US mulls first proposals for national GHG reporting

www.carbon-financeonline.com
11 March, 2009

The US Environmental Protection Agency (EPA) released its proposal for mandatory reporting of greenhouse gas (GHG) emissions yesterday, setting in train a crucial underpinning of any carbon cap-and-trade system.

The proposals would require around 13,000 facilities, responsible for about 80-90% of US GHG emissions, to begin reporting from 2010. Among those required to report their GHG emissions, if the proposals are adopted, would be:

• facilities that directly emit 25,000 or more tonnes of carbon dioxide equivalent per year, including electricity generators and producers of cement, steel and iron;
• manufacturers of motor vehicles and engines; and
• suppliers of fossil fuel and industrial chemicals.

Those affected would be required to report emissions of carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulphur hexafluoride, and other fluorinated gases, including nitrogen trifluoride and hydrofluorinated ethers. EPA administrator Lisa Jackson said: "Our efforts to confront climate change must be guided by the best possible information."

Eileen Claussen, president of the Pew Center on Global Climate Change, said: "A GHG registry provides the foundation for building a successful and transparent federal programme to reduce emissions and protect the climate."

She added: "Just as the EU learned in the trial period of its emissions trading system, accurate and comprehensive emissions accounting is key to the successful start-up of a cap-and-trade programme. A well-designed national GHG registry will ensure comprehensive emissions reporting and put the US on the right path toward an effective climate policy."

Prices plummeted in Phase I of the EU emissions trading scheme after it emerged that there were more than enough allowances in the system to cover emissions. If adopted, the EPA expects a first 'annual report' to be produced in 2011, covering 2010 emissions, apart from vehicle and engine manufacturers, which would begin reporting in 2011.

The EPA envisages that reporting would mostly be carried out at the facility level, with some exceptions – such as vehicle manufacturers and suppliers – which would report at corporate level. The total cost of instituting the reporting system would be $168 million in its first year, the EPA said, falling to $134 million in subsequent years. Around 95% of the cost is expected to fall on the private sector.

Jackson said: "Through this new reporting, we will have comprehensive and accurate data about the production of greenhouse gases. This is a critical step towards helping us better protect our health and environment – all without placing an onerous burden on our nation's small businesses."

The proposals are open for public comment for 60 days. The EPA will hold two open meetings in April, in Virginia and California. Details are available on its website.