Report on Building Trust In Emissions Reporting
PricewaterhouseCoopers Releases Report on Building Trust In Emissions Reporting
Julia Hoare, leader of Climate Change Services at PricewaterhouseCoopers in New Zealand, said a new report on emissions trading released today would provide “valuable reading” for many businesses and Government organisations looking towards carbon neutrality or offsetting emissions.
PricewaterhouseCoopers’ report Building Trust in Emissions Reporting highlights the key elements of a successful carbon trading regime, presents a new vision for compliance in emissions trading, and calls for global action to develop this important area.
Emissions trading schemes are based on emission rights (or other marketable units) linked to emissions. In an increasingly carbon constrained world, they represent an important value driver for both management and investors. Businesses covered by a scheme are required to report on their emissions and the verification of their emissions reporting is often comparable to an audit of financial statements.
The trading of emissions units is increasingly seen as a central part of the response to climate change, but such market mechanisms depend on trust and confidence. Any widespread or systemic failure, as a result of deficient monitoring and reporting, flawed compliance processes or fraud, could undermine confidence in markets and regulation and jeopardise the crucial policy goals that they are designed to address.
The report tackles an issue addressed by the Prime Minister in her opening address to Parliament on Tuesday where she stated: “[The Government is] also following closely exciting work in the private sector on the development of carbon trading regimes, and will be willing to consider what legislative and regulatory changes might be needed to put them into effect."
Ms Hoare said the findings of the PwC report also sounded a warning: “This report highlights problems arising due to the patchwork of emissions regulations emerging around the world, and sets out the areas that need to be considered,” she said. “It rightly stresses the importance of ensuring that any compliance or regulatory framework introduced to New Zealand demonstrates transparency, accountability and integrity.”
The report makes the case for urgent and coordinated action to develop a framework of generally accepted principles and practice that will underpin trust and efficiency in these new markets - in effect, a new Global Emissions Compliance Language.
Ms Hoare said confidence in the way any system
worked was critical. “Everyone needs to be able to trust
that emissions reductions are real and that they can put
faith in the value of the underlying credits.”
She also said the report’s findings were likely to be of particular interest to the 39 core public service departments that were recently directed to achieve carbon neutrality as part of the government's push for sustainability.
“Even in the absence of a formal regulatory response, the Government agencies singled out by David Parker and Annette King this week will need to understand emissions reporting and instruments to correctly report their carbon footprint and assess offset opportunities.”