GHG emissions standard on its way

Throughout the world, there is increasing pressure on governments, companies,regulators and standard-setters to respond to the global challenge of climate change. The growing number of regulatory requirements for organisations to disclose their greenhouse gas (GHG) emissions and emergent national, regional and international emissions trading schemes (ETSs) reflect key government responses to this challenge. Assurance of GHG emissions disclosures enhances the credibility of these disclosures and any associated trading schemes. The auditing and assurance profession has an important role to play in the provision of such assurance, highlighted by the International Auditing and Assurance Standards Board’s (IAASB) decision to develop an international GHG emissions assurance standard. This article sets out the developments to date on an international standard for the assurance of GHG emissions disclosures. It then provides information on the way Australian companies have responded to the challenge of GHG reporting and assurance. Finally, it outlines the types of assurance that assurance providers in Australia are currently providing in this area.

Renewable Energy and Climate Policies: Studies in the Forest and Energy Sector

‪This dissertation examines the impacts of energy and climate policies on the energy and forest sectors, focusing on the case of Finland. The thesis consists of an introduction article and four separate studies. The dissertation was motivated by the climate concern and the increasing demand of renewable energy. In particular, the renewable energy consumption and greenhouse gas emission reduction targets of the European Union were driving this work. In Finland, both forest and energy sectors are in key roles in achieving these targets. In fact, the separation between forest and energy sector is diminishing as the energy sector is utilizing increasing amounts of wood in energy production and as the forest sector is becoming more and more important energy producer.‬ ‪The objective of this dissertation is to find out and measure the impacts of climate and energy policies on the forest and energy sectors. In climate policy, the focus is on emissions trading, and in energy policy the dissertation focuses on the promotion of renewable forest-based energy use. The dissertation relies on empirical numerical models that are based on microeconomic theory. Numerical partial equilibrium mixed complementarity problem models were constructed to study the markets under scrutiny. The separate studies focus on co-firing of wood biomass and fossil fuels, liquid biofuel production in the pulp and paper industry, and the impacts of climate policy on the pulp and paper sector.‬ ‪The dissertation shows that the policies promoting wood-based energy may have have unexpected negative impacts. When feed-in tariff is imposed together with emissions trading, in some plants the production of renewable electricity might decrease as the emissions price increases. The dissertation also shows that in liquid biofuel production, investment subsidy may cause high direct policy costs and other negative impacts when compared to other policy instruments. The results of the dissertation also indicate that from the climate mitigation perspective, perfect competition is the favored wood market competition structure, at least if the emissions trading system is not global.‬ ‪In conclusion, this dissertation suggests that when promoting the use of wood biomass in energy production, the favored policy instruments are subsidies that promote directly the renewable energy production (i.e. production subsidy, renewables subsidy or feed-in premium). Also, the policy instrument should be designed to be dependent on the emissions price or on the substitute price. In addition, this dissertation shows that when planning policies to promote wood-based renewable energy, the goals of the policy scheme should be clear before decisions are made on the choice of the policy instruments.‬

Tecnologias CAC e Inquéritos de Percepção da Opinião Pública sobre “O papel da Captação e do Armazenamento/Sequestração de Dióxido de Carbono no Futuro da Energia na Europa”:O caso-de-estudo da Comunidade Fernando Pessoa

O carvão e outros combustíveis fósseis, continuarão a ser, por décadas, a principal matéria-prima energética para as Centrais Térmicas, não obstante os esforços para, dentro do possível, substituir os combustíveis fósseis por fontes de energia renovável.Tal como está, hoje, bem documentado, a produção de gases com efeito estufa (GEE), designadamente CO2, resulta da combustão dos ditos combustíveis fósseis, sendo que se espera ser possível mitigar substancialmente a emissão de tais gases com a aplicação das chamadas Tecnologias Limpas do Carvão.Há, pois, necessidade de promover o abatimento do CO2 através de Tecnologias de Emissão Zero ou Tecnologias Livres de Carbono, incluindo designadamente a Captura, o Transporte e a Sequestração geológica de CO2 correspondentes ao que é costume designar por Tecnologias CAC (Captação e Armazenamento de Carbono). De facto, tais tecnologias e, designadamente, o armazenamento geológico de CO2 são as únicas que, no estado actual do conhecimento, são capazes de permitir que se cumpram as metas do ambicioso programa da EU para a energia e o ambiente conhecido por “20 20 para 2020” em conjugação com os aspectos económicos das directivas relativas ao Comércio Europeu de Licenças de Emissão – CELE (Directivas 2003/87/EC, 2004/101/EC e 2009/29/EC).A importância do tema está, aliás, bem demonstrada com o facto da Comissão Europeia ter formalmente admitido que as metas supracitadas serão impossíveis de atingir sem Sequestração Geológica de CO2. Esta é, pois, uma das razões de ter sido recentemente publicada a Directiva Europeia 2009/31/EC de 23 de Abril de 2009 expressamente dedicada ao tema do Armazenamento Geológico de CO2.Ora, a questão do armazenamento geológico de CO2 implica, para além das Tecnologias CAC acima mencionadas e da sua viabilização em termos tanto técnicos como económicos, ou seja, neste último aspecto, competitiva com o sistema CELE, também o conhecimento, da percepção pública sobre o assunto. Isto é, a praticabilidade das Tecnologias CAC implica que se conheça a opinião pública sobre o tema e, naturalmente, que face a esta realidade se prestem os esclarecimentos necessários como, aliás, é reconhecido na própria Directiva Europeia 2009/31/EC.Dado que a Fundação Fernando Pessoa / Universidade Fernando Pessoa através do seu Centro de Investigação em Alterações Globais, Energia, Ambiente e Bioengenharia – CIAGEB tem ultimado um Projecto de Engenharia relativo à Sequestração Geológica de CO2 nos Carvões (Metantracites) da Bacia Carbonífera do Douro – o Projecto COSEQ, preocupou-se naturalmente, desde o início, com o lançamento de inquéritos de percepção da opinião pública sobre o assunto.Tal implicou, nesta fase, a tradução para português e o lançamento do inquérito europeu ACCSEPT que não tinha sido ainda formalmente lançado de forma generalizada entre nós. Antes, porém, de lançar publicamente tal inquérito – o que está actualmente já em curso – resolveu-se testar o método de lançamento, a recolha de dados e o seu tratamento com uma amostra correspondente ao que se designou por Comunidade Fernando Pessoa, i.e. o conjunto de docentes, discentes, funcionários e outras pessoas relacionadas com a Universidade Fernando Pessoa (cerca de 5000 individualidades).Este trabalho diz, precisamente, respeito à preparação, lançamento e análise dos resultados do dito inquérito Europeu ACCSEPT a nível da Comunidade Fernando Pessoa. Foram recebidas 525 respostas representando 10,5% da amostra. A análise de resultados foi sistematicamente comparada com os obtidos nos outros países europeus, através do projecto ACCSEPT e, bem assim, com os resultados obtidos num inquérito homólogo lançado no Brasil. The use of coal, and other fossil fuels, will remain for decades as the main source of energy for power generation, despite the important efforts made to replace, as far as possible, fossil fuels with renewable power sources.As is well documented, the production of Greenhouse Gases (GHG), mainly CO2, arises primarily from the combustion of fossil fuels. The increasing application of Clean Coal Technologies-CCTs, is expected to mitigate substantially against the emission of such gases.There is consequently a need to promote the CO2 abatement through Zero Emission (Carbon Free) Technologies - ZETs, which includes CO2 capture, transport and geological storage, i.e. the so-called CCS (Carbon, Capture and Storage) technologies. In fact, these technologies are the only ones that are presently able to conform to the ambitious EU targets set out under the “20 20 by 2020” EU energy and environment programme, jointly with the economic aspects of the EU Directives 2003/87/EC, 2004/101/EC and 2009/29/EC concerned with the Greenhouse Gas Emissions Allowance Trading Scheme – ETS scheme. The European Commission formal admission that the referred targets will be impossible to reach without the implementation and contribution of geological storage clearly demonstrate the importance of this particular issue, and for this reason the EC Directive 2009/31/EC of April 23, 2009 on Geological Storage of CO2 was recently published.In considering the technical and economical viabilities of CCS technologies, the latter in competition with the ETS scheme, it is believed that public perception will dictate the success of the development and implementation of CO2 geological storage at a large industrial level. This means that, in order to successfully implement CCS technologies, not only must public opinion be taken into consideration but objective information must also be provided to the public in order to raise subject awareness, as recognized in the referred Directive 2009/31/EC.In this context, the Fernando Pessoa Foundation / University Fernando Pessoa, through its CIAGEB (Global Change, Energy, Environment and Bioengineering) RDID&D Unit, is the sponsor of an Engineering Project for the Geological Sequestration of CO2 in Douro Coalfield Meta-anthracites - the COSEQ Project, and is therefore also engaged in public perception surveys with regards to CCS technologies.At this stage, the original European ACCSEPT inquiry was translated to Portuguese and submitted only to the “Fernando Pessoa Community” - comprising university lecturers, students, other employees, as well as, former students and persons that have a professional or academic relationship with the university (c. 5000 individuals). The results obtained from this first inquiry will be used to improve the survey informatics system in terms of communication, database, and data treatment prior to resubmission of the inquiry to the Portuguese public at large.The present publication summarizes the process and the results obtained from the ACCSEPT survey distributed to the “Fernando Pessoa Community”. 525 replies, representing 10.5% of the sample, have been received and analysed. The assessment of the results was systematically compared with those obtained from other European Countries, as reported by the ACCSEPT inquiry, as well as with those from an identical inquiry launched in Brazil.

Terminating links between emission trading programs

© 2015 Elsevier Inc.Links between emission trading programs are not immutable, as highlighted by New Jersey's exit from the Regional Greenhouse Gas Initiative in 2011. This raises the question of what to do with existing permits that are banked for future use-choices that have consequences for market behavior in advance of, or upon speculation about, delinking. We consider two delinking policies. One differentiates banked permits by origin, the other treats banked permits the same. We describe the price behavior and relative cost-effectiveness of each policy. Treating permits differently generally leads to higher costs, and may lead to price divergence, even with only speculation about delinking.

Abatement and Allocation in the Pilot Phase of the EU ETS

We use historical industrial emissions data to assess the level of abatement and over-allocation that took place across European countries during the pilot phase (2005–2007) of the European Union Emission Trading Scheme. Using a dynamic panel data model, we estimate the counter factual (business-as-usual) emissions scenario for EU member states. Comparing this baseline to allocated and verified emissions, we find that both over-allocation and abatement occurred, along with under-allocation and emissions inflation. Over the three trading years of the pilot phase we find over-allocation of approximately 280 million EUAs and total abatement of 247 Mt CO2. However, we calculate that emissions inflation of approximately 73 Mt CO2 also occurred, possibly due to uncertainty about future policy design features.

Progress report on longitudinal and cross-sectional study of carbon disclosure strategies: evidence from UK listed companies

Global warming has attracted attention from all over the world and led to the concern about carbon emission. Kyoto Protocol, as the first major international regulatory emission trading scheme, was introduced in 1997 and outlined the strategies for reducing carbon emission (Ratnatunga et al., 2011). As the increased interest in carbon reduction the Protocol came into force in 2005, currently there are already 191 nations ratifying the Protocol(UNFCCC, 2012). Under the cap-and-trade schemes, each company has its carbon emission target. When company’s carbon emission exceeds the target the company will either face fines or buy emission allowance from other companies. Thus unlike most of the other social and environmental issues carbon emission could trigger cost for companies in introducing low-emission equipment and systems and also emission allowance cost when they emit more than their targets. Despite the importance of carbon emission to companies, carbon emission reporting is still operating under unregulated environment and companies are only required to disclose when it is material either in value or in substances (Miller, 2005, Deegan and Rankin, 1997). Even though there is still an increase in the volume of carbon emission disclosures in company’s financial reports and stand-alone social and environmental reports to show their concern of the environment and also their social responsibility (Peters and Romi, 2009), the motivations behind corporate carbon emission disclosures and whether carbon disclosures have impact on corporate environmental reputation and financial performance have not yet to explore. The problems with carbon emission lie on both the financial side and non-financial side of corporate governance. On one hand corporate needs to spend money in reducing carbon emission or paying penalties when they emit more than allowed. On the other hand as the public are more interested in environmental issues than before carbon emission could also impact on the image of corporate regarding to its environmental performance. The importance of carbon emission issue are beginning to be recognized by companies from different industries as one of the critical issues in supply chain management (Lee, 2011) and 80% of companies analysed are facing carbon risks resulting from emissions in the companies’ supply chain as shown in a study conducted by the Investor Responsibility Research Centre Institute for Corporate Responsibility (IRRCI) and over 80% of the companies analysed found that the majority of greenhouse gas (GHG) emission are from electricity and other direct suppliers (Trucost, 2009). The review of extant literature shows the increased importance of carbon emission issues and the gap in the study of carbon reporting and disclosures and also the study which links corporate environmental reputation and corporate financial performance with carbon reporting (Lohmann, 2009a, Ratnatunga and Balachandran, 2009, Bebbington and Larrinaga-Gonzalez, 2008). This study would focus on investigating the current status of UK carbon emission disclosures, the determinant factors of corporate carbon disclosure, and the relationship between carbon emission disclosures and corporate environmental reputation and financial performance of UK listed companies from 2004-2012 and explore the explanatory power of classical disclosure theories.

The core of the global warming problem: energy

From the thermodynamic point of view, the global warming problem is an ''energy balance'' problem. The heat (energy) accumulation in the earth and its atmosphere is the cause of the global warming. This accumulation is mainly due to the imbalance of (solar) energy reaching and the energy leaving the earth, caused by ''greenhouse effect'' in which the CO₂ and other greenhouse gases play a critical role; so that balance of the energy entering and leaving the earth should be the key to solve the problem. Currently in the battle of tackling the global warming, we mainly focus on the development of CO₂-related measures, i.e., emission reduction, CO₂ sequestration, and CO₂ recycle technologies. It is right in technical aspect, because they are attempting thinner the CO₂ ''blanket'' around the earth. However, ''Energy'' that is the core of the problem has been overlooked, at least in management/policy aspect. This paper is proposing an ''Energy Credit'' i.e., the energy measure concept as an alternative to the ''CO₂ credit'' that is currently in place in the proposed emission trading scheme. The proposed energy credit concept has the advantages such as covering broad activities related to the global warming and not just direct emissions. Three examples are given in the paper to demonstrate the concept of the energy measure and its advantages over the CO₂ credit concept.

Climate change and reduction of CO2 emissions: the role of developing countries in carbon trade markets

Includes bibliography

Climate change and carbon markets: implications for developing countries

While the Kyoto Protocol provided a framework for reducing the greenhouse gas emissions of industrialized nations, current climate change negotiations envisage future commitments for major co2 emitters among developing countries. This document uses an updated version of the gtap-e general equilibrium model to analyse the economic implications of reducing carbon emissions under different carbon trading scenarios. The participation of developing countries such as China and India would reduce emissions trading costs. Impacts in Latin America would depend on whether a country is an energy exporter or importer and whether the United States reduces emissions. Welfare impacts might be negative depending on the carbon trading scheme adopted and a country’s trading partners.

A villamos erőművek szén-dioxid-kibocsátásának modellezése reálopciók segítségével = Modelling of the carbon dioxide emissions of a power plant, using real options

A szerző egy, a szennyezőanyag-kibocsátás európai kereskedelmi rendszerében megfelelésre kötelezett gázturbinás erőmű szén-dioxid-kibocsátását modellezi négy termékre (völgy- és csúcsidőszaki áramár, gázár, kibocsátási kvóta) vonatkozó reálopciós modell segítségével. A profitmaximalizáló erőmű csak abban az esetben termel és szennyez, ha a megtermelt áramon realizálható fedezete pozitív. A jövőbeli időszak összesített szén-dioxid-kibocsátása megfeleltethető európai típusú bináris különbözetopciók összegének. A modell keretein belül a szén-dioxid-kibocsátás várható értékét és sűrűségfüggvényét becsülhetjük, az utóbbi segítségével a szén-dioxid-kibocsátási pozíció kockáztatott értékét határozhatjuk meg, amely az erőmű számára előírt megfelelési kötelezettség teljesítésének adott konfidenciaszint melletti költségét jelenti. A sztochasztikus modellben az alaptermékek geometriai Ornstein-Uhlenbeck-folyamatot követnek. Ezt illesztette a szerző a német energiatőzsdéről származó publikus piaci adatokra. A szimulációs modellre támaszkodva megvizsgálta, hogy a különböző technológiai és piaci tényezők ceteris paribus megváltozása milyen hatással van a megfelelés költségére, a kockáztatott értékére. ______ The carbon-dioxide emissions of an EU Emissions Trading System participant, gas-fuelled power generator are modelled by using real options for four underlying instruments (peak and off-peak electricity, gas, emission quota). This profit-maximizing power plant operates and emits pollution only if its profit (spread) on energy produced is positive. The future emissions can be estimated by a sum of European binary-spread options. Based on the real-option model, the expected value of emissions and its probability-density function can be deducted. Also calculable is the Value at Risk of emission quota position, which gives the cost of compliance at a given confidence level. To model the prices of the four underlying instruments, the geometric Ornstein-Uhlenbeck process is supposed and matched to public available price data from EEX. Based on the simulation model, the effects of various technological and market factors are analysed for the emissions level and the cost of compliance.

Uncertainty and Speculators in an Auction for Emissions Permits

Auctions have become popular as means of allocating emissions permits in the emissions trading schemes developed around the world. Mostly, only a subset of the regulated polluters participate in these auctions along with speculators, creating a market with relatively few participants and, thus, incentive for strategic bidding. I characterize the bidding behavior of the polluters and the speculators, examining the effect of the latter on the profits of the former and on the auction outcome. It turns out that in addition to bidding for compliance, polluters also bid for speculation in the aftermarket. While the presence of the speculators forces the polluters to bid closer to their true valuations, it also creates a trade-off between increasing the revenue accrued to the regulator and reducing the profits of the auction-participating polluters. Nevertheless, the profits of the latter increase in the speculators' risk aversion.

The function of property in creating an effective legal regime for trade in environmental offsets

Market-based environmental regulation is becoming increasingly common within international and national frameworks. Environmental offset and trading regimes are part of the market-based instrument revolution. This paper proposes that environmental market mechanisms could be used to introduce an ethic of land holder responsibility. In order for market based regimes to attract sufficient levels of stakeholder engagement, participants within such scheme require an incentive to participate and furthermore need to feel a sense of security about investing in such processes. A sense of security is often associated with property based interests. This paper explores the property related issues connected with environmental offset and trading scheme initiatives. Relevant property-related considerations include land tenure considerations, public versus private management of land choices, characteristics and powers associated with property interests, theories defining property and the recognition of legal proprietal interests. The Biodiversity Banking Scheme in New South Wales is then examined as a case study followed by a critique on the role of environmental markets.

Towards a model of the institutional logics of climate change

The proliferation of innovative schemes to address climate change at international, national and local levels signals a fundamental shift in the priority and role of the natural environment to society, organizations and individuals. This shift in shared priorities invites academics and practitioners to consider the role of institutions in shaping and constraining responses to climate change at multiple levels of organisations and society. Institutional theory provides an approach to conceptualising and addressing climate change challenges by focusing on the central logics that guide society, organizations and individuals and their material and symbolic relationship to the environment. For example, framing a response to climate change in the form of an emission trading scheme evidences a practice informed by a capitalist market logic (Friedland and Alford 1991). However, not all responses need necessarily align with a market logic. Indeed, Thornton (2004) identifies six broad societal sectors each with its own logic (markets, corporations, professions, states, families, religions). Hence, understanding the logics that underpin successful –and unsuccessful– climate change initiatives contributes to revealing how institutions shape and constrain practices, and provides valuable insights for policy makers and organizations. This paper develops models and propositions to consider the construction of, and challenges to, climate change initiatives based on institutional logics (Thornton and Ocasio 2008). We propose that the challenge of understanding and explaining how climate change initiatives are successfully adopted be examined in terms of their institutional logics, and how these logics evolve over time. To achieve this, a multi-level framework of analysis that encompasses society, organizations and individuals is necessary (Friedland and Alford 1991). However, to date most extant studies of institutional logics have tended to emphasize one level over the others (Thornton and Ocasio 2008: 104). In addition, existing studies related to climate change initiatives have largely been descriptive (e.g. Braun 2008) or prescriptive (e.g. Boiral 2006) in terms of the suitability of particular practices. This paper contributes to the literature on logics by examining multiple levels: the proliferation of the climate change agenda provides a site in which to study how institutional logics are played out across multiple, yet embedded levels within society through institutional forums in which change takes place. Secondly, the paper specifically examines how institutional logics provide society with organising principles –material practices and symbolic constructions– which enable and constrain their actions and help define their motives and identity. Based on this model, we develop a series of propositions of the conditions required for the successful introduction of climate change initiatives. The paper proceeds as follows. We present a review of literature related to institutional logics and develop a generic model of the process of the operation of institutional logics. We then consider how this is applied to key initiatives related to climate change. Finally, we develop a series of propositions which might guide insights into the successful implementation of climate change practices.

Legal responses to climate change

The challenges of climate change pose problems requiring new and innovative legal responses by legal practitioners, government officials and corporate officers. This book addresses a broad range of topic areas where climate change has impact and systematically analyses the key legal responses to climate change, both at the international level and within Australia at federal, State and local levels. In particular, it critically examines: •the rights, duties and market mechanisms established under the international climate change regime •the effect of climate change policies on the implementation of environmental and planning laws •new regimes for the implementation of renewable energy and energy efficiency initiatives •legal frameworks for the implementation of biological and geological sequestration projects (including forest projects and carbon rights); and •legal principles for the design of an effective carbon trading scheme for Australia It also considers the role of the common law including: •the likely response of the law of torts to emerging forms of climate change harm; and •potential liabilities for professionals who must take climate change into account in their decision-making and advice

Crime and the commodification of carbon

Carbon will be the world's biggest market. Barclays was the first UK bank to set up a dedicated carbon trading desk to help clients, and Barclays Capital is the most active player in the emissions trading market having traded 300 million tonnes as at February 2007. (Barclays, 2007: 1)