluntary GHG reporting regime, the public
GHG emissions. One cross-cutting measure that the group identified
sector can also act as a demonstration laboratory for
was for the DENR to inventory its own GHG emissions and report them
developing new data collection methods and efficient
as a member of The Climate Registry. With emissions occurring in
reporting procedures that later may be adopted by other
multiple divisions across the state, the DENR needed to coordinate its
organizations. Public organizations often have the lati-
data-collection systems and state-wide accounting with other agen-
tude to share their experiences and GHG inventory
cies such as the Department of Administration and the Department of
resources widely.
Transportation. Building this internal capacity was aided by the
momentum of a large, internal stakeholder process, management
support from the department’s secretary and division directors, and NOTES
streamlining the GHG inventory process with existing legislative 1
See California Executive Order No. S-20-04 (July 27, 2004) and Florida
mandates to reduce energy and petroleum consumption in state Executive Order 07-126 (July 13, 2007).
government buildings and fleets.
As mandatory GHG programs continue to develop at the

local, state, regional, and national levels, organizations
may need to coordinate and leverage their reporting prac-
G
tices to achieve consistency. Preparing a credible and
comprehensive inventory early on can initiate the data
collection mechanisms and practices necessary for almost
U
all reporting purposes. It can also serve to document an
organization’s early emissions reductions, which some
programs may take into consideration for the application I
of future reporting requirements. For instance, the state
of California indicated that it will use its best efforts to
D
ensure that organizations that registered certified emis-

sion reports with the California Climate Action Registry
will receive appropriate consideration under any future
A
California regulatory program relating to GHG emissions.

N
Gaining Relevant GHG Experience

to Inform Public Policy Design
C
Organizations that have taken the initiative to develop a

GHG inventory often have the opportunity to have a
“seat at the table” during critical policy-making or stan-
E
dards development. Sharing GHG inventory experience

with relevant policymakers can ensure that emerging
GHG policies and regulations reflect practical insights
and maximize synergies between multiple mandatory or
3 Setting Organizational Boundaries
D
R
A
D
N
A
T
S
How do I set an organizational boundary that determines

which operations or facilities are included in the inventory?
How do I deal with complex organizational structures

and shared GHG emissions ownership?
P ublic sector operations vary in their legal and organizational structures;
they include those fully owned and operated by the government, those
owned by the government but operated by a contractor or private entity, and those
owned and operated by multiple governmental organizations.
S T A N D A R D
G U I D A N C E
16
CHAPTER 3 Setting Organizational Boundaries 17
Tables 3.1 and 3.2 detail several structures and relation- the equity share approach is often less applicable to
ships common to government organizations, though public sector entities; however, it is discussed separately
some government operations may be combinations of in Appendix B for those organizations for which an equity
more than one of the categories. The complexity of these share inventory may produce a more meaningful reflec-
arrangements means that particular care must be taken tion of their GHG emissions than the control approach.
when setting organizational boundaries, and thorough
This U.S. Public Sector Protocol recommends the opera-
documentation is required to ensure transparency.
tional control approach as the most appropriate
boundary for government organizations, as their primary
activities most often consist of providing public services
Defining the Organization
through specific operations. Most government organiza-
Government operations are often structured in hierarchies
tions’ operations are not structured to gain economic
with individual organizations exercising different levels
benefit from managing financial assets. However, there
of autonomy. The appropriate organizational level for
may be organizations whose core activities include finan-
conducting a GHG inventory—i.e., a division, agency, or
cially controlling and managing assets such as real
multiple agencies—must first be defined. Some factors
estate, vehicle fleets, and land. In such cases, the finan-
to consider in making this designation might include:
cial control approach may be relevant.
• The levels specified by previous reporting requirements
Organizations shall account for and report their consoli-
• The levels or units where meaningful operational dated GHG data according to either one of the control
policy decisions can be implemented approaches presented below or, if appropriate, the equity
share approach. Only one approach can be used to
• The level at which the data can be most conveniently
prepare a given inventory and that approach must be
collected.
Once determined, the management of the headquarters

organization or overarching governing body must decide
on a consolidation approach (i.e., the financial or opera-
tional control, or the equity share approach). Once an
S
organization-wide consolidation policy has been selected,
it shall be applied consistently to all levels of the organi-
zation to avoid double counting or omitting emissions.
Selecting a Consolidation Approach T

A
For the purpose of accounting and reporting GHG emis-
sions, organizations must select an approach for
N
consolidating or “grouping” together the activities or

the GHG-emitting sources that fall under the organiza-
tion’s responsibility. This grouping is known as the
D
organizational boundary.
A
R E C O M M E N D E D A P P R O A C H : O P E R AT I O N A L C O N T R O L
The Corporate Standard describes two distinct approaches
R
that can be used to consolidate GHG emissions for orga-

nizational reporting: control and equity share. The
control approach can be further subdivided into financial
D
control and operational control. Public sector activities

usually do not involve buying or trading of equity and
individual organizations do not usually directly own or
generate value from assets such as real estate. Therefore,
Setting Organizational Boundaries
D
R
A
D
N
A
T
S
applied consistently across all of an organization’s In many cases, organizations exercise both forms of
operations. To reflect the range of these activities, control over a given operation or activity. In making the
organizations may choose to develop multiple separate choice between the two control approaches, organiza-
inventories using different consolidation approaches. If tions should select the criterion that best reflects the
the reporting organization wholly owns and operates all organization’s actual ability to control emissions, as well
of its activities, its organizational boundary will be the as how GHG reporting can be aligned with financial and
same no matter which approach is used. For organiza- environmental reporting and any other emissions
tions with joint or shared operations, or for those that reporting requirements.
manage leased assets as a lessee or lessor, the resulting
emissions profile will differ depending on which
approach is used. The choice of approach will also affect BOX 3.1 Defining Operational
whether emissions from these operations or assets are and Financial Control
categorized as direct or indirect (see Chapter 4).
Operational Control: the authority to introduce and imple-
ment operating policies. Operational control is generally
demonstrated if organization holds an operating license for
The Control Approaches
the facility.
Control can be defined in either financial or operational
terms. Under the control approach, an organization Financial Control: the authority to direct the financial and
accounts for 100 percent of the GHG emissions from operating policies of the operation with a view to gaining
operations over which it exercises control. It does not economic or other benefits from its activities. This includes
account for GHG emissions from operations in which it a right to the majority of risks and rewards of ownership of
owns an interest but has no control. When using the the operation’s assets. Financial control is demonstrated if
control approach to consolidate GHG emissions, organi- the operation is fully consolidated in the organization’s
zations shall choose between operational control or financial accounts.
financial control criteria. (See Box 3.1 for the defini-
tions of operational and financial control.)
18 CHAPTER 3
O P E R AT I O N A L C O N T R O L an operation if it retains the majority risks and rewards

An organization has operational control over an opera- of ownership of the operation’s assets.
tion if it or one of its sub-organizations (see Table 3.1
for organizational types and relationships) has the Under this criterion, the economic substance of the rela-
authority to introduce and implement operating policies. tionship between the organization and the operation
This criterion is consistent with the current practice of takes precedence over the legal ownership status, so that
many organizations that report on emissions from facili- the organization may have financial control over an
ties they operate, or for which they hold the operating operation even if it has less than a 50-percent interest in
license, and is also the approach recommended by the that operation. In assessing the economic substance of
LGO Protocol. In the majority of cases, the operational the relationship, the impact of potential voting rights,
control approach will most accurately represent the including both those held by the organization and those
emissions associated with the activities of public sector held by other parties, is also taken into account. This
organizations, since: criterion is consistent with international financial
accounting standards; therefore, an organization has
• These activities are usually centered on an operational financial control over an operation for GHG accounting
mandate to provide a public service purposes if the operation is fully consolidated in the
• Many individual U.S. government organizations do organization’s financial accounts. If this criterion is
not own GHG-emitting sources such as vehicle fleets chosen to determine control, emissions from partnerships
and buildings but instead lease, operate, and exercise where partners have joint financial control and joint
control over these sources. These sources are often a reporting requirements are accounted for based on
necessary part of how an organization fulfills its percentage of financial ownership (see Table 3.1).
mission or provides a public service.
It is expected that, except in very rare circumstances, if

the organization or one of its sub-organizations is the
operator of a facility, it will have the full authority to
introduce and implement operating policies and thus will
have operational control. See Chapter 4 for more guid-
S
ance on accounting for leased assets.
Under the operational control approach, an organization
T
shall account for 100 percent of emissions from opera-
tions over which it or one of its sub-organizations has
operational control. It should be emphasized that having A
operational control does not mean that an organization
necessarily has authority to make all decisions
N
concerning an operation. For example, substantial

capital investments will likely require the approval of
organizations within the hierarchical structure that have
D
joint financial or budgetary control.

A
FINANCIAL CONTROL
The organization has financial control over an operation
R
if it has the authority to direct the financial and oper-

ating policies of the operation with a view to gaining
economic or other benefits from its activities.1 For
D
example, financial control usually exists if the organiza-

tion has the right to the majority of benefits of the
operation, however these rights are conveyed. Similarly,
an organization is considered to have financial control of
D
Importantly, having financial control does not neces- JOINT CONTROL

sarily mean that a public sector organization also exerts Multiple organizations can have joint financial control
operational control. There may be situations where an over an operation, but joint operational control for the
R
organization has financial control of an asset (e.g., a purposes of GHG accounting is more difficult to delineate.
public transit fleet), but does not maintain operational Many criteria can be used to define operational control
control of that asset (i.e., its operation has been over an operation, facility, building, vehicle fleet, or other
A
contracted out). emissions source. Multiple organizations may each have

control over certain aspects of an operation, such as in
D
TABLE 3.1 Organization Types and Consolidation Approaches

from the Government Organization’s PerspectiveA
N
ACCOUNTING FOR GHG EMISSIONS B (PERCENT)

A
TYPE OF BASED ON BASED ON

ORGANIZATION DEFINITION O P E R AT I O N A L C O N T R O L FINANCIAL CONTROL
GOGO Government-owned/government operated facility 100 100

T
GOCO Government-owned/contractor-operated facility 0 100
GOPO Government-owned/privately-operated facility where the 0 100

S
government has leased all or part of its facility to a private

operator for its operation and profit
POGO Privately-owned/government-operated facility where the 100 0

government uses leased buildings or space for its operations
COCO Contractor-owned/contractor-operated facility that provides 0 0

goods and/or services to a governmental organization
under contract
COCO(E) Same as COCO. However, the contractor may be furnished 0 100

government equipment to manufacture a product or provide (of emissions from
a service owned equipment)
Jointly operated Government facilities owned and operated by multiple Track the activities the Track the activities
government government organizations organization operates C the organization
operations financially controls
Public-private Partnerships in which a government organization and private Track the activities the Track the activities
partnership entity contribute various amounts of real property, financial organization operates C the organization
capital, and borrowing ability for the purpose of establishing financially controls
operating capacity
100
Public sector organizations may be responsible for the environmental 100
(of emissions from
remediation of private sites, particularly if the site owner cannot be identified (of emissions from
financially-controlled
or compelled to undertake the remediation. GHG emissions from fuel, electricity operated equipment)
equipment)
and biogenic fugitive emissions at these sites may be substantial.
Adapted from “The Yellow Book: Guide to Environmental Enforcement and Compliance at Federal Facilities,” EPA 315-B-98-001, February 1999.
A
Here, “government” means the distinct organization within a governmental structure conducting a GHG inventory.
B
“Emissions reported” means those required under scopes 1 and 2 as opposed to optional scope 3 emissions. Further detail on scopes is provided in
Chapter 4.
C
The percentage would depend on contractual or operational arrangements between the partners, or on legislative directives.
20 CHAPTER 3
TABLE 3.2 Accounting for the Transfer of Land-Use Rights

HOW THE GHG EMISSIONS FROM THE LAND CONCERNED ARE
ACCOUNTED FOR BY THE REPORTING ORGANIZATION
TYPE OF B A S E D O N O P E R AT I O N A L BASED ON FINANCIAL

ARRANGEMENTS DEFINITION CONTROL (PERCENT) CONTROL (PERCENT)
Permit The reporting organization awards a permit to a 100

0
private party for the use of government owned land
Withdrawal from The reporting organization receives a permit to use 100 0

Public Use land owned by another government organization
for up to 20 years administratively, as long as the
intended use does not involve destruction of the
land (e.g., military uses, dams)
Grant The reporting organization bestows a grant 0 0

permanently authorizing the use of a given right-
of-way. Grants usually involve a single payment
for the land or transfer of land-use rights.
Easement The reporting organization has rights to use the real 100 0
property of another entity for a specified purpose.
leased spaces. For instance, a tenant organization may Public sector organizations frequently operate their own
have the ability to implement policies that influence the equipment, such as remedial systems or emergency
use of heating and cooling equipment, while the owner of equipment, on or in privately-owned facilities. In these
the building may be responsible for purchasing and main- cases, the associated GHG emissions would be consid-
taining such equipment. When applying the operational ered direct emissions regardless of the consolidation
control approach, organizations shall clearly define how approach adopted, since the organization has both finan-
S
control is determined so that overall program goals are cial and operational control of the equipment.
met, and the GHG accounting and reporting principles of
consistency and transparency are followed. See Chapter 4
T
for more information on leases. Accounting and Reporting Requirements
Organizations shall account for and report their consoli-
dated GHG data according to either one of the control A
Applications of the Control Approaches approaches or, if appropriate, the equity share approach.
Government activities span a substantial range of struc- Only one approach can be used to prepare a given inven-
N
tures and control arrangements, and Table 3.1 shows tory and that approach must be applied consistently
how several common types of public sector organizations across all of an organization’s operations. To reflect the
should account for GHG emissions depending on which range of these activities, organizations may choose to
D
control approach is chosen. In addition, Table 3.2 details develop multiple separate inventories using different
how to account for emissions related to leased or consolidation approaches. If the reporting organization
permitted land. The percentages reflected here indicate wholly owns and operates all of its activities, its organi-
A
whether the emissions from those activities must be zational boundary will be the same no matter which
included in the inventory. However, even if an activity’s approach is used. For organizations with joint or shared
R
emissions do not fall under an organization’s control operations, or for those that manage leased assets as a
according to the selected boundary approach, they may lessee or lessor, the resulting emissions profile will differ
still be reported optionally in scope 3. See Chapter 4 for depending on which approach is used. The choice of
D
how to categorize direct and indirect sources into scopes. approach will also affect whether emissions from these
operations or assets are categorized as direct or indirect
(see Chapter 4).
W
E
hen planning the consolidation of GHG data, National Parks Service conducts inventories for all
it is important to distinguish between GHG activities within park boundaries). This can become
accounting and GHG reporting. GHG tedious when organizations are required to report to
C
accounting concerns the development of GHG invento- multiple entities (e.g., emissions data from one site may
ries —that is, consolidating GHG emissions from need to feed into accounts for state, national, or organi-
operations for which an organization has control and zation-level reports).
N
attributing these to specific operations, sites,

Voluntary initiatives: The organization’s willingness to
geographic locations, processes, and owners. GHG
publicly account for its emissions to a wide array of
A
reporting, on the other hand, concerns the presenta-

stakeholders through voluntary public reporting. This
tion of GHG data in formats tailored to the needs of
may involve consolidating organization-wide GHG
various reporting uses and users.
data to show the emissions of its entire scope of activi-
D
An organization must consider its reporting objectives ties, or consolidating function-specific emissions such
carefully before designing its GHG accounting and as those related to transportation. It may also involve
I
reporting systems. For instance, achieving emissions consolidating emissions from facilities falling within a
reductions frequently depends on an understanding of site-specific boundary or “fence line.”
GHG emissions at a finely disaggregated level, so GHG
U
Developing inventories and managing data to facilitate

reports would need to be sufficiently detailed to allow
consolidation at these various levels may be particularly
the identification of emissions reduction opportunities.
important for entities from different parent organiza-
G
In addition, public organizations may have several

tions that share facilities and for organizations that are
goals for GHG reporting, e.g., regulation-based
geographically dispersed. For example, military instal-
reporting requirements, demonstrating leadership, or
lations such as an Air Force base may host activities
responsibility for the public interest (see Chapter 2).
from other departments or services, such as the Army.
Therefore, it is important to ensure that GHG
Under operational control in such situations, the Army
accounting systems are capable of meeting a range of
and Air Force would need to agree on which organiza-
reporting requirements. Ensuring that data are
tion controlled which emissions sources and electricity
collected and recorded at a sufficiently disaggregated
uses on the base and they would then need to roll up
level will provide organizations with flexibility to meet
emissions to their respective headquarters so as to avoid
a range of reporting requirements.
double counting and/or gaps.
Reporting Goals and Level of Consolidation

Leasing Arrangements
Reporting requirements for GHG data may exist at
Leased assets introduce complexities when determining
various levels, from a specific local facility level to an
organizational boundaries. How GHG emissions associ-
aggregated organization-wide level. Examples of drivers
ated with leased assets are accounted for depends on
for various levels of reporting include:
which consolidation approach is utilized and the lease
Mandatory reporting: Official government reporting type. Chapter 4 discusses how the particular combina-
programs or regulations may require GHG data to tion of consolidation approach and lease type determines
be reported at a facility level, particularly for power whether the lessor or lessee has financial or operational
plants or industrial processes. In these cases, consoli- control. This, in turn, impacts whether emissions are
dation of organizational GHG data is not relevant. considered to be direct or indirect and, therefore, either
However, organizations may also be required to required or optional for reporting purposes.
conduct a more comprehensive GHG inventory that
goes beyond facility-level reporting, in which case an
appropriate consolidation method must be determined.
Contracts that Cover GHG Emissions
Geographic reporting: Government reporting that To clarify ownership (rights) and responsibility (obliga-
requires that data be consolidated within certain tions) issues, organizations involved in joint operations
geographic and operational boundaries (e.g., the may draw up contracts that specify how the ownership
22 CHAPTER 3
of emissions or the responsibility for managing emissions nizational boundaries of the reporting entities are trans-
and associated risk is distributed between the parties. parently and consistently established.
Where such arrangements exist, organizations may opt
to describe the contractual arrangement and include
information on allocation of related risks and obliga-
Treatment of Exceptional,
tions in their GHG reports (see Chapter 8). In some
Multi-Organization Activities
situations, public sector organizations may choose to
Multi-organization responses to emergencies (e.g., fires
include language that clarifies ownership and responsi-
and other natural disasters) may pose complications for
bilities regarding GHG emissions and accounting in the
drawing organizational boundaries and responsibility.
contracts they develop with private businesses.
Organizations may maintain informal cost-sharing
arrangements for fuel/vehicle use, with the understanding
that the responsibility for emissions reporting will be
Double Counting evenly shared or distributed through time. In other situa-
When two or more organizations hold interests in the tions, financial responsibility for these resources may be
same operation and use different consolidation articulated in legal agreements which can be modified to
approaches (e.g., in a public-private partnership where also include responsibility for the associated GHG emis-
Government Agency A follows the operational control sions. In all cases, parties should strive to avoid double
approach while Company B uses the equity approach), counting or omitting any emissions.
emissions from that joint operation could be double
counted or not counted at all. This may not matter for
voluntary reporting as long as there is adequate disclo-
sure from the company on its consolidation approach. NOTES
However, double counting or omitting emissions needs to 1
The term “operations” is used here as a generic term to denote any kind of
be avoided in mandatory government reporting organizational activity, irrespective of its organizational, governance, or
legal structures.
programs, or programs across a single government level
2
(i.e., all state or federal government organizations). Financial accounting standards use the generic term “control” for what is
denoted as “financial control” in this chapter.
Such policies and programs should ensure that the orga-
G
U
I
D
A
N
C
E
4 Setting Operational Boundaries
D
R
A
D
N
A
T
S
What is the difference between direct and indirect

emissions, and why does it matter?
Which indirect emissions should I report?
How do I account for leased buildings and vehicles?
How do I account for contracted or outsourced operations?
O nce an organization has established its organizational boundaries
through applying a consolidation approach (see Chapter 3), it then sets
its operational boundaries. The established organizational and operational bound-
aries together constitute an organization’s inventory boundary.
S T A N D A R D
G U I D A N C E
24
CHAPTER 4 Setting Operational Boundaries 25
Setting operational boundaries involves identifying identify where to allocate limited resources in a way
emission sources and then categorizing these sources that maximizes GHG reductions and reduces operational
in two steps: costs. Finally, emissions reductions along the value chain
support public sector organizations’ efforts to further the
1. Categorization as either direct or indirect. Direct
public good by reducing overall GHG emissions.
GHG emissions come from sources that are
controlled by the reporting organization. Indirect Figure 4.2 provides an overview of the relationship
GHG emissions are those that are a consequence of between the scopes and activities that generate direct
the activities of the organization, but that occur at and indirect emissions.
sources owned or controlled by another organization
or company.1 What is classified as direct or indirect
depends on the consolidation approach selected for Scope 1: Direct GHG Emissions
setting the organizational boundary (see Chapter 3). Direct GHG emissions come from sources owned or
Figure 4.1 shows the relationship between the organi- controlled by the organization. These scope 1 emissions
zational and operational boundaries of an come from:
organization.
• Stationary combustion, including boilers, furnaces,
2. Categorization by scope. All direct emission sources emergency generators, etc.
are classified as scope 1, but indirect emission
• Mobile combustion from transportation vehicles
sources are classified as either scope 2 or scope 3.
• Chemical production from owned or controlled
Public sector organizations shall separately
process equipment
account for and report on all scope 1 and 2
emissions at a minimum. • Fugitive emissions, including leaks or unintended
releases.
Such categorization improves transparency, eliminates
the risk of double counting, and facilitates more effective Direct CO2 emissions from the combustion of biomass
management of GHG risks and opportunities along an or biofuels shall not be included in scope 1 but shall be
organization’s “value chain,” encompassing all of its reported separately (see Box 4.1). However, the CH4
S
upstream and downstream activities. Even without any and N2O emitted from combustion of these materials
policy drivers, accounting for GHG emissions along the will be reported as scope 1. For fuels that contain a
value chain may reveal potential for greater efficiency blend of biofuel and fossil fuel (for example, ethanol
T
and lower costs. Making indirect emissions reductions, products such as E85), all GHG emissions from the
such as electricity efficiency improvements, may be a fossil fuel portion must be calculated and reported as
more cost-effective measure than reducing scope 1 scope 1 direct emissions. The emissions from the A
emissions, so accounting for indirect emissions can help biofuel portion must be calculated separately, with CH4
N
FIGURE 4.1 Organizational and Operational Boundaries of an Organization
}
O R G A N I Z AT I O N A L
Parent Organization
BOUNDARIES
Department A Department B Department C Department D
}
R
Car Fleet Power Car Fleet Leased Laboratory Owned/

O P E R AT I O N A L
BOUNDARIES
Generation Unit Controlled

D
Building
Leased Building Direct and Indirect Emissions

Setting Operational Boundaries
FIGURE 4.2 Overview of Scopes and Emissions across Activities

D
CO2 SF6 CH4 N2O HFCs PFCs

R
SCOPE 1
DIRECT
SCOPE 2 SCOPE 3
A
INDIRECT INDIRECT
D
PRODUCTION OF EMPLOYEE BUSINESS

PURCHASED ELECTRICITY
Adapted from NZBCSD, 2002

PURCHASED MATERIALS TRAVEL
FOR OWN USE
N
AGENCY CONTRACTED
OWNED WASTE DISPOSAL
VEHICLES
EMPLOYEE
A
COMMUTER TRAVEL
FUEL COMBUSTION CONTRACTOR OPERATIONS

T
and N2O emissions reported as scope 1, and CO2

BOX 4.1 Why biogenic CO2 emissions are
emissions reported separately from the scopes. (See
S
reported separately from the scopes

Chapter 6 for a table explaining these calculations.)
Biogenic emissions are those that result from the combustion
GHG emissions not covered by the Kyoto Protocol,
of materials that naturally sequester CO2 - biomass -
e.g., chlorofluorocarbons (CFCs) and NOx, shall not
including those materials used to make biofuels (e.g., crops,
be included in scope 1 but may be reported separately
vegetable oils, or animal fats). For the purposes of national-
(see Chapter 8).
level GHG inventories such as those outlined by IPCC,
land-use activities (e.g., forest felling) are recorded as
sources of CO2 emissions. Reporting the emissions from
Scope 2: Electricity Indirect GHG Emissions
combusting these fuels would result in double counting on a
Scope 2 accounts for GHG emissions from the generation
national level. This double counting issue does not typically
of purchased electricity, steam, and district heating/
affect the GHG inventories of government organizations or
cooling consumed by the organization.2 Purchased elec-
private corporations, since the biofuels would not likely arise
tricity is electricity purchased or otherwise brought into
from land-use changes falling within the organization’s
the organizational boundary of the organization. Scope 2
boundaries. However, to maintain consistency with this
emissions physically occur at the facility where electricity
national-level accounting convention, biogenic CO2 emissions
is generated and would be considered a direct scope 1
are reported separately from the scopes.
emission by that facility. (Note: this is not considered
“double counting” within an organization’s inventory A life cycle analysis of a given biofuel would include an
since scopes 2 and 3 are by definition indirect emissions, assessment of the GHG impact of the land-use changes asso-
constituting another organization’s direct scope 1). ciated with the generation of the biofuel. But calculating the
indirect GHG emissions from these land-use changes and
attributing them to specific fuels still presents significant
Scope 3: Other Indirect GHG Emissions methodological challenges. See Appendix C for more informa-
Scope 3 is an optional reporting category for this U.S. tion on calculating sequestered atmospheric carbon.
Public Sector Protocol that allows for the treatment of all
other indirect emissions. Scope 3 emissions are a conse-
quence of the activities of the organization but come activities. The forthcoming GHG Protocol Scope 3
from sources not owned or controlled by the organiza- Standard specifies procedures for comprehensively
tion. Some examples of scope 3 activities prominent in accounting and reporting scope 3 emissions and
government activities include emissions from employee organizations who wish to conduct an inventory in
commuting, business travel, and outsourced contractor conformance with this standard can do so separately.
26 CHAPTER 4
A
fter applying a consolidation approach, emissions sions from the use of refrigeration and air conditioning
from within the organizational boundary are then equipment; methane from solid waste and wastewater
categorized as direct or indirect. Organizations may treatment facilities; methane leakages from gas
further subdivide emissions data within scopes where this transport; and SF6 emissions from owned electricity
aids transparency or facilitates comparability over time. transformers and from leaking electrical equipment.
For example, they may subdivide data by facility, region,
• Less common but still significant, direct emissions may
routine versus non-routine operations, source type
include those from on-site landfills, composting, waste-
(stationary combustion, process, fugitive, etc.), and
water treatment plants and incinerators, laboratory
activity type (production of electricity, consumption of
activities, munitions firing, and organization-specific
electricity, generated or purchased electricity that is sold
activities (such as space shuttle launches).
to end users, etc.).
In addition to the six Kyoto Protocol gases, organizations

may also provide emissions data for other GHGs (e.g., S A L E O F O W N - G E N E R AT E D E L E C T R I C I T Y
Montreal Protocol gases) to give context to changes in Emissions associated with the sale of generated electricity
emission levels of Kyoto Protocol gases. Switching from to another organization are not deducted or “netted” from
a CFC to HFC, for example, will increase emissions of scope 1. This treatment of sold electricity is consistent
Kyoto Protocol gases. Information on emissions of GHGs with how other sold GHG intensive products are accounted
other than the six Kyoto Protocol gases may be reported for, e.g., emissions from the production of sold clinker by
separately from the three scopes in a GHG public report. a cement company or the production of sold scrap steel
by an iron and steel company are not subtracted from
their scope 1 emissions. Emissions associated with the
Scope 1: Direct GHG Emissions sale or transfer of generated electricity may additionally
Organizations report GHG emissions from sources they be reported in optional information (see Chapter 8).
control as scope 1. Direct GHG emissions are principally
the result of the following types of activities undertaken
by the organization: Scope 2: Electricity Indirect GHG Emissions
Organizations report the emissions from the generation
G
• Generation of electricity, heat, or steam. These
of purchased electricity, steam, or district heating/cooling
emissions result from combustion of fuels in
that is consumed in their owned or controlled equipment
stationary sources, e.g., boilers, furnaces, turbines,
U
or operations as scope 2. For many organizations,
and emergency generators.
purchased electricity represents one of the largest sources
• Physical or chemical processing.3 Most of these of GHG emissions and the most significant opportunity to
I
emissions result from the manufacture or processing reduce these emissions. Accounting for scope 2 emissions
of chemicals and materials (e.g., cement, aluminum, allows organizations to assess the risks and opportunities
D
adipic acid, ammonia manufacture, and waste associated with changing electricity and GHG emissions
processing) and are not typical of most public costs, in addition to providing information necessary for
sector organizations. some GHG reporting programs.
A
• Transportation of materials, products, waste, and Organizations can reduce their use of electricity by
employees. These emissions result from the combustion investing in energy-efficient technologies and energy
N
of fuels in organization-owned/controlled mobile conservation. Additionally, emerging green power markets

combustion sources (e.g., trucks, trains, ships, provide opportunities for some organizations to switch to
airplanes, buses, and cars). The CO2 from biofuel less GHG-intensive sources of electricity.5,6 Organizations
C
combustion is tracked separately from the scopes; can also install an efficient on-site co-generation plant,
see Chapter 8. particularly if it replaces the purchase of more GHG-
intensive electricity from the grid or electricity supplier.
E
• Fugitive emissions. These emissions result from inten-

Reporting of scope 2 emissions allows transparent
tional or unintentional releases, e.g., equipment leaks
accounting of GHG emissions and assists in identifying
from joints, seals, packing, and gaskets; methane
reduction opportunities associated with such emissions.
emissions from coal mines and venting4; HFC emis-
I N D I R E C T E M I S S I O N S A S S O C I AT E D
E
This approach ensures that there is no double counting

WITH TRANSMISSION AND DISTRIBUTION within scope 2 since only the T&D utility company
Electric utility companies often purchase electricity from accounts for indirect emissions associated with T&D
C
independent power generators or the grid and resell it to losses in scope 2. Another advantage is that it adds
end-consumers through a transmission and distribution simplicity to the reporting of scope 2 emissions by
(T&D) system.7 A portion of the electricity purchased by a allowing the use of commonly available emission factors
N
utility company is lost or “consumed” during its transmis- that in most cases do not include T&D losses. End
sion and distribution to end-consumers (see Box 4.2); this consumers may, however, report their indirect emissions
is usually referred to as T&D loss.
A
associated with T&D losses in scope 3 under the cate-

gory “generation of electricity consumed in a T&D
BOX 4.2 Electricity Balance system.” Appendix D provides more guidance on
D
accounting for emissions associated with T&D losses.

Purchased electricity consumed
by the utility company during T&D
G E N E R AT E D
=
I
+
ELECTRICITY O T H E R E L E C T R I C I T Y- R E L AT E D I N D I R E C T E M I S S I O N S
Purchased electricity consumed
Indirect emissions from activities upstream of an organi-
by end consumers
U
zation’s electricity provider (e.g., exploration, drilling,

Adapted from the GHG Protocol Corporate Standard, 2004 flaring, and transportation) are reported under scope 3.
Emissions from the generation of electricity that has been
G
Consistent with the scope 2 definition, emissions from purchased for resale to end-users are reported in scope 3.
the generation of purchased electricity consumed during Emissions from the generation of purchased electricity
T&D are reported in scope 2 by the organization that for resale to non-end users (e.g., electricity traders) may
owns or controls the T&D operation. End consumers of be reported separately in “optional information.”
the purchased electricity do not report indirect emis- The following two examples illustrate how GHG emis-
sions associated with T&D losses in scope 2 because sions from the generation, sale, and purchase of
they do not own or control the T&D operation where the electricity are accounted for.
electricity is consumed.
28 CHAPTER 4
FIGURE 4.3 GHG Accounting from the Sale and Purchase of Electricity
A’s Scope 1 C’s Scope 2 D’s Scope 2

emissions = 20t emissions = 1t emissions = 19t
➡
➡
➡ ➡ ➡
100 MWh 100 MWh 95 MWh
Generator A Electricity Utility End-user D

Trader B Company C
emission factor emission factor emission factor
= 0.2 t/MWh = 0.2 t/MWh
➡
➡
= 0.2 t/MWh
B’s Optional Information = 20t C’s Scope 3 emissions = 19t D’s Scope 3 emissions = 1t
Adapted from the GHG Protocol Corporate Standard, 2004
Example one (Figure 4.3): Company A is an independent Organization D reports all direct emissions from the
power generator that owns a power generation plant. co-generation unit under scope 1. Under optional
The power plant produces 100 megawatt hours (MWh) information, Organization D may also identify and
of electricity and releases 20 tonnes of emissions per report the amount of emissions from the co-generation
year. Company B is an electricity trader and has a unit that were associated with the electricity sold to
supply contract with company A to purchase all its Organization E. In turn, Organization E reports the
electricity. Company B resells the purchased electricity emissions from the electricity it purchased from
(100 MWh) to Company C, a utility that owns or Organization D as under scope 2. For more guidance,
controls the T&D system. Organization C consumes see Appendix D on accounting for indirect emissions
5 MWh of electricity in its T&D system and sells the from purchased electricity.
remaining 95 MWh to Organization D. Public sector
organization D is an end user who consumes the
Scope 3: Other Indirect GHG Emissions
G
purchased electricity (95 MWh) in its own operations.
Scope 3 is considered optional for reporting in confor-
• Company A reports its direct emissions from power
mance with this U.S. Public Sector Protocol, but certain
generation under scope 1.
U
voluntary or regulatory programs may require the
• Company B reports emissions from the purchased reporting of specific scope 3 categories. Scope 3
electricity sold to a non-end user as optional informa- provides an opportunity to be innovative in GHG I
tion separately from the scopes. management. Organizations may want to initially focus
on accounting for and reporting activities that are rele-
• Company C reports the indirect emissions from the
D
vant to their organizational mission and goals and for

generation of the part of the purchased electricity
which they have reliable information. Further, organiza-
that is sold to the end user under scope 3 and the
tions should consider their ability to influence scope 3
A
part of the purchased electricity that it consumes in

reductions and the costs associated with such efforts.
its T&D system under scope 2.
Given the substantial impact public sector organizations
• End user D reports the indirect emissions associated can have on indirect GHG emissions through the use of
N
with its own consumption of purchased electricity contractors, scope 3 emissions for the public sector may
under scope 2 and can optionally report emissions be quite significant. Accounting for scope 3 emissions
C
associated with upstream T&D losses in scope 3. highlights opportunities to reduce overall GHG emis-
Figure 4.3 shows the accounting of emissions sions through procurement and leasing contracts,
associated with these transactions. policies, and practices.
E
Example two: Public sector Organization D installs a The forthcoming GHG Protocol Scope 3 Standard will offer
co-generation unit and sells surplus electricity to a detailed guidance on comprehensively identifying scope 3
neighboring Organization E for its consumption. sources, determining which sources are relevant, and
E
specify accounting, calculation, and reporting require-

Scope 3 Emissions at National Parks
ments. However, the Corporate Standard and this U.S.
Public Sector Protocol state that scope 3 emissions may National Park Service authorities have the ability to affect direct
C
be reported optionally, and suggest that it is usually emissions from their own facilities and equipment, as well as the
valuable to focus on major scope 3 GHG-generating ability to affect emissions from their visitors, concessions, etc., both
activities. In addition, the forthcoming GHG Protocol within park boundaries and beyond. Parks that participate in the
N
Product Life Cycle Standard will provide guidelines for Climate Friendly Parks (CFP) Program—a joint program between EPA
conducting comprehensive life-cycle assessments of and the National Park Service—account not only for their own scope
A
specific products. 1 and scope 2 sources, but also for many scope 3 category sources,
Since organizations have discretion over which such as visitor vehicle travel, off-site landfilled solid waste and
categories they choose to report, scope 3 may not be wastewater treatment, commercial aircraft, and cruise ships and
D
comparable across organizations. This section provides concession operations among others.
a list of scope 3 categories common to government Visitor vehicle emissions within the park are a particularly important
I
activities and includes case studies on some of the source, since the national parks collectively receive over 250 million
categories. However, this does not constitute a visitors each year. In most cases, these visitors travel within the park
complete list of potential scope 3 sources. Some of in their own vehicles. For parks participating in the CFP Program, this
U
these activities are also included under scope 1 if the means that a significant amount (often greater than 90 percent) of
pertinent emission sources are owned or controlled by the GHG emissions that occur within park boundaries result from
G
the organization (e.g., if employee transportation is visitor vehicle travel. These scope 3 sources are a consequence of the
done in vehicles owned or controlled by the organiza- operation of the park, but are not from sources it owns or controls.
tion). To determine whether an activity falls within
scope 1 or scope 3, the organization should refer to CFP parks work with their surrounding communities, concessions,
the selected control approach used in setting its visitors, and contractors to plan ways to reduce emissions, set emis-
organizational boundaries. sion reduction targets, and implement mitigation actions. Through
these efforts, CFP parks have found that accounting for, and seeking
• Transport-related activities (in vehicles not owned or to reduce, scope 3 emissions provides opportunities for resource
controlled by the reporting organization) sharing, knowledge sharing, and community action.
• Employee business travel
• Employee commuting to and from work

• Leased assets and outsourced activities. Note:
• Transportation of purchased materials or goods emissions from such contractual arrangements are
only classified as scope 3 if the selected consolidation
• Upstream transportation of purchased fuels
approach (operational or financial control) does not
• Transportation of waste (by a contracted service). require their reporting. See the subsection on
FIGURE 4.4 Illustration of Value Chain Mapping
➡ ➡
VALUE CHAIN
➡ ➡
➡
Raw Materials
➡
Product Distribution
➡
Energy Activities
Reporting Product Use
➡ ➡ ➡
Capital Equipment Organization
Product Disposal
Transportation
Scope 2 and 3 Scope 1 Scope 3
Adapted from GHG Protocol Scope 3 Standard (Draft for Road Testing, January 2010).
30 CHAPTER 4
Emissions Accounting • Extraction and production associated with purchased

from Employee Business Travel materials and fuels.8
ACCOUNTING FOR SCOPE 3 EMISSIONS

When calculating the emissions of an organization, it can be easy to
Four general steps can be articulated in accounting for
overlook the day-to-day activities of office workers as a significant
scope 3 emissions:
contribution to the total GHG inventory. However, many of those
workers are not just sitting behind a desk; they are traveling across 1. Describe/map the value chain. The purpose of mapping
town for a meeting, around the country on an investigation, or maybe the value chain is to identify the full range of possible
even around the world on business. Employee business travel can be scope 3 categories before an organization determines
a significant source of an organization’s GHG emissions. which are most relevant and should be included in the
scope 3 inventory. This value chain represents all the
As an example, one section in a federal agency has about 600
activities upstream and downstream of the organization
employees who take approximately 3,000 trips per year. If each trip is
that contribute to, or are a consequence of, its opera-
estimated to involve about 2,000 miles of air travel, this section’s
tions (see Figure 4.4 below). Describing the value chain
annual GHG contribution from air business travel alone is over 1,000
might include listing all the suppliers, and inputs and
metric tons of CO2.
outputs related to the organization, also encompassing
The transportation sector accounted for 29 percent of the total U.S. the activities already tracked in scope 1 and scope 2.
energy consumption in 2007, with air travel responsible for over 3 For this step, the list of scope 3 categories given earlier
percent of the total. The U.S. government, projected to spend nearly can be used as a checklist.
$15 billion on travel and transport of persons in 2008, has significant
2. Determine which scope 3 categories are relevant.
purchasing power in this sector. Reporting emissions related to the
Only some types of upstream or downstream emissions
government employees’ travel could provide important data and
categories might be relevant to the organization. They
impetus to modify activities in an effort to reduce overall emissions.
may be relevant for several reasons:
Sources: • They are large (or believed to be large) relative to the
EPA (2009), Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2007, U.S.
Environmental Protection Agency. organization’s scope 1 and scope 2 emissions
Lewis, H. (2008), Green Meetings, Conferences, and Events: A Federal Procurement Strategy,
EPA presentation at the Federal Environmental Symposium. • Potential emissions reductions in these categories could
G
be undertaken or influenced by the organization.
• They contribute to the organization’s GHG risk expo-

• Waste treatment and disposal at sites owned or
U
sure (e.g., climate change related risks such as
controlled by third parties
financial, regulatory, supply chain, product and tech-
• Wastewater treatment
nology, compliance/litigation, reputational, and
I
• Disposal of waste generated in operations physical risks)
• Disposal of waste generated in the production of • They are deemed critical by key stakeholders (e.g.,
D
purchased materials and fuels feedback from constituents, suppliers, citizens,

or legislators)
• Disposal of purchased or sold products at the end of
A
their life. • They are an outsourced activity that previously

contributed significantly to an organization’s scope 1
• Electricity-related activities not included in scope 2
or scope 2 emissions, or represent an activity that
N
(see Appendix D)
comparable government organizations typically
• Extraction, production, and transportation of fuels
perform “internally” with own staff and facilities
consumed in the generation of electricity (either
C
purchased or own-generated by the reporting The following are examples of scope 3 activities that may
company) be relevant to organizations:
E
• Purchase of electricity that is sold to an end user • Organizations whose work involves a significant
(reported by a utility) amount of employee business travel may want to report
on related emissions.
• Generation of electricity that is consumed in a T&D
system (reported by end user).
E
4. Quantify scope 3 emissions. While the availability and

BOX 4.3 Principal-Agent Problems reliability of data, calculation tools, and commonly
in Leased Space accepted methodologies may influence which scope 3
C
Attributing responsibility for GHG emissions from leased assets activities are included in the inventory, it is accepted that
(and in particular, buildings) presents numerous challenges. It data accuracy may be lower. It may be more important to
is unavoidable that the “operation” and resulting GHG emis- understand the relative magnitude of and possible changes
N
sions of a building is shaped by both its infrastructure and to scope 3 activities. Emission estimates are acceptable as
equipment (the purview of the landlord) and its use (the activ- long as there is transparency with regard to the estimation
A
ities and consumption choices of the tenants). The approach, and the data used for the analysis are adequate
responsibility for reducing emissions may not always align with to support the objectives of the inventory. Verification of
the party that has the incentive – financial or otherwise—to scope 3 emissions is often difficult and may only be mean-
D
reduce emissions. The disconnections between users (“opera- ingful if data are of reliable quality.
tors”) and owners are known as “principal-agent problems” or
“split incentives,” and are acknowledged as one of the barriers
I
preventing greater uptake of energy efficiency improvements in Leased Assets

building infrastructure and product design. Most public organizations encounter leasing situations
U
as either a lessee or lessor of building space, vehicles,

While principal-agent problems may be impossible to avoid or equipment, and must decide how to account for and
entirely, they can be reduced by aligning the incentives as much report the GHG emissions associated with these assets.
G
as possible for both parties to make reductions. For example, A common leasing arrangement is for a single public
sub-metering and other mechanisms that isolate individual organization to lease and manage assets for multiple
tenant’s energy consumption can incentivize tenant responsi- other government organizations. The General Services
bility and help landlords identify priority areas for structural Administration (GSA) fulfills this role at the federal
upgrades. More fundamentally, ensuring that both landlords level, for example.
and tenants report emissions (in different scopes depending on
the lease type and consolidation approach chosen) can provide These leasing arrangements can be complex, and both
the means to track the impact of both efficiency and behavioral lessees and lessors contribute to the total emissions that
changes over time. are incurred from the leased asset (see Box 4.3).
For both the lessee or the lessor to account for emissions

• If fossil fuel or electricity is required to use any prod- from leased assets, the clearest approach is to first iden-
ucts produced by the organization, the resulting tify the types of leases maintained by the organization
emissions may be a relevant category to report. This (elaborated below), and then apply the selected consoli-
would be especially important if the organization can dation approaches (operational or financial control)
influence product design attributes (e.g., energy effi- mentioned in Chapter 3. Leases generally fall into one
ciency) or users’ behavior in ways that reduce GHG of two categories established by financial accounting:
emissions during the use of the products. capital leases and operating leases.
• If GHG-intensive materials (such as cement or steel) • Capital lease. This type of lease, often referred to as
are involved in the production of a significant amount a finance lease in the private sector, enables the lessee
of the supplies and materials used for an organiza- to operate an asset and also gives the lessee all the
tion’s activities, the organization may want to risks and rewards of owning the asset. Assets leased
examine whether there are opportunities to reduce under a capital lease are considered wholly owned
consumption of the product or to substitute with less assets in financial accounting and are recorded as
GHG-intensive materials. such on the balance sheet.
3. Identify and engage partners along the value chain.
Identify any partners that contribute potentially signifi- Under a capital lease, the tenant/lessee is considered
cant amounts of GHGs along the value chain (e.g., to have ownership and both financial and operational
constituents, suppliers, manufacturers, energy providers, control of the leased asset. Therefore, emissions asso-
etc.). This is important when trying to identify sources, ciated with fuel combustion should be categorized as
obtain relevant data, and calculate emissions. scope 1 (direct), and emissions associated with use of
32 CHAPTER 4
purchased electricity should be categorized as scope 2

(indirect), regardless of the organizational boundary
approach selected (see Table 4.1).9
The landlord/lessor does not have ownership or financial

or operational control of these assets. Therefore, the
associated emissions always are scope 3 (indirect) for
the lessor, regardless of the type of organizational
boundary approach used.
• Operating lease. This type of lease enables the lessee to

operate an asset, such as a building or vehicle, but does
not give the lessee any of the risks or rewards of owning
the asset. Any lease that is not a capital lease is an
operating lease.10 Government organizations working
through a central provider (such as the GSA) will most
often maintain some type of operating lease.
Under an operating lease, the tenant/lessee does not

have ownership or financial control but has operational
control of the leased asset. If the lessee uses the opera-
tional control approach, emissions associated with fuel
combustion should be categorized as scope 1 (direct),
and emissions associated with the use of purchased elec-
tricity should be categorized as scope 2 (indirect). But if
the lessee uses the financial control or equity approach,
G
TABLE 4.1 Emissions from Leased Assets: Leasing Agreements and Boundaries for Lessees and Lessors
TYPE OF LEASING ARRANGEMENT
U
BOUNDARY APPROACH CAPITAL LEASE O P E R AT I N G L E A S E
Operational Control Tenant/Lessee has operational control. I
• TENANT/LESSEE : Emissions associated with fuel combustion are scope 1 and with use of purchased
electricity are scope 2.a
D
• LANDLORD/LESSOR: Emissions associated with tenant’s fuel combustion and purchased electricity are scope 3.
A
Financial Control Tenant/Lessee has financial control or ownership. Landlord/lessor has financial control or ownership.
or Equity Share
• TENANT/LESSEE : Emissions associated with • TENANT/LESSEE : Emissions associated with fuel
N
fuel combustion are scope 1 and with use of combustion and with use of purchased electricity
purchased electricity are scope 2. are scope 3.
• LANDLORD/LESSOR: Emissions associated • LANDLORD/LESSOR: Emissions associated with

C
with tenant’s fuel combustion and purchased tenant’s fuel combustion are scope 1 and with
electricity are scope 3. use of purchased electricity are scope 2.
E
a
Some organizations may be able to demonstrate that they do not have operational control over a leased asset held under an operating lease. In these cases, the organization may report
emissions from the leased asset as scope 3, but must state clearly in its GHG inventory report the reason(s) why they do not have operational control. See section below on determining
control in centralized heat/cooling systems.
E
the emissions associated with fuel combustion and serving a multi-tenant building or set a building-wide
electricity use are categorized as scope 3. thermostat. As a result, the tenant/lessee may wish to
categorize the emissions from these centralized
C
Likewise, the landlord/lessor has ownership and finan- heating/cooling emissions as indirect (scope 3) rather
cial control of these assets but not operational than direct.
control. Therefore, if the operational control approach
N
This U.S. Public Sector Protocol recommends that emis-

is used, emissions from the tenant/lessee’s fuel
sions from centralized heating/cooling systems be
combustion and the use of purchased electricity will
classified as scope 1 under the operational control
A
always be scope 3 (indirect) for the lessor. But if the

approach, consistent with current best practices.
equity share or a financial control approach is used,
However, if the tenant/lessee can demonstrate that
the emissions associated with fuel combustion should
they do not have operational control in these situa-
D
be categorized as scope 1 (direct) and the emissions

tions, the inventory report should explain the reasons
associated with the use of purchased electricity should
and record the emissions as scope 3.
be categorized as scope 2 (indirect) for the lessor.
I
Scopes and Double Counting

U
MULTI-TENANT BUILDINGS
Concern is often expressed that accounting for indirect
For multi-tenant buildings, tenants are generally only
emissions will lead to double counting when two
required to account for emissions from their portion of
G
different organizations include the same emissions in

the leased building. Where energy use is tracked on an
their respective inventories. By definition, scope 2
individual basis (i.e., through sub-meters), emissions
emissions are “indirect” and reflect the electricity
from energy use in common spaces such as a lobby,
generator’s scope 1 emissions. Scope 3 captures all
elevators and shared conference spaces should be
emissions associated with upstream/downstream opera-
divided up proportionally among the tenants based on
tions and therefore will always be reflected as another
occupancy and floor space, and reported optionally
entity’s scope 1 or 2. The U.S. Public Sector Protocol is
under scope 3. Where energy use is only tracked on a
designed to prevent double counting of emissions
building-wide level, the general procedures for esti-
between different organizations within scope 1 and 2.
mating the organization’s relative share of overall
For example, the scope 1 emissions of Organization A
energy use recommend taking occupancy into account,
(generator of electricity) can be counted as the scope 2
so these common space emissions will already be incor-
emissions of Organization B (end user of electricity).
porated, unless responsibility for common space
However, Organization A’s scope 1 emissions cannot be
emissions is otherwise accounted for. See Chapter 6 for
counted as scope 1 by any other organization using the
further information on performing these calculations.
same consolidation approach as Organization A.
Similarly, the electricity consumed by Organization B
(end user) can only be categorized as scope 2 by
B O U N D A R Y- S E T T I N G W I T H C E N T R A L I Z E D
Organization B.
H E AT I N G / C O O L I N G S Y S T E M S I N L E A S E D B U I L D I N G S
As shown in Table 4.1, emissions from combustion (for Organizations do, however, need to ensure that emis-
example, natural gas burned in a boiler for building heat) sions are not double counted when emissions from
or fugitive emissions from an air-conditioning unit would multiple entities are consolidated within a single GHG
be considered the tenant’s direct scope 1 emissions under inventory. In general, the consistent application of
the recommended operational control approach, regard- either the control or equity share approach for defining
less of lease type. organizational boundaries allows only one organization
to exercise ownership of scope 1 or scope 2 emissions.
However, some organizations have interpreted their
control of a leased space to be limited to the contractual Double counting also needs to be avoided when
square footage denoted in their lease agreement. In the compiling national (country) inventories under the
case of centralized heating or cooling systems, the lessee Kyoto Protocol, but these are usually compiled via a
may feel that the operational control they exert is limited top-down exercise using national economic data, rather
as the landlord may maintain and operate equipment than aggregation of bottom-up organizational data from
34 CHAPTER 4
entity-wide inventories described in this U.S. Public Sector

Protocol. Compliance regimes are more likely to focus
on the “point of release” of emissions (i.e., direct or
G
scope 1 emissions) and/or indirect emissions from use of
electricity. For GHG risk management and voluntary
reporting, double counting is less important.
U
I
NOTES
1
The terms “direct” and “indirect” as used in this document should not be 6
This U.S. Public Sector Protocol recognizes the potential role green power
D
confused with their use in national GHG inventories where “direct” refers markets can play in GHG reduction strategies, but at this time does not
to the six Kyoto gases and “indirect” refers to the precursors nitrogen provide guidance on how such products should be reflected in an inven-
oxide (NOx), non-methane volatile organic compounds, and carbon tory.
monoxide.
A
7
A T&D system includes T&D lines and other T&D equipment (e.g., trans-
2
The term “electricity” is used in this chapter as shorthand for electricity, formers).
steam, and district heating/cooling. 8
“Purchased materials and fuels” are those purchased or otherwise
N
3
For some integrated manufacturing processes, such as ammonia manu- brought into the organizational boundary.
facture, it may not be possible to distinguish between GHG emissions 9
from the process and those from the production of electricity, heat, or For this discussion, we assume that most emissions that could be cate-
gorized as direct emissions are associated with fuel combustion.
C
steam.
However, organizations may also have other sources of emissions, such
4
The categorization of venting as a fugitive emission is consistent with as emissions from industrial processes or HFC emissions from refrigera-
IPCC 2006 Guidelines for National Greenhouse Gas Inventories. tion and air conditioning, which could also be categorized as direct
E
5
emissions. For these other potential sources of direct emissions, compa-
Green power includes renewable energy sources and specific clean nies should follow the leasing guidance described for fuel combustion.
energy technologies that reduce GHG emissions relative to other sources We have focused on fuel combustion in this chapter for simplicity.
of energy that supply the electric grid, e.g., solar photovoltaic panels,
geothermal energy, landfill gas, hydropower, and wind turbines. 10
Financial Accounting Standards Board, Statement of Financial
Accounting Standards, no. 13, “Accounting for Leases” (1976).
5 Tracking Emissions Over Time
D
R
A
D
N
A
T
S
What is a base year and why do I need one?
My emissions changed with alterations to the organization’s

structure. How do I account for these?
P ublic sector organizations often undergo significant reorganizations,
including the acquisition, elimination, reassignment, and merging of
existing programs or subordinate organizations. These changes can alter an organi-
zation’s fundamental structure, making meaningful comparisons of emissions over
time difficult. To maintain consistency over time—in other words, to keep comparing
“like with like”—historic emissions data may have to be adjusted or recalculated.
S T A N D A R D
G U I D A N C E
36
CHAPTER 5 Tracking Emissions Over Time 37
A meaningful and consistent comparison of emissions Recalculating Base Year Emissions

over time requires that public organizations set a Public organizations shall develop a base year emis-
performance datum with which to compare current sions recalculation policy, and clearly articulate the
emissions. This performance datum is referred to as basis and context for any such recalculation. If appli-
base year1 emissions. For consistent tracking of emis- cable, the policy shall state a “significance threshold”
sions over time, base year emissions may need to be to apply when deciding if base year emissions should
recalculated if a public organization undergoes signifi- be recalculated. “Significance threshold” is a qualita-
cant structural change such as reorganization, merger, tive or quantitative criterion used to define any
division, or consolidation where operations are reas- significant change to the data, inventory boundary,
signed from one reporting organization to another. The methods, or any other relevant factors relative to the
base year may also need to be adjusted if significant base year. The organization or overriding reporting
calculation or methodological improvements materi- program is responsible for determining and disclosing
alize. The first step in tracking emissions, however, is the “significance threshold” that triggers base year
the selection of a base year. emissions recalculation. The verifier is responsible for
confirming the organization’s adherence to the
threshold policy. The following cases shall trigger
Choosing a Base Year recalculation of base year emissions, if the stated
Public organizations shall choose and report a base significance threshold is met:
year for which verifiable emissions data are available
• Structural changes in the reporting organization that
and specify their reasons for choosing that particular
significantly impact its base year emissions. A struc-
year as the base year. In many voluntary reporting
tural change involves the transfer of control of
programs, the base year is the first year that a member
emissions-generating activities or operations from
submits a report. Most public organizations select a
one organization to another. While a single structural
single year as their base year. However, it is also
change might not significantly impact base year
possible to choose an average of annual emissions over
emissions, the cumulative effect of a number of minor
several consecutive years. For example, Chicago
structural changes can. Structural changes include
Climate Exchange members that joined during the first
the following:
S
period the program (Phase I) use average emissions
• Reorganization, division, or consolidation of organi-
from 1998–2001 as the base year reference for
zational activities
tracking reductions. A multiyear average may help
T
smooth out unusual fluctuations in GHG emissions that • Outsourcing or insourcing of activities.
would make a single year’s data unrepresentative of the
• Changes in calculation methodology or improvements
organization’s typical emissions profile. A
in the accuracy of emission factors or activity data that
The base year can also be used as a basis for setting and significantly impact the base year emissions estimate.
N
tracking progress towards a GHG target, in which case

• Discovery of significant errors or a number of cumu-
it is referred to as a target base year (see Chapter 10).
lative errors that are collectively significant.
D
In summary, base year emissions shall be retroactively

recalculated to reflect changes in the organization that
would otherwise compromise the consistency and rele-
A
vance of the reported GHG emissions information. Once

an organization has determined its policy on how it will
recalculate base year emissions, it shall apply this policy
R
in a consistent manner. For example, it shall recalculate

for both GHG emissions increases and decreases.
D
Tracking Emissions Over Time
S
E
election and recalculation of a base year should for reporting. Calendar year reporting is consistent with
relate to the organizational goals and the partic- most voluntary GHG reporting programs and UNFCCC
ular context of the organization: reporting standards. While using the same reporting
C
• A public organization subject to a mandatory GHG period for both financial and GHG emissions accounting
reporting program may face external rules governing will reduce data collection and reporting burdens, doing
the choice and recalculation of base year emissions. so may not always be possible. For instance, public
N
sector organizations may have to report their GHG emis-

• For voluntary public reporting or internal manage-
sions to voluntary or mandatory reporting programs on a
ment goals, the organization may follow the standard
A
calendar year basis and their utility or energy data on a

and guidelines recommended in this protocol, or it
fiscal year basis. Such issues should be addressed early
may develop its own approach, which should be
on in the design of a GHG inventory.
followed consistently.
D
Significance Thresholds for Recalculations

I
Choosing a Base Year

Whether base year emissions are recalculated depends
Public organizations should choose as a base year the
on the significance of the changes. The determination of
U
earliest relevant point in time for which they have reli-

a significant change may require considering the cumu-
able data. National inventories prepared in accordance
lative effect on base year emissions of a number of small
with the Kyoto Protocol set 1990 as a base year, but
G
consolidations or divisions. The U.S. Public Sector Protocol

obtaining reliable and verifiable data for an historical
makes no specific recommendations as to what consti-
base year this far in the past can be very challenging.
tutes “significant.” However, some GHG reporting
Other organizations will have to use a base year
programs do specify numerical significance thresholds.
prescribed through legislation, regulation, or executive
For example, The Climate Registry establishes a cumula-
order. For example, EO 13514 specifies fiscal year 2008
tive change of five percent or larger in an entity’s total
as the base year for federal GHG reduction goals.
base year emission as the trigger for recalculation of
Some public organizations may require multiple base base year emissions. If the cumulative change in base
years due to the cyclical nature of their operations. A year emissions due to any of the earlier discussed factors
government census bureau, for instance, may utilize is more than the significance threshold, the base year
vehicle fleets and offices to undertake a periodic census, emissions should be recalculated.
but then relinquish these resources following the
completion of the census. This bureau may therefore
need two base years, one with and one without the
Base Year Emissions
census activities. Other organizations with non-cyclical,
Recalculation for Structural Changes
but highly variable emissions may require the use of an
Structural changes trigger recalculation because they
average of emissions over multiple but consecutive
merely transfer emissions from one organization to
years. For example, an emergency response organiza-
another without any change in emissions released to the
tion may want to create a base year using an average
atmosphere. For instance, a consolidation or division of
emissions rate across multiple consecutive years to
subordinate organizations only transfers existing GHG
account for unusually large and non-routine activities
emissions from one organization’s inventory to another.
in any given year. Performance ratios can also serve
Examples of structural changes that would require the
to normalize emissions by set metrics (for example,
recalculation of base year emissions include:
emissions per emergency response incident), to provide
• The consolidation of school districts
context to measuring these non-routine activities.
However, most emissions trading and registry programs • Significant reorganization of departments or creation
require a fixed base year. of new organizations or commissions.
In choosing a base year and, more generally, in designing Figures 5.1 and 5.2 illustrate the effect of structural
a GHG accounting system, public organizations should changes and the application of this standard on recalcu-
choose between fiscal year or calendar year as the basis lation of base year emissions.
38 CHAPTER 5
FIGURE 5.1 Base Year Emissions Recalculation for Consolidation
Department A
Facility C Department B
emissions 15 20 20
Department C
➡
Figures reported in respective years Recalculated figures
80 80
GAMMA EMISSIONS (TONS CO 2 )
GAMMA EMISSIONS (TONS CO 2 )

20 20 20
60 60 15
30 30 30 30
40 40
25 25
20 20
30 30 30 30
25 25
0 0
Year 1 Year 2 Year 3 Year 1 Year 2 Year 3
(Base Year)
(Increase in (Gamma (Base Year)
Activities) Acquires C)
Agency Gamma consists of two departments (A and B). In its base year (year one), each department emits 25 tons CO2. In year two, the
agency undergoes organic growth, leading to an increase in emissions to 30 tons CO2 per department, i.e., 60 tons CO2 in total. The base
year emissions are not recalculated in this case. At the beginning of year three, the agency is reorganized and acquires Department C from
another agency. The annual emissions of Department C in year one were 15 tons CO2 and 20 ton CO2 in year two and three. The total emis-
sions of Agency Gamma in year three, including Department C, are therefore 80 tons CO2. To maintain consistency over time, the agency
recalculates its base year emissions to take into account the addition of Department C. The base year emissions increase by 15 tons CO2
G
–the quantity of emissions produced by Department C in Gamma’s base year. The recalculated base year emissions are 65 tons CO2.
Gamma also (optionally) reports 80 tons CO2 as the recalculated emissions for year two.
U
Timing of Recalculations Recalculations for Changes in Calculation

for Structural Changes Method or Improvements in Data Accuracy I
When significant structural changes occur during the A public organization might report the same sources of
middle of the reporting year, the base year emissions GHG emissions as in previous years, but measure or
D
should be recalculated for the entire year, rather than calculate emissions differently. For example, an organiza-
only for the remainder of the reporting period after the tion might have used a national electric power generation
A
structural change occurred. This avoids having to recal- emissions factor to estimate scope 2 emissions in year
culate base year emissions again in the succeeding year. one of reporting. In later years, it may obtain more accu-
Similarly, current year emissions should be recalculated rate region-specific emission factors (for the current as
N
for the entire year to maintain consistency with the base well as past years) that better reflect the GHG emissions
year recalculation. If it is not possible to recalculate in associated with the electricity it has purchased. If the
the year of the structural change (e.g., due to lack of differences in emissions resulting from such a change
C
data for an acquired organization), it may be done the exceed the defined significance threshold, historic data
following year.2 are recalculated applying the new data or method.
E
Sometimes the more accurate data points may not be

available for all past years. The organization may then
have to backcast these data points; alternatively, the
change in data source may be acknowledged without
FIGURE 5.2 Base Year Emissions Recalculation for Realignment of Operations

E
Department A
C
30 Department B
Department C
Figures reported in respective years Recalculated figures
N
➡
80 80
BETA EMISSIONS (TONS CO 2 )
BETA EMISSIONS (TONS CO 2 )

A
60 30 30 60
25
D
40 40
30 30 30 30
25 25
I
20 20
25 30 30 25 30 30
U
0 0
(Base Year) (Increase in (Beta Loses C) (Base Year)
G
Activities)
Agency Beta consists of three departments (A, B, and C). Each department emits 25 tons CO2 and the total emissions for the agency are
75 tons CO2 in the base year (year one). In year two, the output of the agency grows, leading to an increase in emissions to 30 tons CO2 per
department, i.e., 90 tons CO2 in total. At the beginning of year three, Agency Beta is reorganized and “loses” Department C to another
agency. The Agency Beta annual emissions are now 60 tons, representing an apparent reduction of 15 tons relative to its base year emis-
sions. However, to maintain consistency over time, the agency recalculates its base year emissions to take into account the divestment of
Department C. The base year emissions are lowered by 25 tons CO2 –the quantity of emissions produced by the Department C in the base
year. The recalculated base year emissions are 50 tons CO2, and the emissions of Agency Beta are seen to have risen by 10 tons CO2 over
the three years. Beta (optionally) reports 60 tons CO2 as the recalculated emissions for year two.
recalculation. This acknowledgment should be made in • All actual emissions as reported in respective years
the report each year to enhance transparency; otherwise, in the past, i.e., the figures that have not been recalcu-
new users of the report in years after the change may lated. Reporting the original figures in addition to the
make incorrect assumptions about the performance of recalculated figures contributes to transparency
the organization. because it illustrates the evolution of the organiza-
tion’s structure over time.
Any changes in emissions factors or activity data that
reflect real changes in emissions (i.e., changes in fuel
type or technology) do not trigger a recalculation.
No Recalculation for Base Year Anomalies
As an organization tracks its GHG emissions over time,
it may experience anomalous situations that temporarily
Optional Reporting for Recalculations cause its emissions to increase or decrease. Table 5.1
Optional information that public organizations may provides three examples of such anomalies, which will
report on recalculations includes the following: be familiar to public sector managers. While such
anomalies should not lead to the recalculation of base
• The recalculated GHG emissions data for all years
year emissions, they do have important implications for
between the base year and the reporting year if new
the type of base year an organization should select. For
data or methodologies make this possible.
instance, the periodic changes in emissions associated
40 CHAPTER 5
TABLE 5.1 Anomalous Conditions and Base Year Decisions

T Y P E O F A N O M A LY DEFINITION EXAMPLE P O T E N T I A L S O L U T I O N A N D I M P L I C AT I O N
Discontinuous Significant and sudden NASA’s transition from the Use original base year and recognize that the
change (either up or down) “Space Shuttle Program” to new mission has led to increased (or
in GHG emissions due to a the expanded operational scale decreased) emissions.
major change in the organi- and launch tempo of the
zation’s mission. “Constellation Program for
Human Space Exploration.”
Periodic Temporary (repeating) U.S. Census Bureau’s Base year consists of two separate years, one
increase in GHG emissions acquiring new temporary with and one without census. Comparison to
due to a foreseen activity office space and vehicles the appropriate base year shows real increases
change within an organiza- to conduct the U.S. nation- or decreases.
tional mission. wide census every 10 years.
Episodic Temporary increase in GHG U.S. Federal Emergency • Use original base year and recognize that
emissions due to an unfore- Management Agency (FEMA) the increase is real, even if temporary.
seen event outside the responding to an unusually However, if base year is an anomalously
organization’s control. high number of national large disaster year, this produces apparent
emergencies in a particularly decreases that are misleading.
active season.
• Multi-year base periods may be particularly
useful in averaging over the effects of such
episodic anomalies.
with cyclical census activities may require the use of BOX 5.1 Definitions of Insourcing and Outsourcing
multiple base years (see Table 5.1). Also, instead of for the Purposes of GHG Reporting
G
adopting individual base years, organizations may use a
base period, which represents the average of emissions Outsourcing: Contracting out to other entities activities that
were previously performed by the reporting organization.
U
over a continuous multi-year period.
Regardless of the solution chosen, organizations Insourcing: The inverse of outsourcing; that is, the reporting
must provide a justification for making this choice organization performing activities previously contracted out to I
and a description of the anomalies in their GHG other entities.
emissions reports.
D
Figure 5.3 illustrates a situation in which no recalcula-

tion of base year emissions is required because the
No Base Year Emissions Recalculations for acquired facility came into existence after the base year.
A
Operations that Did Not Exist in the Base Year

Base year emissions are not recalculated if the organiza-
No Recalculation for Expansion,
N
tion makes an acquisition of operations that did not exist

in its base year, or takes back (insources) previously Contraction, or Closure
outsourced operations. (See Box 5.1 for definitions of Base year emissions and any historic data are not recal-
C
insourcing/outsourcing.) culated for expansion, contraction, or closure. Expansion

includes new or increased emissions from new regulatory
There may only be a recalculation of historic data back responsibilities or increased operations, often accompa-
E
to the year in which the acquired operations came into nied by an increase in organizational budget. Sudden
existence. The same applies to cases where the organiza- expansions or contractions may appear as historical
tion loses ownership of (or outsources) operations that anomalies, but because they represent a substantive
did not exist in the base year. change in operations, the base year emissions should not
FIGURE 5.3. Acquisition of Operations that Came Into Existence after Base Year
E
Department A
C
15 Department B
20
Department C
Figures reported in respective years Recalculated Figures
N
➡
80 80
OMEGA EMISSIONS (TONS CO 2 )
OMEGA EMISSIONS (TONS CO 2 )

A
60 20 60 20
15
D
40 30 40 30
30 30
25 25
I
20 20
25 30 30 25 30 30
U
0 0
(Base Year) (Increase in (Omega
G
Activities) Acquires C)
Agency Omega consists of two departments (A and B). In its base year (year one), the agency emits 50 tons CO2. In year two, the agency
undergoes organic growth, leading to an increase in emissions to 30 tons CO2 per department, i.e., 60 tons CO2 in total. The base year
emissions are not recalculated in this case. At the beginning of year three, omega acquires a Department C from another agency.
Department C came into existence in year two, its emissions being 15 tons CO2 in year two and 20 tons CO2 in year three. The total emis-
sions of agency Omega in year three, including Department C, are therefore 80 tons CO2. In this acquisition case, the base year emissions
of agency Omega do not change because the acquired Department C did not exist in year one, the base year of Omega. The base year emis-
sions of Omega therefore remain at 50 tons CO2. Omega (optionally) reports 75 tons as the recalculated figure for year two emissions.
be recalculated. Expansion does not include subsuming recorded the emissions in the required scope 2 category;
another organization’s existing emissions through reor- but insourcing that service and producing electricity
ganization. Closures should be considered as reductions onsite from burning fuel such as natural gas, for
in emissions against a base year, and so they do not example, incurs scope 1 emissions. This does not trigger
trigger base year recalculations. The rationale for this is base-year-emissions recalculation, since the emissions
that expansion or contraction results in an actual change associated with the organization’s power needs are still
of emissions to the atmosphere and therefore needs to be reflected in the inventory, but simply in different scopes.
counted as an increase or decrease in the organization’s These changes should be documented in the overall
emissions profile over time. report to ensure transparency.
However, because activities falling within the scope 3

categories are optional to report, there may be
When to Recalculate insourced operations that were not previously reported,
for Outsourcing or Insourcing or outsourced operations that the organization chooses
Structural changes due to outsourcing or insourcing do not to track in scope 3 in its current inventory. Here,
not trigger base year emissions recalculation if the emis- outsourcing or insourcing can trigger a base year emis-
sions are still reflected in the inventory under a different sions recalculation, since those activities may not be
scope (see Table 5.2). For example, an organization may recorded in either the base year inventory or the current
have previously purchased electricity from the grid and reporting year inventory. For example, an organization
42 CHAPTER 5
TABLE 5.2 Impact of Outsourcing and Insourcing on Base Year Recalculations

ACTION HOW RECORDED IN CURRENT HOW RECORDED R E C A L C U L AT I O N O F B A S E
INVENTORY, AFTER THE IN THE BASE YEAR EMISSIONS?
OUTSOURCING/INSOURCING? YEAR INVENTORY?
OUTSOURCED Scope 3 Scope 1 and 2 No
EXAMPLE:
Transportation of goods and Activity did not exist in
services previously conducted
with organization-owned base year
vehicles now contracted out
to private company Not tracked in scope 3 Scope 1 and 2 Yes, if passes significance threshold
– considered a “structural change”
Activity did not exist in No

base year
INSOURCED Scope 1 and scope 2 Scope 3 No

EXAMPLE:
Administrative office services Not tracked in scope 3 Yes if passes significance threshold
previously contracted out – considered a “structural change”
to private management
company now carried out by Activity did not exist in the No
government organization
(emissions included building base year
energy and heat)
that previously carried out transportation for its prod-

ucts would have incurred scope 1 emissions from vehicle
fuel combustion. It may decide to outsource that activity
to a logistics firm, but choose not to track those emis-
sions under the scope 3 category. A recalculation of
G
base year is appropriate here, since the outsourced
activity is not captured anywhere in the current year’s
U
inventory, making the current year’s emissions appear
disproportionately low.
For reporting or compliance purposes, an organization I

might decide to track emissions over time separately for
different scopes. In such cases, separate base years
D
could be established for each scope, and the base year

emissions would be recalculated for any outsourcing or
insourcing of activities.
A
NOTES
1
“Base year” differs from “baseline,” which is mostly used in the context
N
of project-based accounting. Base year emissions refer to actual emis-

sions in a year identified as a reference year to which subsequent
annual emissions will be compared. A baseline is a hypothetical
C
scenario for what GHG emissions would have been in the absence of a
GHG reduction project or activity. However, many reporting programs use
these terms interchangeably, and reporting organizations should be
clear on which definition is being referenced.
E
2
For more information on the timing of base year emissions recalcula-
tions, see the guidance document “Base year recalculation
methodologies for structural changes” on the GHG Protocol website
(www.ghgprotocol.org/calculation-tools/all-tools).
6 Identifying and Calculating GHG Emissions
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C
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D
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G
How do I identify and calculate my organization’s

emission sources?
What kinds of tools are there to help me calculate

emissions?
What data collection activities and data management

issues do my facilities have to deal with?
O nce the inventory boundary has been established, public
organizations generally calculate GHG emissions using the
following five steps:

G U I D A N C E
44
CHAPTER 6 Identifying and Calculating GHG Emissions 45
FIGURE 6.1
1. Identify GHG emissions sources. Steps in Identifying and Calculating GHG Emissions
2. Select a GHG emissions calculation approach.
Identify Sources
3. Collect activity data and choose emission factors.
4. Apply calculation tools. Select Calculation Approach
5. Roll up GHG emissions data to the relevant organiza-

tional or headquarters level. Collect Data and Choose Emission Factors
This chapter does not identify specific methodologies or
equations by which emissions must be calculated, but Apply Calculation Tools
only describes the steps necessary in the process.
Appendix A offers a list of GHG reporting programs,
most of which have accompanying methodologies and Roll-up Data to Corporate Level
calculation/reporting tools. This is not a comprehensive
list, and government organizations may be directed to Adapted from the GHG Protocol Corporate Standard, 2004
use specific calculation or reporting tools. The GHG

Protocol Initiative also maintains a set of calculation The GHG Protocol Initiative calculation tools are organ-
tools available on the GHG Protocol Initiative website ized on the basis of these categories. Table 6.1 shows a
at www.ghgprotocol.org. sample of GHG emissions from typical public sector
operations, although some governmental organizations
will have industrial operations not listed here. Appendix
Identify GHG Emissions Sources E provides an overview of direct and indirect GHG emis-
from Government Operations sions sources organized by activity and scopes that may
The first of the five steps in calculating an organization’s be used as an initial guide to identify major GHG emis-
emissions, as outlined in Figure 6.1, is to identify GHG sion sources in public organizations.
sources within the organization’s boundaries. Direct
(Scope 1) GHG emissions from government operations
G
typically occur from the following source categories: IDENTIFY SCOPE 1 EMISSIONS
• Stationary combustion: combustion of fuels in As a first step, a public organization should undertake
U
stationary equipment such as boilers, furnaces, burners, an exercise to identify its direct (scope 1) emission
turbines, heaters, incinerators, engines, and flares. sources in each of the four source categories listed
above. Process emissions are usually only relevant to I
• Mobile combustion: combustion of fuels in transporta- certain industry sectors such as oil and gas, aluminum,
tion devices such as automobiles, trucks, buses, trains, and cement. Public organizations that generate process
airplanes, boats, ships, barges, and vessels.
D
emissions or that own or control a power production

• Process emissions: a range of emissions from physical facility, such as defense facilities, will likely have direct
or chemical processes such as laboratory activities and emissions from all the main source categories. Office-
A
weapons production. based public organizations may not have any direct GHG
emissions except in cases where they own or operate
• Fugitive emissions: intentional and unintentional vehicles, combustion devices, or refrigeration and air-
N
releases, such as equipment leaks from joints, seals, conditioning equipment.

packing, and gaskets; HFC or PFC emissions from the
use of refrigeration and air conditioning equipment;
C
methane emissions from coal mines and venting;1 IDENTIFY SCOPE 2 EMISSIONS
methane leakages from gas transport; SF6 emissions The next step is to identify indirect emission sources
E
from owned electricity transformers; as well as fugi- from the consumption of purchased electricity, heat, or
tive emissions from detonation and firing of munitions, steam. Almost all public organizations generate indirect
rocket firing, coal piles, wastewater treatment, cooling emissions due to the purchase of electricity for use in
towers, and gas processing facilities. their processes or services.
Identifying and Calculating GHG Emissions
TABLE 6.1 Illustrative Emissions Sources Associated with Public Sector Operations
E
EMISSION SOURCE TYPE POSSIBLE DATA NEEDS POTENTIAL DATA SOURCE
Buildings S, P, F 1) For stationary combustion sources: amounts of natural gas and other • Utility provider that
(Government- owned, fuels consumed (CO2, CH4, and N2O) transmits the power
C
operated or occupied 2) For electricity consumption: amount of electricity purchased from the (e.g., investor-owned
facilities) grid (CO2, CH4, and N2O) utility, municipal utility)
3) Amount of imported steam or district heating or cooling (CO2, CH4, • Accounts payable
N
and N2O) • Property

4) For refrigeration and heating, ventilation, and air management
A
conditioning (HVAC) systems: type of refrigerants, type and quantities • HVAC maintenance
of air conditioning (A/C) equipment, total refrigerant charge, and contract manager
annual leak rates (HFCs and PFCs)
D
Road and marine vehicle M, F 1) Fuel consumption or mileage data by vehicle, vehicle type, and • Fleet management
and aircraft fleets vehicle year (CO2, CH4, and N2O) • Accounts payable
(Vehicles in organiza- 2) For vehicle A/C systems: type of refrigerants, number and type of vehi-
I
tion-managed fleet) cles in fleet, total refrigerant charge, and annual leak rates (HFCs)
Water and Sewage S,P, F 1) See buildings • Utility provider that
U
Treatment and pumping 2) Information on the volume and composition of water/sewage treated transmits the power
(at treatment facility) at water/sewage treatment plants and type of treatment technologies (e.g., investor-owned
(CH4 and N2O) utility, municipal utility)
G
• Accounts Payable
• Public Works Dept
• Municipal Utility District
(Water District)
Solid Waste Facilities F 1) See fleets (waste hauling) • Utility provider that
(Landfill) 2) Information on the total amount of waste deposited annually, transmits the power
amount of CH4 flared or used for energy, and amount of CH4 oxidized (e.g., investor-owned
in landfills utility, municipal utility)
3) Information about the landfill operation • Public Works Dept
Stationary combustion S 1) Amount of fuel consumed (CO2, CH4, and N2O) • Bulk Fuel Purchases
equipment • Maintenance/testing
(including power plants records
and generators)
Fire Protection S, M, F 1) See buildings • Maintenance records
(Vehicles, fire suppres- 2) See fleets • Coolant purchase records
sion systems) 3) For fire suppression systems: type of suppressants, number and type
of vehicles in fleet, total charge, and annual leak rates (HFCs)
Road Construction S, M, P 1) See buildings • Materials purchase
(Vehicles, cement, and 2) See fleets records
asphalt use) 3) Data on cement production
4) See parks and lands (soils and forests)
5) Traffic lights and other signal/lighting equipment
Laboratories S, F 1) See buildings • Bulk Fuel Records
2) Gases for testing: N2O, HFCs, PFCs.
TABLE 6.1 CONTINUES NEXT PAGE
46 CHAPTER 6
TABLE 6.1 Illustrative Emissions Sources Associated with Public Sector Operations ( C O N T I N U E D )
EMISSION SOURCE TYPE POSSIBLE DATA NEEDS POTENTIAL DATA SOURCE
Parks and lands S, F 1) See buildings • Fleet management

2) See fleets • Fish stock and food
3) Fish hatcheries: potential N2O and potential CH4 from fish food purchase records
4) Soils: CO2 emissions (and removals) and N2O emissions • Land management
5) Forests: CO2 emissions and removals associated with changes in records or surveys
above-ground forest stocks
6) Off-road mobile sources (snowmobiles, lawnmowers, ATVs)
Other S, M, F Examples include: • Dependent on
(Emissions that may 1) Fuel consumption and hours of use for portable equipment such as emissions source
not be captured in lawnmowers, line trimmers, leaf blowers, forklifts, etc. • Air permits
above categories) 2) Data to calculate emissions of PFCs for fire suppression systems • Maintenance records
Note: S = stationary emissions; M = mobile emissions; P = process emissions; F = fugitive emissions

Adapted from The Climate Registry, State Government Emissions Inventory Guide, http://www.theclimateregistry.org/downloads/State_Government_GHG_Sources.pdf
IDENTIFY SCOPE 3 EMISSIONS

This optional step involves identification of other indirect BOX 6.1 Example Application of Emissions Factors
emissions from an organization’s upstream and down- Emission factor (tons of CO 2e/kWh)
EMISSIONS
stream activities; for government organizations, these
(tons of CO 2e)
= x
can include emissions from outsourced or contracted Activity data (kWh)
services that were not included in scope 1 or scope 2.
The inclusion of scope 3 emissions allows public organi- measure of activity; for example, electricity emission
zations to expand their inventory boundary along their factors are expressed in tons of CO2 equivalent per kilo-
value chain, providing a broad overview of linkages watt-hour. These emission factors are then applied to the
(such as inter-organization management of shared appropriate activity data (such as kilowatt-hours of elec-
G
resources) that offer opportunities for significant GHG tricity) in order to calculate the emissions resulting from
emissions reductions. See Chapter 4 for an overview of the activity (see Box 6.1).
activities that can generate GHG emissions along an
U
In many cases, accurate emissions can be calculated
organization’s value chain. from fuel use data. Even small users usually know the
amount of fuel consumed and have access to data on the
I
carbon content of the fuel through default carbon
Select a Calculation Approach content coefficients or through more accurate periodic
The IPCC guidelines (IPCC, 2006) refer to a hierarchy fuel sampling. Public organizations should use the most
D
of calculation approaches and techniques, ranging from accurate calculation approach available to them and
direct monitoring to the application of generic emission appropriate for their reporting context.
factors. The most accurate GHG emission data can be
A
obtained through direct measurement by monitoring

concentration and flow rate (with technology commonly Collect Activity Data
N
known as continuous emissions monitoring, or CEM), and Choose Emission Factors

but this approach is not commonly available or practical For most organizations, scope 1 GHG emissions are
for all organizations. Emissions can also be calculated calculated on the basis of the purchased (or consumed)
C
on a mass balance or stoichiometric basis specific to a quantities of commercial fuels (such as natural gas,
facility or process, based on the quantities of chemical vehicle fuels, and heating oil) using published emissions
inputs and outputs. However, the most common
E
factors. Special attention is needed when calculating and

approach for calculating GHG emissions is through the categorizing the emissions from biofuels, particularly
application of documented emission factors. These blended fuels (see Box 6.2). Much of the information
factors are calculated ratios relating GHG emissions to a required to complete the inventory may already be avail-
E
able in other data bases maintained by the organization.

BOX 6.2 Calculating Emissions from Biofuels For example, U.S. federal agencies are required to
measure and report annually their facility and vehicle
C
Biofuels are alternative, non-petroleum fuels made from renew-

fleet energy use to the Federal Energy Management
able biological material. One common biofuel is biodiesel,
Program to satisfy the requirements of the Energy Policy
crafted from vegetable oil and animal fats. Pure biodiesel, also
Act of 2005 and EO 13423. Coordinating with the
N
known as B100, is often combined with various amounts of

parties responsible for such data may simplify reporting
petro-diesel to create a blended product. A common blend, B20,
and avoid unnecessary duplication of effort. However,
consists of 20 percent biodiesel and 80 percent petro-diesel.
A
some organizations may have difficulty gathering suffi-

Such intermingling of fuels complicates the accounting of GHG
ciently disaggregated data to allow for inventory
emissions. In order to calculate B20’s combustion emissions, a
calculations at the appropriate level; in these cases,
D
percentage breakdown into its fuel constituents (i.e., petro-

organizations must clearly identify limitations on data in
diesel & pure biodiesel) is required. The N20, CH4, and CO2
the inventory report.
emissions from the 80% petro-diesel portion should all be
I
reported under scope 1 within the appropriate organizational Some public organizations (e.g., DoD and NASA) have
boundaries. However, combustion of the 20% biodiesel is industrial operations and operate their own power gener-
accounted for in two places: the CH4 and N2O are reported in ation facilities. Organizations should seek guidance from
U
scope 1, and the CO2 is separately reported “biogenic” emissions sector-specific guidelines, protocols, and studies to
category. See Chapter 4 for more information. ensure that they use or develop appropriate emissions
G
factors for these unique emission sources.

B20 Scope 1 Emissions Biogenic Emissions
]
CO2 Scope 2 GHG emissions are primarily calculated from

metered electricity consumption and supplier-specific,
N20
local grid, or other published emission factors. Scope 3
CH4 GHG emissions are primarily calculated from activity
N20 data such as fuel use or passenger miles and published
CH4 or third-party emission factors. In most cases, if
source- or facility-specific emission factors are avail-
CO2
able, they are preferable to more generic or general
emission factors. The forthcoming GHG Protocol Scope 3
48 CHAPTER 6
For these reasons, the U.S. Public Sector Protocol does not
NREL: Calculating Emissions specify the use of particular emission factors, but encour-
in Leased Spaces ages inventorying organizations to carefully select those
The National Renewable Energy Laboratory (NREL) has been that will best represent a given situation. The GHG
reporting its GHG emissions since 2003 as a partner in the EPA Protocol Initiative maintains a suite of calculation tools
Climate Leaders program. NREL's inventory is composed of based on widely-accepted emission factors, which can
several sites in Colorado. The main site on South Table Mountain offer organizations a place to start. Regulatory or volun-
(STM) is composed of buildings owned, built, and controlled by tary programs will usually specify which emission factors
NREL. Each building has data acquisition systems so utility data their reporting members should use.
can be tracked at the building level and reported in NREL’s scope
1 and scope 2 emissions. This is also the case with the National
Wind Technology Center, which is located about 30 minutes north A C T I V I T Y D AT A F O R L E A S E D S P A C E S
of the STM site. Energy bill/meter records that track the consumption of
electricity and/or heat by individual users will provide
The laboratory does lease space for some of its administrative the most specific activity data for GHG emissions calcu-
and non-research offices, and emissions from natural gas and lations. However, collecting energy use data at this level
electricity use in these leased facilities are calculated based on is not always possible, particularly in multi-tenant leased
the percentage of the building area occupied by NREL. Emissions facilities that do not have sub-meters to track individual
from natural gas and electricity are reported in NREL’s scope 1 tenant energy use. If total building energy use is known,
emissions and scope 2 emissions, respectively. To account for the then approximate activity data for electricity use may be
energy usage and the requisite GHG emissions in the leased employed, including:
space, NREL uses the following formula:
• Building-specific estimation, where the building’s total
NREL electric = (NREL leased office space area/total building energy use is divided by the portion of the total building
area) x (1/occupancy rate) x electric bill for building area the organization occupies. For buildings with less
Then: NREL GHGs = NREL electric x eGrid factors for the appro- than 100% occupancy, the total building energy use is
priate region divided by the occupancy rate to more accurately
capture the tenant’s total portion of emissions.
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NREL is currently constructing new office buildings on the STM
site, mitigating its need for leased office space and providing • Similar building/facility estimation, where data is
opportunities to implement energy-efficient design features. In extrapolated from other similar buildings/facilities
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order to help manage traffic on the STM site and to cut down on owned by the reporting organization. This method
its commuter emissions, the laboratory is piloting a telecom- should only be used if the reporting organization has
muting plan for administrative staff. multiple buildings/facilities of a similar type, with I
similar energy use patterns, and is able to obtain accu-
rate, reliable energy use data for some of them using
Standard provides further guidance on identifying and
D
actual energy/fuel use records.

calculating these emissions.
• Generic building space data method, using default
The U.S. Public Sector Protocol recognizes that numerous
A
data from a published source on energy use per area of

sources of emissions factors for a wide range of emissions
generic building space in a particular country. This
sources exist, and some are better developed and more
method is only recommended as a last resort that
N
widely recognized than others. Most often, this is due to

serves as a very rough estimate that may be signifi-
the fact that the science behind the factors is evolving at
cantly inaccurate.
different rates in different sectors: for example, emissions
C
factors for power production are generally well-estab- For multi-tenant buildings, tenants are required to
lished, while those for CH4 released from composting are account for emissions only from their leased space, as
less so. Even some emission factors for the same sector determined by building area and occupancy. Tenants in a
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include different pieces of information (e.g., factors multi-tenant building whose energy use is sub-metered
related to power production include transmission and may optionally account for their portion of emissions
distribution (T&D) losses while others do not), so they from common spaces such as lobbies, shared conference
must be applied appropriately to avoid double counting. rooms, etc., under scope 3.
Climate Leadership In Parks (CLIP): Greenhouse Gas Emissions Inventory Tool

E
The Climate Friendly Parks (CFP) program stems from a partnership to approximate emissions that occur within park boundaries. It also
between the U.S. EPA and National Park Service (NPS) and works to pinpoints how employees, concessionaires, and visitors each impact
C
educate, communicate, and mitigate climate change by: climate change. The tool looks at both GHGs and criteria air pollu-
tants (CAPs). While both types of emissions often result from similar
• Educating every park employee about climate change and what
activities, there are some differences in how these emissions are esti-
N
role each can take in addressing the problem.

mated.
• Identifying a strategy for each CFP to reduce their GHG emissions
The Emissions Inventory Tool is broken into four key sections: control,
in order to help mitigate the effects of climate change.
A
background, GHG sources, and CAP sources. In the control section,

• Empowering every park employee to communicate to the public users insert all key information about a park. Other parts of the tool
how climate change is affecting their park’s natural resources, focus on what data needs to be collected and how to go about
D
how the park is dealing with these effects, and the difference obtaining that information. The next two sections focus on calcula-
each person can make in being stewards of our climate and other tions. They are broken into GHG calculations and CAP calculations.
I
natural resources. Both calculators are separated into the individual emission sources
that are relevant to each park. At the end the user is presented with
The CFP program created the Climate Leadership in Parks (CLIP) Tool
a summary sheet.
U
in order to help National Parks conduct emission inventories, develop

action plans, and communicate about climate change. The Source: National Parks Service, U.S. Department of the Interior, The Climate Leadership in Parks
Emissions Inventory Tool has been designed to assist park employees (CLIP) Tool, http://www.nps.gov/climatefriendlyparks/ CLIPtool/emissioninventory.html.
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Apply Calculation Tools

This U.S. Public Sector Protocol does not require specific
calculation tools to be utilized to create an inventory, but
recommends the use of tools that have been peer
reviewed by experts and industry leaders, are regularly
updated, and are believed to be the best available. There
are two main categories of calculation tools, reflected in
the GHG Protocol Initiative calculation toolset:
• Cross-sector tools that can be applied to different

sectors. These include stationary combustion, mobile
combustion, HFC and PFC use in refrigeration and
air conditioning, and measurement and estimation
of uncertainty.
• Sector-specific tools that are designed to calculate

emissions in specific sectors such as aluminum, iron
and steel, cement, oil and gas, pulp and paper, and
office-based organizations.
Many public organizations may need to use more than one

calculation tool to cover all of their GHG emission
sources. Mandatory or voluntary program reporting may
also specify tools and practices to be used for whole inven-
tories or particular sources. Utilizing tools established by
voluntary GHG reporting programs may also offer the
advantage of access to technical assistance. In addition,
some government organizations have developed GHG
50 CHAPTER 6
TABLE 6.2 Centralized and Decentralized Data Collection and Calculation Approaches
CENTRALIZED DECENTRALIZED
FA C I L I T Y A FA C I L I T Y B FA C I L I T Y C FA C I L I T Y A FA C I L I T Y B FA C I L I T Y C
Activity and fuel use data
➡
Activity and fuel use data
➡ Calculates emissions
➡
Headquarters
Calculates emissions
Headquarters
➡
Compiles inventory
Compiles inventory
Definition Individual facilities report activity and fuel use data • Individual facilities collect activity and fuel use data, directly
(such as quantity of fuel used) to the headquarters calculate their GHG emissions using approved methods, and
level, where GHG emissions are calculated report this data to the headquarters level
When • The staff at the headquarters or division level can • Mitigation decisions (such as funding allocation) requires
preferred calculate emissions data in a straightforward knowledge of emissions at the level of individual equipment
option? manner on the basis of activity or fuel use data
• Local regulations require reporting of GHG emissions at a
facility level
• Emissions calculations are standard across a
number of facilities. • Calculations require detailed knowledge of the kind of
equipment being used at facilities
• Calculation methods vary across a number of facilities
• Process emissions (in contrast to emissions from burning fossil

fuels) make up an important share of total GHG emissions
G
• Resources are available to train the facility staff to conduct
these calculations and to audit them
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• A user-friendly tool is available to simplify the calculation
and reporting task for the facility-level staff.
I
inventory calculation tools specific to their organization’s Roll Up GHG Emissions Data to Organizational
D
activities. Such individualized tools have the advantage of or Headquarters Level

increasing the efficiency of inventory development by To report an organization’s total GHG emissions, public
A
streamlining data gathering, calculation and reporting organizations will usually need to gather and summarize
functions (see above case study on the Climate Leadership data from multiple facilities, potentially across different
in Parks (CLIP): Greenhouse Gas Emissions Inventory subordinate sub-organizations or divisions and even in
N
Tool). In developing or using such integrated tools, suffi- different countries. Carefully planning this process mini-
cient access to raw data and calculation formulas should mizes the reporting burden, reduces the risk of errors
be ensured for cross-checking and verification purposes.
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that might occur while compiling data, and ensures that

all facilities are collecting information on an approved,
consistent basis.
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Ideally, organizations integrate GHG reporting with

their existing reporting tools and processes, and take
E
advantage of any relevant data already collected and the headquarters level that is not readily available at
reported by facilities. Depending upon the amount of the facility level, and vice versa. Individual facility
detail headquarters wishes to be reported from facili- managers may identify sources of emissions that head-
C
ties, data collection and management tools could quarters may not monitor. To maximize accuracy and
include the following: minimize reporting burdens, some public organizations
• Secure databases available over the organizations’ use a combination of the two approaches. Complex
N
intranet or internet for direct data entry by facilities facilities with process emissions may calculate their
emissions at the facility level, while facilities with
• Spreadsheet templates filled out and sent to a
A
uniform emissions from standard sources only report

headquarters or division office where data are
fuel use, electricity consumption, and travel activity.
processed further.
The headquarters’ database or reporting tool then
D
For internal reporting up to the headquarters level, the calculates total GHG emissions for each of these stan-
use of standardized reporting formats is recommended to dard activities. Public organizations desiring a
ensure that data received from different facilities are consistency check on facility-level calculations can
I
comparable and that internal reporting rules are follow both approaches and compare the results. Even
observed. Standardized formats can significantly reduce when facilities calculate their own GHG emissions,
U
the risk of errors. headquarters staff may still wish to gather activity and
fuel use data to double-check calculations and explore
opportunities for emissions reductions. These data
G
should be available and transparent to staff at the head-

Approaches for Rolling Up
quarters level. The headquarters staff should also verify
GHG Emissions Data to Headquarters Level
that facility-reported data are based on well-defined,
There are two basic approaches for gathering data on
consistent, and approved inventory boundaries,
GHG emissions from a public organization’s subordinate
reporting periods, calculation methodologies, etc.
facilities: the centralized approach, where the emissions
are calculated at headquarters level, and the decentral-
ized approach, where emissions are calculated by
individual facilities. These approaches may be used indi- Common Guidance on
vidually or in combination for certain groups of Reporting to Headquarters Level
facilities. The two approaches are not mutually exclu- Reports from the facility level to headquarters or division
sive and should produce the same result. Asking offices should include all relevant information as speci-
facilities to calculate GHG emissions themselves helps fied in Chapter 8. Some reporting categories are
to increase their awareness and understanding. common to both the centralized and decentralized
However, it may also lead to resistance, increased approaches and should be reported by facilities to their
training needs, an increase in calculation errors, and a headquarters offices, including the following:
greater need for auditing of calculations. See Table 6.2 • A brief description of the emission sources
detailing these approaches.
• A list and justification of specific exclusion or inclu-
The difference between these two approaches lies in sion of sources
where the emissions calculations occur (i.e., where
• Comparative information from previous years
activity data are multiplied by the appropriate emis-
sion factors) and in what type of quality-management • The reporting period covered
procedures must be put in place at each level of the
• Any trends evident in the data
organization. Facility-level staff members are gener-
ally responsible for initial data collection under both • Progress toward any organizational targets
approaches. The choice of collection approach
• A discussion of uncertainties in activity, fuel use, or
depends on the needs and characteristics of the
emissions data reported, their likely causes, and
reporting organization.
recommendations for how data can be improved
Although the two approaches should produce the same
result, often information may be initially available at
52 CHAPTER 6
• A description of events and changes that have had an REPORTING FOR THE DECENTRALIZED APPROACH
impact on reported data (acquisitions, restructuring, In addition to the aforementioned common categories of
closures, technology upgrades, changes of reporting reporting data, individual facilities following the decen-
G
boundaries, calculation methods applied, etc.). tralized approach by reporting calculated GHG
emissions to the headquarters level should also report
the following:
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REPORTING FOR THE CENTRALIZED APPROACH • A description of GHG calculation methods and any
In addition to the aforementioned common categories of changes made to those methods relative to previous
reporting data, facilities following the centralized reporting periods I
approach by reporting activity/fuel use data to the head-
• Details on any data references used for the calculations,
quarters level should also report the following:
in particular information on emission factors used
D
• Activity data for freight and passenger transport activ-

ities (e.g., freight transport in ton-miles) • Ratio indicators as defined by program policies (see
Chapters 8 and 10 for examples).
A
• Activity data for process emissions (e.g., tons of waste

in landfills) Clear records of calculations undertaken to derive emis-
sions data should be kept for any future internal or
• Clear records of any calculations undertaken to derive
N
external verification.
activity/fuel use data
• Local emission factors necessary to translate fuel use

C
and/or electricity consumption into CO2e emissions.

E
NOTES
1
The categorization of venting as a fugitive emission is consistent with
the IPCC 2006 Guidelines for National Greenhouse Gas Inventories.
7 Managing Inventory Quality
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C
N
A
D
I
U
G
What determines the quality and credibility

of my emissions information?
A n organization’s GHG reporting objectives should guide the design of
an inventory quality management system, as well as the treatment of
uncertainty regarding inventory estimates. Given an uncertain future, high quality
information will have greater value and more uses, while low quality information may
have little or no value or use, and may even incur penalties. For example, an organi-
zation may currently be focusing on voluntary GHG reporting, but also want its
inventory data to meet the anticipated requirements of future regulations. A quality
management system will help ensure that an inventory meets the principles of the
U.S. Public Sector Protocol and adequately prepares public organizations for require-
G U I D A N C E
ments of potential future GHG emissions programs.
54
CHAPTER 7 Managing Inventory Quality 55
Even if an organization is not anticipating a future regu- management system and to help plan for future
latory mechanism, internal and external stakeholders improvements. This framework focuses on the
will demand high quality inventory information. following institutional, managerial, and technical
Therefore, the implementation of some type of quality components of an inventory (see Table 7.1):
management system is important. However, the U.S.
• M E T H O D S . These are the technical aspects of inventory
Public Sector Protocol recognizes that public organiza-
preparation. Public organizations should select or
tions have limited resources and, unlike financial
develop methods for estimating emissions that accu-
accounting, organizational GHG inventories involve a
rately represent the characteristics of their source
level of scientific and engineering complexity.
categories. The GHG Protocol maintains a set of
Organizations should develop their inventory program
online calculation tools which contain default methods
and quality management system as a cumulative effort in
and emission factors to help with this effort. In addi-
keeping with their resources, the broader evolution of
tion, many voluntary and mandatory reporting
policy, and their own organizational mission.
programs specify calculation methodologies and proce-
A practical framework for the quality management of a dures. The design of an inventory program and quality
GHG accounting system, such as the Inventory management system should provide for the selection,
Management Plan (IMP) developed by the EPA Climate application, and updating of inventory methods as new
Leaders program, should describe the steps a public research becomes available, changes are made to
organization can take in developing a GHG inventory, organizational operations, or the importance of inven-
including GHG accounting procedures, and data collec- tory reporting is elevated.
tion and reporting.1 It should provide a process for
• D AT A . Data are the basic information on activity levels,
preventing and correcting errors, and identifying areas
emission factors, processes, and operations. Although
where investments will likely lead to the greatest
methods need to be appropriately rigorous and detailed,
improvement in overall inventory quality. However, the
data quality is as important. No method can compen-
primary objective of quality management is to ensure the
sate for poor quality input data. The design of an
credibility of an organization’s GHG inventory informa-
organization’s inventory program should facilitate the
tion. The first step towards achieving this objective is
collection of high-quality inventory data and the main-
defining inventory quality.
G
tenance and improvement of collection procedures.
• I N V E N T O R Y P R O C E S S E S A N D S Y S T E M S . These are the
U
institutional, managerial, and technical procedures for
Defining Inventory Quality
preparing GHG inventories. They include the team and
Chapter 1 outlines five accounting principles that set an
processes charged with the goal of producing a high-
implicit standard for the faithful representation of an I
quality inventory. To streamline GHG inventory quality
organization’s GHG emissions through its technical,
management, these processes and systems should be
accounting, and reporting efforts. Putting these princi-
integrated, where appropriate, with other organiza-
D
ples into practice will result in a credible and unbiased

tional processes related to quality.
treatment and presentation of issues and data. The goal
of a quality management system is to ensure that these • D O C U M E N T AT I O N . This is the record of methods, data,
A
principles are put into practice. processes, systems, assumptions, and estimates used
to prepare an inventory. It includes everything
This chapter outlines the steps a public organization
N
employees need to prepare and improve an organiza-

can take to implement practical inventory quality
tion’s inventory. Because estimating GHG emissions is
assurance measures, and addresses the limitations of
inherently technical (involving engineering and
uncertainty estimates.
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science) and data intensive, high-quality, transparent

documentation is particularly important for credi-
bility. If information is not credible or fails to be
E
An Inventory Program Framework effectively communicated to internal and external

A practical framework is needed to help public stakeholders, it will not have value.
organizations conceptualize and design a quality
Managing Inventory Quality
TABLE 7.1 Inventory Quality Management Fundamentals

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INVENTORY COMPONENT DETAILS
Methods—the technical aspects • Define inventory boundaries and treatment of joint ventures and identify sources, etc.
of inventory preparation (see Chapters 3, 4, and 6)
C
• Identify methods for estimating emissions; the GHG Protocol website (http://www.ghgprotocol.org/)
provides many default methods and tools to help organizations with this effort
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• Establish procedures for applying and updating inventory methods in response to new organization
activities, new technical information, or new reporting requirements
Data—the basic information on • Develop the approach and assign roles and responsibilities to facilitate collection of high-quality
A
activity levels, emission factors, inventory data

processes, and operations • Create a process for the maintenance and improvement of data collection procedures
D
Inventory processes and • Define all institutional, managerial, and formal procedural aspects required to develop and maintain
systems—the institutional, a GHG inventory that meets the U.S. Public Sector Protocol accounting and reporting standard
I
managerial, and technical proce- • Whenever reasonable, integrate these processes with other organizational processes
dures for preparing GHG inventories
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Documentation—the record • Identify data requirements and document procedures for obtaining the data, including data
of methods, data, processes, sources and contact information for key personnel
systems, assumptions, and • Identify internal and external audiences and develop procedures to document information intended
G
estimates used to prepare for their use

an inventory • Establish documentation sufficient for an inventory development team to accurately and efficiently
continue preparing and improving all four fundamentals in the organization’s inventory
• Ensure that documentation provides sufficient transparency to facilitate potential internal or
external verification
Adapted from EPA, Program Guide for Climate Leaders, March 2007, http://epa.gov/climateleaders/
Implementing an Inventory final reporting of accounts. For efficiency and compre-

Quality Management System hensiveness, public organizations should integrate
An organization’s quality management system should (and extend as appropriate) existing quality assurance
address all four of the inventory components described systems to cover GHG management and reporting,
above. To implement the system, an organization should such as any procedures in the ISO 9000 (Quality
take the following seven steps (see Figure 7.1): Management) and ISO 14001 (Environmental
Management) family of standards. To ensure accuracy,
1. Establish an inventory quality team. This team is the bulk of the plan should focus on practical measures
responsible for implementing a quality management for ensuring quality, as described in steps 3 and 4.
system and continually improving inventory quality.
The team or manager should coordinate interactions 3. Perform generic quality checks. These checks are
between relevant operational units, facilities, and “generic” in that they apply to data and processes
external entities such as government programs, across the entire inventory, focusing on data
research institutions, verifiers, or consulting firms. handling, documentation, and emission calculation
activities (e.g., ensuring that the correct unit conver-
2. Develop an Inventory Quality Management Plan. sions are used). Guidance on quality checking
This plan describes the steps an organization is taking procedures is provided in the section on implementa-
to develop a GHG inventory, which should be incorpo- tion below (see Table 7.2).
rated into the design of its inventory program from
the beginning, although further rigor and coverage of 4. Perform source-category-specific quality checks.
certain procedures may be phased in over multiple This includes more rigorous investigations into the
years. The Quality Management Plan should include appropriate application of boundaries, recalculation
procedures for all organizational levels and inventory- procedures, and adherence to accounting and
development processes—from initial data collection to reporting principles for specific source categories, as
56 CHAPTER 7
FIGURE 7.1 Inventory Quality Management System
INVENTORY MANAGEMENT SYSTEM
➡ 1. Establish Inventory Quality Team
➡
D AT A
7. Report, Document, and Archive 2. Develop Quality Management Plan
METHODS
➡
➡
SYSTEMS
6. Institutionalize Formal Feedback Loops 3. Perform Generic Quality Checks
➡
D O C U M E N T AT I O N
➡
➡
A
5. Review Final Inventory Estimates and Reports 4. Perform Source-Specific Quality Checks
F E E D B A C K
well as the quality of the data input used (e.g., exam- should be archived, and the information to be reported
ining whether electricity bills or meter readings are to external stakeholders. Like internal and external
the best source of consumption data) and a qualitative reviews, these record-keeping procedures should
description of the major causes of uncertainty in the include formal feedback mechanisms.
data. The information from these investigations can
also be used to support a quantitative assessment of
uncertainty. Guidance on these investigations is
provided in the section below on implementation.
5. Review final inventory estimates and reports. After
G
the inventory is completed, an internal technical review
should focus on its engineering, scientific, and other
technical aspects. Subsequently, an internal managerial
U
review should focus on securing official organizational
approval of and support for the inventory. Chapter 9
addresses a third type of review involving experts I
external to the organization’s inventory program who
can verify the inventory. Most voluntary or manda-
D
tory reporting programs will specify required or

recommended verification procedures.
A
6. Institutionalize formal feedback loops. The results

of the reviews in step 5, as well as the results of every
other component of an organization’s quality
N
management system, should be formally fed back to

the person or team identified in step 1. Errors should
C
be corrected and improvements implemented based

on this feedback.
7. Establish reporting, documentation, and archiving

E
procedures. The system should contain record-keeping

procedures that specify the information to be docu-
mented for internal purposes, how that information
TABLE 7.2 Generic Quality Management Measures

E
D AT A G AT H E R I N G , I N P U T, A N D H A N D L I N G A C T I V I T I E S
• Check a sample of input data for transcription errors.

C
• Validate input data prior to calculating GHG emissions to check for outliers (e.g., impossibly high fuel economy rates for vehicles).
• Identify spreadsheet modifications that could provide additional controls for data protection or checks on quality.
N
• Ensure that adequate version control procedures for electronic files have been implemented.
A
DATA DOCUMENTATION
• Confirm that bibliographical data references are included in spreadsheets for all primary data.
D
• Check that copies of cited references have been archived.
• Check that assumptions and criteria for selection of boundaries, base year, methods, activity data, emission factors, and other
I
parameters are documented.
• Check that changes in data or methods are documented.

U
CALCULATING EMISSIONS AND CHECKING CALCULATIONS
• Check whether emission units, parameters, and conversion factors are appropriately labeled.
G
• Check whether units are properly labeled and correctly carried through from the beginning to the end of calculations.
• Check that conversion factors are correct.
• Check the data processing steps (e.g., equations) in the spreadsheets.
• Check that spreadsheet input data and calculated data are clearly differentiated.
• Check a representative sample of calculations, by hand or electronically.
• Check some calculations with abbreviated calculations (i.e., back-of-the-envelope calculations).
• Check the aggregation of data across source categories, operational units, etc.
• Check consistency of time series inputs and calculations.
• Get staff not involved in inventory development to spot check data handling and calculations
An organization’s quality management system and inventory management measures. An organization

overall inventory program should be treated as an should implement these measures at multiple levels,
evolving entity, in keeping with an organization’s reasons from the point of primary data collection to the final
for preparing an inventory. The plan should address the headquarters inventory approval process. Implementing
organization’s strategy for a multiyear implementation these measures at points in the inventory program where
(i.e., recognize that inventories are part of a long-term errors are most likely to occur—such as the initial data
effort), including steps to ensure that all quality control collection phase and during calculation and data aggre-
findings from previous years are adequately addressed. gation—is important. Although headquarters-level
inventory quality may initially be emphasized, ensuring
quality measures are implemented at all levels of disag-
Practical Measures for Implementation gregation (e.g., by facility, process, geographical unit,
Although principles and broad program design guidelines project scope, etc.) better prepares the organization for
are important, any guidance on inventory management GHG regulation in the future.
would be incomplete without a discussion of practical
58 CHAPTER 7
Public organizations also need to ensure the quality of

their historical emission estimates and trend data. They USDA Forest Service: Ensuring Data Quality
can do so by employing inventory quality measures to
G
Through the process of creating a GHG inventory for the 6 national
minimize biases that can arise from changes in the char-
forests in the Greater Yellowstone area, the USDA Forest Service
acteristics of the data or methods used to calculate
identified several important procedures that helped ensure data
U
historical emission estimates and by following the stan-
quality and the accuracy of the GHG inventory. Given that organi-
dards and guidance in Chapter 5. Source-specific quality
zations are often faced with inconsistent and incomplete data
measures that can be employed for emission factors,
records, an important first step was to create user-friendly I
activity data, and emission estimates are addressed below.
templates when requesting data from field offices or utility
companies, with instructions as to whether the data should be
D
gathered on a calendar- or fiscal-year basis and that it be

E M I S S I O N FA C T O R S A N D O T H E R P A R A M E T E R S
expressed in consistent units (BTUs, kWhs, etc.). The Forest
For a particular source category, calculations generally
Service also noted the importance of documenting all calculation
A
rely on emission factors and other parameters (e.g.,

assumptions and creating copies of the raw data, so that
utilization factors, oxidation rates, and methane conver-
different individuals could each perform quality-control checks
sion factors).2 These factors and parameters may be
N
throughout the inventory process. These quality-control checks

published default factors or they may be based on organ-
became critical when they sought to calculate the GHG emissions
ization or site-specific data, direct emissions, or other
from its leased vehicles. The leasing agency provided data on fuel
measurements. For fuel consumption, published emission
C
consumption and vehicle miles traveled; but when performing a

factors based on energy content are generally more accu-
quality-control check, the Forest Service determined that the data
rate than those based on mass or volume, except when
implied impossibly high vehicle fuel economies. Had the Forest
E
mass- or volume-based factors have been measured at

Service not performed these checks, it would have based its GHG
the organization- or site-specific level. Quality investiga-
mitigation strategies on incorrect data.
tions need to assess the representativeness and
applicability of emission factors and other parameters
E
to the specific characteristics of an organization. measures (e.g., ISO 9000) may have already been
Differences between measured and default values need conducted during the data’s original preparation.
to be qualitatively explained and justified on the basis These measures can be integrated with the organiza-
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of the organization’s operational characteristics. tion’s quality management system.
• Check that base year recalculation procedures have

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been followed consistently and correctly (see Chapter 5).

A C T I V I T Y D AT A
The collection of high-quality activity data is often the • Check that operational and organizational boundary
A
most significant challenge in creating GHG inventories. decisions have been applied correctly and consistently to
Therefore, establishing robust data-collection proce- the collection of activity data (see Chapters 3 and 4).
dures takes priority in the design of any organization’s
• Investigate whether biases or other characteristics that
D
inventory program. The following are useful measures

could affect data quality have been previously identi-
for ensuring the quality of activity data:
fied (e.g., by communicating with experts at a
I
• Develop data collection procedures that allow the same particular facility or elsewhere). For example, a bias
data to be efficiently collected in future years. could arise from the unintentional exclusion of opera-
tions at smaller facilities or data that do not
U
• When sufficient activity data are not available to allow

correspond exactly with organizational boundaries.
for reliable calculations, ensure that this lack of
information is transparently conveyed in the inven- • Extend quality management measures to cover any
G
tory report. Note the shortcomings and attempts to additional data (sales, production, etc.) used to esti-
estimate the missing data and work to implement mate emission intensities or other ratios.
corrective measures for subsequent inventories.
• Convert fuel-consumption data to energy units before

applying carbon content emission factors, which may
better correlate to a fuel’s energy content than its
mass. (See the GHG Protocol calculation tools for
further information about this.)
• Compare current year data with historical trends. If

data do not exhibit relatively consistent changes from
year to year, the causes for these patterns should be
investigated (e.g., changes of more than 10 percent
from year to year may warrant further investigation).
• Compare activity data from multiple reference sources

(e.g., government survey data or data compiled by
trade associations) with organization data when
possible. Such checks can ensure that consistent data
are being reported to all parties. Data should also be
compared among facilities within an organization.
• Investigate activity data that are generated for

purposes other than preparing a GHG inventory. In
doing so, public organizations need to check the appli-
cability of these data to inventory purposes, including
completeness, consistency with the source category
definition, and consistency with the emission factors
used. For example, data from different facilities may
be examined for inconsistent measurement techniques,
operating conditions, or technologies. Quality control
60 CHAPTER 7
• Use and compare data compiled for other purposes, In an ideal situation, in which an organization has
such as U.S. federal agency energy and fuel use data perfect quantitative information on the uncertainty of its
that is reported to DOE under the Energy Independence emission estimates at all levels, the primary use of this
and Security Act. Title IV of the Clean Air Act requires information would almost certainly be comparative.
owners or operators of regulated facilities to measure Such comparisons might be made across public organi-
and report sulfur dioxide, NOx, and CO2 emissions zations, operational units, or source categories or
under the EPA’s Acid Rain Program, and reported data through time. In this situation, inventory estimates could
on CO2 emissions can often be used directly in an orga- even be rated or discounted on the basis of their quality
nization’s GHG inventory. before they were used, with uncertainty being the objec-
tive quantitative metric for quality. Unfortunately, such
objective uncertainty estimates rarely exist.
E M I S S I O N E S T I M AT E S
Estimated emissions for a source category can be
compared with historical data or other estimates to ensure TYPES OF UNCERTAINTIES
they fall within a reasonable range. Potentially unreason- Uncertainties associated with GHG inventories can be
able estimates are cause for checking emission factors or broadly categorized into scientific uncertainty and esti-
activity data and determining whether changes in method, mation uncertainty. Scientific uncertainty arises when
market forces, or other events are sufficient reasons for the science of the actual emission or removal process is
the difference. In situations where actual emission moni- not completely understood. For example, many direct
toring occurs (e.g., power plant CO2 emissions), the data and indirect factors associated with global warming
from monitors can be compared with calculated emissions potential (GWP) values that are used to combine emis-
using activity data and emission factors. sion estimates for various GHGs involve significant
scientific uncertainty. Analyzing and quantifying such
If any of the above emission factors, activity data, emis-
scientific uncertainty is extremely problematic and is
sions estimates, or other parameter checks indicate a
likely to be beyond the capacity of most organization
problem, more detailed investigations into the accuracy
inventory programs.
of the data or appropriateness of the methods may be
required. More detailed investigations can also be Estimation uncertainty arises any time GHG emissions
G
utilized to better assess the quality of data. One potential are quantified. Therefore, all emissions or removal esti-
measure of data quality is a quantitative and qualitative mates are associated with estimation uncertainty.
U
assessment of their uncertainty. Estimation uncertainty can be further classified into two
types: model uncertainty and parameter uncertainty.3
Model uncertainty refers to the uncertainty associated I

Inventory Quality and Inventory Uncertainty with the mathematical equations (i.e., models) used to
Preparing a GHG inventory is inherently both an characterize the relationships between various parame-
D
accounting and a scientific exercise. Most applications ters and emission processes. For example, model
for organization-level emissions and removal estimates uncertainty may arise either due to the use of an incor-
require that these data be reported in a format similar to rect mathematical model or inappropriate input into the
A
financial accounting data. In financial accounting, it is model. As with scientific uncertainty, estimating model
standard practice to report individual point estimates uncertainty is likely to be beyond most organization’s
N
(i.e., single values rather than a range of possible inventory efforts.

values). In contrast, the standard practice for most Parameter uncertainty refers to the uncertainty associ-
scientific studies of GHG and other emissions is to report ated with quantifying the parameters used as inputs
C
quantitative data with estimated error bounds (i.e., (e.g., activity data and emission factors) into estimation
uncertainty). Just like financial figures in a profit-and- models. Parameter uncertainties can be evaluated
loss statement or bank account statement, point
E
through statistical analysis, measurement equipment

estimates in an organization emission inventory have precision determinations, and expert judgment.
obvious uses. However, what value does a quantitative Quantifying parameter uncertainties and then estimating
measure of uncertainty bring to an emission inventory? source category uncertainties on the basis of these
E
parameter uncertainties will be the primary focus of • Similarly, when a single facility uses the same esti-
public organizations that choose to investigate the uncer- mation method each year, the systematic parameter
tainty in their emission inventories. uncertainties—in addition to scientific and model
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uncertainties—in a source’s emission estimates for

2 years are, for the most part, identical.7 Because the
L I M I T AT I O N S O F U N C E R T A I N T Y E S T I M AT E S systematic parameter uncertainties then cancel out,
N
Given that only parameter uncertainties are within the the uncertainty in an emissions trend (e.g., the differ-
feasible scope of most public organizations, uncertainty ence between the estimates for 2 years) is generally
A
estimates for organization GHG inventories are inher- less than the uncertainty in total emissions for a
ently imperfect. Complete and robust sample data are single year. In such a situation, quantified uncer-
not always available to assess the statistical uncertainty tainty estimates can be treated as being comparable
D
in every parameter.4 For most parameters (e.g., gallons over time and used to track relative changes in the
of gasoline purchased or tons of limestone consumed), quality of a facility’s emission estimates for that
only a single data point may be available. In some cases, source category. Such estimates of uncertainty in
I
public organizations can utilize instrument precision or emission trends can also be used as a guide for
calibration information to inform their assessment of setting a facility’s emissions reduction target. Trend
U
statistical uncertainty. However, to quantify some of the uncertainty estimates are likely to be less useful for
systematic uncertainties associated with parameters and setting broader (e.g., organization-wide) targets (see
to supplement statistical uncertainty estimates,5 public Chapter 10) because of the general problems with
G
organizations usually have to rely on expert judgment.6 comparability between uncertainty estimates across
The problem with expert judgment, though, is that it is gases, sources, and facilities.
difficult to obtain in a comparable (i.e., unbiased) and
Given these limitations, the role of qualitative and
consistent manner across parameters, source categories,
quantitative uncertainty assessments in developing GHG
or different public organizations.
inventories includes the following:
For these reasons, almost all comprehensive estimates of
• Promoting a broader learning and quality
uncertainty for GHG inventories are not only imperfect
feedback process.
but also have a subjective component and, despite the
most thorough efforts, are themselves highly uncertain. • Supporting efforts to qualitatively understand and
In most cases, uncertainty estimates cannot be inter- document the causes of uncertainty and help identify
preted as an objective measure of quality, nor can they ways of improving inventory quality. For example,
be used to compare the quality of emission estimates collecting the information needed to determine the
between source categories or public organizations. statistical properties of activity data and emission
factors forces one to ask hard questions and to care-
The following cases—which assume that either statistical
fully and systematically investigate data quality.
or instrument precision data are available to estimate
objectively each parameter’s statistical uncertainty • Establishing lines of communication and feedback with
(i.e., expert judgment is not needed)—are exceptions: data suppliers to identify specific opportunities to
improve the quality of the data and methods used.
• When two operationally similar facilities use identical
emission estimation methods, the differences in scien- • Providing valuable information to reviewers, verifiers,
tific or model uncertainties can, for the most part, be and managers for setting priorities for investments
ignored. Quantified estimates of statistical uncertainty into improving data sources and methods.
can be treated as being comparable between facilities.
The U.S. Public Sector Protocol has a supplementary guid-
Some trading programs that prescribe specific moni-
ance document on uncertainty assessments (“Guidance
toring, estimation, and measurement requirements aim
on uncertainty assessment in GHG inventories and calcu-
for this type of comparability. However, even in this
lating statistical parameter uncertainty”) along with an
situation, the degree of comparability depends on the
uncertainty calculation tool, both of which are available
flexibility that participants are given for estimating
on the GHG Protocol website. The guidance document
emissions, homogeneity across facilities, and the level
describes how to use the calculation tool in aggregating
of enforcement and review of the methods used.
62 CHAPTER 7
uncertainties. It also discusses in more depth different Additional guidance and information on assessing uncer-
types of uncertainties, the limitations of quantitative tainty—including optional approaches to develop
uncertainty assessment, and how uncertainty estimates quantitative uncertainty estimates and elicit judgments
should be properly interpreted. from experts—can also be found in EPA’s Emissions
G
Inventory Improvement Program, Volume VI: Quality
Assurance/Quality Control (1999) and in Chapter 6 of the
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IPCC’s Good Practice Guidance and Uncertainty Management
in National Greenhouse Gas Inventories (2000a).
I
NOTES
D
1
See EPA, Program Guide for Climate Leaders, March 2007. tified, or incorrect or incomplete estimation methods or faulty measure-
2
Some emissions estimates may be derived using mass or energy balances, ment equipment have been used. Because the true value is unknown,
engineering calculations, or computer simulation models. In addition to such systematic biases cannot be detected through repeated experi-
A
investigating the input data to these models, organizations should ments and, therefore, cannot be quantified through statistical analysis.
consider whether the internal assumptions (including assumed parame- However, identifying biases (and, sometimes, quantifying them) through
ters in the model) are appropriate to the nature of their operations. data quality investigations and expert judgments is possible.
N
6
3
Emissions estimated from direct emissions monitoring generally only The role of expert judgment can be twofold: first, it can provide the data
involve parameter uncertainty (e.g., equipment measurement error). necessary to estimate the parameter, and second, it can help (in combi-
nation with data quality investigations) identify, explain, and quantify
4
Statistical uncertainty results from natural variations (e.g., random both statistical and systematic uncertainties.
C
human errors in the measurement process and fluctuations in measure- 7

ment equipment). Statistical uncertainty can be detected through Biases may not be constant from year to year, instead exhibiting a
repeated experiments or sampling of data. pattern over time (e.g., growing or falling). For example, an organization
that continues to disinvest in collecting high-quality data may create a
E
5
Systematic parameter uncertainty occurs if data are systematically situation in which the biases in its data get worse each year. These
biased. In other words, the average of the measured or estimated value types of data quality issues are extremely problematic because of the
is always less or greater than the true value. Biases arise, for example, effect they can have on calculated emission trends. In such cases,
because emission factors are constructed from non-representative systematic parameter uncertainties cannot be ignored.
samples, all relevant source activities or categories have not been iden-
8 Reporting GHG Emissions
D
R
A
D
N
A
T
S
What information should be included

in a GHG emissions report?
A credible GHG emissions report presents relevant information that is
complete, consistent, relevant, accurate, and transparent. While it takes
time to develop a rigorous and complete organizational inventory of GHG emissions,
knowledge will improve with experience in calculating and reporting data. It is
therefore recommended that a public GHG report should:
S T A N D A R D
G U I D A N C E
64
CHAPTER 8 Reporting GHG Emissions 65
• Be based on the best data available at the time of publi- • Total scope 1 and 2 emissions, independent of any
cation, while being transparent about its limitations; sales, purchases, transfers, or banking of GHG
offsets/credits/allowances
• Communicate any material discrepancies identified in
previous years; and • Emissions data for direct CO2 emissions from the
combustion of biologically sequestered carbon
• Include the organization’s gross emissions for its
(e.g., CO2 from burning biomass or biofuels), reported
chosen inventory boundary separate from and inde-
separately from the scopes
pendent of any purchases or trades of external
GHG reduction instruments such as offsets, credits, • Year chosen as base year (designated as calendar year
or allowances. or fiscal year), and an emissions profile over time that
is consistent with and clarifies the chosen policy for
The standards and guidance here are designed to be an
making base year emission recalculations.
overview of essential components in a GHG report.
However, many organizations will develop their GHG • Appropriate context for any significant emission
reports according to requirements specified in legislation changes that trigger base-year emissions recalculation
or internal management systems. Appendix A summa- (subsuming or shedding resources and responsibilities,
rizes the requirements of various GHG reporting outsourcing or insourcing, changes in reporting
programs. For those organizations that are currently boundaries or calculation methods, etc.)
developing reporting policies, the key components listed
• Methods used to calculate or measure emissions,
here can serve as a foundation for inventory information.
providing a reference or link to any calculation
tools used
Required Information • Any specific exclusion of sources, facilities, programs,

Reported information shall be in accordance with the or operations (for example, for exemptions required
principles highlighted in Chapter 1 of this U.S. Public for security).
Sector Protocol; namely, it will be “relevant, complete,
consistent, transparent, and accurate.” In addition,
S
inventories shall include reporting of scope 1 and
Optional Information
scope 2 emissions at a minimum. A public GHG emis-
A public GHG emissions report should include, when
sions report that is in accordance with the U.S. Public
applicable, the following additional information.
T
Sector Protocol shall include the information in the
following subsections.
I N F O R M AT I O N O N E M I S S I O N S A N D P E R F O R M A N C E A
• Emissions data from relevant scope 3 activities for
DESCRIPTION OF BOUNDARIES AND REPORTING PERIOD
which reliable data can be obtained
N
• An outline of the organizational boundaries chosen,

including the chosen consolidation approach • Emissions data further subdivided, where this aids
transparency, by program, facilities, location, source
D
• An outline of the operational boundaries chosen, and

types (stationary combustion, process, fugitive, etc.),
if scope 3 is included, a list specifying the types of
and activity types (production of electricity, trans-
activities covered
portation, generation of purchased electricity that is
A
• The reporting period covered. sold to end users, etc.)
• Emissions from on-site generation of electricity, heat,

R
or steam that is sold or transferred to another organi-

I N F O R M AT I O N O N E M I S S I O N S
zation (see Chapter 4)
• Emissions data for all six GHGs separately (CO2, CH4,
D
N2O, HFCs, PFCs, and SF6) in metric tons, and also in • Emissions from the generation of electricity, heat, or
metric tons of carbon dioxide equivalent (CO2e) steam that is purchased for resale to non-end users
(see Chapter 4)
• Emissions data separately for each scope (scope 1
and 2 required, scope 3 is optional)
Reporting GHG Emissions
D
• A description of performance measured against • Information on the quality of the inventory (e.g.,
internal and external benchmarks (see Chapter 10 for information on the causes and magnitudes of uncer-
more on target setting) tainties in emission estimates) and an outline of
R
policies in place to improve inventory quality (see

• Emissions from GHGs not covered by the Kyoto
Chapter 7)
Protocol (e.g., CFCs, NOx), reported separately
A
from scopes • Information on any GHG sequestration
• Relevant ratio performance indicators (e.g., emissions • A list of facilities included in the inventory
D
per kilowatt-hour or emissions per unit of service

• A contact person.
provided)
• An outline of any GHG management or reduction

N
programs or strategies I N F O R M AT I O N O N O F F S E T S
• Information on allowable offsets that have been
• Information on any contractual provisions addressing
A
purchased or developed outside the inventory

GHG-related risks and obligations
boundary, subdivided by GHG storage or removals
• An outline of any external assurance provided and a and emissions reduction projects, including specifica-
T
copy of any verification statement, if applicable, of tion whether the offsets are verified, certified, or
the reported emissions data approved by an external GHG program (e.g., the
Clean Development Mechanism, Green-e, etc.)
S
• Information on the causes of emission changes that

did not trigger a base-year emissions recalculation • Information on emissions reductions at sources inside
(e.g., process changes, efficiency improvements, or the inventory boundary that have been sold or trans-
plant closures) ferred as offsets to a third party, when allowed,
including specification whether the reduction has
• GHG emissions data for all years between the base
been verified, certified, or approved by an external
year and the reporting year (including details of and
GHG program.
reasons for recalculations, if appropriate)
66 CHAPTER 8
B
y following the U.S. Public Sector Protocol reporting
Washington State Department of Transportation:
requirements, users adopt a comprehensive stan-
Identifying Significant Emissions Sources
dard with the necessary detail and transparency
for credible public reporting. The reporting of optional The Washington State Department of Transportation (DOT)
information can be determined by the objectives and conducted an inventory of its GHG emissions from 2007 and
intended audience for the report. For example, an prepared an inventory report based on The Climate Registry’s
organization may wish to use some parts of an inventory General Reporting Protocol in order to better understand its emis-
report as a policy planning tool and other parts for sions. The report highlighted that 69 percent of its emissions
compliance reporting. came from operating the ferry fleet that provides access across
Not every circulated report must contain all information Puget Sound to British Columbia and to a number of other
as specified by this standard, but a link or reference islands. Vehicle fleets constituted 14 percent of emissions,
should be made to a publicly available full report where including DOT-owned passenger cars, as well as snowplows and
all required information is available. For some organi- other specialty equipment. Conducting a GHG inventory allowed
zations, providing emissions data for specific GHGs or the DOT to prioritize where it can reduce the most emissions and
facilities or programs, or reporting ratio indicators, costs. In addition, having experience with a GHG inventory gave
may compromise confidentiality or security concerns. If the agency an opportunity to participate in and prepare for state-
this is the case, such data need not be publicly reported, level reporting requirements targeting vehicle fleets above a
but can be made available to those auditing the GHG certain size threshold.
emissions data, assuming confidentiality and security
are assured. In contrast, other organizations have found
that exposing their raw, disaggregated data as well as Use of Ratio Indicators
their final reports to multiple audiences can help Two principal aspects of GHG performance are of interest
provide critical fact cross-checking and feedback. to management and stakeholders. One concerns the overall
GHG impact of an organization—that is, the absolute
All organizations should strive to create a report that is
quantity of GHG emissions released to the atmosphere.
as transparent, relevant, accurate, consistent, and
The other concerns the organization’s GHG emissions
complete as possible. Structurally, this may be achieved
normalized by some operational metric that results in a
G
by adopting the reporting categories of the standard
“ratio indicator.” The U.S. Public Sector Protocol requires
(e.g., required description of the boundaries and
reporting of absolute emissions; reporting of ratio indica-
reporting period, required information on organization
U
tors is optional. Ratio indicators provide information on
emissions, optional information on emissions and
performance relative to operational activities and can
performance, and optional information on offsets) as a
facilitate comparisons between similar organizations and
basis of the report. Qualitatively, including a discussion I
processes over time. Organizations may choose to report
of the reporting organization’s strategy and goals for
GHG ratio indicators in order to:
GHG accounting, any particular challenges or tradeoffs
D
faced, the context of decisions on boundaries and other • Evaluate performance over time (e.g., relate figures
accounting parameters, and an analysis of emissions from different years), identify trends in the data, and
trends may help provide a complete picture of the orga- show performance in relation to targets and base year
A
nization’s inventory efforts. (see Chapter 10)
• Establish a relationship between data from different

N
categories, for example, an organization may want to

Double Counting
establish a relationship between its organizational
Organizations should take care to identify and exclude
goals (e.g., tons of mail delivered) and its impact on
C
from reporting any scope 2 or scope 3 emissions that are

society or on the environment (e.g., emissions from
also reported as scope 1 emissions by other facilities,
mail distribution)
sub-units, or organizations included in the emissions
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inventory consolidation (see Chapters 4 and 6). • Improve comparability between different sizes of opera-
tions by normalizing figures (e.g., by assessing the impact
of different sized organizations on the same scale).
Reporting GHG Emissions
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The public sector is inherently diverse and the circum- such as number of public transportation passengers serv-
stances of individual organizations can result in iced per ton of CO2e emitted) and process eco-efficiency
misleading indicators. Organizations should develop (e.g., production volume per ton of CO2e emitted).
ratios that make sense for their activities, are relevant to
their decision-making needs, and that best capture the
benefits and impacts of their work (i.e., its operations, I N T E N S I T Y R AT I O S
services, and effects on the marketplace and on the Intensity ratios express GHG impact per unit of physical
entire economy). Sub-units within an organization should activity or unit of productivity, reflecting the inverse of a
coordinate the reporting of ratio indicators to ensure the productivity ratio. A physical intensity ratio is suitable
indicators’ relevance and consistency where possible. when aggregating or comparing across organizations
that have similar outputs or missions. An economic
Some examples of different ratio indicators are provided
intensity ratio is suitable when aggregating or
here and in Chapter 10.
comparing across organizations that have differing oper-
ations. A declining intensity ratio reflects a positive
performance improvement. Many organizations track
P R O D U C T I V I T Y O R E F F I C I E N C Y R AT I O S
environmental performance with intensity ratios, often
Productivity or efficiency ratios express the value or
called “normalized” environmental impact data.
achievement of an organization divided by its GHG
Examples of intensity ratios include product emission
impact. Increasing efficiency ratios reflect a positive
intensity (e.g., tons of CO2e emissions per unit of elec-
performance improvement. Examples of productivity
tricity generated) and service intensity (e.g., tons of CO2e
ratios include resource productivity (e.g., units of service,
emissions per function or per service).
68 CHAPTER 8
Ratio Indicators for Loudoun County Public Schools GHG Inventory
The Energy Education Team at Loudoun County Public Schools Emissions Per Student
(LCPS) in Virginia conducted its first GHG inventory based on the LCPS, like many public organizations, is unable to directly control
draft U.S. Public Sector Protocol in the fall of 2009. This inventory the population growth trends within its boundaries. Over the four
included Scope 1 and 2 emissions for each year during the period of year period reflected in the GHG inventory, student enrollment grew
2005 - 2008. During this time, the team had coordinated energy by 9,648. This represents a 20% increase over the 2005 student
conservation and efficiency improvement throughout all of the enrollment level. During this same time period, emissions per
district’s schools, instituted behavioral change initiatives and student have declined by 0.254 metric tons / student, or 14% below
certified 25 buildings in the U.S. EPA’s ENERGY STAR buildings 2005 levels. See the chart below.
program. In recognition of the efforts made by the district, the EPA LCPS Total CO2e Emissions Compared to CO2e Emissions
named LCPS a 2010 ENERGY STAR Partner of the Year. per Student
M E T R I C T O N S O F CO 2 e PER STUDENT
Although absolute emissions for the district have increased, 92,000 1.9
T O T A L M E T R I C T O N S O F CO 2 e
reductions in GHG intensity have occurred, as evidenced by the 90,000 • • 1.8
following ratios:
88,000 •
Emissions Per Building Area 1.7
• •
As one of the fastest growing school districts in the nation, LCPS has 86,000 •
1.6
increased its building area by nine percent, or over 711,183 square 84,000 • •
feet, from 2005-2008. During this same timeframe, emissions per
82,000 1.5
square foot have gone down by 0.006 metric tons/square foot, or 5%
below 2005 levels. See the chart below. 80,000 1.4
LCPS Total CO2e Emissions Compared to CO2e Emissions 2005 2006 2007 2008
per square foot of Building Area
• Total emissions in metric tons of CO2e
M E T R I C T O N S O F CO 2 e PER STUDENT
92,000 0.014 • Metric tons of CO2e emissions per square foot

T O T A L M E T R I C T O N S O F CO 2 e
90,000 •
• 0.012
• The LCPS Planning & Legislative Services division projects that
88,000 • from 2010-2015, the district’s student enrollment will expand by
0.010
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• • another 16,200 students. This will represent an increase of over
86,000
0.008 50% above the 2005 student level. Because of this rapid growth,
84,000 •
there will likely be an increase in absolute emissions. However,
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•
82,000 0.008 considering the context of efforts made by a public body, and
expressing emissions in terms of relevant ratio indicators can
80,000 0.008 I
provide a critical performance benchmark by which the LCPS’s
2005 2006 2007 2008
energy management efforts can be meaningfully compared over
• Total emissions in metric tons of CO2e time and to other similar organizations.
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• Metric tons of CO2e emissions per square foot

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PERCENTAGES
A percentage indicator is a ratio between two similar
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values (with the same physical unit in the numerator and

the denominator). Examples of percentages that can be
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meaningful in performance reports include current GHG

emissions expressed as a percentage of base year GHG
emissions.
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For further guidance on ratio indicators, refer to GRI,

2002; and Verfaillie and Bidwell, 2000.
9
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Verification of GHG Emissions
What data must be available to obtain external

verification of the inventory?
V erification is an objective independent assessment of the accuracy and
completeness of reported GHG information and its conformance to pre-
established GHG accounting and reporting principles.1 Although the practice of
verifying public sector inventories is still evolving, verification methodologies have
become well-established. This chapter provides an overview of the key elements of a
GHG verification process. It is relevant to organizations that are developing GHG
inventories and have planned for, or are considering, obtaining an independent veri-
fication of their results and systems.
G U I D A N C E
70
CHAPTER 9 Verification of GHG Emissions 71
This information here may be useful for public sector • Improvement of internal accounting and reporting prac-
organizations that face potential conflict of interest issues tices (e.g., calculation, recording, and internal reporting
when selecting external parties to provide inventory and systems, as well as the application of GHG accounting
verification services. This chapter is also important for and reporting principles) and facilitation of learning and
government organizations that may be charged with knowledge transfer within the organization
verification, auditing, or compliance-enforcement duties.
• Mandatory verification requirements of GHG programs
Furthermore, as the process of developing a verifiable
inventory is largely the same as that for obtaining • Response to reporting requests or mandates from other
reliable and defensible data, this chapter is also relevant sectors (e.g., states reporting to the federal government).
to all organizations regardless of any intention to
commission a GHG inventory verification.
Internal Assurance
Verification involves an assessment of the risks of mate-
As noted in Chapter 7, a quality GHG inventory requires
rial discrepancies in reported data. Discrepancies relate
a thorough “first party” review of data and procedures
to differences between reported data and data generated
as a basic level of verification. Verification is often, but
from the proper application of the relevant standards
not always, also undertaken by an independent, external
and methods.
“third party” verifier. For stakeholders, external third-
party verification is likely to significantly increase the
credibility of the GHG inventory. Third-party reviews
Relevance of GHG Principles
bring unbiased expert analysis to bear, providing a level
The primary aim of verification is to provide confidence to
of confidence to stakeholders that formal procedures and
users that the reported information and associated state-
reliable data have been utilized and reported.
ments represent a faithful, true, and fair account of an
organization’s GHG emissions. Ensuring transparency of However, many organizations interested in improving
the inventory data is crucial for verification. The more their GHG inventories may also subject their informa-
transparent, well-controlled, and well-documented an tion to internal verification by personnel independent of
organization’s emissions data and systems are, the easier the GHG accounting and reporting process through a
it will be to verify. As outlined in Chapter 1, a number of “second party” verification process. Independent
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GHG accounting and reporting principles need to be internal verifications can provide valuable assurance
followed when compiling a GHG inventory. Adherence to over the reliability of information. Internal verification
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these principles, along with a transparent, well-docu- can be a worthwhile learning experience for an organi-
mented system (sometimes referred to as an audit trail) zation prior to commissioning an external verification
will facilitate a successful verification. While transparency by a third party. It can also provide external verifiers
I
is essential, certain organizations may need to restrict the with useful information to begin their work. Both
release of some information due to security concerns. internal and external verification should follow similar
procedures and processes.
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Goals
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Before commissioning an independent verification, an The Concept of Materiality

organization should clearly define its goals and decide The concept of “materiality” is essential to under-
whether they are best met by an external verification standing the process of verification. Chapter 1 provides
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process. Common reasons for undertaking verification a useful interpretation of the relationship between the
include the following: principle of completeness and the concept of materiality.
Information is considered to be material if, by its
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• Increased credibility of publicly reported emissions

inclusion or exclusion, it can be seen to influence any
information and progress toward GHG targets, leading
decisions or actions taken by users of it. A material
to enhanced stakeholder trust
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discrepancy is an error (for example, from an oversight,

• Increased senior management confidence in reported omission, or miscalculation) or a combination of errors
information on which to base investment and target- that results in a reported quantity or statement signifi-
setting decisions cantly differing from the true value or meaning.2 To
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express an opinion on data or information, a verifier • The complexity of the computer information system
would need to form a view on the materiality of all iden- used to process the information
tified errors or uncertainties.
• The type, state of calibration, and maintenance of
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While the concept of materiality involves a value judg- equipment used

ment, the point at which a discrepancy becomes material
• The reliability and availability of input data
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(materiality threshold) is usually predefined. As a rule of

thumb, an error is considered to be materially • Assumptions and estimations applied
misleading if its value exceeds 5 percent of the total
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• Aggregation of data from different sources

inventory for the part of the organization being verified.
• Other assurance processes to which the systems and
However, the verifier needs to assess an error or omis-
data are subjected (e.g., internal audits and external
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sion in the full context in which information is presented.

reviews and certifications).
For example, if a two-percent error prevents an organi-
zation from achieving its organizational target, this
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would most likely be considered material. Understanding

Establishing Verification Parameters
how verifiers apply a materiality threshold enables
The extent of an independent verification and the level of
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companies to more readily establish whether the omis-

assurance it provides are influenced by the organiza-
sion of an individual source or activity from their
tion’s goals and any specific jurisdictional requirements.
inventory is likely to raise questions of materiality.
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This scope may be predefined by legislation or guidance

Materiality thresholds may also be outlined in the for public organizations. The verification provider may
requirements of a specific GHG program or determined also be determined by law or regulation.
by a national verification standard, depending on the
Verifying the entire GHG inventory or specific parts is
entity requiring the verification and the reasons. A mate-
possible. Discrete parts may be specified in terms of
riality threshold provides guidance to verifiers on what
geographic location, operating units, facilities, and type
may be an immaterial discrepancy so that they can
of emissions. The verification process may also examine
concentrate their work on areas that are more likely to
more general managerial issues, such as quality manage-
lead to materially misleading errors.
ment procedures, managerial awareness, availability of
resources, clearly defined responsibilities, segregation of
duties, and internal review procedures.
Assessing the Risk of Material Discrepancy
Verifiers need to assess the risk of material discrepancy of The organization and verifier should reach an agreement
each component of the GHG information collection and upfront on the scope, level, and objective of the verifica-
reporting process. This assessment is used to plan and tion. This agreement (often referred to as the scope of
direct the verification process. In assessing this risk, they work) will address issues such as the information to be
consider a number of factors, including the following: included in the verification (e.g., head-office consolida-
tion only or information from all sites), the level of
• The structure of the organization and the approach
scrutiny to which selected data will be subjected (e.g.,
used to assign responsibility for monitoring and
desk-top review or on-site review), and the intended use
reporting GHG emissions
of the results of the verification. The materiality threshold
• The approach and commitment of management to is another item to be considered in the scope of work. It is
GHG monitoring and reporting a key consideration for both the verifier and the organiza-
tion and is linked to the objectives of the verification.
• Development and implementation of policies and
processes for monitoring and reporting (including The scope of work is influenced by what the verifier actu-
documented methods explaining how data are generally finds once the verification commences and, as a result,
ated and evaluated) the scope of work must remain sufficiently flexible to
enable the verifier to adequately complete the verification.
• Processes used to check and review calculation methods
A clearly defined scope of work is important not only to
• The complexity and nature of operations
the organization and verifier, but also for external
72 CHAPTER 9
stakeholders to be able to make informed and appro-

priate decisions. Verifiers ensure that specific
exclusions have not been made solely to improve the
organization’s performance. To enhance transparency
and credibility, organizations should make the scope of
work publicly available.
Site Visits
Depending on the level of assurance required from verifi-
cation, verifiers may need to visit a number of sites to
enable them to obtain sufficient and appropriate
evidence over the completeness, accuracy, and reliability
of reported information. The sites visited should be
representative of the organization as a whole. The selec-
tion of sites to be visited is based on a number of factors,
including the following:
• Nature of the operations and GHG sources at each site
• Complexity of the emissions data collection and

calculation process
• Percentage contribution to total GHG emissions from

each site
• The risk that the data from sites are materially misstated
• Security requirements of sites (e.g., restrictions)
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• Competencies and training of key personnel
• Results of previous reviews, verifications, and uncer-
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tainty analyses.
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Timing of Verification
A verifier can be engaged at various points during the
GHG preparation and reporting process. Some organiza-
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tions may establish a semi-permanent internal

verification team to ensure that GHG data standards are Selecting a Verifier
A
continuously met and improved. Verification during a Factors to consider when selecting a verifier include their
reporting period allows for any reporting deficiencies or • Accreditation by relevant GHG programs
data issues to be addressed before the final report is
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• Previous experience and competence in undertaking

prepared. This may be particularly useful for organiza-
GHG verifications
tions preparing high-profile public reports. However,
some GHG programs may require, often on a random • Understanding of GHG issues, including calculation
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selection basis, an independent verification of the GHG methods

inventory following the submission of a report.
• Understanding of the organization’s operations and
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Verification timing may also be established by govern-

industry
ment regulation, law, or executive order. In all cases, the
verification cannot be closed out until the final data for • Objectivity, credibility, and independence.
the period has been submitted.
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The knowledge and qualifications of the individuals • Production data (tons of material produced, kWh of
conducting the verification can be more important electricity produced, etc.)
than those of the organizations from which they come.
• Raw material consumption data for mass balance
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Large organizations may actually have a predefined

calculations (invoices, delivery notes, weigh-bridge
internal verifier established by a regulation, law, or
tickets, etc.)
executive order. In cases where the verifier is not pre-
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defined, organizations should select groups on the • Emission factors (laboratory analysis, etc.)
basis of their knowledge and qualifications and ensure
• Description of how GHG emissions data have been
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that the lead verifier assigned is appropriately experi-

calculated:
enced. Effective verification of GHG inventories often
• Emission factors and other parameters used and
requires a mix of specialized skills, both at an opera-
their justification
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tional level and at a technical level (e.g., engineering

experience or industry specialization). • Assumptions on which estimations are based
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• Information on the measurement accuracy of meters

and weigh-bridges (e.g., calibration records) and
Preparing for GHG Verification
other measurement techniques
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The internal processes described in Chapter 7 are likely

to be similar to those followed by an independent veri- • Documentation of any GHG sources or activities
fier. Therefore, materials that the verifiers need are excluded due to, for example, technical or cost reasons
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similar. Information required by an external verifier is

• Information gathering process:
likely to include the following:
• Description of the procedures and systems used to
• Information about the organization (list of sub-organi- collect, document, and process GHG emissions
zations and their geographic location, ownership data at the facility and organization level
structure, financial entities within the organization)
• A roadmap documenting files (including filenames)
• Selected consolidation approach as defined in Chapter 3 containing the raw activity data, intermediate
processed data and final calculations
• Information about the organization’s main activities
and GHG emissions (types of GHG emissions produced, • Description of quality control procedures applied
description of activity that causes GHG emissions) (internal audits, comparison with last year’s data,
recalculation by second person, etc.)
• Details of any changes to organizational boundaries or
processes during the period, including the effects of • Other information:
these changes on emissions data • List of (and access to) persons responsible for
collecting GHG emissions data at each site and at
• Details of inter-organization and other partnering
the organizational level (name, title, e-mail, and
agreements, outsourcing and contractor agreements,
telephone numbers)
production sharing agreements, emissions rights and
other legal or contractual documents that determine • Information on uncertainties, qualitative and, if
the organizational and operational boundaries available, quantitative.
• Documented procedures for identifying sources of emis- Appropriate documentation needs to be available to
sions within the organizational and operational boundaries support the GHG inventory being subjected to external
verification. Statements made by management for which
• Information on other assurance processes to which the
no supporting documentation is available cannot be veri-
systems and data are subjected (e.g., internal audit,
fied. When a reporting organization has not yet
external reviews and certifications)
implemented systems for routinely accounting and
• Data used for calculating GHG emissions. This might, recording GHG emissions data, an external verification
for example, include the following: is difficult and may result in the verifier being unable to
• Energy consumption data (invoices, delivery notes, issue an opinion. Under these circumstances, the veri-
weigh-bridge tickets, meter readings: electricity, gas fiers may make recommendations on how current data
pipes, steam, and hot water, etc.)
74 CHAPTER 9
collection and collation processes should be improved so As well as issuing an opinion on whether the reported
that an opinion can be obtained in future years. information is free from material discrepancy, the veri-
fiers may, depending on the agreed upon scope of work,
Organizations are responsible for ensuring the existence,
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also issue a verification report containing a number of
quality, and retention of documentation to create an
recommendations for future improvements. The process
audit trail of how the inventory was compiled. If an
of verification should be viewed as a valuable input to
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organization issues a specific base year against which it
the process of continual improvement. Other entities
assesses its GHG performance, it should retain all rele-
outside of the organization may have responsibilities for
vant historical records to support the base year data.
improving the recording and reporting process as well. I
These issues should be kept in mind when designing and
Whether verification is undertaken for the purposes of
implementing GHG data processes and procedures.
internal review, public reporting, or certifying compli-
D
ance with a particular GHG program, it is likely to

contain useful information and guidance on how to
Using the Verification Findings
improve and enhance an organization’s GHG accounting
A
Before the verifiers can verify that an inventory has met

and reporting system.
the relevant quality standard, they may require the
organization to adjust any material errors identified Similar to the selected verifiers, those selected to assess
N
during the course of the verification. If the verifiers and and implement responses to the verification findings
the organization cannot agree on the adjustments, the should also have the appropriate skills and under-
verifier may not be able to provide the organization with standing of GHG accounting and reporting issues.
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an unqualified opinion. All material errors (individually

or in aggregate) need to be amended prior to the final NOTES
1
Verification is also known as “assurance.”
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verification sign off.

2
This is not the same as a de minimis threshold. A de minimis threshold
establishes an emissions source or group of sources that either should
be excluded from the inventory or to which an alternative estimation
method should be applied. See discussion on completeness in Chapter 1.
10 Setting a GHG Target
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What is involved in setting an emissions target and

how do I report performance in relation to my target?
S etting targets is a routine practice that helps ensure that an issue has
senior management’s attention and is factored into relevant decisions
about the services provided, and the materials and technologies used. Often, an
organizational GHG emissions reduction target is the logical follow-up to developing
a GHG inventory. Some government organizations may also be required to meet
mandatory reduction targets, in which case these guidelines can serve to inform
those policies.
G U I D A N C E
76
CHAPTER 10 Setting a GHG Target 77
Within an organization’s target, there may be operating • S AV I N G C O S T S A N D S T I M U L AT I N G I N N O VAT I O N .

unit goals such as reducing CO2 from a specific source, Implementing a GHG target can result in cost savings
department, or division. Further, within an operating by driving improvements in process innovation and
unit, goals can be set for specific operations or locations. resource efficiency. Targets that apply to products can
While setting targets may be within the authority of drive research and development, which in turn creates
many organizations, the targets may also be imposed on products and services that can improve efficiencies and
an organization from within the hierarchical structure. reduce emissions associated with the use of facilities.
This chapter provides guidance on the process of setting • P R E P A R I N G F O R F U T U R E R E G U L AT I O N S . Internal

and reporting on an organizational GHG target. accountability and incentive mechanisms established
Although the chapter focuses on emissions, many of the to support a target’s implementation can also equip
considerations equally apply to GHG sequestration (see organizations to respond more effectively to future
Appendix C). This chapter does not prescribe an organi- GHG regulations. In addition, organizations which
zation’s target, but focuses on the steps involved, choices have set and worked towards reduction targets are
to be made, and implications of those choices. better positioned to contribute practical insight to
shape future policy requirements.
• P A R T I C I P AT I N G I N V O L U N T A R Y P R O G R A M S . A growing
Why Set a GHG Target?
number of voluntary GHG programs are emerging to
Any robust public-sector performance strategy requires
encourage and assist organizations in setting, imple-
setting targets for productivity, mission accomplishment,
menting, and tracking progress toward GHG targets.
and other core indicators, as well as tracking perform-
Participation in voluntary programs can result in public
ance against those targets. Likewise, effective GHG
recognition, prepare organizations for future regula-
management involves setting a GHG target. As organiza-
tions, and enhance an organization’s GHG accounting
tions develop strategies to reduce the GHG emissions of
and reporting capacity and understanding. See
their products and operations, organization-wide GHG
Appendix A for a list of these programs.
targets are often key elements of these efforts, even if
only some parts of the organization are or will be subject
G
to mandatory GHG limits. Common drivers for setting a
Steps in Setting a Target
GHG target include the following:
Setting a GHG target involves making choices among
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• D E M O N S T R AT I N G L E A D E R S H I P A N D O R G A N I Z AT I O N A L various strategies for defining and achieving a GHG
R E S P O N S I B I L I T Y. With the emergence of GHG reduction. The organizational goals, policy context,
regulations in many parts of the world, as well as existing planning mechanisms such as Environmental I
growing concern about the effects of climate change, Management Systems (EMS), costs of making reductions,
establishing and publicizing a GHG target demon- and stakeholder discussions should inform these choices.
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strates leadership and organizational responsibility.

The following sections outline the 10 steps involved in
This can improve an organization’s standing and
target setting. Although presented sequentially, in prac-
enhance reputation with taxpayers, employees, stake-
tice target setting involves cycling back and forth between
A
holders, partners, and the general public.

the steps. The organization is assumed to have developed
• M I N I M I Z I N G A N D M A N A G I N G G H G R I S K S . While devel- a GHG inventory before implementing these steps.
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oping a GHG inventory is an important step toward However, due to the nature of public-sector management,
identifying GHG risks and opportunities, a GHG target an executive order or legislation could impose both simul-
is a planning tool that can drive GHG reductions. A taneously. Figure 10.1 summarizes the steps.
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GHG target helps raise internal awareness about the

risks and opportunities presented by climate change,
and ensures the issue is on the operational agenda. 1. Obtain Senior Management Commitment
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This can serve to minimize and more effectively As with any organization-wide target, senior manage-
manage the risks associated with climate change. ment buy-in and commitment, particularly at the highest
level, are prerequisites for a successful GHG reduction
Setting a GHG Target
FIGURE 10.1. Steps in Setting a GHG Target

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internal accountability and incentive system and

1. Obtain senior management commitment
providing adequate resources to achieve the target. This
will be difficult, if not impossible, without senior
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management commitment.
2. Decide on the target type
Set an absolute or intensity target? If a target is imposed, it may be necessary for a senior
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manager to understand the intricacies of an organiza-

tion’s GHG management plan. For example, the
3. Decide on the target boundary boundaries set (see Chapters 3 and 4) may carry legal
A
Which GHGs to include? implications in terms of which assets must be managed

Which direct and indirect emissions? towards GHG emissions reductions under a mandatory
Which geographical operations? program. Some elements of the program may be
D
Treat business types separately? prescribed by regulations so adherence to these regula-

tions will be part of official responsibilities. Delegation
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of responsibilities and accountability must be agreed at

4. Choose the target base year the senior management level.
Use a fixed or rolling approach?
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Finally, while commitment from senior management is

Use a single or multi-year approach?
crucial, the setting and successful attainment of emission
reduction goals requires commitment at all levels of an
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5. Define the target completion date organization, as well as behavioral changes on the
Set a long- or short-term target? ground. Successful GHG mitigation strategies are
embedded within the fabric of an organization’s day-to-
day operations.
6. Define the length of the target commitment period
Set a one-year or multi-year commitment period?
2. Decide on the Target Type
There are two broad types of GHG targets: absolute and
7. Decide on the use of offsets or credits intensity-based. Targets can be imposed by external
regulation or determined internally by an organization.
An absolute target is usually expressed in terms of a
8. Establish a target double counting policy specified reduction over time in the quantity of GHG
How to deal with double counting of reductions across companies? emissions to the atmosphere, the unit typically being ton
How does GHG trading affect target performance? of CO2e (such as reducing CO2e by 20 percent below
2000 levels by 2010). An intensity target is usually
expressed as a reduction in the ratio of GHG emissions
9. Decide on the target level
relative to another operational metric over time (such as
What is business-as-usual? How far to go beyond that?
reducing CO2 by 12 percent per hospital bed provided
How do all the above steps influence the decision?
between 2000 and 2008).1
The comparative metric should be carefully selected. The

10. Track and report progress Government Accounting Standards Board offers impor-
Make regular performance checks tant guidance on the selection of measures of
Report information in relation to the target productivity, effectiveness, quality, and timeliness that
may provide a useful starting point for organizations as
Adapted from the GHG Protocol Corporate Standard, 2004 they develop metrics.2 The metric chosen can be the
output of the organization (e.g., ton CO2e per blighted
program. Implementing a reduction target is likely to home restored, per student educated, or per mile of road
necessitate changes in behavior and decision making paved) or some other metric such as office space. To
throughout the organization, as well as with landlords, facilitate transparency, organizations using an intensity
tenants, and suppliers. It also requires establishing an target shall also report the absolute emissions from
78 C H A P T E R 10
sources covered by the target. Table 10.1 summarizes basis of an average emission factor of fuel use per
the advantages and disadvantages of each type of target, passenger. However, how this reduction actually trans-
and provides examples. Some organizations have both an lates into a change in GHG emissions to the atmosphere
absolute and an intensity target. depends on a number of factors, including whether
another person takes the “empty seat” or whether this
INDIRECT EMISSIONS
unused seat contributes to reduced air traffic over the
When considering whether to include indirect emissions
longer term. Similarly, reductions in scope 2 emissions
in either absolute or intensity-based targets, it should be
calculated with an average grid emission factor may
noted that changes in scope 2 or 3 emissions over time
overestimate or underestimate the actual reduction,
may not always accurately capture the actual reduction
depending on the nature of the grid.
in the release of emissions to the atmosphere. This is
because the activity of the reporting organization does Generally, so long as the accounting of indirect emissions
not always have a direct cause-and-effect relationship over time recognizes activities that in aggregate change
with the resulting GHG emissions. For example, a reduc- global emissions, any such concerns over accuracy
tion in air travel would reduce an organization’s scope 3 should not inhibit organizations from reporting their
emissions. This reduction is usually quantified on the indirect emissions reductions. In cases where accuracy is
TABLE 10.1 Comparing Absolute and Intensity Targets

A D VA N T A G E S D I S A D VA N T A G E S EXAMPLES
ABSOLUTE TARGETS
• Designed to achieve a reduction in a • May be difficult to achieve if the organization grows • Tons CO2
specified quantity of GHGs emitted to unexpectedly and growth is linked to GHG emissions • Tons CH4
the atmosphere • Target base year recalculations for significant • Tons CO2e
• Environmentally robust, entailing a commit- structural changes to the organization add
ment to reduce GHGs by a specified amount complexity to tracking progress over time
• Transparently address potential • Do not allow comparisons of GHG intensity or effi-
G
stakeholder concerns about the need to ciency
manage absolute emissions • Rewards absolute GHG reductions that may be
• Avoids complexity that may be involved with achieved by decreasing production or services offered
U
selecting intensity metrics that can apply (i.e., contraction, see Chapter 5)
across multiple, diverse organizations
INTENSITY TARGETS I
• Reflect GHG performance improvements • No guarantee that GHG emissions to the atmosphere • Tons CO2e/square foot of
D
independent of expansion or contraction will be reduced—absolute emissions may rise even if warehouse space
• Target base year recalculations for structural intensity goes down while output increases • Tons CO2e/tons of mail
changes are usually not required (see step 4) • Organizations with diverse operations may find it delivered
A
• May increase the comparability of GHG difficult to define a single common metric • Tons CO2e/number of
performance among organizations • If a monetary variable is used for the metric, it must employees
be recalculated for changes in inflation, adding • Tons CO2e/square
N
complexity to the tracking process foot/person

• Especially sensitive to inaccuracies in the underlying • Tons CO2e/$ appropriated
C
data. Public organizations should take particular • Tons CO2e/megawatt hour

care to ensure that these data are reliable, complete of electricity produced
and accurate • CO2e/British thermal unit
E
• If organization changes mission, chosen denominator • Tons CO2e/park visitor

in the metric may no longer be relevant • Tons CO2e/mile of highway
constructed

E
C
N
A
D
I
U
G
more important, undertaking a more detailed assessment itate more cost-effective reductions by increasing the
of the actual reduction using a project quantification reduction opportunities available. Though indirect
method may be appropriate. See Appendix F for more emissions are generally harder to measure accurately
examples of reductions in indirect emissions. and verify than direct emissions, some categories such
as scope 2 emissions from purchased electricity may
be amenable to accurate measurement and verifica-
tion. Including indirect emissions can raise issues with
3. Decide on the Target Boundary
regard to ownership and double counting of reductions,
The target boundary defines which GHGs, geographic
as indirect emissions are by definition someone else’s
operations, sources, and activities are covered by the
direct emissions (see step 8).
target. The target and inventory boundary can be iden-
tical or the target may address a specified subset of the
However, inclusion of both direct and indirect emis-
sources included in the organization inventory. The
sions in targets can help to prevent “leakage” of
quality of the GHG inventory should be a key factor
emissions that may occur when organizational activi-
informing this choice. The questions to be addressed in
ties shift between scopes. For example, organizations
this step include the following:
with only a scope 1 or 2 target may be incentivized to
• W H I C H G H G S ? Targets usually include one or more of outsource certain activities such as printing, whereby
the six major GHGs covered by the Kyoto Protocol. scope 2 emissions from electricity used to power the
For organizations with significant non-CO2 GHG internal printing machinery become scope 3 emissions,
sources, it usually makes sense to include these to and may not be reported at all. Carefully selecting
increase the range of reduction opportunities. targets can ensure that the organization’s total impact
However, practical monitoring limitations may apply is tracked and managed.
to smaller sources.
• W H I C H G E O G R A P H I C A L O P E R AT I O N S ? Only country or
• WHICH DIRECT AND INDIRECT EMISSION SOURCES? regional operations with reliable GHG inventory data
Including indirect GHG emissions in a target will facil- should be included in the target. For organizations
80 C H A P T E R 10
with global operations, it makes sense to limit the • U S I N G A F I X E D T A R G E T B A S E Y E A R . Most GHG

target’s geographical scope until a robust and reliable targets are defined as a percentage reduction in emis-
inventory has been developed for all operations. sions below a fixed target base year (e.g., reduce CO2
Organizations with facilities that are subject to GHG emissions 25 percent below 2008 levels by 2020).
regulations or reporting programs need to decide Chapter 5 describes how organizations should track
whether or not to include the covered emission sources emissions in their inventory over time in reference to a
in their organizational target.3 fixed base year. Although using different years for the
inventory base year and the target base year is possible,
• S E P A R AT E T A R G E T S F O R D I F F E R E N T T Y P E S O F O P E R -
to streamline the inventory and target reporting process,
AT I O N S ? For organizations with diverse operations, it
it usually makes sense to use the same year for both. As
may make more sense to define separate GHG targets
with the inventory base year, ensuring the emissions data
for different core activities, especially when using an
for the target base year are reliable and verifiable is
intensity target, where the most meaningful metric for
important. Using a multiyear average target base year is
defining the target varies across operating units.
also possible, and the same considerations as described
for multi-year average base years in Chapter 5 apply.
4. Choose the Target Base Year • U S I N G A R O L L I N G T A R G E T B A S E Y E A R . Organizations

For a target to be credible, how target emissions are may consider using a rolling target base year if
defined in relation to past emissions has to be trans- obtaining and maintaining reliable and verifiable data
parent. Two general approaches are available: a fixed for a fixed target base year is likely to be challenging
target base year or a rolling target base year. (for example, due to frequent acquisitions). With a
TABLE 10.2 Comparing Targets with Rolling and Fixed Base Years
QUESTIONS FIXED TARGET BASE YEAR ROLLING TARGET BASE YEAR
What is the target base year? A fixed reference year in the past The previous year
How far back is like-with-like The time series of absolute emissions will If there have been significant structural changes,
compare like with like for all years if the the time series of absolute emissions will not
G
comparison possible?
emissions for intervening years are also recal- compare like with like over more than two years at
culated in the event of base year recalculations a time
U
What is the basis for comparing The comparison over time is based on what is The comparison over time is based on what was
emissions between the target owned/controlled by the organization in the owned/controlled by the organization in the years
target completion year the information was reporteda I
base year and completion year?
(See Figure 10.2)
How far back are recalculations Emissions are recalculated for the fixed target Emissions are recalculated only for the year prior
D
made? base year to the structural change, or ex-post for the year of
the structural change which then becomes the
base year
A
How reliable are the target base If an organization with a target acquires an Data from an acquired organization’s GHG emis-
organization that did not have reliable GHG data sions are only necessary for the year before the
N
year emissions?
in the target base year, then back-casting of acquisition (or even only from the acquisition
emissions becomes necessary, reducing the reli- onwards), reducing or eliminating the need for
C
ability of the base year back-casting
When are recalculations made? The circumstances which trigger recalculations for structural changes, etc., (see Chapter 5) are the
same under both approaches
E

a Simply adding the yearly emissions changes under the rolling base year yields a different result from the comparison over time made with a fixed base year, even without structural changes.
In absolute terms, an X percent reduction every year over five years (compared with the previous year) is not the same as an (X times 5) reduction in year 5 compared to year 1.
FIGURE 10.2 Comparing a Stabilization Target under the Fixed and Rolling Target Base Year Approach
E
INCREASE
C
Department A
N
Fixed base year
➡
Department
A
B 1 2 3
EMISSIONS
D
A aquires B at
the start of year 3 NO CHANGE
NO CHANGE
Department
I
➡
A
1 2 3
Rolling base year
U
Department A
1 2 2 3
G
A stabilization target is one that aims to keep emissions constant over time. In this example, Department A merges with and subsumes
Department B, which has experienced organic GHG growth since the target base year (or starting year). Under the rolling approach, emis-
sions growth in the subsumed Department (B) from year 1 to year 2 does not appear as an emissions increase in relation to the target of
the acquiring Department (A). Thus Department A would meet its stabilization target when using the rolling approach but not when using
the fixed approach. In parallel to the example in chapter 5, past GHG growth or decline in divided organizations (GHG changes before the
division) would affect the target performance under the rolling approach, while it would not be counted under the fixed approach.
rolling target base year, the base year rolls forward at consolidations or realignments) or changes in measure-
regular intervals, usually one year, so that emissions ment and calculation methods alter the emissions profile
are always compared with the previous year.4 However, over time. The definition of what triggers a base year
emissions reductions can still be collectively stated emissions recalculation is the same under both the fixed
over several years. An example would be “from 2001 base year and rolling base year approach. The difference
through 2012, emissions will be reduced by 1 percent lies in how far back emissions are recalculated. Table
every year, compared to the previous year.” When the 10.2 compares targets using the rolling and fixed base
organization structure or calculation methodologies year approaches, and Figure 10.2 illustrates one of the
changes, recalculations only need to be made to the key differences.
previous year, which is the target base year.5 As a
• Recalculations under intensity targets. While the
result, the emission inventories in the “target starting
standard in Chapter 5 applies to absolute inventory
year” (2001 in the example) are not comparable with
emissions of organizations using intensity targets,
those of the “target completion year” (2012 in the
recalculations for structural changes for the purposes
example), because the former have not been corrected
of the target are not usually needed unless the struc-
for structural or methodological changes, whereas the
tural change results in a significant change in the GHG
latter have been. In contrast, the current inventory is
intensity. However, if recalculations for structural
always comparable with the inventory for the
change are made for the purposes of the target, they
preceding inventory period (the base year).
should be made for both the absolute emissions and the
Chapter 5 provides standards on when and how to recal- operational metric. If the target operational metric
culate base year emissions to ensure like-with-like becomes irrelevant through a structural change, a
comparisons over time when structural changes (e.g., reformulation of the target might be needed.
82 C H A P T E R 10
FIGURE 10.3 Short and Long Commitment Periods

5. Define the Target Completion Date
The target completion date determines whether the
1 year target is relatively short- or long-term. Long-term
targets (e.g., with a completion year 10 years from the
time the target is set) facilitate long-term planning for
EMISSIONS
large capital investments with GHG benefits. However,

they might also encourage later phase-outs of less effi-
cient equipment. Generally, long-term targets depend on
uncertain future developments, which can have opportu-
nities as well as risks. A 5-year target period may be
TIME more practical for organizations with shorter planning
cycles. It is also possible that a target date will be
5 years imposed by legislation. Some organizations may face an
imposed date or series of dates, with tiered targets.
EMISSIONS
6. Define the Length of the Commitment Period

The target commitment period is the time during which
emissions performance is actually measured against the
target. It ends with the target completion date. Many
TIME organizations use single-year commitment periods,
whereas the Kyoto Protocol, for example, specifies a
Adapted from the GHG Protocol Corporate Standard, 2004 multiyear “first commitment period” of 5 years
(2008–12). The length of the target commitment period
is an important factor in determining an organization’s
Setting a Target for Portland level of commitment. In the public sector, legislation or
and Multnomah County Government Operations higher authority can impose target commitment periods.
G
Generally, the longer the target commitment period is,
The City of Portland and Multnomah County have been conducting
the longer the period during which emissions perform-
GHG inventories for several years. The 2009 effort included both
U
ance counts towards the target.
an inventory of the government operations of the city and county,
as well as an assessment of the whole county’s emissions (i.e., a • EXAMPLE OF A SINGLE-YEAR COMMITMENT PERIOD.
community-level inventory). Although the city and county govern- Organization Beta has a target of reducing emissions I
ment operations accounted for only one percent of the county’s by 10 percent compared with its target base year
total emissions, the governments chose to lead by example and 2000, by the completion date of 2010. For Beta to
D
set GHG reduction targets for their activities. They pledged to meet its target, it is sufficient for its emissions to be,
reduce carbon dioxide emissions from city and county operations in the year 2010, no more than 90 percent of year
50 percent below 1990 levels by 2050, and identified specific 2000 emissions.
A
actions to be completed before 2012. Some of these actions

• EXAMPLE OF A MULTIYEAR COMMITMENT PERIOD.
include: installing more efficient technologies for street lighting,
Organization Gamma has a target of reducing emis-
N
water pumps, and water treatment; requiring all new city and
sions by 10 percent, compared with its target base
county buildings to achieve energy-efficiency performance
year 2000, by the commitment period 2008–12. For
targets; generating 15 percent electricity from on-site or district
Gamma to meet its target, its sum total emissions
C
renewable energy sources; and recovering 75 percent of all waste

from 2008–12 must not exceed 90 percent of year
generated in city and county operations. The city and county also
2000 emissions times five (number of years in the
emphasized the GHG impact of their supply chain.
E
commitment period). In other words, its average

See City of Portland and Multnomah County (2009) City of Portland and Multnomah annual emissions over those 5 years must not exceed
County Climate Action Plan, City of Portland Bureau of Planning and Sustainability, and
Multnomah County Sustainability Program 90 percent of year 2000 emissions.
voluntary or mandatory programs. The use of offsets

E
may be appropriate when the cost of internal reductions

is high, opportunities for reductions are limited, or the
C
organization is unable to meet its target because of

unexpected circumstances.
Reporting on the target should specify whether offsets

N
are used and how much of the target reduction was

achieved using them.
A
CREDIBILITY OF OFFSETS AND TRANSPARENCY

D
Offsets/credits reflect activities that occur outside of

the organizational and operational boundaries of
entity-level inventories, and the methodology by which
I
these reductions are quantified is beyond the scope of

this U.S. Public Sector Protocol. The Project Protocol and
U
its accompanying supplements on Land Use, Land-Use

Change, and Forestry and Grid-Connected Electricity
Projects detail basic methodology for these types of
G
external reduction projects.
Still, the uncertainties that surround GHG project

accounting make it difficult to establish that an offset is
Target commitment periods longer than one year can be equivalent in magnitude to the internal emissions it is
used to mitigate the risk of unpredictable events in one offsetting. This is why organizations should always
particular year influencing performance against the report their own internal emissions in separate accounts
target. Figure 10.3 shows that the length of the target from offsets used to meet the target, rather than
commitment period determines how many emissions are providing a net figure (see step 10). It is also important
actually relevant for target performance. to carefully assess the credibility of offsets used to meet
a target and to specify the origin and nature of the
For a target using a rolling base year, the commitment offsets when reporting. Information needed includes:
period applies throughout: emission performance is
continuously being measured against the target every • The type of project
year from when the target is set until the target • Geographic and organizational origin
completion date.
• How offsets have been quantified
• Whether they have been recognized by external

7. Decide on the Use of GHG Offsets or Credits6 programs (Clean Development Mechanism (CDM),
A GHG target can be met entirely from internal reduc- Joint Implementation (JI), etc.).
tions at sources included in the target boundary or
through using offsets generated from GHG reduction One important way to ensure the credibility of offsets is to
projects that reduce emissions at sources (or enhance demonstrate that the quantification method adequately
sinks) external to the target boundary.7 Offsets are addresses these key project accounting challenges.
discrete GHG reductions used to compensate for (i.e., Additionally, it is important to check that purchased
offset) GHG emissions elsewhere and are generally offsets have not also been counted toward another organi-
calculated relative to a baseline that represents a hypo- zation’s GHG target. This might involve a contract
thetical scenario for what emissions would have been in between the buyer and seller that transfers ownership of
the absence of the project. However, it is important to the offset. Step 8 provides more information on accounting
note that offsets are a policy issue and that a variety of for GHG trades in relation to an organizational target,
standards and methods have been defined for different including establishing a policy on double counting.
84 C H A P T E R 10
OFFSETS AND INTENSITY TARGETS • Organization A has a target that includes GHG
When using offsets under intensity targets, all the above sources that are also regulated under a trading
considerations apply. To determine compliance with the program. In this case, reductions at these common
target, the offsets can be subtracted from the absolute GHG sources are used by organization A to meet
emissions value (the numerator); the resulting difference both its organizational target and the trading
is then divided by the corresponding metric. Absolute program target.
emissions are still reported separately both from offsets
• Organization B has a target to reduce its direct
and the operational metric (see step 9 below).
emissions from the generation of electricity (scope
1). Organization C purchases electricity directly from
organization B and also has a target that includes
8. Establish a Target Double Counting Policy
reducing its indirect emissions from purchased elec-
This step addresses double counting of GHG reductions
tricity (scope 2). Organization C undertakes energy
and offsets, as well as allowances issued by external
efficiency measures to reduce its consumption of
trading programs. It applies only to organizations that
electricity. These may show up as reductions in both
engage in trading (sale or purchase) of GHG offsets or
organizations’ emissions (and contribute towards
whose organizational target boundaries interface with
each organization’s target) if a decrease in electricity
other organizations’ targets or external programs.
consumption by organization C also leads to a
Given that there is currently no consensus on how such decrease in electricity generation by organization B.9
double counting issues should be addressed, organiza-
These two examples illustrate that double counting is
tions should develop their own target double-counting
inherent when the GHG sources where the reductions
policy. This should specify how reductions and trades
occur are included as part of fulfilling more than one
related to other targets and programs are reconciled
with their organization target and, accordingly, which
types of double counting situations are regarded as rele-
vant. The following are some examples of double
counting that might need to be addressed in the policy:
G
• D O U B L E C O U N T I N G O F O F F S E T S . This can occur when
a GHG offset is counted toward the target by both the
selling and purchasing organizations. For example,
U
organization A undertakes an internal reduction
project that reduces GHGs at sources included in its
own target. Organization A then sells this project I
reduction to organization B to use as an offset toward
its target, while still counting the reduction toward its
D
own target. In this case, reductions are counted by two

different organizations against targets that cover
different emissions sources. Trading programs address
A
this by using registries that allocate a serial number to

all traded offsets or credits and ensuring the serial
N
numbers are retired once they are used. In the absence

of registries, this could be addressed by a contract
between seller and buyer, so that the emissions reduc-
C
tions are only reflected in one inventory.
• D O U B L E C O U N T I N G D U E T O T A R G E T O V E R L A P. 8 This
E
can occur when sources included under an organiza-

tion’s target are also subject to limits by an external
program or another organization’s target. Two
examples follow:
• Considering whether there are any environmental or

E
energy plans, capital investments, product or service

changes, or targets that will affect GHG emissions.
Are there plans already in place for fuel switching, on-
C
site power generation, or renewable energy

investments that affect the future GHG trajectory?
N
• Developing different reduction strategies on the basis

of the major reduction opportunities available and
examining their effects on total GHG emissions.
A
Investigate how emissions projections change with

different mitigation strategies.
D
• Looking at the future of the organization as it relates

to GHG emissions.
I
• Benchmarking GHG emissions with similar organiza-

tions. Generally, organizations that have not previously
invested in energy and other GHG reductions should be
U
capable of meeting more aggressive reduction levels

because they would have more cost-effective reduction
G
opportunities available.
10. Track and Report Progress

target of the same or different organizations. Ideally, an Once the target has been set, it is necessary to track
organization should try to avoid double counting in its performance against it to check compliance and—to
organizational target if this undermines the environ- maintain credibility—to report emissions and any
mental integrity of the target. Also, any prevented external reductions in a consistent, complete, and trans-
double counting between two organizations provides an parent manner:
additional incentive for one of these organizations to
• C A R R Y O U T R E G U L A R P E R F O R M A N C E C H E C K S . To
further reduce emissions. However, in practice, the
track performance against a target, it is important to
avoidance of double counting can be quite challenging,
link the target to the annual GHG inventory process
particularly for organizations subject to multiple
and make regular checks of emissions in relation to
external programs and when indirect GHG emissions are
the target. Some organizations use interim targets for
included in the target. Organizations should therefore be
this purpose (a target using a rolling target base year
transparent about their double counting policy and state
automatically includes interim targets every year).
any reasons for choosing not to address some double-
counting situations. • R E P O R T I N F O R M AT I O N I N R E L AT I O N T O T H E T A R G E T.
Organizations should include the following informa-
tion when setting and reporting progress in relation
9. Decide on the Target Level to a target:
The decision on setting the target level should be 1. Description of the target
informed by all the previous steps. Other considerations • Provide an outline of the target boundaries
to take into account include the following: chosen
• Understanding the key drivers affecting GHG emis- • Specify target type, target base year, target
sions by examining the relationship between GHG completion date, and length of commitment
emissions and other operational metrics such as period
productivity, square footage of warehouse space,
• Specify whether offsets can be used to meet the
number of employees, unit of service provided, and
target; if yes, specify the type and amount
costs of making reductions.
86 C H A P T E R 10
• Describe the target double-counting policy NOTES

1
Some organizations set GHG targets by formulating this ratio the
• Specify the target level other way around.
2. Information on emissions and performance in 2
See “What is performance measurement?” About Performance
relation to the target Reporting for Government, http://seagov.org/aboutpmg/
performance_measurement.shtml.
• Report emissions from sources inside the target
3
boundary separately from any GHG trades Examples include the UK ETS, the CCX, and the EU ETS.
4
Using an interval other than one year is possible, but the longer the
• If using an intensity target, report absolute interval at which the base year rolls forward, the more this approach
emissions from within the target boundary becomes like a fixed target base year. This discussion is based on
separately, both from any GHG trades and a rolling target base year that moves forward at annual intervals.
the operational metric 5
For further details on different recalculation methodologies, see
the guidance document “Base year recalculation methodologies
• Report GHG trades relevant to compliance with for structural changes” on the GHG Protocol Initiative website
the target (including how many offsets were used (www.ghgprotocol.org).
to meet the target) 6
This chapter uses the term offsets as a generic term, but offsets can
be treated as interchangeable with credits or allowances in a cap
• Report any internal project reductions sold or and trade regulatory program.
transferred to another organization for use as 7
For the purposes of this chapter, the terms “internal” and “external”
an offset refer to whether the reductions occur at sources inside (internal) or
outside (external) the target boundary.
• Report overall performance in relation to the 8
Overlap here refers to a situation when two or more targets include
target. the same sources in their target boundaries.
9
The energy efficiency measures implemented by organization C may not
always result in an actual reduction of organization B’s emissions. See
Appendix F for further details on reductions in indirect emissions.
G
U
I
D
A
N
C
E
A Overview of GHG Programs
X
FOCUS
GA SES ORGA NIZ ATION A L OPER ATION A L
N A ME OF PROGR A M (ORGA NIZ ATION,
COV ERED BOUNDA RIES BOUNDA RIES
PRO JECT, FACILIT Y )
VOLUNTARY REPORTING PROGRAMS
I
American College and University Organization Six Kyoto gases Equity share or control Scope 1, 2 and specific scope 3
President’s Climate Commitment sources required, other scope 3
D
(ACUPCC) http://www. sources optional

presidentsclimatecommitment.org
Carbon Disclosure Project Organization Six Kyoto gases Equity share or control Scope 1 and 2 required, scope 3
N
http://www.cdproject.net encouraged
Energy Information Administration Organization and Can report six Financial control preferred, Scope 1 required, scope 2 and 3
E
1605B http://www.eia.doe.gov/ project Kyoto gases plus but equity share or optional
oiaf/1605/1605b.html other GHGs operational control possible
P
Global Reporting Initiative Organization Six Kyoto gases Determined according to Scope 1, 2 and specific scope 3
http://www.globalreporting.org GRI’s Boundary Technical sources required, other scope 3
Protocol sources optional
P
ICLEI (Local Governments for Organization and Six Kyoto gases Control for local government Scope 1, 2 and specific scope 3
Sustainability) http://www.iclei.org/ community-level inventories, and geographical sources required, other scope 3
city boundaries for sources optional
A
community-wide inventories
The Climate Registry Organization Six Kyoto gases Equity share or control Scope 1 and 2 required, scope 3
http://www.theclimateregisty.org encouraged
World Wildlife Fund Climate Savers Organization CO2 Equity share or control Scope 1 and 2 required, scope 3
http://www.worldwildlife.org/ encouraged
climatesavers
MANDATORY REPORTING PROGRAMS
US Federal Executive Order 13514 Organization Six Kyoto gases Operational Control Scope 1 and 2, and specific
http://www.gpo.gov/fdsys/pkg/DCPD- scope 3 sources required
200900783/pdf/DCPD-200900783.pdf.
U.S. EPA Mandatory Reporting Rule1 Facility, with Six Kyoto Defined by source category Defined by source category
http://www.epa.gov/climatechange/ organization elements gases, plus applicability criteria applicability criteria
emissions/ghgrulemaking.html other qualifying
fluorinated gases
VOLUNTARY EMISSIONS TRADING PROGRAMS
Chicago Climate Exchange Organization and Six Kyoto gases Owned facilities with direct Direct combustion and process
www.chicagoclimateexchange.com project emissions emission sources required,
scope 2 optional
REGULATORY EMISSIONS TRADING PROGRAMS
European GHG Emissions Allowance Facility Six Kyoto gases Facilities in selected sectors Scope 1
Trading Scheme
http://ec.europa.eu/environment/
index_en.htm
Regional Greenhouse Gas Initiative Facility CO2 Facilities in selected sectors Scope 1
(RGGI) http://www.rggi.org/home
Midwestern Greenhouse Gas Reduction Facility Six Kyoto gases Facilities in selected sectors Scope 1
Accord (Midwestern Accord) 2
http://www.midwesternaccord.org/
Western Climate Initiative (WCI) 2 Facility Six Kyoto gases Facilities in selected sectors Scope 1
http://www.westernclimateinitiative.org/
1
Rule specification not finalized at the time of publication. First GHG reports are due March 2011.
2
Program specifications not finalized at the time of publication, but reflect current program recommendations. See www.midwesternaccord.org and
88 www.westernclimateinitiative.org for more details.
APPENDIX A 89
N AT URE / PURPOSE
BA SE Y E A R REDUCTION TA RGE T V ERIFICATION
OF PROGR A M
Foster GHG reductions in colleges and Specific to each Required to set reduction target within None required
universities organization two years of joining the program
Global repository of emissions Specific to each Encouraged but not required None required
information from company survey organization
responses
Encourage the reporting of emissions, Specific to each Encouraged but not required Third-party verification encouraged
emission reductions and sequestration organization, can be the
activities average of a one-to-four
year base period
Comprehensive multi-indicator Year that organization joins Encouraged but not required “External assurance” necessary to
performance tracking and target-setting program qualify for certain Application levels
Assist local governments in tracking Specific to each local Required, specific to each local government None required
emissions, setting targets and achieving government according to Five Milestone process
reductions at organizational and
community-wide levels
Track emissions through verified public Specific to each Encouraged but not required Required through approved third
registry, provide technical assistance organization party verifier
Help companies achieve reductions Specific to each Required, specific to each organization Required through approved third
through promoting innovation and organization party verifier
providing technical assistance
Demonstrate government leadership Agency-specific Agency-specific reduction targets contribute TBA

and achieve reductions to collective 28% reduction in scope 1 and
A
2 emissions, and 13% reduction of specified
scope 3 emissions, below 2008 levels by
2020
P
Collect accurate emissions data to guide Source-specific Not applicable Combination of monitoring
future climate change policy decisions equipment requirements, self-
certification and on-site audits
P
E
Achieve annual targets through tradable Average of 1998 through 6% reduction below base year by 2010 Required through approved third
allowance market 2001, or Phase II members party verifier
can use single year 2000
N
Achieve annual caps through tradable Determined by member Member state allocations based on collective Required through third party verifier
allowance market country for allowance EU commitment of 8% overall reduction
D
allocation below 1990
Achieve annual caps through tradable 2009 10% reduction by 2018 below 2009 levels Auditing by states
I
allowance market
Achieve annual caps through tradable 2005 20% reduction by 2020 and 80% reduction Required through third party verifier
allowance market by 2050 below 2005 levels
X
Achieve annual caps through tradable 2005 15% reduction by 2020 from 2005 levels Required through third party verifier
allowance market
B Equity Share Consolidation Approach
T
he U.S. Public Sector Protocol recommends the The staff preparing the inventory may therefore need
control approach as the most appropriate consoli- to consult with the organization’s accounting or legal
X
dation for public sector activities, and specifically staff to ensure that the appropriate equity share
recommends the use of operational control as percentage is applied for each joint operation. For
I
discussed in Chapter 3. Nonetheless, the equity share assets which are leased to other entities, the emissions
approach may be applicable to certain public sector would be treated the same as the financial control
organizations where ownership boundaries can be approach, as both approaches reflect financial owner-
D
clearly delineated, and where ownership of assets ship or control rather than operation of the asset.
represents a significant aspect of the organization’s Tables 4.2 and 4.3 in Chapter 4 detail this accounting.
N
mission. Some examples here might include a treasury

department that owns stock or assets pursuant to
policy directives, or a public organization that owns Which Approach is Most Suitable?
E
major assets such as real estate or land. In such In general, organizations should choose a consolida-
circumstances, inventory reporting goals may require tion approach that is best suited to their
different data sets, and the reporting organization may organizational goals and mission, activities, and GHG
P
need to account for its GHG emissions in two separate accounting and reporting requirements. Examples of
inventories, one using the equity share and one using how such considerations may drive the selection of an
P
the control approach. approach include the following:
• Government reporting programs. Government regu-

A
latory programs need to monitor and enforce

Equity Share Approach
compliance. Since compliance responsibility gener-
Under the equity share approach, an organization
ally falls to the operator (not equity holders or the
accounts for GHG emissions from operations
organization that has financial control), govern-
according to its share of equity or ownership in the
ments usually require reporting on the basis of
operation. The equity share reflects economic interest,
operational control, either through a facility-level-
which is the extent of rights an organization has to the
based system or involving the consolidation of data
risks and rewards flowing from an operation. Typically,
within certain geographical boundaries (e.g., RGGI
the share of economic risks and rewards in an opera-
allocates emission permits to the operators of
tion is aligned with the organization’s percentage
certain installations).
ownership of that operation, and equity share will
normally be the same as the ownership percentage. • Alignment with financial accounting. Future finan-
Where this is not the case, the economic substance of cial accounting standards may treat GHG emissions
the relationship the organization has with the opera- as liabilities and emissions allowances/credits as
tion always overrides the legal ownership form to assets. To assess the assets and liabilities an organi-
ensure that equity share reflects the percentage of zation creates through joint operations, the same
economic interest. This principle is consistent with consolidation rules used in financial accounting
international financial reporting standards. should be applied in GHG accounting. The equity
share and financial control approaches result in
In the private sector, equity can include ownership of
closer alignment between GHG accounting and
common stock or preferred stock, or any other assets.
financial accounting.
While government organizations might maintain major
assets such as buildings or real estate, they generally do • Management information and performance tracking.
not buy stock in private companies. Certain financial For the purpose of performance tracking, the control
public organizations such as a treasury department may approaches are more appropriate because managers
purchase stock in private companies pursuant to specific can only be held accountable for activities under
policy directives. In this case, a GHG inventory their control.
prepared according to the equity share approach could
• Cost of administration and data access. The equity
reveal the GHG profiles and risks associated with those
share approach can result in higher administrative
companies, and provide a more comprehensive picture
costs than the control approach because it can be
of the organization’s total GHG impact.
90
APPENDIX B 91
difficult and time consuming to collect GHG emis-

sions data from joint operations not under the
control of the reporting organization. Organizations
are likely to have better access to operational data
and therefore greater ability to ensure that it meets
minimum quality standards when reporting on the
basis of control.
• Completeness of reporting. Organizations might find

it difficult to demonstrate completeness of reporting
when the operational control criterion is adopted
because there are unlikely to be any matching records
or lists of financial assets to verify the operations.
A
P
P
E
N
D
I
X
C Accounting for Sequestered Atmospheric Carbon
A
key purpose of the U.S. Public Sector Protocol is to nities for improving the organization’s GHG profile.
X
provide organizations with guidance on how to Opportunities may also exist to create value from reduc-
develop inventories that provide an accurate and tions along the value chain by organizations acting alone
I
complete picture of their GHG emissions, both for or in partnership with private companies, constituents,
their direct operations as well as those along the value or the public.
chain. For some types of organizations, this is not
D
possible without addressing the organization’s impact

on sequestered atmospheric carbon.1 Accounting for Sequestered Carbon in
N
the U.S. Public Sector Protocol

Consensus methods have yet to be developed under the
Sequestered Atmospheric Carbon Corporate Standard or this U.S. Public Sector Protocol
E
During photosynthesis, plants remove carbon (as CO2) regarding the accounting of sequestered atmospheric
from the atmosphere and store it in plant tissue. Until carbon. Nonetheless, some issues that would need to be
this carbon is cycled back into the atmosphere, it resides addressed when addressing impacts on sequestered
P
in one of a number of “carbon pools.” These pools carbon in organizations’ inventories can be examined in
include (a) above ground biomass (e.g., vegetation) in the context of existing guidance as highlighted below.
P
forests, farmland, and other terrestrial environments,

(b) below ground biomass (e.g., roots), and (c) biomass-
based products (e.g., wood products) both while in use S E T T I N G O R G A N I Z AT I O N A L B O U N D A R I E S
A
and when stored in a landfill. This protocol recommends the control approach for
consolidating GHG data. In some cases, it may be
Carbon can remain in some of these pools for long periods
possible to apply this approach directly to emis-
of time, sometimes for centuries. An increase in the stock
sions/removals associated with sequestered atmospheric
of sequestered carbon stored in these pools represents a
carbon. Among the issues that may need to be examined
net removal of carbon from the atmosphere; a decrease in
is the ownership of sequestered carbon under the
the stock represents a net addition of carbon to the atmos-
different types of contractual arrangements involving
phere. In general, carbon sequestration in plants is
land and wood ownership, harvesting rights, and control
recognized as an opportunity for organizations to offset
of land management and harvesting decisions. This is
GHG emissions, but it should be noted that intact plants
particularly important when logging rights for timber on
may also represent a liability in that certain unplanned
publicly-owned lands are involved. Where disparate
events such as fires and diseases can unexpectedly release
accounting practices are used by the parties involved,
stored carbon back into the atmosphere.
explicit contractual agreements may be required to
clarify the transfer of ownership as carbon moves
through the value chain.
Why Include Impacts on Sequestered Carbon
in Organizational GHG Inventories?
Changes in stocks of sequestered carbon and the associ-
S E T T I N G O P E R AT I O N A L B O U N D A R I E S
ated exchanges of carbon with the atmosphere are
As with GHG emissions accounting, setting operational
important to national- level GHG emissions inventories,
boundaries for sequestered carbon inventories would help
and consequently, these impacts on sequestered carbon
organizations transparently report their impacts along
are commonly addressed in national inventories
their value chain. At this time, the three scopes have not
(UNFCCC, 2000). Similarly, for organizations managing
been defined to capture information about sequestered
large stocks of biomass such as public lands and forests,
atmospheric changes and an organization’s impacts on
some of the most significant aspects of an organization’s
it; the scopes primarily reflect emissions from combus-
overall impact on atmospheric CO2 levels will occur as a
tion and other known processes. Until consensus methods
result of impacts on sequestered carbon through their
are developed for characterizing impacts on sequestered
direct operations as well as along their value chain.
atmospheric carbon along the value chain, this informa-
Information on an organization’s impacts on sequestered tion can be included in the “optional information”
atmospheric carbon can be used for strategic planning, section of a GHG inventory compiled using the U.S. Public
for educating stakeholders, and for identifying opportu- Sector Protocol. Organizations should indicate which
92
APPENDIX C 93
pools are included in the analysis, which are not, and the
rationale for the selections.
T R A C K I N G R E M O VA L S O V E R T I M E
As is sometimes the case with accounting for GHG emis-
sions, base year data for impacts on sequestered carbon
may need to be averaged over multiple years to accom-
modate the year-to-year variability expected of these
systems. The temporal scale used in sequestered carbon
accounting will often be closely tied to the spatial scale
over which the accounting is done. The question of how
to recalculate base year to account for land acquisition
and divestment, land use changes, and other activities
also needs to be addressed.
I D E N T I F Y I N G A N D C A L C U L AT I N G G H G R E M O VA L S
The U.S. Public Sector Protocol does not include consensus
methods for sequestered carbon quantification.
Organizations should, therefore, explain the methods
used. In some instances, quantification methods used in
national inventories can be adapted for organization- R E P O R T I N G G H G R E M O VA L S
level quantification of sequestered carbon. IPCC (1997; Until consensus methods are developed for character-
2000b) provides useful information on how to do this. izing impacts on sequestered atmospheric carbon along
IPCC has issued Good Practice Guidance for Land Use, the value chain, this information can be included in the
Land Use Change and Forestry, with information on “optional information” section of the inventory (see
Chapter 8). Information on sequestered carbon in the
A
methods for quantification of sequestered carbon in
forests and forest products. organization’s inventory boundary should be kept sepa-
rate from project-based reductions at sources that are
In addition, although organizational inventory
P
not in the inventory boundary. However, they should
accounting differs from project-based accounting (as also be identified separately to ensure that they are not
discussed below), it may be possible to use some of the double counted. This is especially important when they P
calculation and monitoring methods derived from project are sold as offsets or credits to a third party.
level accounting of sequestration projects.
As organizations develop experience using various
E
methods for characterizing impacts on sequestered

A C C O U N T I N G F O R C A R B O N R E M O VA L E N H A N C E M E N T S carbon, more information will become available on the
level of accuracy to be expected from these methods.
N
An organizational inventory can be used to account for

yearly removals within the organizational boundary. In In the early stages of developing this experience,
contrast, the Project Protocol is designed to calculate however, organizations may find it difficult to assess
D
project reductions that will be used as offsets, relative to the uncertainty associated with the estimates and
a hypothetical baseline scenario for what would have therefore may need to give special care to how the
happened without the project. In the forestry sector, estimates are represented to stakeholders.
I
projects take the form of carbon removal enhancements.

The GHG Protocol Initiative has developed The Land Use,
X
Land-Use Change, and Forestry Guidance to supplement NOTES

1
In this appendix, the term “sequestered atmospheric carbon” refers
the Project Protocol, specifying carbon measurement, exclusively to sequestration by biological sinks, such as harvested
accounting, reporting, and ownership issues associated wood products, above ground and below ground biomass, and dead
with sequestration projects. organic matter.
D Accounting for Indirect Emissions from Purchased Electricity
E missions associated with the purchased electricity information in the category “generation of purchased
X
that is consumed by the reporting organization are electricity, heat, or steam for re-sale to non-end users.”
reported in scope 2. Scope 2 only accounts for the
I
portion of the direct emissions from generating elec-

tricity that is actually consumed by the organization. An Purchased Electricity
organization that purchases electricity and transports it for Resale to Intermediaries
D
in a T&D system that it owns or controls reports the Emissions associated with the generation of purchased
emissions associated with T&D losses under scope 2. electricity that is resold to an intermediary (e.g., trading
However, if the reporting organization owns or controls transactions) may be reported under optional informa-
N
the T&D system but generates (rather than purchases) tion under the category “Generation of purchased
the electricity transmitted through its wires, the emis- electricity, heat, or steam for re-sale to non-end users.”
E
sions associated with T&D losses are not reported under Examples of trading transactions include
scope 2, as they would already be accounted for under brokerage/trading room transactions involving purchased
scope 1. This is the case when generation, transmission, electricity or any other transaction in which electricity is
P
and distribution systems are vertically integrated and purchased directly from one source or the spot market
owned or controlled by the same organization. and then resold to an intermediary (e.g., a non-end
user). These emissions are reported under optional infor-
P
mation separately from scope 3 because there could be a

Purchased Electricity for Resale to End Users number of trading transactions before the electricity
A
Emissions from the generation of purchased electricity finally reaches the end user. This may cause duplicative
for resale to end users, for example purchases by a public reporting of indirect emissions from a series of trading
utility, may be reported under scope 3 in the category transactions for the same electricity.
“generation of purchased electricity that is sold to end
users.” This reporting category is particularly relevant
for utilities that purchase wholesale electricity supplied GHG Emissions Upstream
by independent power producers for resale to their of the Generation of Electricity
customers. Since utilities and electricity suppliers often Emissions associated with the extraction and production
exercise choice over where they purchase electricity, this of fuels consumed in the generation of purchased elec-
provides them with an important GHG reduction opportu- tricity may be reported in scope 3 under the category
nity. Since scope 3 is optional, organizations that are “extraction, production, and transportation of fuels
unable to track their electricity sales in terms of end consumed in the generation of electricity.” These emis-
users and non-end users can choose not to report these sions occur upstream of the generation of electricity.
emissions in scope 3. Instead, they can report the total Examples include emissions from mining of coal,
emissions associated with purchased electricity that is refining of gasoline, extraction of natural gas, and
sold to both end users and non-end users under optional production of hydrogen (if used as a fuel).
FIGURE D.1 Accounting for the Indirect GHG Emissions Associated with Purchased Electricity
Own consumption Scope 2

Indirect emissions from own consumption of purchased electricity
Scope 3
Purchased Electricity Resale to end-users
Indirect emissions from purchased electricity sold to end users
Resale to Optional Information

intermediaries Emissions from purchased electricity sold to non end users
94 Adapted from the GHG Protocol Corporate Standard, 2004

APPENDIX D 95
Choosing Electricity Emission Factors T O T A L C O 2 E M I S S I O N S FROM GENERATION

EFG = ELECTRICITY GENERATED
The choice of emission factors depends on whether an
organization obtains its purchased electricity directly
from a known “off-grid” electric generation source T O T A L C O 2 E M I S S I O N S FROM GENERATION
EFC = ELECTRICITY CONSUMED
or from the electric grid. In the former case, the
U.S. Public Sector Protocol recommends that organiza-
tions obtain and use source/supplier specific emission EFC and EFG are related as shown below.
factors for the electricity purchased. In the latter case, EFC x ELECTRICITY CONSUMED
=
regional- or grid-specific emission factors should be EFG x ( E L E C T R I C I T Y C O N S U M E D + T & D L O S S E S )
used. For more information on choosing emission
factors, see the relevant GHG Protocol calculation
T&D LOSSES
tools available on the GHG Protocol website EFC = EFG x (1+ ELECTRICITY CONSUMED )
(www.ghgprotocol.org).
As these equations indicate, EFC multiplied by the amount
of consumed electricity yields the sum of emissions attrib-
Emissions Associated with the Consumption utable to electricity consumed during end use and
of Electricity In T&D transmission and distribution. In contrast, EFG multiplied
Emissions from the generation of electricity that is by the amount of consumed electricity yields emissions
consumed in a T&D system may be reported in scope 3 attributable to electricity consumed during end use only.
under the category “generation of electricity that is
consumed in a T&D system” by end users. Published elec- Consistent with the scope 2 definition (see Chapter 4),
tricity grid emission factors do not usually include T&D the U.S. Public Sector Protocol requires the use of EFG to
losses. To calculate these emissions, it may be necessary to calculate scope 2 emissions. The use of EFG ensures
apply supplier or location specific T&D loss factors. internal consistency in the treatment of electricity
related upstream emissions categories and avoids double
Organizations that purchase electricity and transport counting in scope 2. Additionally, there are several other
it in their own T&D systems would report the portion advantages in using EFG:
of electricity consumed in T&D under scope 2. • It is simpler to calculate and widely available in
A
However, if the reporting organization owns or published regional, national, and international sources.
controls the T&D system but generates (rather than
purchases) the electricity transmitted through its • It is based on a commonly used approach to calculate
P
wires, the emissions associated with T&D losses are emissions intensity, i.e., emissions per unit of produc-
not reported under scope 2, as they would already be tion output.
accounted for under scope 1. This is the case when P
• It ensures transparency in reporting of indirect emis-
generation, transmission, and distribution systems are sions from T&D losses.
vertically integrated and owned or controlled by the
E
same organization. The formula to account for emissions associated with

T&D losses is the following:
EFG x INDIRECT EMISSIONS
N
Accounting for Indirect Emissions ELECTRICITY CONSUMED = FROM CONSUMPTION OF

DURING T&D ELECTRICITY DURING T&D
Associated with T&D Losses
D
There are two types of electricity emission factors: In some countries, such as Japan, local regulations may
emission factor at generation (EFG) and emission require utility organizations to provide both EFG and
factor at consumption (EFC). EFG is calculated from EFC to its consumers, and consumers may be required to
I
CO2 emissions from generation of electricity divided by use EFC to calculate indirect emissions from the
amount of electricity generated. EFC is calculated consumption of purchased electricity. In this case, an
from CO2 emissions from generation divided by amount
X
organization still needs to use EFG to report its scope 2

of electricity consumed. emissions for a GHG report prepared in accordance with
the GHG Protocol Corporate Standard and this U.S. Public
Sector Protocol.
E Public Operations and Scopes
SECTOR SCOPE 1 EMISSION SOURCES SCOPE 2 SCOPE 3 EMISSION SOURCES 1

EMISSION SOURCES
X
OFFICE-BASED ORGANIZATIONS
Service Sector/ • Stationary combustion (production of electricity, • Stationary combustion • Stationary combustion (production of purchased
Office-Based heat or steam) (consumption of materials)
I
Organizations purchased electricity,

• Mobile combustion (transportation of raw mate- heat or steam) • Process emissions (production of purchased materials)
rials/waste)
• Mobile combustion (transportation of raw mate-
D
• Fugitive emissions (mainly HFC emissions during rials/products/waste, employee business travel,
use of refrigeration and air-conditioning equipment)| employee commuting)
N
WASTE
Landfills, Waste • Stationary combustion (incinerators, boilers, • Stationary combustion • Stationary combustion(recycled waste exported from
Combustion, flaring) (consumption of the site to be used as a fuel elsewhere)
E
Water Services purchased electricity,

• Process emissions (sewage treatment, nitrogen heat or steam) • Process emissions (recycled waste exported from the
loading) site to be used as a feedstock elsewhere)
• Fugitive emissions (CH4 emissions from waste and • Mobile combustion (transportation of waste/products,
P
animal product decomposition. Biogenic CO2 emis- employee business travel, employee commuting)
sions should be reported separately from the scopes.)
P
• Mobile combustion (transportation of

waste/products)
ENERGY
A
Energy • Stationary combustion (boilers and turbines used in • Stationary combustion • Stationary combustion (mining and extraction of
Generation the production of electricity, heat or steam, fuel (consumption of fuels, energy for refining or processing fuels)
pumps, fuel cells, flaring) purchased electricity,
heat or steam) • Process emissions (production of fuels, SF6 emissions)
• Mobile combustion (trucks, barges and trains for
transportation of fuels) • Mobile combustion (transportation of fuels/waste,
employee business travel, employee commuting)
• Fugitive emissions (CH4 leakage from transmission
and storage facilities, HFC emissions from Liquid • Fugitive emissions (CH4 and CO2 from waste landfills,
Propane Gas (LPG) storage facilities, SF6 emissions pipelines, SF6 emissions)
from transmission and distribution equipment)
Oil and Gasb • Stationary combustion (process heaters, engines, • Stationary combustion • Stationary combustion (product use as fuel or
turbines, flares, incinerators, oxidizers, production(consumption of combustion for the production of purchased mate-
of electricity, heat and steam) purchased electricity, rials)
heat or steam)
• Process emissions (process vents, equipment vents, • Mobile combustion (transportation of raw mate-
maintenance/turnaround activities, non-routine rials/products/waste, employee business travel,
activities) employee commuting, product use as fuel)
• Mobile combustion (transportation of raw mate- • Process emissions (product use as feedstock or emis-
rials/products/waste; company owned vehicles) sions from the production of purchased materials)
• Fugitive emissions (leaks from pressurized equip- • Fugitive emissions (CH4 and CO2 from waste landfills
ment, wastewater treatment, surface or from the production of purchased materials)
impoundments)
Coal Mining • Stationary combustion (methane flaring and use, • Stationary combustion • Stationary combustion (product use as fuel)
use of explosives, mine fires) (consumption of
purchased electricity, • Mobile combustion (transportation of coal/waste,
• Mobile combustion (mining equipment, transporta- heat or steam) employee business travel, employee commuting)
tion of coal)
• Process emissions (gasification)
• Fugitive emissions (CH4 emissions from coal mines
and coal piles)
a
This does not constitute a complete list of Scope 3 sources for each activity, but offers several common sources.
b
The American Petroleum Institute’s Compendium of Greenhouse Gas Emissions Methodologies for the Oil and Gas Industry (2009) provides guidelines and calculation methodology for
calculating GHG emissions from the oil and gas sector.
96
97
Accounting for Indirect Emissions Reductions
F
S
ome organizations can make changes to their
own operations that result in GHG emissions
changes not fully captured by comparing
emissions changes over time or at sources not included
in their own inventory boundary.
Some examples relating to indirect effects of

emissions include:
On-Site Power Used

by the Reporting Organization
A C T I V I T Y : A company may substitute purchased grid
electricity with an on-site power generation plant
(e.g., a combined heat and power, or CHP, plant),
where both the heat/steam and electricity outputs are
used by the organization.
E F F E C T S : This may increase an organization’s direct

GHG emissions while reducing the GHG emissions
associated with purchased grid electricity. This reduc-
tion may be overestimated or underestimated when
merely comparing scope 2 emissions over time, if the
latter are quantified using an average grid emission
factor. This is because an average grid emissions
factor represents the total GHG emissions from
electricity production on the grid divided by the total
kWh produced, and most electricity generation
systems dispatch different types of energy sources
A
(with different GHG intensities) depending on the
Fuel Substitution
demand of the grid.
A C T I V I T Y : Substituting purchased fossil fuel with the
P
Reducing grid electricity demand through an on-site organization’s own waste-derived fuel
CHP project might therefore prevent the dispatching
E F F E C T S : The organization’s waste might have other-
of a specific type of fuel source to the grid and a
P
wise been sent to a landfill or incinerated without energy
higher or lower reduction in emissions (depending
recovery. Such substitution will decrease the organiza-
on that dispatched source) than would be reflected
tion’s scope 1 emissions (as CO2 from biogenic
E
in the average.
combustion will be reported separately from the scopes),
but also could result in emissions reductions elsewhere
N
by another organization, e.g., through avoiding landfill

On-Site Power Sold To Other Organizations
gas and related fossil fuel use.
A C T I V I T Y : Installing an on-site power generation plant
(e.g., CHP), where surplus electricity is sold to other
D
organizations
Recommended Approach
E F F E C T S : This may increase the on-site organization’s These types of reductions beyond the organization’s
I
direct GHG emissions while reducing the other organiza- boundary may be separately quantified, for example,
tion’s need to purchase grid electricity. Any resulting using the processes described in the Project Protocol, and
X
emissions reductions at the plants where this grid-elec- reported in an organization’s public GHG report under
tricity would have otherwise been produced will not be optional information.
captured in the inventory of the on-site organization.
Acronyms
A/C air conditioning HVAC heating, ventilation, and air conditioning
CaCO3 calcium carbonate IMP inventory management plan
CAP criteria air pollutant IPCC Intergovernmental Panel on Climate Change
CCAR California Climate Action Registry ISO International Standards Organization
CCX Chicago Climate Exchange JI Joint Implementation
CDM Clean Development Mechanism kWh kilowatt hour
CEM continuous emission monitoring LGO local government operations
CFCs chlorofluorocarbons MMT million metric tons
CFP Climate Friendly Parks MWh megawatt hour
CH4 methane N2O nitrous oxide
CHP combined heat and power NASA National Aeronautics and Space
Administration
CLIP Climate Leadership In Parks
NASA-JSC National Aeronautics and Space
CO2 carbon dioxide
Administration – Johnson Space Center
CO2e carbon dioxide equivalent
NGO non-governmental organization
COCO contractor owned/contractor operated
NOx nitrogen oxide
CRS Congressional Research Service
NPS National Park Service
DoD Department of Defense
PFCs perfluorocarbons
DOE Department of Energy
REC renewable energy certificate
EFC emission factor at consumption
RGGI Regional Greenhouse Gas Initiative
EFG emission factor at generation
SF6 sulfur hexafluoride
EIA Energy Information Administration
SO2 sulfur dioxide
eGRID Emissions & Generation Resource
T&D transmission and distribution
Integrated Database
UK ETS United Kingdom Emission Trading Scheme
EMS Environmental Management Systems
UNFCC United Nations Framework Convention on
EO executive order
Climate Change
EPA Environmental Protection Agency
WBCSD World Business Council for Sustainable
EU ETS European Union Emissions Allowance Development
Trading Scheme
WRI World Resources Institute
GHG greenhouse gas
GRI Global Reporting Initiative
GWP global warming potential
HCFC hydrochlorofluorocarbons
HFCs hydrofluorocarbons
98
99
Glossary
Absolute target A target defined by reduction in absolute emissions over time, e.g., reduces CO2 emissions by 25 percent
below 1994 levels by 2010.
Additionality A criterion for assessing whether a project has resulted in GHG emissions reductions or removals in
addition to what would have occurred in its absence. This is an important criterion when the goal of the
project is to offset emissions elsewhere.
Agency Term used interchangeably with “organization” in this U.S. Public Sector Protocol to denote a public
sector entity.
Allowance A commodity giving its holder the right to emit a certain quantity of GHGs.
Audit trail Well-organized and transparent historical records documenting how an inventory was compiled.
Base year A historic datum (a specific year or an average over multiple years) against which an organization’s
emissions are tracked over time.
Base year emissions GHG emissions in the base year.
Base year emissions Recalculation of emissions in the base year to reflect a change in the structure of the organization, or
recalculation to reflect a change in the accounting methodology used. This ensures data consistency over time, i.e.,
comparisons of like with like over time.
Baseline A hypothetical scenario for what GHG emissions, removals, or storage would have been in the absence of
the GHG project or project activity.
Biofuels Fuel made from plant material, e.g. wood, straw, corn.
Biogenic emissions Emissions resulting from the combustion of materials that naturally sequester CO2, such as biomass, or
biofuels derived from vegetable oils or animal fats. These emissions are reported separately from the
scopes.
Biomass Organic, recently living non-fossil material, often used as the basis for creating biofuels.
Boundaries The grouping of GHG activities following several dimensions, i.e. organizational, operational,
geographic, business unit, and target boundaries. The inventory boundary determines which emissions
are accounted and reported by the organization.
Cap and trade system A system that sets an overall emissions limit, allocates emissions allowances to participants, and
allows them to trade allowances and emission credits with each other.
Capital lease A lease that transfers substantially all the risks and rewards of ownership to the lessee and is
accounted for as an asset on the balance sheet of the lessee. Also known as a financial or finance
lease. Leases other than capital/financial/finance leases are operating leases. Consult an accountant
for further detail as definitions of lease types differ between various accepted financial standards.
Carbon sequestration The uptake of CO2 and storage of carbon in biological sinks.
Clean development mechanism A mechanism for project-based emissions reduction activities in developing countries established by
(CDM) Article 12 of the Kyoto Protocol. The CDM is designed to meet two main objectives: to address the
sustainability needs of the host country and to increase the opportunities available to Annex 1 Parties
to meet their GHG reduction commitments. The CDM allows for the creation, acquisition, and transfer
of CERs (certified emissions reductions) from climate change mitigation projects undertaken in non-
Annex 1 countries.
CO2 equivalent The universal unit of measurement to indicate the global warming potential (GWP) of each of the six
GHGs regulated by the Kyoto Protocol, expressed in terms of the GWP of one unit of CO2. It is used to
evaluate the impact of different GHG emissions against a common basis.
Glossary
Co-generation unit/combined A facility producing both electricity and steam/heat using a common fuel supply.
heat and power
Community-level inventories Inventories representing emissions from all sectors within a geographically-defined community,
including electricity generation, transportation, land use change, etc. This type of inventory is based
upon boundaries, assumptions and methodologies which are significantly different than those refer-
enced and utilized in the U.S. Public Sector Protocol and the GHG Protocol Corporate Standard, which
only track emissions that a given entity owns or controls.
Consolidation The grouping together of GHG emissions data from separate operations according to a specific approach
in order to create a consistent, complete inventory.
Continuous Emissions A technological means of monitoring the emissions from combustion facilities.
Monitoring Systems (CEMS)
Control The ability of an organization to direct the policies of an operation. It is defined as either operational
control (the organization or one of its subsidiaries has the authority to introduce and implement oper-
ating policies at the operation) or financial control (the organization has the ability to direct the financial
and operating policies of the operation with a view to gaining economic benefits from its activities).
Corporate inventory program A program to produce annual corporate (or enterprise-wide) inventories that are in keeping with the
principles, standards, and guidance of the GHG Protocol Corporate Standard. This includes all institu-
tional, managerial and technical arrangements made for the collection of data, preparation of a GHG
inventory, and implementation of the steps taken to manage the quality of their emission inventory.
Cross-sector calculation tool A calculation tool that addresses GHG sources common to various sectors, e.g., emissions from
stationary or mobile combustion. See also GHG Protocol Initiative calculation tools
(www.ghgprotocol.org).
De minimis A level of emissions from a single source or group of sources that is excluded from reporting because it
is thought to be very small in the context of an organization’s total emissions. However, such omission
causes a predefined negative bias in estimates (i.e., an underestimate) and therefore is not compatible
with the completeness principle of the U.S. Public Sector Protocol. Sometimes, de minimis is interpreted
as a group of small or hard-to-measure sources to which a simplified estimation method is applied.
Direct GHG emissions Emissions from sources that are owned or controlled by the reporting organization.
Direct monitoring Direct monitoring of exhaust stream contents in the form of continuous emissions monitoring or periodic
sampling.
Double counting Two or more reporting organizations take ownership of the same emissions or reductions within the
same scope. Indirect emissions (scopes 2 and 3) are inherently another entity’s direct (scope 1) emis-
sions but this is not considered double counting.
eGRID A comprehensive inventory of environmental attributes of electric power systems, including various GHG
emission factors for different electric grid regions in the United States.
Emission factor A factor expressing an amount of GHG emissions produced per a unit of activity data (e.g., tonnes of CO2
per tonne of fuel consumed), which permits GHG emissions to be estimated for various activity types.
Emissions The release of GHGs into the atmosphere.
Environmental Management A set of processes and practices that enable an organization to reduce its environmental impacts and
Systems (EMS) increase its operating efficiency, as defined by the EPA.
100
GLOSSARY 101
Equity share The equity share reflects economic interest, reflecting the rights an organization has to the risks and
rewards flowing from an operation. Typically, the share of economic risks and rewards in an operation is
aligned with the organization’s percentage ownership of that operation, and equity share will normally
be the same as the ownership percentage.
Estimation uncertainty Uncertainty that arises whenever GHG emissions are quantified, due to uncertainty arising from incom-
plete or imprecise data and from imprecise calculation methodologies used to quantify GHG emissions.
Executive Order A policy directive issued by an executive body usually intended to manage operations within the government.
Finance lease A lease which transfers substantially all the risks and rewards of ownership to the lessee and is
accounted for as an asset on the balance sheet of the lessee. Also known as a capital or financial lease.
Leases other than capital/financial/finance leases are operating leases. Consult an accountant for
further detail as definitions of lease types differ between various accepted accounting principles.
Fugitive emissions Emissions that are not physically controlled but result from the intentional or unintentional releases of
GHGs. They commonly arise from the production, processing, transmission, storage and use of fuels and
other chemicals, often through joints, seals, packing, gaskets, etc.
Green-e An independent certification and verification program for renewable energy and greenhouse gas emis-
sions reductions in the retail market.
Green power A generic term for renewable energy sources and specific clean energy technologies that emit fewer GHG
emissions relative to other sources of energy that supply the electric grid. Includes solar photovoltaic
panels, solar thermal energy, geothermal energy, landfill gas, low-impact hydropower, and wind
turbines.
Greenhouse gases (GHGs) Gases that contribute to the greenhouse effect, trapping heat in the atmosphere. For the purposes of the
U.S. Public Sector Protocol, GHGs are the six gases listed in the Kyoto Protocol: CO2, CH4, N2O, HFCs,
PFCs, and SF6.
GHG capture Collection of GHG emissions from a GHG-emitting source for storage in a sink.
GHG credit GHG offset that can be used to meet an externally imposed target. A GHG credit is a convertible and
transferable instrument usually bestowed by a GHG program.
GHG offset Discrete GHG reductions used to compensate for (i.e., offset) GHG emissions elsewhere, for example to
meet a voluntary or mandatory GHG target or cap. Offsets are calculated relative to a baseline that
represents a hypothetical scenario for what emissions would have been in the absence of the mitigation
project that generates the offsets. To avoid double counting, the reduction giving rise to the offset must
occur at sources or sinks not included in the target or cap for which it is used.
GHG program A generic term used to refer to any voluntary or mandatory international, national, sub-national, govern-
ment or non-governmental authority that registers, certifies, or regulates GHG emissions or removals
outside the company, e.g., CDM, EU ETS, and CCX.
GHG project Shorthand for a specific project or activity designed to achieve GHG emissions reductions, storage of
carbon, or enhancement of GHG removals from the atmosphere. GHG projects may be stand-alone proj-
ects, or specific activities or elements within a larger non-GHG related project.
GHG Protocol Initiative A multi-stakeholder collaboration convened by World Resources Institute and the World Business
Council for Sustainable Development (WBCSD) to design, develop, and promote the use of GHG
accounting and reporting standards. Its two primary publications include the Corporate Standard and
the Project Protocol. More information is available at www.ghgprotocol.org.
Glossary
GHG Protocol Initiative A number of cross-sector and sector-specific tools developed by the Greenhouse Gas Protocol Initiative
calculation tools at the World Resources Institute that calculate GHG emissions on the basis of activity data and emis-
sion factors (available at www.ghgprotocol.org).
GHG public report A report that provides, among other details, the reporting organization’s physical emissions for its
chosen inventory boundary.
GHG registry A public database of organization GHG emissions and/or project reductions. Examples include the EIA
1605b Voluntary GHG Reporting Program and The Climate Registry. Each registry has its own rules
regarding what and how information is reported.
GHG removal Absorption or sequestration of GHGs from the atmosphere.
GHG sink Any physical unit or process that stores GHGs, usually in reference to forests and underground/deep sea
reservoirs of CO2.
GHG source Any physical unit or process which releases GHGs into the atmosphere.
GHG trades All purchases or sales of GHG emission allowances, offsets, and credits.
Global warming potential (GWP) A factor describing the radiative forcing impact (degree of harm to the atmosphere) of one unit of a
given GHG relative to one unit of CO2.
Heating value The amount of energy released when a fuel is burned completely. Care must be taken not to confuse one
measure of heating values, used in the United States and Canada (called higher heating values) with
another that is used in all other countries (lower heating values). For further details refer to the calcula-
tion tool for stationary combustion available at www.ghgprotocol.org).
Indirect GHG emissions Emissions that are a consequence of the operations of the reporting organization, but occur at sources
owned or controlled by another organization.
Insourcing The inverse of outsourcing; that is, the reporting organization performing work previously contracted out
to other entities.
Intensity ratios Ratios that express GHG impact per unit of physical activity or unit of economic value (e.g., tonnes of
CO2 emissions per unit of electricity generated). Intensity ratios are the inverse of productivity/efficiency
ratios.
Intensity target A reduction target defined by the ratio of emissions to a business metric over time e.g., reduce CO2 per
tonne of cement by 12 percent between 2000 and 2008.
Intergovernmental Panel International body of climate change scientists. The role of the IPCC is to assess the scientific,
on Climate Change technical and socio-economic information relevant to the understanding of the risk of human-induced
climate change (www.ipcc.ch).
Inventory A quantified compilation of an organization’s GHG emissions and sources.
Inventory boundary An imaginary line that encompasses the direct and indirect emissions that are included in the inventory.
It results from the chosen organizational and operational boundaries.
Inventory quality The extent to which an inventory provides a faithful, true, and fair account of an organization’s
GHG emissions.
Joint Implementation A mechanism established in Article 6 of the Kyoto Protocol referring to climate change mitigation proj-
ects implemented between two Annex 1 countries. JI allows for the creation, acquisition, and transfer of
“ERUs,” or tradable commodities which can be used by Annex 1 countries to help meet their commit-
ments under the Kyoto Protocol.
102
GLOSSARY 103
Kyoto Protocol A protocol to the UNFCCC. It requires countries listed in its Annex B (developed nations) to meet reduc-
tion targets of GHG emissions relative to their 1990 levels averaged over the period 2008–12.
Leakage (secondary effect) Leakage occurs when an activity designed to reduce GHGs in one location in fact increases GHG emis-
sions elsewhere.
Life-cycle analysis Assessment of the sum of a product’s effects (e.g., GHG emissions) at each step in its life cycle,
including resource extraction, production, use, and waste disposal.
Local Government Operations A flexible framework serving the needs of local governmental organizations drafted jointly by The
(LGO) Protocol Climate Registry, ICLEI (Local Governments for Sustainability), the California Climate Action Registry,
and the California Air Resources Board. Because of its compatibility with both the GHG Protocol
Corporate Standard and the U.S. Public Sector Protocol, local government bodies should consult the
LGO Protocol for accounting guidance that is tailored to cities, counties, and municipalities.
Material discrepancy An error or combination of errors (for example from an oversight, omission, or miscalculation) that
results in the reported quantity being significantly different from the true value to an extent that will
influence performance or decisions. Also known as material misstatement.
Materiality threshold A concept employed in the process of verification. It is often used to determine whether an error or omis-
sion is a material discrepancy or not. It should not be viewed as a de minimus threshold for defining a
complete inventory.
Mobile combustion Burning of fuels by transportation devices such as cars, trucks, trains, airplanes, ships, etc.
Model uncertainty GHG quantification uncertainty associated with mathematical equations used to characterize the rela-
tionship between various parameters and emission processes.
National-level inventories Inventories representing emissions from all sectors within a country, including electricity generation,
transportation, land use change, etc. These inventories are usually compiled via a top-down exercise
using national economic data for the purposes of the UNFCCC process.
Non-Annex 1 countries Countries that have ratified or acceded to the UNFCC but are not listed under Annex 1 and are therefore
not under any emissions reduction obligation (see also Annex 1 countries).
Operating lease A lease which does not transfer the risks and rewards of ownership to the lessee and is not recorded as
an asset in the lessee’s balance sheet. All leases other than capital/finance leases are operating leases
(see above).
Operation A generic term used to denote any kind of business, irrespective of its organizational, governance, or legal
structures. An operation can be a facility, subsidiary, affiliated company, or other form of joint venture.
Operational boundaries The boundaries that determine the direct and indirect emissions associated with operations owned or
controlled by the reporting organization. This assessment allows an organization to establish which
operations and sources cause direct and indirect emissions, and to decide which indirect emissions to
include that are a consequence of its operations.
Organic growth/decline Increases or decreases in GHG emissions as a result of changes in production output, product mix, plant
closures, and the opening of new plants.
Organizational boundaries The boundaries that determine the operations owned or controlled by the reporting organization,
depending on the consolidation approach taken (equity or control approach).
Outsourcing Contracting out work to outside entities previously performed internally by the reporting organization.
Parameter uncertainty Uncertainty associated with quantifying the parameters used as inputs to GHG estimation models.
Primary effects The specific GHG reducing elements or activities (reducing GHG emissions, carbon storage, or
enhancing GHG removals) that a reduction project is intended to achieve.
Glossary
Process emissions Emissions generated from manufacturing processes, such as the CO2 that arises from the breakdown of
CaCO3 during cement manufacture.
Project Protocol A module of the GHG Protocol Initiative addressing the quantification of GHG reduction projects. This
(GHG Protocol for includes projects that will be used to offset emissions elsewhere and/or generate credits.
Project Accounting)
Productivity/efficiency ratios Ratios that express the value or achievement of a business divided by its GHG impact. Increasing effi-
ciency ratios reflect performance improvement, e.g., resource productivity (sales per tonne of GHG).
Productivity/efficiency ratios are the inverse of intensity ratios.
Public Sector Organization Any organization that is owned, controlled or operated by various levels of government. Such organiza-
tions usually provide basic public services such as law enforcement, public transport, environmental
protection, etc.
Ratio indicator Indicators providing information on relative performance such as intensity ratios or produc-
tivity/efficiency ratios.
Renewable energy Energy taken from sources that are inexhaustible, e.g., wind, water, solar, geothermal energy, and biofuels.
Reporting Presenting data to internal management and external users such as regulators, shareholders, the
general public, or specific stakeholder groups.
Reversibility of reductions This occurs when reductions are temporary, or where removed or stored carbon may be returned to the
atmosphere at some point in the future.
Rolling base year The process of shifting or rolling the base year forward by a certain number of years at regular intervals
of time.
Scientific uncertainty Uncertainty that arises when the science of the actual emission and/or removal process is not
completely understood.
Scope Defines the operational boundaries in relation to indirect and direct GHG emissions.
Scope 1 inventory A reporting organization’s direct GHG emissions.
Scope 2 inventory A reporting organization’s indirect emissions associated with the generation of electricity,
heating/cooling, or steam purchased for own consumption.
Scope 3 inventory A reporting organization’s indirect emissions other than those covered in scope 2.
Scope of works An up-front specification that indicates the type of verification to be undertaken and the level of assur-
ance to be provided between the reporting organization and the verifier during the verification process.
Secondary effects (leakage) GHG emissions changes resulting from the project not captured by the primary effect(s). These are typi-
cally the small, unintended GHG consequences of a project.
Sequestered atmospheric CO2 removed from the atmosphere by biological sinks and stored in plant tissue. Sequestered atmosph-
carbon eric carbon does not include GHGs captured through carbon capture and storage.
Significance threshold A qualitative or quantitative criterion used to define any significant change to the data, inventory
boundary, methods, or any other relevant factors affecting a GHG inventory. The organization is respon-
sible for determining the “significance threshold” that triggers base year emission recalculation and to
disclose it.
Stationary combustion Burning of fuels to generate electricity, steam, heat, or power in stationary equipment such as boilers,
furnaces, etc.
104
GLOSSARY 105
Structural change A change in the organizational or operational boundaries of an organization that result in the transfer of
ownership or control of emissions from one organization to another. Structural changes usually result
from a transfer of ownership of emissions, such as mergers, acquisitions, divestitures, but can also
include outsourcing/insourcing.
Target base year The base year used for defining a GHG target, e.g., to reduce CO2 emissions 25 percent below 2000
levels (the base year) by the year 2010.
Target boundary The boundary that defines which GHG’s, geographic operations, sources, and activities are covered by
the target.
Target commitment period The period of time during which emissions performance is actually measured against the target. It ends
with the target completion date.
Target completion date The date that defines the end of the target commitment period.
Target double counting policy A policy that determines how double counting of GHG reductions or other instruments, such as
allowances issued by external trading programs, is dealt with under a GHG target. It applies only to
organizations that engage in trading (sale or purchase) of offsets or whose target boundaries interface
with other organizations’ targets or external programs.
Tonne One metric ton, with a mass equal to 1,000 kilograms, or 2,205 pounds.
Transmission and distribution A network of cables and infrastructure that permits electrical energy to be sent from generators
(T&D) system to substations to customers.
Transmission and distribution The amount or percentage of generated electricity that is lost during its transmission or distribution
(T&D) loss from the generator to either substations or customers. The extent of this loss is mostly determined by
the age and quality of the T&D infrastructure.
Uncertainty 1. Statistical definition: A parameter associated with the result of a measurement that characterizes
the dispersion of the values that could be reasonably attributed to the measured quantity (e.g., the
sample variance or coefficient of variation).
2. Inventory definition: A general and imprecise term which refers to the lack of certainty in emis-
sions-related data resulting from any causal factor, such as the application of non-representative
factors or methods, incomplete data on sources and sinks, lack of transparency, etc. Reported uncer-
tainty information typically specifies a quantitative estimate of the likely or perceived difference
between a reported value and a qualitative description of the likely causes of the difference.
United Nations Framework Signed in 1992 at the Rio Earth Summit, the UNFCCC is a milestone Convention on Climate Change
Convention on Climate Change treaty that provides an overall framework for international efforts to mitigate climate change.
(UNFCCC) The Kyoto Protocol is a protocol to the UNFCCC.
Value chain emissions Emissions from the upstream and downstream activities associated with the operations of the reporting
organization.
Verification An independent assessment of the reliability (considering completeness and accuracy) of a GHG inven-
tory. Also called assurance.
World Business Council A Geneva-based association of over 200 companies. The WBSCD partners with World Resources
for Sustainable Development Institute in the establishment of the GHG Protocol Initiative and the development of its GHG
(WBCSD) accounting standards.
References
California Executive Order No. S-20-04 (July 27, 2004), GRI (2002), Global Reporting Initiative, Sustainability Reporting
http://gov.ca.gov/executive-order/3360/ Guidelines, Global Reporting Initiative
City of Portland and Multnomah County (2009), City of Portland ICLEI (2009), International Local Governments GHG Emissions
and Multnomah County Climate Action Plan, City of Portland Analysis Protocol (IEAP), v.1.0. ICLEI (Local Governments for
Bureau of Planning and Sustainability, and Multnomah County Sustainability)
Sustainability Program
IPCC (1997), Revised 1996 IPCC Guidelines for National GHG
CCAR (2003), General Reporting Guidelines, California Climate Inventories: Reference Manual, Intergovernmental Panel on
Action Registry Climate Change
EPA (1999), The Yellow Book: Guide to Environmental IPCC (2006), 2006 IPCC Guidelines for National GHG Inventories:
Enforcement and Compliance at Federal Facilities, Reference Manual, Intergovernmental Panel on Climate Change
U.S. Environmental Protection Agency
IPCC (2000a), Good Practice Guidance and Uncertainty
EPA (1999), Emission Inventory Improvement Program, Management in National Greenhouse Gas Inventories,
Volume VI: Quality Assurance/Quality Control, U.S. Environmental Intergovernmental Panel on Climate Change
Protection Agency
IPCC (2000b), Land Use, Land-Use Change, and Forestry: A
EPA (2007), Program Guide for Climate Leaders, U.S. Special Report for the IPCC, Intergovernmental Panel on Climate
Environmental Protection Agency Climate Leaders Program Change. Cambridge University Press, Cambridge, UK
EPA (2009), Inventory of U.S. Greenhouse Gas Emissions Lewis, H. (2008), Green Meetings, Conferences, and Events: A
and Sinks: 1990-2007, U.S. Environmental Protection Agency Federal Procurement Strategy, EPA presentation at the Federal
Environmental Symposium
Executive Order No. 13514, 74 Fed. Reg. 52117 (Oct. 9, 2009),
http://www.gpo.gov/fdsys/pkg/DCPD-200900783/pdf/DCPD- National Parks Service, U.S. Department of the Interior, The
200900783.pdf Climate Leadership in Parks (CLIP) Tool, http://www.nps.gov/
climatefriendlyparks/ CLIPtool/ emissioninventory.html
FASB (1976), Statement of Financial Accounting Standards,
no. 13, “Accounting for Leases,” Financial Accounting NZBCSD (2002), The Challenge of GHG Emissions: The “Why” and
Standards Board “How” of Accounting and Reporting for GHG Emissions: An
Industry Guide, New Zealand Business Council for Sustainable
Florida Executive Order 07-126 (July 13, 2007),
Development, Aukland
http://www.flgov.com/pdfs/orders/07-126-actions.pdf
The Climate Registry, State Government Emissions Inventory Guide,
The GHG Protocol (2004), A Corporate Accounting and Reporting
http://www.theclimateregistry.org/downloads/State_Government_
Standard, The Greenhouse Gas Protocol Initiative—World
GHG_Sources.pdf
Resources Institute and World Business Council for Sustainable
Development UNFCCC (2000), Synthesis Report on National Greenhouse Gas
Information Reported by Annex I Parties for the Land-Use Change
The GHG Protocol (2010), The Scope 3 Accounting and Reporting
and Forestry Sector and Agricultural Soils Category,
Standard – Draft for Road Testing. The Greenhouse Gas Protocol
FCCC/TP/1997/5, United Nations Framework Convention on
Initiative—World Resources Institute and World Business Council
Climate Change
for Sustainable Development
Verfaillie, H. and R. Bidwell (2000), Measuring Eco-efficiency:
Government Accounting Standards Board,“What is performance
A Guide to Reporting Company Performance, World Business
measurement?” About Performance Reporting for Government,
Council for Sustainable Development, Geneva
http://seagov.org/aboutpmg/performance_measurement.shtml
106
107
Contributors
Kevin DeGroat, Antares Group, Inc. Ed Pinero, Parsons Corporation
Rachel Thompson, Austin Climate Protection Program Matthew Dwyer, PricewaterhouseCoopers
Sascha Petersen, Austin Climate Protection Program Nick Shufro, PricewaterhouseCoopers
David Edwards, California Air Resources Board Tom Colbert, Prince William County Schools, VA
Alicia Ayars, Carbon Disclosure Project Carol Guy, PRIZIM Inc.
Kyle Diesner, City of Portland Matthew Holtry, PRIZIM Inc.
Rachael Tornek, Climate Action Reserve Cal Broomhead, San Francisco Department of Environment
Pete Brunelli, Connecticut Department of Environmental Protection Lisa Dickson, SEA Consultants
Christine Chulick, Defense Logistics Agency David Zimmerman, Tennessee Valley Authority
Evan Fago, Eastern Research Group Dan Kowalczyk, U.S. Air Force
David Wright, Eastern Research Group Peter Heinricher, U.S. Army Construction Engineering
Research Laboratory
Steve Sinclair, Fairfax County, VA
Dave Sheets, U.S. Army Environmental Policy Institute
Michael Barancewicz, Loudoun County Public Schools, VA
Denise Ingram, U.S. Department of Agriculture/Forest Service
John Lord, Loudoun County Public Schools, VA
Craig Lasser, U.S. Department of Agriculture/Forest Service
Mary Jane Rutkowski, Maryland Department of the Environment
Julie Harllee Tucker, U.S. Department of Agriculture/Forest Service
Molla Sarros, Maryland Department of the Environment
David Asiello, U.S. Department of Defense
Rich Norling, Maryland Department of National Resources
Paul McArdle, U.S. Department of Energy
Jeffrey King, Metropolitan Washington Council of Governments
Chris Tremper, U.S. Department of Energy
Susan Heffron, Minnesota Pollution Control Agency
William Lintner, U.S. Department of Energy/Federal
Jeremy Alcorn, National Aeronautics and Space Administration
Energy Management Program
Kathleen Moxley, National Aeronautics and Space Administration
Louis Martino, U.S. Department of Energy/Argonne
Linda Wennerberg, National Aeronautics and Space Administration National Laboratory
Sam Higuchi, National Aeronautics and Space Administration John Nangle, U.S. Department of Energy/National
Renewable Energy Laboratory
Julie McNamee, National Park Service
Kathleen Judd, U.S. Department of Energy/ Pacific
Shawn Norton, National Park Service
Northwest Laboratory
Chris Steuer, National Park Service
Keith Rule, U.S. Department of Energy/Princeton Plasma
Mark Lowery, New York State Department of Physics Laboratory
Environmental Conservation
Pete Aitcheson, U.S. Department of Health and Human Services
Sushma Masemore, North Carolina Department of Environment
Lucas Hollenkamp, U.S. Department of Health and Human
and Natural Resources
Services/National Institutes of Health
Jason Hollett, Nova Scotia Environment
Edward Rau, U.S. Department of Health and Human Services/
Dana Arnold, Office of the Federal Environmental Executive National Institutes of Health
Eva Musso, Ontario Ministry of Environment Catherine Cesnik, U.S. Department of the Interior
Bill Drumheller, Oregon Department of Energy Susan Caplan, U.S. Department of the Interior/Bureau
of Land Management
Contributors
Robert Jolley, U.S. Department of the Interior/Bureau

of Land Management
Angela Zahniser, U.S. Department of the Interior/Bureau

of Land Management
Dawn Gunning, U.S. Department of Justice
Renae Steichen, U.S. Department of Justice
CJ Cordova, U.S. Department of Veterans Affairs
Stephen Earsom, U.S. Federal Highway Administration
Ann Kosmal, U.S. General Services Administration
Kevin Kampschroer, U.S. General Services Administration
Joseph Lerch, Virginia Municipal League
Karin Landsberg, Washington State Department of Transportation
Pankaj Bhatia, World Resources Institute
Jefferson Cox, World Resources Institute
Cynthia Cummis, World Resources Institute
Tom Damassa, World Resources Institute
Holly Lahd, World Resources Institute
Janet Ranganathan, World Resources Institute
Neelam Singh, World Resources Institute
Micah Ziegler, World Resources Institute
Carlos Calvo Ambel, Zeroemissions
Disclaimer
This document, designed to promote best practice GHG
FPO
accounting and reporting, has been developed through a
FSC
unique multi-stakeholder consultative process involving
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representatives of reporters and report-users from within
the U.S. and around the world. While LMI and WRI
encourage the use of the U.S. Public Sector Protocol by
all government organizations, the preparation and Printed with linseed-oil based inks on elemental chlorine-free Chorus
publication of reports based fully or partially on the Art Silk paper (50% recycled, including 25 % post consumer content).
U.S. Public Sector Protocol is the full responsibility of Using this paper created the following benefits:
those producing them. Neither LMI and WRI, nor other • 5.66 trees preserved for the future
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the U.S. Public Sector Protocol. • 4,011,788 BTU’s energy not consumed.
108
About WRI About LMI
World Resources Institute (WRI) is an independent environmental LMI has a rich history of public service, bringing the best manage-
think tank that goes beyond research to find practical ways to ment and technical minds to address intricate issues across the
protect the earth and improve people’s lives. Our mission is to federal government. As administrations, priorities, and policies
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for Sustainable Development.
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The Greenhouse Gas Protocol

for the U.S. Public Sector

Interpreting the Corporate Standard

LMI Team Authors

Chapter 1 GHG Accounting and Reporting Principles S T A N D A R D G U I D A N C E 8

Chapter 2 Organizational Goals and Inventory Design G U I D A N C E 12

Chapter 3 Setting Organizational Boundaries S T A N D A R D G U I D A N C E 16

Chapter 4 Setting Operational Boundaries S T A N D A R D G U I D A N C E 24

Chapter 5 Tracking Emissions Over Time S T A N D A R D G U I D A N C E 36

Chapter 6 Identifying and Calculating GHG Emissions G U I D A N C E 44

Chapter 7 Managing Inventory Quality G U I D A N C E 54

Chapter 8 Reporting GHG Emissions S T A N D A R D G U I D A N C E 64

Chapter 9 Verification of GHG Emissions G U I D A N C E 70

Chapter 10 Setting GHG Targets G U I D A N C E 76

Appendix A Overview of GHG Programs 88

Appendix B Equity Share Consolidation Approach 90

Appendix C Accounting for Sequestered Atmospheric Carbon 92

Appendix D Accounting for Indirect Emissions from Purchased Electricity 94

Appendix E Public Operations and Scopes 96

Appendix F Accounting for Indirect Emissions Reductions 97

The Greenhouse Gas Protocol Initiative

of developing internationally accepted greenhouse gas (GHG) accounting

stakeholder partnership of businesses, non-governmental organizations (NGOs), and

governments, it was convened by the World Resources Institute (WRI), a U.S.-based

(WBCSD), a Geneva-based coalition of international companies.

The GHG Protocol Corporate Standard

Interpreting the Corporate Standard How This Protocol Was Developed

Relationship to GHG Programs

Mandatory reporting requirements for government organi-

F O R M AT: S T A N D A R D S A N D G U I D A N C E • The Land Use, Land-Use Change, and Forestry Guidance

GHG Calculation Tools • What is the difference between direct and

• What is involved in setting an emissions

• What are the principles that underpin a

• What goals should I consider when setting

• How do I set an organizational boundary

A s with financial accounting and reporting, generally accepted green-

house gas (GHG) accounting principles are intended to underpin and

multiple entities. This is particularly critical for departments or sub-organizations

rolling up or aggregating their inventories to higher organizational units

(division, bureau, etc.)

GHG accounting and reporting shall be based on the following principles:

Their primary function is to guide the implementation

3 (Organizational Boundaries), and 4 (Operational

as accuracy and completeness are in tension with each

omitted from the inventory. Technically, such a threshold

affecting emission estimates, they need to be transpar-

Data should be sufficiently accurate to enable intended

estimates, or calculations should be systematically

credibility while enhancing transparency.

What goals should I consider when setting out to account

P ublic organizations at the local, state, regional or federal level

generally want their GHG inventory to be capable of serving multiple

determining at what organizational level to conduct an inventory—i.e., at a

division, bureau, agency, or multi-agency level.

The U.S. Public Sector Protocol has been designed as a

Gaining relevant GHG inventory experience to inform public

mental issues, including GHG emissions. (See case

(including all six Kyoto GHGs), as well as indirect Sector Protocol.

Virginia Municipal League: Indeed, an organization’s indirect emissions can be

The Virginia Municipal League (VML) is a statewide, nonprofit,