An International Standard to Boost Carbon Trading

by Jamie Gairns

Please Note: The author, Jamie Gairns of Offsetters, is on the agenda of the OGC Energy & Utilities Domain Working Group (E&U DWG) webinar to be held from 1745 CET to 1840 CET (1145 EST to 1240 EST) on September 23, 2013. The title of his presentation is, “Why the development of a ‘CarbonML’ encoding standard will revolutionize the Carbon Trading World.” See the recent OGC press release for details.

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Cap and Trade programs have proven to be the most effective way for governments to enforce reductions of CO2 emissions. Emitters, such as owners of coal-fired power plants, must either reduce their emissions or else purchase carbon offsets from developers of carbon offsetting projects (wind farms, no-till agriculture projects, green buildings, reforestation projects, etc.). The cap for a particular polluter determines extent of the required emissions reductions and/or offsets.

This market-based approach depends on transparency and good data. Quantification and description of offsetting projects’ avoided carbon emissions needs to be thorough, and this information needs to be easily verified and communicated as well as compared and aggregated with information about other similar offsetting projects. The same need for transparency and good data applies to emissions reports that quantify the obligations of owners of CO2 emitting facilities.

Anyone with a financial interest in carbon trading or an altruistic interest in climate action can’t ignore these two aspects about carbon trading information:

1) There is currently no international encoding standard for use by greenhouse gas (GHG) registries, 3rd-party verifiers, buyers and sellers and financial institutions throughout the carbon value chain. Markets are fragmented and growth is blocked because there is no standard way of describing and communicating details such how avoided carbon emissions are measured and verified. Communicating such details is essential if value is to be determined and then trusted, and then reviewed over time.

2) Carbon trading information products all have one or more a spatial components.

The case for OGC CarbonML©

Founded in 2005, Offsetters is Canada’s first and now its leading carbon management team. Offsetters was the first supplier of carbon credits for the Pacific Carbon Trust initiative to make the BC government carbon neutral for 2010, and the first ever official supplier of Carbon Offsets to the International Olympic Committee, providing offsets for the Vancouver 2010 Olympic and Paralympic Games.

Offsetters develops and invests in high-quality offset projects that promote the shift to a low carbon future with clean technology, energy efficiency and sustainable forest management practices. We partner with organizations to create unique programs that enhance their brand and make a real difference.

In 2007 I became involved in the development of a software platform called the Carbon Credit Asset Management System (CCAMS v1.0). Since late 2008, CCAMS has been operational and has helped a client company, Viterra, aggregate close to 3,000,000 carbon credits under the Alberta Offset System. Since then, we have worked with Viterra on project verification, carbon credit generation & aggregation, a specified procedures test (SPT) conducted by PricewaterhouseCoopers on the CCAMS application, generating field-level map data to support numerous project audits, and various other activities. We are currently planning the next evolution of CCAMS to v3.2.

In addition to CCAMS, we have developed a product called FCAMS (Forest Carbon Asset Management Solution), which is now in use in Canada and Africa. FCAMS also has a transaction journal that allows users to manage project-level carbon credit activities.

In dealing with project verification, it occurred to me that there is an obvious connection between the carbon credits CCAMS was generating, serial numbers for these credits and the link to the GHG registries. These relationships led to the idea for CarbonML in 2010. An international open standard communications mechanism would streamline and standardize the transmission of GHG-related data. In addition, since carbon credits are financial instruments CarbonML would be a perfect way to embed key information in various transactions.

Finally, CarbonML would be perfect to connect any company involved in GHG footprinting. CarbonML would allow companies reporting emissions with The Climate Registry (TCR) or the Global Reporting Initiative (GRI), for example, to connect through an API, dramatically streamlining the reporting process.

Virtually all carbon emissions reduction projects have a specific location, and location is important for a variety of reasons. Calculating the carbon asset value of agriculture and forestry, for example, depends on knowledge of geospatial and temporal factors such as weather as well as soil, moisture, disease and related spectral signatures in aerial and satellite imagery. Quantifying and projecting the outputs of solar and wind projects depends on weather data. Geospatial and indoor spatial considerations are important in building energy management. In addition, projects are subject to specific geographic jurisdictions’ regulations, zoning and taxation.

Because of carbon assets’ sometimes complex spatial dependencies, and because the OGC has an efficient and respected process for developing and promoting international standards (with a standards suite that includes standards for sensors, remote sensing, meteorology and hydrology) Offsetters has joined the OGC to start a CarbonML Standards Working Group.

We plan to first bring into this working group technically savvy companies, government organizations, NGOs and university groups with experience in GHG projects and reporting.

Players all along the carbon value chain should be interested, but our initial focus will be on companies reporting to GHG registries and carbon projects such as agriculture and forestry. We will gather requirements, develop the standard in rapid prototyping experiments and testbeds, implement it in information systems, and develop compliance tests and documentation. Because costs are shared and the focus is on rapid prototyping, OGC members typically recognize a very high return on their standards development investments. Participation by major technology users motivates technology providers to help with development and then promptly implement the standards in products and services.

We have begun drafting a charter for the CarbonML Standards Working Group, and we will be circulating this for review and comment by members and the public, per the OGC Technical Committee Policies and Procedures. We plan to hold our first ad hoc meeting in late November or early December.

The number and strength of GHG policy initiatives around the world makes it clear that awareness of the climate crisis is been growing. Global GHG management efforts have been maturing, but an international open standard mechanism for quantifying and communicating carbon management is a critical missing requirement for a widely trusted, effective and efficient international carbon trading regime. We think the OGC is the right forum in which to address this requirement.

Offsetters and the OGC will soon issue a formal announcement calling for comments on the charter of the proposed CarbonML Working Group. Watch Energy Dimensions for this announcement and for subsequent news about CarbonML. If your organization wants to ensure that the CarbonML standard meets your needs and succeeds as an international standard, please join the effort and contribute your requirements!

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