An Overview of Greenhouse Gas Emissions Verification Issues

The need for information on how to count, track, and verify greenhouse gas emissions has never been greater. Many of the world’s nations are working toward international, national, and subnational regimes for reducing emissions. These efforts have been accompanied by a growing number of corporate targets to reduce greenhouse gas emissions, as well as the emergence of a greenhouse gas trading market. To ensure that the numbers on which governments determine compliance, and on which companies stake their finances and reputations, are real, greenhouse gas emissions verification is critical.

In this Pew Center report, authors Christopher Loreti, Scot Foster, and Jane Obbagy of Arthur D. Little, Inc. describe the evolving approaches to corporate greenhouse gas emissions verification. They identify factors that drive verification activities and suggest a number of principles that organizations should consider when verifying greenhouse gas emissions, with an eye toward the experiences of the firms, governments, and non-governmental organizations that have been involved in verification activities.

This report builds on An Overview of Greenhouse Gas Emissions Inventory Issues which the Pew Center released last year, and which offered a set of principles for conducting greenhouse gas inventories. Both of these reports are part of the Solutions series, which is aimed at providing individuals and organizations with tools to evaluate and reduce their contributions to climate change.

The authors and the Pew Center would like to thank the companies featured in this report for sharing their experiences and perspectives, and acknowledge the members of the Center’s Business Environmental Leadership Council, as well as Jean-Bernard Carrasco of the Australian Greenhouse Office, Nick Hughes of BP, and Janet Ranganathan of the World Resources Institute for their review and advice on a previous draft of this report.

Executive Summary

The growing number of companies that inventory greenhouse gas (GHG) emissions, implement emissions reductions projects and targets, and trade GHG emissions reductions has generated increasing interest in emissions verification. Stakeholders in the corporate, governmental, and non-governmental sectors recognize the need for complete, credible, and accurate information about GHG emissions and emissions reductions. To address this issue, some government bodies have developed standards for verifying GHG emissions for specific programs. More general approaches to verifying emissions are just beginning to evolve, however, as uniform approaches to inventorying and reporting GHG emissions are not yet fully established.

This paper describes the evolving approaches to corporate GHG emissions verification. The authors discuss the experiences of leading firms that inventory and verify GHG emissions, the approaches to verification embodied in various GHG programs sponsored by governments and non-governmental organizations, and the factors that drive verification. They also review general verification issues, including who should verify, what should be verified, and when verification should occur.

This paper builds on an earlier publication of the Pew Center on Global Climate Change, An Overview of Greenhouse Gas Emissions Inventory Issues (Loreti et al., 2000). Much of the content is the result of discussions with the Pew Center’s Business Environmental Leadership Council, a survey of leading corporations on approaches to GHG emissions verification, a review of the current literature on corporate GHG emissions verification, discussions with representatives from governmental and non-governmental organizations involved in GHG emissions issues, and prior experience of Arthur D. Little, Inc. in environmental auditing and GHG verification.

Just as there are multiple purposes and methods for performing emissions inventories, there are a variety of reasons for verifying emissions inventories and a range of approaches to verification. However, the authors’ review of the work to date on GHG emissions verification suggests several principles for any firm that conducts a GHG emissions inventory:

  1. Conduct your inventory as if it is going to be verified, regardless of whether your organization is planning to verify it. Rigorous reporting, emissions estimation, and data management systems will facilitate any future verification. Indeed, these systems will make it possible to conduct third-party verification of today’s emissions in the future should it become necessary, for example, to establish a baseline or obtain credit for early emissions reductions.

  2. Be clear on the purpose of verification. Verification can be conducted for many reasons and the results of verification performed for one purpose may not be applicable to another. Be sure that all stakeholders who rely on the verification result will be satisfied with the scope and methods of the verification.

 3. Choose your verifiers carefully. Be sure the individuals conducting the verification understand your organization, its type of business, and its emissions. The verifiers’ knowledge and experience are more important than the type of organization they are from. If the verification is performed as part of an established GHG reporting or reduction program, be sure the verifiers you choose have the qualifications that that program requires.

4. Learn from your verification experience. Organizations will maximize the value of the verification if they use it to improve their inventory process, improve the reliability of reported information, and facilitate future verification. When hiring third-party verifiers, be sure that they provide specific recommendations for improving your organization’s GHG inventory.