Interview by Hae Seung Yi, Cornell University
Michael Gillenwater is co-founder and executive director of the Greenhouse Gas Management Institute, a nonprofit organization that trains experts in measuring, accounting, auditing, and managing greenhouse gas (GHGs) emissions. He has dedicated his career to the development of the policies and infrastructure needed to produce highly credible environmental information that can serve as the basis for market and other compliance mechanisms, especially monitoring and verification policies and management and reporting systems for greenhouse gases and other ecosystem services. Mr. Gillenwater is currently pursuing a PhD in the Woodrow Wilson School of Public and International Affairs at Princeton University. Recently, he spoke at the Cornell Institute for Public Affairs colloquium about climate change policy and workforce needs. Cornell Institute for Public Affairs Fellow Hae Seung Yi had the opportunity to speak with Mr. Gillenwater.
On becoming involved in greenhouse gas emissions and climate change policy:
I was interested in the environment and “big picture,” complex questions. So, I went to grad school and focused on interdisciplinary topics at the intersection of science and policy. In school, I was able to work on issues related to climate change and energy policy. After graduating, I got my first job at a consulting firm in D.C. where I was tasked with creating the U.S. Greenhouse Gas Inventory Program, which was responsible for submitting an annual report on U.S. greenhouse gas emissions to the United Nations. This was in 1995 and 1996, before the Kyoto Protocol was negotiated, and the United States had not done much work on greenhouse gas emissions measurement and reporting. In addition to working on the U.S. reporting program, I also worked with the Intergovernmental Panel on Climate Change (IPCC) and UN Framework Convention on Climate Change (UNFCCC) to develop the guidelines for how the broader international community should report its emissions.
On creating the U.S. Greenhouse Gas Inventory Program within the U.S. Environmental Protection Agency (EPA):
The purpose of national inventory programs is to report sufficient data to be used for treaty compliance purposes. Under the UNFCCC and Kyoto Protocol, developed countries must report their total GHG emissions annually and track those emissions against any targets agreed upon. The resulting report is a hybrid between a scientific and policy document because it has legal implications. The systems we put in place were codified in treaty language. Nowadays, countries in Europe and elsewhere are using the same approaches we helped develop.
On the importance of using metrics to achieve climate policy compliance, internationally and locally:
Our aim is to work towards achievable climate policy solutions. The philosophy and vision of the Greenhouse Gas Management Institute is that environmental management should be driven by metrics. Climate policy compliance issues are not the same as general environmental issues. If you want to manage something as complex as greenhouse gas and climate change, you need metrics to figure out whether the policies and technologies you are implementing are improving matters or making things worse. There are various levels working on the issue: for example, the regional level and the international level. There are also individual companies, and their role is to aggregate their work to the international level. Whatever the level, metrics are necessary to help you understand the scale and source of the problem and to measure whether or not the changes implemented are improving the results. Without that foundation, treaty compliance is impossible.
On the need for the Greenhouse Gas Management Institute:
We formed the Greenhouse Gas Management Institute primarily because there was an emerging interdisciplinary community of technical policy experts. There were communities working on the same issues from different angles, such as Intergovernmental Panel on Climate Change (IPCC), UN negotiations, corporate carbon footprints, carbon markets, sustainable communities, and local governments. People [in the field] worked on the same issues in different sectors of the economy, but they were not communicating, collaborating, or learning from each other. Furthermore, there were no associations or degree programs to bring them all together. Thus, they were often asking the same questions, but not sharing the solutions. They were not taking advantage of each other’s research, work, and findings. The Institute was created partly to create that space for networking. The idea was to find a way to bring this technical community together and to work on professional standards and good practices. We also focused on ways to improve our work and broaden our goals in the field.
On professionalism in the Greenhouse Gas Management community:
There is a lack of defined standards and skill sets that one must have to be a carbon management professional. For example, there is a minimum set of criteria that lawyers and doctors should fit, but there is nothing similar in the greenhouse gas management area. There are consultants saying that they can analyze carbon footprints when, in reality, they might know nothing. In cases where there is carbon policy or a market where numbers are tied to financial value or regulatory compliance, we need a minimum level of confidence in those numbers to make sure there is no fraud, intentional or unintentional.
On the idea of carbon as a commodity:
This is the area of my academic research. Essentially, you are converting a public good into something that you can use as a private good. The key example everyone points to is the Acid Rain Program in the United States where we commoditized the pollution that causes acid rain and then allowed trading. It is a question of design. It does not mean that you can commoditize anything, trade it in any way, and that it will work. There are serious policy-design and market-design issues to make sure the policy achieves what you want it to achieve. Greenhouse gas emissions are ideal to commoditize in that they are a global public good, so it does not really matter where they are emitted. Therefore, it is more easily commoditized given that it is fungible across time and space. Similarly, there is not one technical solution. If we knew one magical solution we wouldn’t need a market. However, since there is not one magical solution, we can use the creativity of a market mechanism to find the most cost-effective solutions and to promote innovation.
On the viability of a global market for carbon trade:
It is probably not fair to call it one market. Right now, the global carbon market is a creation of policy because carbon is not a natural private good. Thus, the form and character of the commodity changes with policy decisions and policy decisions are not globally uniform. If you define viable by whether it is possible, this is already happening now, so it is achievable. Whether it is an optimal solution is a different question. There are strengths and weaknesses in the use of market mechanisms to address environmental problems. More importantly, there is no single policy option that will solve all environmental problems for every sector and every industry. Carbon tax may be appropriate for certain industries, cap and trade might be for others, and direct regulation would definitely be the solution for other places where we can just install equipment at a low cost that controls emissions.
Some thoughts on voluntary greenhouse gas reduction programs:
It is hard to come up with too many environmental problem examples that have been solved from a voluntary approach. It is probably impossible to come up with any global environmental problem that has been solved by a voluntary approach. Therefore, to ask what impact a voluntary carbon market would have is almost a rhetorical question to ask. Can you solve a serious problem with a voluntary approach? The obvious answer is no. If you could, greenhouse gases would not be the serious problem we are talking about now. However, there is a role for voluntary approaches. Voluntary markets probably help some companies to innovate, learn, and experiment with the approaches, methodologies, and technologies, which has an educational value. There are other kinds of voluntary approaches that have an impact, like educational programs and labeling programs. However, they are somewhat unrealistic to solve the “big picture” problem.
Many experts say there are currently no clear standards in the world for reporting carbon footprints. However, more and more businesses claim to have reduced their carbon footprints. How meaningful are these claims?
There are standards for what we typically call Corporate Emission Inventories, which are more appropriately defined by geography, physical manifestation, and organizational boundaries. A company is a typical example of an entity, but it could be a conference, an individual person, or a nonprofit organization.
One of the two main standards is the Greenhouse Gas Protocol, from the World Resources Institute and World Business Council for Sustainable Development. Technically the GHG Protocol is not a standard, but it is guidance on how to do an inventory. It provides guidance but not detailed requirements that are auditable. The second standard is ISO 14064 Part 1, which provides auditable requirements but only at a high level, and therefore lacks technical details, which are left open to interpretation.
The more important question might be why companies do it. I think the obvious reason is that they want to appear green to their stakeholders, customers, and employees. Some corporate managers also want to understand their risks with respect to climate change. However, there is a common misunderstanding that their corporate carbon footprint will provide them an accurate picture of their regulatory risk. Companies merge, divest, and are dynamic and social artifacts. If you are trying to track performance over time using metrics and your target is constantly morphing, shifting, and changing, it is probably not the most effective target for tracking compliance. Therefore, regulatory programs almost never focus on corporate emissions. Instead they focus on emissions from individual sources (such as facilities) and regulate them. Unfortunately, corporate carbon footprints rarely give a realistic picture of a company’s regulatory risk with respect to GHG regulation.
What are some current factors complicating accurate carbon-trading reporting?
The main impediment to the growth of carbon markets right now is a lack of policy and political consensus. Many people do not understand that the current voluntary carbon markets are largely driven by what we call pre-compliance, so people are doing things voluntarily in the anticipation that they will get credit for it under regulations later on.
As policymakers begin to design future climate change legislation, what would you urge them to consider in developing and implementing these policies?
High-level design work has been done through negotiations at the international, national, and regional levels. We did cap and trade programs here [in the United States] but that was narrowly looking at a limited population of large power plants. However, Europe has taken that a step further by including power plants and many industries. Since Europe is not one united country, they had to deal with the integration across jurisdictions. In the United States, we have had the Regional Greenhouse Gas Initiative in the Northeast, which is currently up and running. It focuses narrowly on power plants, but has provided a lot of lessons learned. California is now moving on design and implementation of its own cap-and-trade system. Plus, a lot of work was done on Capitol Hill during the debates over federal cap and trade legislation. From this standpoint, the high-level design issues have largely been addressed, but there are still many details to explore, especially if we are looking at including more than just power plants. Different kinds of industries have different costs, issues, and cultures that must be considered. This will bring some challenges, but it is not something we cannot overcome if we learn as we go.
Hae Seung Yi is a first-year Master of Public Administration fellow pursuing a concentration in Environmental Policy at Cornell University. She received a Bachelor of Arts in Consumer Science and Human Development from Ewha Womans University in 2008.