Monitoring, reporting and verifying emissions in the climate economy

Article metrics

  • A Corrigendum to this article was published on 24 September 2015

Abstract

The monitoring, reporting and verification (MRV) of greenhouse-gas emissions is the cornerstone of carbon pricing and management mechanisms. Here we consider peer-reviewed articles and 'grey literature' related to existing MRV requirements and their costs. A substantial part of the literature is the regulatory texts of the 15 most important carbon pricing and management mechanisms currently implemented. Based on a comparison of key criteria such as the scope, cost, uncertainty and flexibility of procedures, we conclude that conventional wisdom on MRV is not often promoted in existing carbon pricing mechanisms. Quantification of emissions uncertainty and incentives to reduce this uncertainty are usually only partially applied, if at all. Further, the time and resources spent on small sources of emissions would be expected to be limited. Although provisions aiming at an effort proportionate to the amount of emissions at stake — 'materiality' — are widespread, they are largely outweighed by economies of scale: in all schemes, MRV costs per tonne are primarily driven by the size of the source.

Access options

Rent or Buy article

Get time limited or full article access on ReadCube.

from$8.99

All prices are NET prices.

Figure 1: Typology of verification requirements across CPMs.
Figure 2: Typology of uncertainty requirements across CPMs.
Figure 3: Typology of incentives to reduce uncertainty across CPMs.
Figure 4: Economies of scale in MRV.
Figure 5: Typology of materiality provisions across CPMs.

Change history

  • 08 September 2015

    In the version of this Review Article originally published, the following affiliation should have been included for Igor Shishlov: CIRED (Centre International de Recherche sur l'Environnement et le Développement), 94736 Nogent-sur-Marne, France. This error has been corrected in the online versions.

References

  1. 1

    Bellassen, V. & Stephan, N. (eds) Accounting for Carbon: Monitoring, Reporting and Verifying Emissions in the Climate Economy (Cambridge Univ. Press, 2015).

  2. 2

    Ascui, F. & Lovell, H. As frames collide: making sense of carbon accounting. Account. Audit. Accountab. J. 24, 978–999 (2011).

  3. 3

    Cochran, I. A Use-Based Analysis of Local-Scale GHG Inventories (CDC Climat Research, 2010).

  4. 4

    Measurement, Reporting and Verification (MRV) for Low Carbon Development: Learning from Experience in Asia (IGES, 2012).

  5. 5

    Ninomiya, Y. Classification of MRV of GHG Emissions/Reductions: For the Discussions on NAMAs and MRV (IGES, 2012).

  6. 6

    IPCC 2006 IPCC Guidelines for National Greenhouse Gas Inventories (eds Eggleston, S. et al.) (IGES, 2006).

  7. 7

    Cormier, A. & Bellassen, V. The risks of CDM projects: How did only 30% of expected credits come through? Energy Policy 54, 173–183 (2013).

  8. 8

    GHG Protocol Guidance on Uncertainty Assessment in GHG Inventories and Calculating Statistical Parameter Uncertainty (WRI/WBCSD, 2004).

  9. 9

    Warnecke, C. Can CDM monitoring requirements be reduced while maintaining environmental integrity? Clim. Policy 14, 443–466 (2014).

  10. 10

    Commission Regulation (EU) No. 601/2012 of 21 June 2012 on the monitoring and reporting of greenhouse gas emissions pursuant to Directive 2003/87/EC of the European Parliament and of the Council (EC, 2012).

  11. 11

    Standard for Sampling and Surveys for CDM Project Activities Version 3.0 (UNFCCC, 2011).

  12. 12

    Shishlov, I. & Bellassen, V. Review of Monitoring Uncertainty Requirements in the CDM (CDC Climat Research, 2014).

  13. 13

    Barker, A. & Robinson, R. Uncertainty in Monitoring of Carbon Offsetting Projects (National Physical Laboratory, 2014).

  14. 14

    Tool to Calculate Project or Leakage CO2 Emissions from Fossil Fuel Combustion (UNFCCC, 2008).

  15. 15

    ARB Mandatory Reporting Regulation. California Code of Regulations Title 17, CCR, sections 95100–95158 (California Air Resource Board, 2013).

  16. 16

    Cosbey, A. et al. A Guide for the Concerned: Guidance on the Elaboration and Implementation of Border Carbon Adjustment (Entwined, 2012).

  17. 17

    Kokoni, S. & Skea, J. Input–output and life-cycle emissions accounting: applications in the real world. Clim. Policy 14, 372–396 (2014).

  18. 18

    VM0012 Improved Forest Management in Temperate and Boreal Forests (LtPF) Version 1.1 (Verified Carbon Standard, 2012).

  19. 19

    Approved Baseline and Monitoring Methodology AM0023: Leak Detection and Repair in Gas Production, Processing, Transmission, Storage and Distribution Systems and in Refinery Facilities Version 04.0.0 (UNFCCC, 2011).

  20. 20

    Millard-Ball, A. The trouble with voluntary emissions trading: Uncertainty and adverse selection in sectoral crediting programs. J. Environ. Econ. Managem. 65, 40–55 (2013).

  21. 21

    Shishlov, I. MRV Incentives: Theory and Practice (the CDM Experience) (2014); http://go.nature.com/BAWHht

  22. 22

    Inclusion of Additional Activities and Gases into the EU-Emissions Trading Scheme (EC Directorate General for Environment, 2006).

  23. 23

    Bellassen, V. & Alberola, E. European Offset Projects: A tool to rally Poland towards the 2030 Energy Climate Package. Tendances Carbone 1 (2014).

  24. 24

    Shishlov, I., Bellassen, V. & Leguet, B. Joint Implementation: A Frontier Mechanism Within the Borders of an Emissions Cap (CDC Climat Research, 2012).

  25. 25

    King, K., Pye, S. & Davison, S. Assessing the Cost to UK Operators of Compliance with the EU Emissions Trading System (Aether, 2010).

  26. 26

    Regulatory Impact Analysis for the Mandatory Reporting of Greenhouse Gas Emissions Final Rule (GHG Reporting) (USEPA, 2009).

  27. 27

    Stephan, N., Bellassen, V. & Alberola, E. Use of Kyoto Credits by European Industrial Installations: From an Efficient Market to a Burst Bubble (CDC Climat Research, 2014).

  28. 28

    Hogan, P. et al. Tracking Emissions and Mitigation Actions: Current Practice in China, Germany, Italy, and the United States (Climate Policy Initiative, 2012).

  29. 29

    Pacala, S. et al. Verifying Greenhouse Gas Emissions: Methods to Support International Climate Agreements Committee on Methods for Estimating Greenhouse Gas Emissions National Research Council Report (NAS, 2010).

  30. 30

    Programme Budget for the Biennium 2012–2013 (UNFCCC, 2012).

  31. 31

    Synthèse Enquête Flash 2013 (Association Bilan Carbone, 2013).

  32. 32

    Beaurain, F. & Schmidt-Traub, G. Developing CDM Programmes of Activities: A Guidebook (South Pole Carbon Asset Management Ltd., 2010).

  33. 33

    Chenost, C. & Gardette, Y-M. Bringing Forest Carbon Projects to the Market (UNEP, 2010).

  34. 34

    Guigon, P., Bellassen, V. & Ambrosi, P. Voluntary Carbon Markets: What the Standards Say (CDC Climat Research, 2009).

  35. 35

    Hardcastle, P. D. & Baird, D. Capability and Cost Assessment of the Major Forest Nations To Measure and Monitor their Forest Carbon (Office of Climate Change, 2008).

  36. 36

    Krey, M. Transaction costs of unilateral CDM projects in India: Results from an empirical survey. Energy Policy 33, 2385–2397 (2005).

  37. 37

    Michaelowa, A. & Stronzik, M. Transaction Costs of the Kyoto Mechanisms (2002).

  38. 38

    Plugge, D., Baldauf, T. & Köhl, M. The global climate change mitigation strategy REDD: monitoring costs and uncertainties jeopardize economic benefits. Climatic Change 119, 247–259 (2013).

  39. 39

    Guidebook to Financing CDM Projects (UNEP, 2007).

  40. 40

    Böttcher, H. et al. An assessment of monitoring requirements and costs of 'Reduced Emissions from Deforestation and Degradation'. Carbon Balance Manage. 4, 7 (2009).

  41. 41

    Costs of Compliance with the EU Emissions Trading Scheme (UK Environment Agency, 2006).

  42. 42

    Administrative Cost of the Emissions Trading Scheme to Participants (Emissions Trading Group, 2008).

  43. 43

    Impact Assessment SWD(2012) 177. Accompanying document for Commission Regulations (EU) No. 601/2012 of 21 June 2012 and No. 600/2012 of 21 June 2012 pursuant to Directive 2003/87/EC of the European Parliament and of the Council (EC, 2012); http://go.nature.com/c1iajw

  44. 44

    Impact Assessment SEC(2008) 85/3 document accompanying the Package of Implementation Measures for the Eu's Objectives on Climate Change and Renewable Energy for 2050 (EC, 2008); http://go.nature.com/jx8NFw

  45. 45

    Graus, W. & Voogt, M. Small Installations within the EU Emissions Trading Scheme (EC & Ecofys, 2007).

  46. 46

    Jaraité, J., Convery, F. & Di Maria, C. Transaction costs for firms in the EU ETS: lessons from Ireland. Clim. Policy 10, 190–215 (2010).

  47. 47

    Heindl, P. Transaction Costs and Tradable Permits: Empirical Evidence from the EU Emissions Trading Scheme (ZEW (Center for European Economic Research), 2012).

  48. 48

    National Inventory Report 2011 (Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education, 2013).

  49. 49

    National Greenhouse and Energy Reporting Bill, Explanatory Memorandum. (House of Representatives, 2007).

  50. 50

    Australia's Plan for Clean Energy Future (Ministry of Finance, 2011).

  51. 51

    Initial Statement of Reasons for Rulemaking: Amendments to the Regulation for the Mandatory Reporting of Greenhouse Gas Emissions (California Air Resource Board, 2013).

  52. 52

    Initial Statement of Reasons for Rulemaking: Amendments to the Regulation for the Mandatory Reporting of Greenhouse Gas Emissions and Conforming Amendments to the Definition Sections of the AB 32 Cost of Implementation Fee Regulation and the Cap-and-trade Regulation (California Air Resource Board, 2012).

  53. 53

    Initial Statement of Reasons for Rulemaking: Proposed Regulation for Mandatory reporting of Greenhouse Gas Emissions pursuant to the California Global Warming Solutions Act of 2006 (California Air Resource Board, 2007).

  54. 54

    Initial Statement of Reasons for Rulemaking: Revisions to the Regulation for Mandatory Reporting of Greenhouse Gas Emissions Pursuant to the California Global Warming Solutions Act of 2006 (California Air Resource Board, 2010).

  55. 55

    Price Waterhouse Coopers & Carbon Disclosure Project Review of the Contribution of Reporting to GHG Emissions Reductions and Associated Costs and Benefits (UK Department for Environment, Food and Rural Affairs, 2007).

  56. 56

    One Hundred Questions and Answers about MRV in Developing Countries (IGES, 2013).

  57. 57

    Warnecke, C., Klein, N., Perroy, R. & Tippman, R. CDM Market Support Study (KFW Bankengruppe, 2013).

  58. 58

    Cacho, O. J., Wise, R. M. & MacDicken, K. G. Carbon monitoring costs and their effect on incentives to sequester carbon through forestry. Mitig. Adapt. Strateg. Glob. Change 9, 273–293 (2004).

  59. 59

    Martel, S. Évaluation préliminaire des coûts de suivi pour un projet en métropole (2013); http://go.nature.com/XeYyGD

  60. 60

    Pearson, T. R. H., Brown, S., Sohngen, B., Henman, J. & Ohrel, S. Transaction costs for carbon sequestration projects in the tropical forest sector. Mitig. Adapt. Strateg. Glob. Change 19, 1209–1222 (2013).

  61. 61

    Torres, D. Les méthodes et coûts du suivi pratiqués dans les pays en développement (2013); http://go.nature.com/XeYyGD

  62. 62

    Vallejo, A., Chandra, R. R. & van der Linder, M. Manual for Monitoring of CDM Afforestation and Reforestation Projects. Part I: Standard Operational Procedures (World Bank, 2011).

  63. 63

    Guidelines for the Technical Review of Greenhouse Gas Inventories from Parties Included in Annex I to the Convention FCCC/CP/2002/8 (UNFCCC, 2002).

  64. 64

    The Global Protocol for Community-Scale Greenhouse Gas Emissions. GPC Pilot Version 1.0 (WRI/WBCSD, 2012).

  65. 65

    How to Develop a Sustainable Energy Action Plan (Covenant of Mayors, 2010).

  66. 66

    Bilan Carbone Entreprises—Collectivités-Territoires. Guide méthodologique Version 6.1. Objectifs et principes de comptabilisation (Agence de l'Environnement et de la Maîtrise de l'Energie, 2010).

  67. 67

    JNR Validation and Verification Process Version 3.0 (Verified Carbon Standard, 2013).

  68. 68

    Commission Regulation 600/2012 on the verification of greenhouse gas emission reports and tonne-kilometre reports and the accreditation of verifiers pursuant to Directive 2003/87/EC of the European Parliament and of the Council (EC, 2012); http://go.nature.com/z5mdF9

  69. 69

    National Greenhouse and Energy Reporting (Measurement), Amendment Determination 2013 (No. 1) F2013L01191 (Australian Government, 2013).

  70. 70

    Specification with Guidance for Quantification and Reporting of the Organization's Greenhouse Gas Emissions (Shenzhen People's Congress, 2012).

  71. 71

    Loi no. 2010–788 du 12 juillet 2010 portant engagement national pour l'environnement. J. Offic. Rép. Fr. (2010).

  72. 72

    Méthode pour la réalisation des bilans d'émissions de Gaz à effet de serre conformément à l'article 75 de la loi no. 2010–788 du 12 juillet 2010 portant engagement national pour l'environnement (Ministère de l'Ecologie, du Développement Durable et de l'Energie, 2012).

  73. 73

    Guidance for Companies Reporting on Climate Change on Behalf of Investors & Supply Chain Members (Carbon Disclosure Project, 2013).

  74. 74

    CDM Validation and Verification Standard Version 03.0 (UNFCCC, 2012).

  75. 75

    Program Manual (Climate Action Reserve, 2011).

  76. 76

    VCS Standard Version 3 (Verified Carbon Standard, 2012).

  77. 77

    The American Carbon Registry Validation and Verification Guideline Version 1.1 (American Carbon Registry, 2012).

  78. 78

    Arrêté du 2 mars 2007 pris pour l'application des articles 3 à 5 du décret no. 2006–622 du 29 mai 2006 et relatif à l'agrément des activités de projet relevant des articles 6 et 12 du protocole de Kyoto. Version consolidée au 02 décembre 2012. J. Offic. Rép. Fr. (2012).

  79. 79

    Jurisdictional and Nested REDD+ (JNR) Requirements Version 3.1 (Verified Carbon Standard, 2013).

  80. 80

    CDM Project Standard for Project Design Requirements Including Principles of Monitoring Version 6.0 (UNFCCC. 2014).

  81. 81

    Nitrogen Management: Project Protocol Version 1.1 (Climate Action Reserve, 2013).

  82. 82

    Quantifying N2O Emissions Reductions in Agricultural Crops through Nitrogen Fertilizer Rate Reduction Version 1.0 (Verified Carbon Standard, 2013).

  83. 83

    Methodology for Quantifying Nitrous Oxide (N2O) Emissions Reductions from Reduced Use of Nitrogen Fertilizer on Agricultural Crops Version 1 (American Carbon Registry, 2012).

  84. 84

    Méthodologie spécifique aux projets de réduction des émissions de N2O dues à la dénitrification des sols agricoles par insertion de légumineuses dans les rotations agricoles (In Vivo, 2011).

  85. 85

    Afforestation and Reforestation Project Activities Implemented on Lands Other Than Wetlands Version 03.0 (UNFCCC, 2013).

  86. 86

    Afforestation and Reforestation of Lands except Wetlands Version 2.0 (UNFCCC, 2013).

  87. 87

    VM0010 Methodology for Improved Forest Management: Conversion from Logged to Protected Forest Version 1.2 (Verified Carbon Standard, 2013).

Download references

Acknowledgements

We thank the sponsors of the MRV project: Agence Française de Développement; EIT Climate-KIC; Ministère français de l'Agriculture, de l'Agroalimentaire et de la Forêt; Ministère français de l'Ecologie, du Développement Durable et de l'Energie; and Union des Industries de la Fertilisation. We are grateful to M. Loprieno (European Commission) and M. Thioye (UNFCCC) who allowed us to discuss our findings at the Bonn MRV conference in June 2014. We also thank X. Wang and P. Guigon (Partnership for Market Readiness, The World Bank) for the connection provided with new CPMs being developed in emerging economies. Many more people contributed to the book on which this Review is based. Their contribution is acknowledged in the relevant chapters of the book.

Author information

V.B. designed the study, analysed the pre-processed data and wrote the paper. V.B, M.A., E.A., A.B., J-P.C., C.C., I.C., M.D., C.D., C.F., G.J., R.M., R.R. and I.S. gathered and pre-processed the raw materials. N.S. coordinated data collection.

Correspondence to Valentin Bellassen.

Ethics declarations

Competing interests

The authors declare no competing financial interests.

Supplementary information

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Bellassen, V., Stephan, N., Afriat, M. et al. Monitoring, reporting and verifying emissions in the climate economy. Nature Clim Change 5, 319–328 (2015) doi:10.1038/nclimate2544

Download citation

Further reading