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WBGGHGAccountingGuidance–Agriculture

WorldBankGHGAccountingGuidanceNote#3:AgricultureSectorInvestmentProjects(v1)

May2014

AgricultureGlobalPractice(AGP)

Disclaimer:thisdocumentisaworkinprogressandconstantlyupdated;somesupportingmaterialinannexesandweblinksarestillincomplete.ThedocumentbuildsontheGHGAccountingGuidanceNoteforAgricultureSectorInvestmentProjects.Allcommentsarewelcome,pleasesendthesetoAdemolaBraimoh(AGP,abraimoh@worldbank.org),cc:ChristineHeumesser(AGP,cheumesser@worldbank.org)

CPFmaintainsawebsiteforGHGaccountingathttp://ghgaccounting.ThesitecontainsthelatestinformationandtemplatestobefollowedandshouldbecheckedwhenconductingGHGaccountingforprojects.

1. INTRODUCTION

In November 2012, a group of International Financial Institutions (IFIs), including theWorldBank,agreedtoharmonizetheirapproachestoproject-levelgreenhousegas(GHG)accounting. Each institution would follow established methodologies consistent withinternational best practices, and the methodologies would be applied during projectappraisal.GHGaccounting isameanstoassessthe impactsaproject is likelytohave,andtakentogether,tomeasuretheoverallimpactsaninstitution’slendingportfoliowillhaveonGHGemissions.Investmentswhichareidentifiedasbeingclimate-smartandwhichleadtosimilarly positive socio-economic outcomes can then be properly weighted according tomultiplecriteria(WBG2012).Aspartof theWorldBankGroupEnvironmentStrategy,allWorldBank (WB) investmentprojectsmustundertakeGHGaccounting(‘carbonfootprinting’)startinginfiscalyearFY14(July2013).Thephasing-inofGHGaccountingwillbedonegradually fromFY14toFY16.Thefirstsectorsincludedintherolloutphase(FY14)wereenergy,transport,andforestry.FromFY15,GHGaccountingwillbeundertakenforagriculturesectorprojectsandwillberequiredattheprojectapprovalstage.Agriculture accounts for about a quarter of anthropogenic GHG emissions, mainly fromdeforestation and agricultural emissions from livestock, soil, and nutrient management(IPCC2014).Theagriculturesectoraccountsfornearly50%ofglobalemissionsofnitrousoxide (N2O) andmethane (CH4).Nitrous oxide is a powerfulwarming agent and is about300timesmoreeffectiveatheatingtheatmospherethancarbondioxide,andmethanehasaglobalwarmingpotentialabout21timesthatofCO2ona100-yeartimescale. Thescaleofglobal emissions from agriculture and land-use change is increasing as a result ofpopulationgrowth,growingconsumptionofmeatanddairyproducts,andtherisinguseofnitrogenfertilizers.

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SeveraloptionsexistformitigationofGHGemissionsinagriculture.Themostprominentoftheseareimprovedcropandgrazinglandmanagement,therestorationoforganicsoils,andthe restoration of degraded lands. Other mitigation options include improved watermanagement, positive landuse change and enhanced livestock andmanuremanagement.Manyoftheseoptionsusecurrenttechnologiesandcanbeimplementedimmediately,buttechnologicaldevelopmentwillbeakeydriverensuringtheefficacyofadditionalmitigationmeasures in the future. The global mitigation potential of agriculture and forestry isestimated at 7.18 – 10.60 GtCO2-e/yr at carbon prices up to US$100 per ton of CO2equivalent.Aboutathirdofthiscanbeachievedatpricesupto$20(IPCC,2014).ThisnoteprovidesguidancetoWorldBankstaffforconductingGHGemissionsassessmentfor investment projects in agriculture. Section2 clarifies the project types requiringGHGassessment,whileSection3discussesharmonizationissueswithintheWorldBankGroup.Section4providesinformationontheEX-ACTtoolandresourcesavailableattheBankwithwhich to conduct GHG analyses. Section5 discusses the practical implementation of GHGaccountinginWorldBankprojects, includingtheroleoftheGHGAccountingHelpDeskatthe Agriculture Global Practice (AGP). Section 6 concludes with the application of keyconcepts.

2. TYPESOFWORLDBANKPROJECTSINCLUDED

Projects to be included for GHG assessment are all operations classified with the sectorcodesAB(Agriculturalextensionandresearch),AH(Crops),AI(IrrigationandDrainage),AJ(Animal Production), and AZ (General Agriculture). The requirement to prepare GHGassessmentsappliestoinvestmentoperations.1DevelopmentPolicyLending(DPL)projectsare not included. Additionally, Investment Fund Projects (IFP) which finance ‘non-sitespecific’ activities, such as capacity building and strengthening of institutions, policydevelopment,andgovernanceareexcluded.The assessment will be carried out by the project team with support from the GHGAccountingHelpDeskatAGP.Theassessmentisexante,andisconductedonlyonceduringproject preparation. GHG accounting is not used in monitoring during implementationunless it forms part of the results framework. A selection tool (decision tree) fordetermining if a particular project requires incorporating GHG footprinting and theappropriatetooltouseispresentedinAnnexI.If a project requiresGHG accounting, the question ariseswhether itwill generate carboncredits and as such is regulated by a formal, internationally recognized mandatory orvoluntary standard such as the Verified Carbon Standard (VCS). If so, the proceduresdescribedinthisdocumentaretobesupersededbythoseofaninternationallyrecognizedthird party such as the Executive Board of the UNFCCC’s Clean DevelopmentMechanism(CDM)orthevalidationorverificationbodyapprovedundertheVCS.

1Thisincludesalsoprojectsfinancedfromtrustfunds.

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Ifapprovedasgeneratingcarboncredits,themeasurementanddataprovidedindocumentssuchastheProjectDesignDocument(PDD,inthecaseofCDM),orequivalent,canbeused.Generally, all projects for which reliable and accurate GHG accounting is undertaken forother reasons can use those results to avoid duplication of work. The World Bank hasdeveloped a VCS approved methodology that quantifies the GHG emission reductions ofsustainable landmanagement practice activities that enhance aboveground, belowgroundand soil-based carbon stocks of agricultural areas. (http://www.v-c-s.org/methodologies/VM0017). If a project is not regulated by a formal internationallyrecognizedstandard;itissubjecttoproject-levelGHGaccounting.ThedecisionofwhetherornotprojectrestructuringoradditionalfinancingtriggersrevisedGHGassessmentwillbereviewedonacase-by-casebasis.Inessence,ifadditionalresourcesareallocatedorthescopeisvaried,aGHGassessmentshouldbeconducted.Theassessmentneeds to be conducted for emergency operations as well, though the timeframe is moreflexibleandassessmentmaybecompletedduringimplementation.

Box1:GuidelinesandStandards

TheGood Practice Guidance (IPCC 2003) and the IPCC Guidelines for National Greenhouse GasEmissions(IPCC,2006)providegeneralguidanceandaframeworktoestimate,measure,monitorandreportcarbonstockchangesandgreenhousegasemissionsfromlanduse,land-usechangeandforestry(LULUCF) activities. They include definitions and classifications, detailed calculation steps withunderpinningequations,defaultemissionfactorsandotherparameters,andreportingtemplates.2There are three primary standards for carbon assessment. These include the Clean DevelopmentMechanism (CDM), the Climate Action Reserve, and the Verified Carbon Standard (VCS). Thesestandardsaccreditandsuperviseanumberofmethodologiesorprotocolstoestimate,measure,monitorandpossiblycreditnetGHGremovalsbysinksresultingfromtheimplementationofLULUCFactivities.TheydosobyprovidinganumberofrulesandprinciplesforGHGaccountingsuchasdefinitionofthebaseline scenario, modalities for considering carbon pools and sources of emissions, and ways toaccountforleakageandpermanence.

3. HARMONIZATIONWITHINTHEWORLDBANKGROUP

TheWorldBank(i.e. IDAandIBRD)andtheInternationalFinanceCorporation(IFC)havedifferentprojectpreparationproceduresand financedifferent typesofprojects.However,theseguidelineswillbealignedtotheextentpossiblewiththepracticesusedbyIFC.Thisalignmentwillbemaintainedinallfutureguidanceandwheneverfeasible,similarsystemswillbeappliedacrossWBG.

2http://www.ipcc-nggip.iges.or.jp/public/2006gl/vol2.html

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TheGlobalEnvironmentFacility(GEF)andvariousclimateandcarbonfinancingprogramsalso have their requirements for GHG accounting. To promote harmonization of GHGaccounting processes and requirements among different financing programs, a morerigorous assessment could be substituted for the ex-ante assessment required at theconceptstage.3

4. RESOURCESFORGHGACCOUNTING

In selecting tools for GHG accounting, the WB is guided by the principles of simplicity,transparency,harmonization,andcredibility, recognizing that trade-offs between accuracyandtimeandresourcesrequiredarelikely(WB2013).4Amongseveral tools5, theEx-AnteCarbonbalanceTool(EX-ACT)hasbeenselectedastheprimary tool for GHG accounting in agriculture at the World Bank. EX-ACT has beensuccessfullypilotedinWBagricultureProjectsinBrazil,Russia,India,China,Niger,Nigeriaand Morocco (WB 2011). Since then, its application has grown considerably, coveringevaluationsofprojectsandprogramsinabout38countries.EX-ACTisarobustaccountingtool offering the advantage of a broad of scope of GHG analysis. It is user friendly,interactiveandparticipatory.Itisveryflexibleintermsofrequirementsforcoefficientsandsite-specificdata,andcanhandlelanduseconversion,changesinagriculturalpracticesandprojections over long time horizons. Its outputs can also be used in the financial andeconomicanalysesofprojects.

3GEF5hasarequirementtohaveanexanteGHGassessmentinProjectInformationForm(PIF)orinProject Concept Note (PCN). However, there is no formal requirement to use specific tools. It isunderstood thatWB ex anteassessmentmeets the GEF criteria as such. Decision on applicabilityunderGEF6willbedoneseparately.4Simple, in terms of assessment time and/or resources and application by project task teams;Transparent, in termsof beingobjective and clear aboutmethodological choices and assumptions;Harmonized, intermsofalignmentwithtriedandtestedapproaches, includingthoseusedbyotherIFIs;Credible,intermsoftherobustnessofanalyticalunderpinning,whichisalsolinkedtotheotherthreeprinciples(WB2013).5AcomparisonofGHGaccountingtoolsisprovidedbyWorldBank(2011)andColombetal.(2013).

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EX-ACTwasdevelopedbytheFoodandAgricultureOrganization(FAO)toprovideex-antemeasurements of themitigation impact of agriculture and forestry development projects.EX-ACT enables estimating the net carbon (C) balance and C sequestration potential ofprojectswhich promote the adoption of improved landmanagement practices comparedwithabusinessasusualscenario.EX-ACTcanbeusedattheprojectpreparationstage, toassisttaskteamsinrefiningcomponentsandactivitiestoincreasethemitigationbenefitsofprojects.EX-ACTiswidelyapplicableintheagriculturesector.Typicalapplicationsincludecrop production intensification, livestock development, food security, rural development,agroforestry, perennial agriculture, forest protection and management, watersheddevelopment,landrehabilitation,andbioenergy.ThemainoutputofthetoolconsistsoftheC balance resulting from the difference between a scenariowith a project and a baselinescenariowithouttheproject.ThoughEX-ACThasbeendesignedfortheprojectlevelitcaneasilybescaleduptoprogram,sectorornationallevel(Bernouxetal.2010).EX-ACTconsistsofasetofsixlinkedExcelsheets,coveringagriculture,forestryandotherlanduses.Thesesixmodulesallowuserstoinputspecificorgeneralinformationabouttheprojectincluding,changesinlanduse,agriculturalmanagementpractices,inputsandotherproject investments. The EX-ACT modules are shown in Figure 1 and described brieflybelow:

Figure1:TheEX-ACTmodules

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1. A general description of the project, including information on the location,climateandsoilcharacteristicsanddurationoftheproject.

2. Land use change, in which information on land use changes regardingdeforestation, afforestation and reforestation, and non-forest land use change isinserted.

3. Crop production and management, to specify agronomic practices, tillagepractices,waterandnutrientmanagement,andmanureapplication.

4. Grassland and livestock, specifyinggrasslandmanagementand livestock feedingpractices.

5. Land degradation that captures information on forest degradation, drainage oforganicsoils,andpeatextraction

6. Inputs and further investment, which captures information fertilizer and agro-chemicaluse,fuelconsumptionandelectricityuse.

AchecklistforchoosingtherelevantstudymoduleispresentedinAnnex2.TheuseofEX-ACTcomprises3steps:1. Ageneraldescriptionoftheproject(geographicarea,climateandsoilcharacteristics,

durationoftheproject);2. Identificationofcurrentlanduse,futurelanduseincasetheprojectisnotimplemented

andchangesinlanduseandtechnologiesforeseenbyprojectcomponentsusingspecific“modules”(deforestation,forestation,forestdegradation,annual/perennialcrops,ricecultivation,grasslands,livestock,inputs,energy);and

3. ComputationofC-balancewithandwithouttheprojectusingIPCCdefaultvaluesand–whenavailable–ad-hoccoefficients.

ThemainoutputofthetoolconsistsoftheC-balanceresultingfromprojectactivities.

The EX-ACT tool and a broad range of additional information can be found athttp://www.fao.org/tc/exact/en/. The GHG Accounting Help Desk at AGP has prepared“EX-ACT Quick Guidance for Users,” that provides an overview and explanation ofmethodology, results and data needs for the application and final use of EX-ACT. Itcomplements the more comprehensive EX-ACTUserManualand it is targeted at leadingWorld Bank users to proficiency in the independent use of the tool. These and otherresourcesareavailableathttp://ghgaccounting.

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5. IMPLEMENTATION

GHGaccountingwillbecomeroutineandpartoftheregularprojectpreparationcycleandwillbeconsideredasoneofthetasksconductedbytheprojectpreparationteam.Resourcesfortheassessmentwillcomefromprojectpreparationbudgets.Figure2depictsthetypicalstepsofthenetemissionscalculationprocess.

Figure2 GHGaccountinginprojectpreparation

To implement sustainable agricultural strategies, task team leaders (TTLs), project staff,andconsultantsmusthavereadyaccesstoexpertise,soundappraisalmethodologies(suchasEX-ACT),toevaluatepotentialGHGimpacts,andmitigationstrategiesfortheirprojects.TheGHGAccountingHelpDesk in theAgricultureGlobal Practice is designed, during theinitial year of the GHG Accounting rollout, as amandatory resource towards these ends.Collaborationwith the guidance unit in the development of sustainableBank agriculturalprojects will help streamline the understanding of the challenges and opportunitiesassociatedwithGHGassessmentforWorldBankagriculturalinvestments.TheGHGAccountingHelpDeskwillprovideguidanceonEX-ACTandotheraccountingtoolsatprojectpreparation,implementationandcompletionstages,andonotherpertinentGHGrelated issues that TTLs can apply to their projects. The unit will also provide specificguidanceforotherfundingsources–suchastheGEF–whichalsohavedevelopedspecificGHGevaluationandmonitoringrequirementsforagricultureprojects.

SupportfromGHGAccountingHelpDeskattheAgricultureGlobalPractice

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6. REPORTING

The measurement of GHG accounting will be conducted at the project level. However,whetherornotreportinganddisseminationwillbeatcorporate level(e.g.specificannualreports)oratproject level(e.g. inPADs)isstill tobedetermined.6,7AreportingsampleisfoundinAnnex3.

7. APPLICATIONOFKEYCONCEPTS

BecauseGHGaccountingisbeingintroducedatseveralIFIs,theinstitutionshaveagreedona joint approach and terminology to allow coherence across institutions (WB 2012).However, their consistent application for accounting purposes requires sector-specificagreement and interpretation on the key concepts. Definitions of these concepts areprovidedintheWorldBankGroupGHGAccountingGuidanceNote(WB2013).InallGHGaccounting,WBguidelinesanddefinitionsareapplied(WB2013).Theirspecificapplicationtoinvestmentprojectsinagricultureisoutlinedbelow.

7.1 Grossvs.NetEmissions

Bothgrossandnetemissionswillbecalculated.Grossemissionsrefertotheactualprojectemissions; while net emissions denote the change in emissions as a result of theimplementationofaWBinvestmentproject.Netemissionsarecalculatedasthedifferencebetween emissions in the project scenario and emissions occurring in the correspondingbaseline scenario. The approach of the WB will focus on net emissions, although grosscalculationsare typically identifiedaswell.Thereportingof these two typesofemissionswillbedecidedseparately(seesection6above).

6ThereisnodecisionyetonwhetherornotGHGfootprintsaretobedisclosedattheprojectlevel.Itis not yet [March 2014] clear if some clients would oppose disclosing project specific carbonaccounting results. Until final decisions have been made, project teams need to take this in toconsideration.7IntheinitialstageofGHGreporting,GHGreportingisaninterim,offlinereporting.GHGreportingwillbecomepartoftheOperationsPortalatalaterstage.

Box2:TheGHGaccountingroll-outprocessatAGPTheGHGAccountingHelpDeskoftheAGPwassetupinFY14tosupporttheapplicationandthemainstreaming of GHG accounting in agriculture operations. InMarch 2014, a Learningand Management System, LMS-accredited face-to-face EX-ACT training was held in DC,followedbyanother for countrystaff inBrazil inApril2014.Moreof such trainingsmaybeheldatothercountrylocationsinfuture.Inaddition,ane-learningcourseisbeingdevelopedtogetherwiththeClimateChangeGroup(CCG).Thee-courseonEX-ACTwillfurtherfacilitatethemainstreamingoftheuseofthetoolandprovideanonline-forumforpeerlearningwithanonlineexpertfacilitation.

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7.2 Baseline

The baseline, also called ‘reference’ or ‘counterfactual’ scenario, is a crucial in GHGestimation,asthecarbonbalanceofaproject(“netemissions”)isgivenbythedifferenceofthe overall effect of the project and the baseline scenarios. The baseline scenario isrepresentedbythemostplausiblescenarioandincludesthemostcredibleoptionsof landuse,possiblelandusechangesandmanagementpracticesthatcouldhaveoccurredonthelandwithintheprojectboundariesbutwithouttheprojectactuallyoccurring.ThebaselineisanextrapolatedvalueofgrossGHGemissionsastheywouldhaveoccurredintheabsenceoftheproject.Itisthusthescenariothatreasonablydescribeschangesovertimeincarbonstocks and GHG emissions within the project boundary in the absence of the proposedprojectactivity.Estimating the baseline is among the most challenging elements of conducting a GHGanalysis as it requires an understanding of current land use options and managementpracticesandtheirevolution,aswellas,theirextrapolationinacrediblescenario.Clearly,thefurtheroutintimeaprojectscenarioisprojected,themoreassumptionsareneededforabaselineprojection.The baseline can be static or dynamic. In contrast to the static elements, which do notchangeovertimeandassumethatthepre-projectassumptionsextendintothefuture, thedynamicelementschangeoverthetimeframeoftheassessmentandaremorecomplicatedtodevelop.Dynamicbaselineare typicallypreferred,butoftencannotbeachieveddue tothelackofdatatoassesshypotheticalscenarios.Ifdataarelackingforcredibleprojections,GHG analysis may opt for a simplified description of the baseline corresponding to acontinuationofcurrentland-useorastaticscenario(WB2013).InEX-ACT,userscanchoosebetween,orcombine,threeapproachestogenerateabaselinescenario.Theseare

i. Nochangescenario:isoftenusedinsmall-scaleprojects.Thisisastaticscenarioasitassumesnochangesinthelanduseandmanagementpracticeswithrespecttotheinitialsituation.

ii. Useofpasttrends:isadynamicscenarioandbasedontheassumptionthatwithoutaprojectthechangesinlanduseandpracticeswillevolveinthesamewayasinthepast.Insmallscaleprojects,expertconsultationcouldinformtheseprocesses,whileininlargescaleprojects,pasttrendsareoftenextrapolatefromsecondarydata.

iii. Useoffuturetrends:isadynamicscenarioandestimatesthefuturelandusesandmanagementpracticesbasedonquantitativedataforseveralorfewselectedvariables.

Thedefaultbaselineisthecurrentuseoftheland.

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7.3 ProjectBoundariesandScope

Theprojectareaisthediscretesite(s)whereaprojectisimplemented(i.e.,theareaunderthe control of the project component). The scope of the GHG assessmentwill encompassscope 1 and scope 2 emissions, as decided in the IFI harmonized approach to GHGaccounting. Itcouldalso includescope3emissionsattributable toaproject,whichshouldbe clearly stated in relevant policies, procedures and results.8The project boundariesshouldincludeallactivities,facilitiesorinfrastructurethatisbeingfinanced.Thisincludestheprojectareaandothercomponentsthatwillbeimpactedbytheprojectsuchasinputs(fertilizers,pesticides,infrastructure,andenergyconsumption)andleakage,i.e.emissionsoccurringoutsidetheproject’sboundariesasaresultofprojectactivities.9

7.4 Relevantgases

GHGaccounting,suchasEX-ACT,ideallyconsidersestimatedvaluesofallfivecarbonpoolsaswellasestimatedcoefficientsofCH4,N2OandselectedCO2emissions.Acarbonpoolisareservoirwith the capacity toaccumulate (remove)or release (emit) carbon.Five carbonpools are usually considered in a GHG analysis including: above ground living biomass,belowgroundlivingbiomass,deadwood(standing, layingoronground,orinthesoil,e.g.dead root stocks), leaf litter, andsoil carbon. Ideally, all carbonpools shouldbe included.However, this depends to a large extent on data availability and default values may beneeded.10The relevant GHG associated with agricultural activities are CO2, CH4, and N2O. As thesegaseshavedifferent globalwarmingpotentials, their flows are converted intoonemetricforaccountingpurposes,CarbonDioxideEquivalent(tCO2e),basedontheirglobalwarmingpotential(GWP).CO2hasa100yearGWPof1,CH4of25andN2Oof298.Themainemissionsourcesinagriculture,whichcanbeaccountedforinEX-ACTare:

i. Fertilizedsoilsemittingnitrousoxide(N2O);

ii. Cattleentericfermentationemittingmethane(CH4);

8Scope1includesalldirectGHGemissions;scope2referstoindirectemissionfromconsumptionofpurchasedelectricity,heatorsteam;andscope3includesotherindirectemissionsuchastheextractionandproductionofpurchasedmaterialsandfuels,transport-relatedactivitiesinvehiclesnotownedorcontrolledbythereportingentity,electricity-relatedactivities(e.g.T&Dlosses)notcoveredinScope2,outsourcedactivities,wastedisposal,etc.(http://www.ghgprotocol.org/).

9AnexampleofleakageisaprojectwhichreducesdeforestationinregionAbypromotingalternativesolutions to wood fuel through e.g. crop intensification, but indirectly results in increasingdeforestationinregionBoutsidetheprojectboundary.10Usuallythedefaultisthatharvestedwoodproductsareconsideredemittedonthedateofharvest.Thisisreasonableforfuelwood.However,fiberandsawlogs/constructionwoodhavemuchlongerlife cycles. Global methodologies are currently being developed e.g. by IPCC. In addition, IFC isdevelopinganapproach forhandlingwoodproducts inGHGaccounting.Theapproachused inWBassessmentswillbealignedwiththatofIFCtotheextentpossible.

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iii. Biomassburning(emittingN2OandCH4);

iv. Riceproduction(emittingCH4);

v. Manure(emittingN2OandCH4);

vi. Fertilizerproduction(emittingN2OandCO2);

vii. Irrigation(emittingCO2);and

viii. Farmingmachinery(emittingCO2).

7.5 Timeframe

TheeconomicandfinancialanalysisofWBprojectsoftenconsiders30-year timehorizon,andasimilar timeframe isused for theGHGassessment11.EX-ACTcanhandleprojectionsforlongertimehorizonswithusermodifications.Inthecaseofforestryprojects,thisallowsensuring thesaturationofcarbonsequestration intobiomassasplantationsprogressivelyreachmaturityisaccuratelycaptured.EX-ACT allows setting two different time periods for the project, denoted as theimplementationphaseandthecapitalizationphase.Theimplementationphaseisanalogueto the investment phase and considered to be the active period of the project. Thecapitalizationphaseisaperiodwhereprojectbenefitsarestilloccurringasaconsequenceoftheactivitiesoftheimplementationphase.

7.6 EmissionFactors

Avarietyofparametersarecriticaltoestimatecarbonstocksandchangesincarbonstock.These include factors relating to biomass growth and changes in land use (e.g.,deforestationrate).TheIPCCprovidesTier1dataformanyoftheseparameterswhileTier2 (and possibly 3) can be obtained from companion documentation to carbon offsetprojects,orunderlyingdatabaseoftool.Thehighestavailabletiershouldbeused.Box3:Tiers1,2and3Datasets

“Differentmethodscanbeusedtoestimateemissionsorremovals frommostsourceandsinkcategories.Theselectionofaparticularmethodwilldependonthedesireddegreeofestimationdetail,theavailabilityofactivitydataandemissionfactors,andthefinancialandhumanresourcesavailabletocompletetheinventory.InIPCCterminology,thelowestrankingorsimplestmethodis“Tier1”,whilemoreelaboratemethodsare“Tier2”and“Tier3.”Tier 1 methods typically utilize IPCC default emission factors and require the most basic, and leastdisaggregated,activitydata.Highertiersusuallyutilizemoreelaboratemethodsandsource-specific,technology-specific,regionspecificand/orcountry-specificemissionfactors,whichareoftenbasedonmeasurements,andnormally requiremore highly disaggregated activity data. Tier 2 and 3methods requiremore detailed dataand/ormeasurements for theirapplication. Incaseswhereanationalmethodologyexists,which isconsistentwith the IPCCGuidelines, it ishighly advisable touse thenationalmethodology.Thismethodology shouldbefully documented in order to allow the reader to understand why this particular method is better than thedefaultoneproposedbytheIPCC.” (UNFCCC2009:9) UNFCCCresourceguideforpreparingthenationalcommunicationsofnon-annexIparties,module3:National

11Forplantationprojectsthismayneedtobeadjustedbasedonrotationlengthstoavoidmisleadingvalues.

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greenhousegasinventories

(http://unfccc.int/resource/docs/publications/09_resource_guide3.pdf)

7.7 Threshold

Usually,aquickex-anteestimate isconductedtodeterminewhetheraproject fallsoverapresetthresholdforanalysis.InaccordancewithotherIFIs,athresholdof20ktCO2eqperyear (net) is recommended, i.e. projects that generate net GHG emission reductions(carbon sequestration) greater than20ktCO2eqper averageyear are subject to a furtherperhectareanalysis.TheimpactofthisthresholdwillbeassessedduringimplementationtounderstandwhethersomeprojecttypeswouldbesystematicallyexcludedfromGHGaccounting.

7.8 Attribution/costsharing

In pooled funding, GHG accountingwill cover the whole project, irrespective of WB’sshareoftheoverallprojectbudget.

7.9 Estimateranges

Oftenattheprojectappraisalstage,manyissuesoftheprojectdesignandimplementationarestillunconfirmedandthedataavailableareoftenrangeestimates.Asageneralrule,thelower(moreconservative)boundaryvalue isusedintheGHGassessments.However,ifsomeothervalueclearlyhasahigherprobability,theteammayusethemostlikelyvalue.

8. UPDATINGANDFURTHERINFORMATION

Thisapproachissubjecttorefinementandexpansionbasedontestingandfeedbackduringimplementation.Foradditionalinformationpleasevisithttp://ghgaccounting.Forcontacts,pleasegetintouchwith:

• CPF(GHGaccountingatcorporatelevel,collaborationwithotherIFIs):

• JaneEbinger• SameerAkbar

• AgricultureGlobalPractice(interpretationattheprojectlevel)

• AdemolaBraimoh• IjeomaEmenanjo• MauriceRawlins• ChristineHeumesser• MariaAnadeRijk

• TechnicalWorkingGroup

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• GabriellaIzzi• MaurizioGuadagni• TijenArin• LoriAnnConzo(IFC)• PhilippeAmbrosi• MariaAmazonas• GrantMilne• JunuShrethsa(GEF)• RiikkaRajalahti• AbelLufafa

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9. REFERENCES:

Bernoux, M., et al. (2010): Ex-Ante greenhouse gas balance of agricultural and forestrydevelopmentprograms.Sci.Agric.,67(1),31-40

Colomb, V., et al. (2013): Selection of appropriate calculators for landscape-scalegreenhousegasassessmentforagricultureandforestry.EnvironmentResearchLetters,8,1-10.

IPCC(2003):GoodPracticeGuidance forLandUse,Land-UseChangeandForestry.EditedbyJimPenman,etal.IPCC.

IPCC (2006):2006 IPCCGuidelines forNationalGreenhouseGas Inventories.PreparedbytheNationalGreenhouseGasInventoriesProgramme,EgglestonH.S.,BuendiaL.,MiwaK.,NgaraT.,andTanabeK.(eds).Geneva:IPCC.

IPCCWorking Group III Contribution to AR5 (2014): Climate Change 2014:Mitigation ofclimate change. Chapter 11. Agriculture, Forestry and Other Land Use (AFOLU).Availableat:https://www.ipcc.ch/report/ar5/wg3/(May,2014)

UNFCC (2009): UNFCCC Resource Guide For Preparing the National Communications of

Non-Annex I Parties: Module 3 National Greenhouse Gas Inventories. Availableathttp://unfccc.int/resource/docs/publications/09_resource_guide3.pdf(May,2014)

World Bank (2011): Carbon-footprinting of ARD projects: Testing the Ex-Ante Carbon

BalanceAppraisalTool(EX-ACT).Washington,DC.

World Bank (2012): International Financial Institution Framework for HarmonizedApproach to Greenhouse Gas Accounting. Available at:http://climatechange.worldbank.org/sites/default/files/IFI_Framework_for_Harmonized_Approach%20to_Greenhouse_Gas_Accounting.pdf(March,2014)

World Bank (2013): GHG Accounting: Definitions and Key Concepts. Available at:http://intresources.worldbank.org/INTCC/Resources/VERSION1GhgAccountingGuidanceNote.pdf(March,2014).

Annexes

ANNEXI: PROJECTELIGIBILITYANDDECISION-TREEFORTOOLSELECTION

1. EligibilityforGHGAccountingprojectsinagriculture:

Annexes

AnnexII:ChecklistforchoosingEX-ACTmodules

Carbon-balanceImpact EX-ACTProject

interventionMainImpactArea Module(s)tobefilled YES NO

A Reducedemissionsofcarbondioxide

A1 Reductioninrateofdeforestation Landusechange

A2 Reductioninforestdegradation Landdegradation

A3 Adoptionofimprovedcroplandmanagement Cropproduction

A4 Introductionofrenewableenergyandenergy-savingtechnologies Investments

B Reducedemissionsofmethaneandnitrousoxide

B1 Improvedanimalproduction Livestock

B2 Improvedmanagementoflivestockwaste Livestock

B3 Moreefficientmanagementofirrigationwaterinrice Cropproduction

B4 Improvednutrientmanagement Cropproduction,Livestock

C Carbonsequestration

C1 Conservationfarmingpractices Cropproduction

C2 Improvedforestmanagementpractices Landusechange

C3 Afforestationandreforestation Landusechange

C4 Adoptionofagro-forestry Cropproduction

C5 Improvedgrasslandmanagement Grassland

POSITIVE(SINK)

C6 Restorationofdegradedland Landusechange

DIncreasedemissionsofmethane,nitrousoxideandcarbondioxide

D1 Increasedlivestockproduction Livestock

D2 Increasedirrigatedriceproduction Cropproduction

D3 Increasedfertilizeruseandover-fertilization Inputs

D4 Production,transportation,storageandtransferofagriculturalchemicals Inputs

D5 Increasedelectricityconsumption Investments

D6 Increasedfuelconsumption Investments

D7 Installationofirrigationsystems Investments

D8 Buildingofinfrastructure Investments

E Decreasedcarbonstocks

E1 Increaseddeforestation&timberlogging Landusechange

E2 Increasedlanddegradation(forests,croplands,grassland)

Landdegradation,Grassland

E3 Croplandexpansion Landusechange

NEGATIVE(SOURCE)

E4 Residueburning,deeptillage,... Cropproduction

Annexes

AnnexIIIa:WorldBankAgricultureGHGInventoryReportingTemplate

Assumptions Baseline GrossGHGEmissions

1

EnterdetailsregardingLandUseChangeGHGemissionswhatisbeingincluded/excluded,why,thedurationandestimatedamount.

2

EnterdetailsregardingCropProductionGHGemissionswhatisbeingincluded/excluded,why,thedurationandestimatedamount.

3

EnterdetailsregardingGrasslandandLivestockGHGemissions,whatisbeingincluded/excluded,why,thedurationandestimatedamount.

4

EnterdetailsregardinganyLandDegradationGHGemissions(i.e.Scope3)whatisbeingincluded/excluded,why,thedurationandestimatedamount.

5

Ifapplicable,enterdetailsonanyInputandInvestmentsGHGemissionswhatisbeingincluded/excluded,why,thedurationandestimatedamount.

AnnexIIIb:GHGValueChainCalculations

TotalEmissionsintCO2-eqforthedifferentphasesoftheValueChain Emissions(tCO2/tproduct)

Without With

PRODUCTION

PROCESSING

TRANSPORT

USE

WASTE