Green Economy and Climate Mitigation: Topics of Relevance to Africa

Chapter 4. Carbon benchmarking and accounting

Green Economy and Climate Mitigation 65 Carbon benchmarking and accounting Godwell Nhamo and Ashley Mutezo Introduction Writing on the subject of international carbon accounting and drawing lessons for Africa is highly relevant today, given that levels of awareness in this field have risen. This is an area supported by the United Nations Framework Convention on Climate Change’s (UNFCCC) 17th Session of the Conference of Parties (COP17), hosted in Durban in November/ December 2011. Issues pertaining to the measurement, reporting and veri fication (MRV) of greenhouse gas (GHG) emissions have dominated global climate negotiations in recent times, especially since the Copenhagen debacle of 2009.1 When one thinks of carbon benchmarking and accounting , terms such as ‘carbon asset’ (sinks) and ‘liability’ (carbon source) come to mind. Consumers now expect corporates and governments to account for their carbon footprint and to ‘do something’ about it. In addition, there has been an increase in carbon regulatory frameworks at all levels (global , continental, subcontinental, national, state/provincial and local), and Africa is no exception to this. Climate change has become a key agenda in international trade negotiations, with direct emphasis on reducing the concentration of GHGs in the atmosphere. The first step towards achieving this is quantifying GHG emissions at organisational and national levels . GHG accounting standards have, therefore, been put in place to provide an international, policy-neutral set of tools to be adopted and used for consistency in undertaking and certifying GHG inventories and projects. 4 66 Green Economy and Climate Mitigation Carbon benchmarking and accounting The use of the terms ‘carbon accounting’ and ‘environmental (green) accounting’ might be misunderstood if not put into proper perspective. According to the Environmental Protection Agency (EPA),2 one can talk of carbon and/or environmental accounting at the global, national, financial (i.e. corporate) and management (i.e. firm, division, facility, product, line or system) levels. Since the main aim of this chapter is awareness raising, with specific reference to carbon accounting, an effort will be made to stay away from the discipline of environmental accounting. Carbon accounting is a growing discipline that draws heavily from environmental science (especially climate change science and policy), accounting and law. It also borrows concepts from other related disciplines, such as forestry, economics, international law and international relations. One climate change mitigation area that has witnessed a great deal of contestation regarding carbon accounting, particularly in the area of MRV, has been reducing emissions from deforestation and forest degradation plus (REDD+).3 The first decade of the twenty-first century has witnessed a proliferation of carbon-accounting standards, protocols and guidelines as the world battles with the need to significantly reduce anthropogenic GHG emissions. Among such standards and protocols are ISO 14064, which deals with GHG accounting and verification;4 the GHG Protocol for Corporate Accounting and Reporting Standards (GHG Protocol);5 the GHG Emissions and Life Cycle Analysis and/or the PAS 2050 Life Cycle Analysis Guidelines;6 the South African Fruit and Wine Industry Carbon Calculator; and the Carbon Protocol of South Africa. The National Climate Change Response Green Paper for South Africa, which was available for public comment at the time of writing,7 proposes to have an internationally recognised draft MRV system in place by 2012. This means that mandatory carbon accounting is inevitable. The aim of this chapter is to raise awareness of international and African carbon-accounting protocols, standards and guidelines and to provide insights for future policy. The chapter seeks to address the question of which international carbon accounting protocols, guidelines and standards are commonly used and how applicable they are to the African context. Linked to these aims are the following research objectives: to present and discuss commonly used international carbon-accounting protocols, standards and guidelines; to determine the extent to which such international carbon-accounting protocols, standards and guidelines have been domesticated for use in Africa, especially South Africa; and to come up with policy recommendations on how the African Green Economy and Climate Mitigation 67 Godwell Nhamo and Ashley Mutezo corporate world should utilise such international carbon-accounting protocols, standards and guidelines. The chapter draws heavily from a literature survey and leaves room for primary research work in the future. This chapter has six main parts. The next section discusses carbonaccounting currency and the global carbon market. The following section deals with the fundamentals of carbon accounting, and another focuses on international...