5.2 Developing the Project Emissions Baseline

5.1 DEFINING PROJECT BOUNDARIES
5.2 DEVELOPING THE PROJECT EMISSIONS BASELINE
5.3 MEASURING POST-IMPLEMENTATION EMISSION LEVELS
5.4 EXAMPLE: COMINCO LTD. STEAM MANAGEMENT

The project emissions baseline is an estimate of what emission levels would have been in the absence of the project (i.e. under regular business practices within the boundaries set by the project).

A project baseline forecast involves two essential elements:

1. the emissions factor, which is the level of emissions per unit of production, throughput, or activity (e.g. CO2e/tonne ore product); and
2. the activity level, which is equivalent to the expected utilization of the technology or system that produces the emissions (e.g. amount of ore produced).

Baseline Emissions = Emissions Factor x Forecast Activity Level

The project baseline should be dynamic. A dynamic baseline incorporates factors such as capital stock turnover, autonomous (non-financially driven) technology efficiency improvements, and consumer/market preferences. It is adjusted as new information about these factors becomes available over time.

This is important because it is not appropriate to assume that the emission reductions generated by an emission reduction project in one year will continue for all years into the future. For example, a mining company may install some new equipment that reduces GHG emissions per unit of production from current levels. This will generate an emission reduction in the year the new equipment comes on line. If, however, the old equipment would have to have been replaced in five years as a part of normal capital stock turnover, it would not be appropriate to use that equipment as the project baseline once five years have passed. Instead, the baseline would need to be adjusted to reflect the fact that the capital equipment would have changed.

Developing a project baseline can be challenging because you are in essence trying to illustrate what would have happened if an emission reduction initiative had not been taken. Several approaches to developing project baselines are, however, available:

• By comparison: a comparable facility that is unaffected by the emission reduction activity can be monitored to provide information on the emission factor and/or activity level of the baseline over time. This method is appropriate when similar projects or facilities are in place and are not being affected by a similar emission reduction project. The selection of a number of comparison projects will increase the robustness of the comparison.
• By simulation: a simulation model based on behavioral and/or financial factors is used to estimate the baseline activity levels and/or emissions factor. This method is appropriate when there is very little practical experience with the emission reduction project and no comparison projects are in place.
• By methods such as benchmarking. Benchmarking can be used to adjust a baseline by monitoring and then reflecting in the baseline new technologies that are being adopted by industry over time and their impact on the emissions intensity of an activity (i.e. producing ore). This method-based approach is appropriate for defining baselines for projects where a substantial amount of experience has been gained on potential technologies or systems that can be applied, and/or where several other applications have been made.