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Methodological Approaches for Cost-Effective Carbon Trading. | |
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12 March 2010 By Sébastien Raoux, Ph.D., J.D., Esq. Carbon trading methodologies are always a tradeoff between accuracy and conservativeness. Because emission reductions must be estimated in a conservative, transparent, and verifiable manner, emissions calculation algorithms must ensure that actual emission reductions are greater than the quantity of allowable credits*. Statistically speaking, there must be a 95% confidence that baseline emissions are underestimated, and that project emissions are over-estimated. The overall impact of conservativeness is that any uncertainty in emission factors will lead to a decrease in the number of credits that can be generated by any given project. Conversely, reduced uncertainty will lead to an increase in the number of allowable credits, and can lead to more attractive returns. And when tonnes of CO2-equivalent emissions are converted into monetary value, markets like certainty and efficiency. Indeed, one of the primary benefits of flexible market mechanisms is to lead to the most cost-effective solutions to reduce emissions. Dr. Raoux proposes that the tension between accuracy and conservativeness actually offers opportunities for optimization of carbon trading projects, in terms of $/MTCO2E saved. In this presentation, Dr. Raoux will review the essential elements of carbon trading methodologies and cover topics such as additionality, anti-gaming and capping procedures, the calculation of baseline and project emissions, and monitoring methodologies. He will pay particular attention to the issue of accuracy and uncertainty in the determination of emissions reduction, and examine the tradeoffs and procedures to optimize the cost effectiveness of carbon trading projects. He will illustrate the presentation with examples taken from existing CDM methodologies (Clean Development Mechanism), in particular related to the electronics and the high-tech industry, as well as energy and waste management. *Emissions Reductions are the difference between Baseline Emissions and Project Emissions (ER=BE-PE). The number of credits generated by a given project is calculated based on (allowable) emission reductions, with one credit = 1 metric tonne of CO2-equivalent emissions saved (MTCO2E). About the Speaker Sébastien Raoux, Ph.D., J.D., Esq. Prior to founding Transcarbon International, Dr. Raoux was a Distinguished Member of Technical Staff and the Director of Technology for Ecosys, a division of Applied Materials and a leading provider of environmental abatement systems and services to the electronics industry. Prior to his 12 years career at Applied Materials, Dr. Raoux was a postdoctoral fellow at the Lawrence Berkeley National Laboratory. Dr. Raoux has also lectured at numerous universities including UC Berkeley, Stanford, the Presidio School of Management and the universities of Orléans and Bordeaux. Dr. Raoux has served as a member of the executive technical committee on environmental health and safety for SEMI, and he was secretary of the AVS division on Technology for Sustainability. In 1999, Dr. Raoux was the recipient of an R&D 100 Award for the development of the Remote CleanTM. He also received, on behalf of Applied Materials, the Climate Protection Award from the US EPA for environmental leadership in the semiconductor industry. Dr. Raoux was a co-author of the 2006 IPCC Guidelines for National Greenhouse Gas Inventories for the electronics industry, a substantial contribution to the work of the IPCC, which, as an organization, received the Nobel Peace Prize in 2007, jointly with Al Gore. Dr. Raoux is the inventor of 20 patents, the author of 30 articles in technical journals and he has presented over 100 communications at international conferences. His areas of expertise include green technologies and environmental impact valuation, design for sustainability, as well as environmental law and policy. Dr. Raoux is the co-author of the first CDM methodology approved for the electronics industry, and is currently working on the development of two additional CDM methodologies to reduce emissions from semiconductor and flat panel display manufacturing. Sébastien Raoux received a Ph.D. in Physics from the University of Bordeaux (France), and a Juris Doctor Degree from the Santa Clara University School of Law (California). Dr. Raoux is a member of the California Bar. Last updated on 2 Mar 10
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