Baseline emissions provide an essential benchmark for measuring the success of emissions reduction activity. Let’s take a closer look at baseline emissions and how to calculate them.
What are baseline emissions?
An emissions baseline is the reference point against which a business or country’s greenhouse gas (GHG) emissions will be measured going forward. Baseline emissions are calculated by looking at a 'baseline emissions period', usually the past 1 - 5 years of an organisation’s activity. If no action is taken to reduce emissions, this is the level at which they can be expected to remain.
All countries that followed the emission reduction guidelines set out by the Kyoto Protocol were required to provide details of their national greenhouse gas emissions from 1990. This data provided a baseline for evaluating the success of future efforts to reduce emissions over designated periods.
Why are baseline emissions so important?
Baseline emissions are critical to measuring the success of a project to reduce GHG emissions and determine whether emission reduction targets are being met. Any change in the volume of greenhouse gases produced compared to the baseline during a specified reporting period can be used to calculate the net reduction in emissions for that period.
Measuring baseline emissions is an essential first step on the journey to becoming carbon neutral and, eventually, achieving net zero – which is critical to avoiding the worst effects of climate change. Only when you know your current emissions can you set accurate targets and create credible strategies for reducing them.
Baseline information is also necessary when countries or organisations collaborate to trade emissions to meet overall targets. For example, Canada’s Pilot Emission Reduction Trading (PERT) scheme requires baseline emissions data to be provided from the previous 5 years.
What about Australia?
The Australian government uses baseline emissions in its Emissions Reduction Fund (ERF) as part of its ‘safeguard mechanism’, introduced in 2016. This mechanism ensures that emission reductions are not displaced by a rise in emissions elsewhere. This applies to Australia’s largest emitters, all businesses with direct (scope 1) baseline emissions of 100,000 tonnes of carbon dioxide equivalence (CO2e) a year are designated as ‘large facilities’.
Under the safeguard mechanism, the person or entity in control of the large facility must ensure that its net emissions do not exceed baseline levels during a monitored period. This is called an ‘excess emissions situation’ and must be avoided to ensure that carbon reductions purchased through the ERF are not cancelled out by rising emissions elsewhere.
To stay below baseline emissions, a business may use Australian carbon credit units (ACCUs) to offset its emissions. Companies can also seek to amend their baseline emissions if they have made significant changes to their business – for example, expanded their facility – or apply for an exemption due to exceptional circumstances, such as a natural disaster.
If none of these applications are granted, and the facility fails to reduce its average emissions to below the baseline during a specified monitoring period, they face fines. However, some studies have found that industrial emissions have increased under the safeguard mechanism. Revamping this policy is central to the current Australian government’s plan to tackle climate change.
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