09-08-2013 makati final report

September 8, 2013This report was produced for review by the United States Agency for International Development (USAID). It was prepared on behalf of the Climate Change and Clean Energy Project (CENERGY) by The Center for Climate Strategies (CCS) under subcontract to International Resources Group

CLIMATE CHANGE AND CLEAN ENERGY PROJECT (CEnergy)FINAL REPORT: BASE YEAR COMMUNITY-LEVEL GREENHOUSE GAS INVENTORY AUDIT FOR MAKATI CITY

CLIMATE CHANGE AND

CLEAN ENERGY PROJECT (CENERGY)FINAL REPORT: BASE YEAR COMMUNITY-LEVEL GREENHOUSE GAS INVENTORY AUDIT FOR MAKATI CITY

September 8, 2013

Stephen M. RoeThomas D. PetersonThe Center for Climate Strategies, Inc.

DISCLAIMERThe author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government

TABLE OF CONTENTSINTRODUCTION 5MAKATI CITY’S GHG REPORTING ISSUES 6

Summary of Issues.................................................................................6Verification Opinion................................................................................8Table 1. Log of Issues.............................................................................9

5 FINAL REPORT: COMMUNITY-LEVEL GHG INVENTORY AUDIT FOR MAKATI CITY

INTRODUCTIONThe Center for Climate Strategies (CCS) was retained by the Climate and Energy Program (CEnergy) to conduct a third-party audit (verification) of the base year community-level greenhouse gas (GHG) inventory prepared by Makati City (the City) and five other local government units (LGUs) of the Philippines. Details of the verification process were documented in the project Inception Report (Verification Plan). Following a desktop review of the base year inventory report and supporting spreadsheets/documentation, CCS prepared a Sampling Plan that documented this initial review and provided a reporting risk assessment to support more focused assessment of reported GHG estimates. After sharing the Verification Plan and Sampling Plan with the City, the CCS Lead Verifier conducted a site visit to review the reported emission estimates and supporting data directly with members of the local GHG Team.

Following the site survey, the CCS verification team provided a Log of Issues (LOI) to the City to document the identified reporting issues. This final report summarizes these issues and the status of the City in addressing each one. A Verification Opinion follows the discussion of issues. The Opinion is meant to provide a succinct statement regarding CCS’ determination of the completeness and accuracy of the base year inventory as of the date of this Final Report.


MAKATI CITY’S GHG REPORTING ISSUESSUMMARY OF ISSUES

The Center for Climate Strategies (CCS) evaluated the completeness, accuracy, and transparency of reported GHG estimates made at the community-scale for the City. This inventory review was completed by conducting data checks on the City’s supporting documentation as specified in the Sampling Plan, developing comparison emission estimates where needed and possible, and evaluating any differences against a definition of materiality as described in the Verification Plan.

CCS developed the Log of Issues (LOI) shown in Table 1 with three different types of issues. A material misstatement is an error or omission that could produce a change of greater than +/- 10% of the total gross1 community-level emissions reported by the City. An immaterial misstatement is an error or omission that would likely result in a change of less than +/- 10% of the community-scale total gross emissions. Finally, an opportunity for improvement (OFI) is an issue that does not affect reported gross emissions estimates; however, addressing these issues could enhance the transparency and understanding of the City’s future GHG reporting program.

CCS identified some material misstatements with the City’s initial reporting for 2011 as indicated in the LOI shown in Table 1 below. In the electricity consumption sector, there was a lack of treatment of transmission & distribution losses within the grid average emission factor applied to the electricity consumption data from MERALCO. In its updated Inventory Report, the City addressed this by adding T&D losses into its consumption-based electricity sector emissions. Also, the City used 2010 electricity consumption data as a proxy for 2011 consumption data (the City has since indicated that they have obtained data for 2011). This issue was also resolved by the City in its updated report by using recently acquired 2011 electricity consumption data from MERALCO.

1 The term gross refers to GHG sectors that are strictly net sources of emissions. Hence, carbon sinks, such as net forest carbon flux, are excluded from gross totals.


In the waste management sector, the City applied a method for estimating emissions from the solid waste sector that doesn’t address the “legacy” emissions associated with past waste management practices (i.e. solid waste landfilled in prior years). Use of this method also creates structural problems with the inventory in that it allocates future year emissions for base year waste emplacement back to the base year (i.e. in this case allocating all future year emissions for landfilling 2011 waste to the year 2011). CCS considers this material in that it treats this sector differently from all other sectors. The City also did not include emissions associated with the management of wastes from affluent barangays and the Central Business District (CBD). Both of these issues were resolved by the City in its updated Inventory Report.

Table 1 also provides a number of immaterial misstatements and OFIs. The City addressed a number of these in its updated Inventory Report. A general OFI worth noting here is that CCS provided a number of suggestions throughout the inventory report in the form of comments within the report. These comments were initially reviewed during the site visits with each LGU and then updated following the site visits.


VERIFICATION OPINION

CCS is able to conclude with a reasonable level of assurance that the City’s 2011 GHG emissions inventory report is free of material misstatement, comprehensive in its coverage of sources and GHGs, and provides a useful starting point for mitigation assessment.


TABLE 1. LOG OF ISSUESIssue

# Sector Observation Type of Issue

Evidence

IndexResolution

1 Industrial Processes

Hydrofluorocarbon (HFC) emissions from refrigerant leaks in buildings, equipment, and onroad vehicles were not reported.

OFI 1 Previous immaterial issue changed to an OFI. Issue properly explained; but no addition of emission estimates in the Inventory Report (IR).

2 Industrial Processes

Insufficient explanation of the lack of industrial activity

OFI 1 Issue resolved. It was suggested to provide additional discussion and available evidence for the lack of any industrial activity in Makati City (e.g. discussion of land use code; any available searches of business licenses for industrial activity). The following is added on page 10 of the IR, “In relation, establishments listed as manufacturing business refers only to their nature of business- the actual industrial plant are located outside of the City.”

3 Electricity Consumptio

n

Sulfur hexafluoride (SF6) emissions from electrical transmission & distribution (T&D) systems were not reported.

OFI 1 Previous immaterial issue changed to an OFI. Issue properly explained. On page 28, the following is added. “For the computation of the Sulfur Hexafluoride (SF6) the GHG Makati Team did not include it to its computation because there are no available data of sub-station


Issue # Sector Observation Type of

IssueEviden

ce Resolutionspecifically located in Makati. There is also no available that can attribute SF6 emissions to Makati due to leakages in transmission systems.”


n

T&D losses were not considered during the development of the electricity consumption-based emission estimates.

Material Misstatement

1 Issue resolved. The following is added in the IR. “Data on transmission and distribution losses, or collectively known as system losses, were acquired from the MERALCO 2011 Annual Report. Data shows that for 2011, MERALCO reported total system losses of 7.35 %. (Please refer to MERALCO 2011 Annual Report, Page 5)…..” CCS independently verified updated calculations of GHG emissions from electricity consumption, including allowance for T&D losses.


n

2010 electricity consumption data were used as a proxy for 2011 (City has since gathered 2011 data). Need to verify with MERALCO that all consumption within the City was captured from the data request. Also a 2010 grid average emission factor was applied rather than 2011 (check with CEnergy on availability of a 2011 emission factor).


1 Issue resolved. On Page 27, data from MERALCO 2011 was presented and incorporated in the discussion. CCS reviewed supporting documentation and calculations for the resolution of this material misstatement.



IssueEviden

ce Resolution6 Electricity

Consumption

A utility-specific carbon intensity factor was not developed and applied to estimate Scope II emissions using data on power purchases by the utility during the base year.

OFI 1 Issue resolved. Emission factor updated based on electricity purchases by MERALCO.

7 Stationary Energy Use

Full coverage of the sector through surveys was not achieved (e.g. boilers and engine/generator sets for commercial and institutional sectors).

Immaterial Misstatement

1 Issue not resolved. In table 5, page 22. There is still no information for boilers and engine/generators sets for the commercial or residential sectors. Nothing was mentioned for the institutional sector either. More work is needed in future inventory efforts.

8 Stationary Energy Use

Charcoal use banned in the City, but it is well-known that residential/commercial use continues (street food vendors). Methane and nitrous oxide emissions would be considered immaterial but no acknowledgment of these sources is provided.

OFI 1, 2 Previous immaterial issue changed to an OFI. On page 18, the following is added. “The GHG Makati Team acknowledged the fact there are some portion of population that still use charcoal more specifically those who belongs to the informal economy. Hence, the GHG Makati Team did not include it to its inventory as it was deemed insignificant.”

9 Transportation

Scope II electricity consumption estimates were not included for Metro Rail Transit. These are currently included within the Electricity Consumption sector

OFI 1 Issue resolved. On Page 30, specific discussion is added and electricity consumption is now included for Metro Rail Transit.



IssueEviden

ce Resolution(presumably within the commercial sector).

10 Transportation

Emissions for other nonroad engines were not included or otherwise documented in the inventory (e.g. small portable engines used in construction, lawn/garden, etc). Emissions captured within the onroad vehicle sector.

OFI 1 Issue not resolved. Nothing changed in IR. More work is needed in future inventory efforts.

11 Transportation

It is assumed that biofuel content requirements for 2010 were met. Note that this issue also affects stationary energy consumption to a lesser degree (e.g. diesel).


1 Issue not resolved. Confirmation/evidence from the Department of Energy or other source needed to cover the assumption that biofuel content requirements for gasoline and diesel were met in 2010. Nothing substantial added to explain this issue. More work is needed in future inventory efforts.

12 Transportation

Fuel sales for one fuel station (small supplier) were not captured in the survey. Scale-up not performed to include this additional volume.


1 Issue resolved. On page 33, information was added for the missing fuel station.

13 Transportation

Philippines National Rail (PNR) has lines and a station in Makati City but no portion of the emissions attributable to the City for PNR rail activity is provided.


1 Issue resolved. Emissions for PNR were added. On Page 35, the following is added: “Lastly, the emission of PNR only accounts for (0.18%).”

14 Transportati Combustion of lubricating oils in Immaterial 1 Issue not resolved. No changes



IssueEviden

ce Resolutionon diesel vehicles was not included. Misstateme

ntnoted in the IR. More work is potentially needed.

Agriculture Not applicable as a source sector for the City.

N/A 1, 2 N/A

15 Forestry & Other Land

Use

Net carbon flux from urban forests was not included.


1,3 Issue not resolved. Nothing changed in IR. More work is needed in future inventory efforts.

16 Forestry & Other Land

Use

Emissions from urban (“settlement”) soils were not included.


1 Issue not resolved. Nothing changed in IR. More work is needed in future inventory efforts.

17 Waste Managemen

t

City used the ICLEI model to estimate landfill methane emissions. Does not capture current emissions due to historic waste management practices. Assigns future landfill methane emissions to base year.


1 Issue resolved. IPCC methodology is adopted in section 6.4.1.2 on page 38. CCS reviewed and independently verified application of IPCC FOD model.

18 Waste Managemen

t

City has information from waste characterization studies that could be used to better characterize waste generation and other needed inputs to the IPCC method for estimating solid waste disposal site emissions (e.g. rather than current use of 2002 World Bank study).


1 Issue resolved. On page 43, the following is added. “the total estimated GHG emission from solid waste in 2011 that is reported in the inventory is 1,333 tons CO2e for waste dumped in the sanitary landfill and 314 tons CO2e for composting, both emissions were computed using the IPCC FOD Model…” CCS reviewed and independently verified application of IPCC FOD model.

19 Waste Managemen

City did not indicate whether landfill gas (methane) controls

Immaterial Misstateme

1 Issue not resolved. On page 42 &43, changes have been made in



IssueEviden

ce Resolutiont are in place at the landfill where

waste is currently emplaced. nt table 19 to amend the MCF to

match that of a managed landfill site. While application of the MCF is likely appropriate for a managed facility, this issue is based on whether any methane is actively (or passively) captured and destroyed through combustion. More work is needed to document the level of control or non-existence of controls.

20 Waste Managemen

t

Solid waste generation data from affluent barangays and the central business district need improvement (e.g. via future surveys of waste haulers serving these areas).

OFI 1, 2 Issue resolved. The following is added on page 39. “For the year 2011, the city has an actual waste collected value of 82,781 tons. The value for the waste collected was calculated by consolidating the collected waste data from the Central Business District (CBD), six (6) affluent barangays….”

21 Waste Managemen

t

Emissions resulting from solid waste generation within affluent barangays and the CBD are not included in the total. Since the amount of waste generated here is unclear, CCS can’t determine that the omission results in an immaterial emissions impact.


1,5 Issue resolved. On page 44, in the discussion part, it is explicitly stated that “Total emissions attributable to the solid waste sector of Makati is1,647 tCO2e. This is inclusive with the emissions from the waste dumped in the sanitary landfill and compostable of the whole Makati City.” CCS has reviewed and verified the calculations workbook to ensure minimal risk of material



IssueEviden

ce Resolutionmisstatement exists regarding this issue.

22 Waste Managemen

t

Insufficient characterization of collected versus uncollected wastewater.


1 Issue not resolved. Wastewater treatment: additional survey work needed to better characterize the amount of wastewater collected for treatment at the 2 plants versus that which is not collected. More work is needed in future inventory efforts.

23 Waste Managemen

t

Emissions from commercial/institutional wastewater treatment were not addressed (e.g. hotels, hospitals, other public buildings).


1 Issue not resolved.

24 Waste Managemen

t

Key activity data (breakdown of sewage treatment practices) from 2000.

OFI 1 Issue not resolved. Suggest using more recent data when available through surveys or other sources. More work is needed in future inventory efforts.

25 Waste Managemen

t

Total emissions from the Wastewater Computation workbook are not in agreement with the Inventory Report. The workbook claims total emissions of 56,986 tCO2e, while the report claims 64,143 tCO2e.


1,6 Issue resolved. On page 48, the number has been changed. New value has been verified in workbook and Inventory Report by CCS.

26 All Sectors Suggestions for improving the documentation and presentation of inventory information were made throughout the inventory

OFI 1, 2 Issue not addressed. More work is needed in future inventory efforts.



IssueEviden

ce Resolutionreport in the form of comments from CCS; a final version of these comments was completed after the site visit.

n/a – not applicableEvidence Index:

1. Initial GHG Inventory Report by the City dated April 2013. 2. Observations during July 2013 site visits.3. The City’s supporting Excel workbook: 0.0Summary.xlsx.4. The City’s supporting Excel workbook: 3.0…Road transportation…xlsx.5. The City’s supporting Excel workbook for the Solid Waste sector: 4.0 SOLID WASTE…xlsx.6. The City’s supporting Excel workbook for the Wastewater sector: 5.0 WASTE WATER….XLSX.


09-08-2013 makati final report

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