The U.S. Domestic Response to Climate Change: Key Elements of a Prospective Program

Tracking and Reporting Greenhouse Gas Emissions

No effort to reduce greenhouse gas emissions can succeed without the accurate measuring and tracking of emissions. Improved tracking and reporting of emissions reductions could provide the basis for government assurances that companies will not be penalized for their early reductions under a future climate policy. Public disclosure of emissions data can also serve as a powerful incentive for reductions.

A first step is establishment of a registration program to more accurately and reliably measure, report, and track GHG emissions. This could be done through legislation that builds on current efforts such as the Department of Energy’s 1605(b) program. The current program has limited value because its reporting standards lack rigor, there are no verification requirements, and many companies choose not to report. In an improved registry program, a company would establish a baseline consisting of current aggregate emissions from all major GHG sources under its control in the United States. Gross emissions on an annual basis could be compared to this established baseline. In addition to accounting for emissions from a company’s core operations, an improved registry should over time develop the means to measure, report, and track GHG emissions resulting from: the use of products manufactured by that company; offsets achieved through sequestration projects designed to store carbon in forests, soils, oceans, or underground; and offsets achieved through increased energy efficiency.

A reliable registry would make it possible to provide “baseline protection” for companies taking action now to reduce their emissions. These entities could be assured that – in the event of future controls involving the allocation of emissions allowances or requiring emissions reductions – they would not be penalized for reductions already achieved voluntarily. The improved registry program could also provide a mechanism to recognize the emissions reductions resulting from companies manufacturing more efficient or carbon-saving products. Finally, it could ensure that GHG reductions and sequestration offsets are of sufficient integrity that they can be traded and sustain their value in future years. This registry would include reductions and offsets achieved outside of the United States, in both developed and developing countries. In this manner, both gross and net (reductions and offsets) emissions would be recorded.

An additional step would be to require public disclosure of GHG emissions data for all facilities or companies whose emissions exceed a given threshold. At present, only electric generating sources must report their CO₂ emissions and, although publicly available, emissions data are not tabulated and disclosed in a manner that encourages companies to reduce their emissions voluntarily. To address these shortcomings, a mandatory GHG reporting program should apply to all major source categories of GHG emissions and require public disclosure as is now required under the federal Toxics Release Inventory (TRI) program. Disclosure reports would be subject to verification and reporting entities would face enforcement action if emissions were misrepresented. As with the TRI program, reported data would be aggregated and made available on facility-specific, company-wide, and source-category bases. Under the TRI program, such disclosures have encouraged companies to assess potential mitigation opportunities and reduce emissions voluntarily, and the same is likely with a GHG reporting program. Gross emissions from an entity’s U.S. sources as well as net emissions (after considering sequestration activities and trading) would be reported to encourage comprehensive mitigation strategies.

A mandatory GHG reporting obligation (and an improved registry) could be linked to a voluntary program for mitigating GHG emissions. Such linkage would likely increase the effectiveness of each initiative, judging by the success of the voluntary pollution prevention programs that were coordinated with mandatory TRI reporting.³ [1] Following the model used in EPA’s 33/50 (Industrial Toxics) Project, the voluntary program could establish clear performance targets to be achieved by each sector within specified time frames. Although voluntary, participation in the program could be limited to only those companies willing to make corporate-wide commitments to achieve minimum reduction levels from their core business operations or prescribed performance levels for products sold in the United States. Setting minimum standards would likely increase the pressure for companies to step forward with voluntary commitments achieving substantial emissions reductions. The minimum standard approach could also be combined with a graduated scale of incentives for those who make voluntary commitments, rewarding those who exceed their emissions goals with greater financial or other incentives like tax credits.

Finally, improved registries coupled with reporting requirements would also serve as an important foundation for mandatory approaches to reducing GHGs.

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