World Bank: Offsetting and Setting an Example

Wed, 31/03/10

Aware of its exposure to climate change and the need to reduce its greenhouse gas (GHG) emissions, the World Bank Group has set up a detailed GHG inventory system to track emissions across its worldwide operations. This not only tells it precisely how it is doing, and gives it a baseline for measuring its future performance, but also, crucially, tells the Bank how much GHG it must offset to achieve its goal of becoming carbon neutral. 

Formalizing its public commitment to this initiative, the World Bank has been a member since 2007 of the Climate Leaders programme, set up by the US Environmental Protection Agency (EPA) to encourage organizations to commit voluntarily to reducing emissions.

The first inventory, in 2005, was limited to the five World Bank buildings in Washington, DC and the premises it leases in New York city. It quantified the emissions from fuel used in buildings and Bank-owned vehicles, and from electricity consumption, refrigerant losses, business travel and employee commuting. At this stage it used an Excel spreadsheet, set up according to a framework provided by EPA, so that it was straightforward to input all the raw data stage by stage, and get an overall result which took account of the various relevant emissions factors and emissions calculations. 

Building on the confidence gained from this inventory of its headquarters, the scope of the inventory was extended progressively in 2006 and 2007, initially to 24 of the Bank's largest offices around the world, and then to all its country offices. In the first instance a basic survey simply requested the basic data that was needed to calculate office and business travel related emissions, along with information about recycling, paper use, water use, charitable contributions, community service and other environmental initiatives. The wider 2007 exercise used a consulting firm to coordinate the dissemination of survey requests and the collection and aggregation of the data, and to deal with any questions that might arise. A detailed but easy-to-use emissions calculation spreadsheet was then developed, again with the help of consultants, to cover all the possible data combinations. This more sophisticated Excel-based survey tool evolved to become a web-based online carbon emissions survey, easily accessible by staff in country offices, which provides standardized calculations and reports that are readily transferable to head office.


Bottom-up involvement plus top-level commitment


The inventory isn't a one-off, but a highly interactive affair. Someone acting as the focal point must dedicate time not just to getting the reporting documents up and running, but to keeping abreast of best practice and new developments in the field, such as changes in emissions factors, methodologies for estimating emissions, and proxies. It's all a learning process, and one which takes up staff time both at World Bank headquarters and in the country offices. The system of collection and calculation of emissions requires year-round involvement, particularly for the focal point to maintain active relationships with data owners – the engineers, the transaction processors, and the staff who deal with utility bills, gas receipts and other such records of activity relevant to calculating GHG emissions. 

A bottom-up approach is important in gaining and maintaining their buy-in to the process, and it is important to stay intimately involved even when consultants are doing the leg-work, but top-level commitment is also essential, particularly when data owners are reluctant. The number of responses rose noticeably after the engagement of regional Vice Presidents, who sent out introductory emails about the emissions inventory to each country office Director, and the involvement of the country office Administrative Officers, requesting their resource managers to provide the necessary data. 

In line with the requirements of the Climate Leaders programme, the Bank drew up and has carried out since 2008 an inventory management plan (IMP) including third party verification. In the interests of accuracy, it has placed a special emphasis on relationships with the data owners - informing them about the inventory and its objectives, setting up individual meetings with them to learn more about how they collect, input, and archive the data, and asking for their help in the form of regular submissions to the team in charge. Procedures have been agreed for using samples and estimates where data is scarce. In leased premises, for instance, where it is hard to get actual figures for electricity consumption, the Bank will use an estimate worked out according to the area occupied and an assumption about 'electricity consumption intensity' (i.e. how many kilowatt hours are being used per unit of area). It can base this assumption on the real figures in equivalent Bank-owned premises.


Costs and benefits


The Bank buys offsets both in the form of Renewable Energy Certificates (RECs) and as Certified Emission Reductions (CERs). It may do this as a direct Emission Reduction Purchase Agreement (ERPA) with the originator of the emissions reduction, or go through a broker, or buy on a market such as the Chicago Climate Exchange (CCX). Offsets in the form of RECs are extremely cost-efficient, within the range of USD 0.90 – 1.07 per tonne of carbon equivalent under the Bank's current long-term purchasing contract, whereas CERs have been working out much more expensive, at around USD 8 per tonne. The Bank does strive to use emission reduction credits with multiple values; its latest credit purchase applied the Social Carbon methodology to ensure that proper social and environmental monitoring will improve the long-term effectiveness of the project. 

In addition to the actual offset price, there are other costs to be taken into consideration in terms of consultancy fees, attendance at conferences, and verification.

The initiative has been beneficial in several ways. Implementing a proper GHG inventory has helped the World Bank raise awareness among its staff about climate change and controlling carbon emissions. It has turned into a showcase of the bank's commitment to neutralizing its climate footprint, as well as giving an accurate picture of the size of its offset requirement. The Bank's offset purchasing programme, in turn, has enabled it to achieve its goal of carbon neutrality in a cost effective manner. And its CER purchases provide an income stream to developing countries which specifically supports low carbon development.

Categories: Energy, Offsets