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If cap-and-trade legislation passes through the Senate as it did Congress earlier this year, what kinds of legal provisions exist to ensure companies are accurately measuring and reporting their emissions?

One reader wants to know the nitty-gritty details, and our climate policy advisor has the answer.

Read what he has to say, and when you're done, send us your questions on any conservation subject for one of the Conservancy's 720 staff scientists. (Note: We regret that we can only answer one or two questions each month and that we cannot answer the others offline.)

Joel McElhannon of Atlanta, Georgia, writes:

“In the "cap-and-trade" legislation that passed a committee in Congress earlier this year, are there any requirements for exactly how carbon emissions are tested and measured? What legal requirements are included that mandate how a company verifies its carbon emissions and measures them so they can then be traded as credits? What prevents them from just making up numbers?"

Michael Wolosin:

Great questions, Joel. Probably more for the lawyers than the scientists, but I'll take a crack at answering (and check with the lawyers myself)!

Clearly, as you point out, it's important that we accurately measure the greenhouse gases we are trying to regulate, and climate legislation before Congress accounts for this need.

Both the "ACES" bill (American Clean Energy and Security Act of 2009) that passed the House in June and the more recent "CEJAPA" bill (Clean Energy Jobs and American Power Act) being debated in the Senate Environment and Public Works Committee include provisions to establish greenhouse gas registries where companies must report their carbon emissions and reductions.

Both bills lay out who needs to report, what they must report, when those reports are required and what types of methods must be used to measure emissions and reductions. The really detailed rules are left for the administrator of the Environmental Protection Agency (EPA) to determine later through the regulatory process.

But in general, companies use a variety of well-established methods to measure their carbon dioxide emissions — including some that are required for compliance with the Acid Rain Program:

• Equipment can be installed on smokestacks to measure the volume and concentration of gas emissions.
• For other types of emissions, such as those created by the burning of transportation fuels and natural gas in homes and commercial buildings, estimates of the carbon content of fuels and the efficiency of combustion can be used to calculate the emissions based on the volume of fuel burned.
• Other methods are available, and rules will clearly spell out which methods are acceptable.

Enforcement is another big part of the answer to why companies can't get away with "just making up numbers." The climate bills themselves don't contain enforcement provisions for these reporting requirements because they don't need to. The emissions control sections of the bills actually take the form of amendments to the Clean Air Act (CAA) — so existing enforcement will apply to the cap-and-trade program. Enforcement options under the CAA have real teeth, including allowing people to bring suits against companies.

Now, to come full circle back to questions of emissions reporting, the EPA is currently issuing a new regulation on Mandatory Reporting of Greenhouse Gases. As of January 1, 2010, roughly 10,000 of the largest greenhouse gas emitting facilities will be required to collect and report data on their emissions. This regulation is intended to improve information about where greenhouse gases are coming from and to guide development of policies to reduce emissions.

However, even this new federal requirement doesn't mean new monitoring efforts will be required from many emitters — more than 40 states and tribes already participate in a "climate registry" that collects emissions data. So, many facilities, corporations and other organizations have been monitoring and reporting greenhouse gas emissions for years for various state programs, and all of them have been monitoring and reporting other types of pollutants to EPA for decades under the Clean Air Act. So the enforcement mechanisms are well known and in place.

I hope this is helpful, and thanks again for a great question!

About the Conservationist

Michael Wolosin is a climate policy advisor with The Nature Conservancy.