UNEP'S Climate Neutral Fund

Thu, 01/04/10

One of the first UN organizations to get to grips with greenhouse gas emissions accounting, the United Nations Environment Programme (UNEP) has pioneered a procedure for offsetting the emissions it can't avoid. Having committed itself to become climate neutral by 1 January 2008, by reducing its emissions reductions where possible and making offset payments for the rest, the organization needed a way of estimating, managing and budgeting for these offsets. The solution it came up with, creating a special UNEP Climate Neutral Fund, was also intended as a model that other UN organizations could follow. 

Air travel is by far the biggest issue in UNEP's carbon footprint, accounting for a massive 87% of its greenhouse gas emissions in 2008. That's why it gets special treatment in the way the organization manages its offset payments. Whenever an air travel ticket request is approved, an estimated offset payment has to be set aside from the same budget line that is paying for the ticket. The carbon dioxide (CO2) emissions caused by the trip in question are worked out automatically, using the UN/International Civil Aviation Organization's air travel emission calculator (which has been linked to the IMIS travel administration system), and taking into account the specific route and the travel class (business or economy). Any travel costs which UNEP meets without knowing the specific route, such as lump sums for home leave, are assumed to create CO2 emissions at the same average rate as other UNEP air travel. 

The offset payments relating to air travel emissions are transferred to the UNEP Climate Neutral Fund on a monthly basis. But emissions related to office operations (electricity, official vehicles, air conditioning refrigerants, generators and so on) are handled in a different way. Each duty station tracks and reports these emissions, and the cost of offsetting them is then shared out annually between the divisions represented at that office, on the basis of their staff head count. The smallest offices, with fewer than four employees, do not actually have to do the sums - they are simply presumed to cause the same level of emissions per staff member as the UNEP average – but the offset programme nevertheless covers all of UNEP's 35 offices worldwide. An 'internal invoice' is sent out by the end of the year, and the required payments from each division are transferred to the UNEP Climate Neutral Fund. 

So how much per tonne do these invoices charge for emissions? Like the monthly transfer payments for air travel emissions, they use an assumed price of offsets – the figure for 2008 was USD 30 per tonne of carbon dioxide equivalent (tCO2eq). The actual price of offsets can't be known until early the following year, when the annual round of offset procurement takes place. UNEP's plan is to retain any surplus in the Climate Neutral Fund, as a buffer against price fluctuation, and to invest in further sustainability initiatives. It's still early days, so there's a lot of experimentation, learning and adjustment yet to be done to make the fund as efficient and useful as possible. 

As UNEP's Climate Neutral Strategy Officer, Lova Andre is in charge of offset procurement, and provides advice and guidance on how the fund is managed, under the supervision of its three member Advisory Board. She emphasises that the organization's climate neutral strategy is an overall package in which actions that cost it money, such as offset procurement, are balanced by savings on things like reduced travelling, reduced printing or increased energy efficiency. “We expect our sustainability efforts to have a pay-back period of less than 2 years,” she says. “Thereafter the savings will be as big as or even bigger than the costs."

Categories: Energy, Finance, Offsets, Procurement, Travel