Published: 30 July 2012

Carbon accounting: our newest, cleanest export?

Asa Wahlquist

Australian company CarbonSystems made headlines around the world in May when it won the contract to provide Microsoft with software for monitoring and managing carbon emissions. A track record in carbon accounting – thanks to Australia’s introduction of a National Greenhouse and Energy Reporting (NGER) Act in 2007 – helped tip the decision in its favour.

Balancing the books: carbon accounting prompts companies to look at the bigger picture, such as their energy use.

Credit: CarbonSystems

‘There is no doubt that being incubated in Australia was the best thing for us because of that real world experience with NGER and that leadership around the compliance reporting of carbon,’ says CarbonSystems’ CEO and co-founder, David Solsky. ‘That was the catalyst that unquestionably got this business going.’

As a result of the Microsoft contract, CarbonSystems has a higher profile in North America than locally, and has received enquiries from ‘very large Fortune 500 companies’.

CarbonSystems' success – along with overseas interest in the National Carbon Accounting Toolbox, in which CSIRO is a partner – means Australian carbon accounting systems have become a growing export industry. In fact, Mr Solsky argues Australia has a ‘strong position of leadership’ in carbon accounting.

The NGER Act requires large companies to report their greenhouse gas emissions annually. Large companies are those emitting more than 25,000 tonnes of carbon dioxide equivalent, or consuming more than 25,000 megawatt hours of electricity or 2.5 million litres of fuel in a financial year.

The federal government introduced the legislation to provide a reporting framework for an emissions trading scheme – introduced in July this year after years of public debate – and to help meet Australia's international greenhouse gas reporting obligations.

Mr Solsky, who previously worked in information technology and accountancy, co-founded CarbonSystems in 2008. ‘We saw the challenge emerging for business around how they were going to capture and manage and report all the information in relation to carbon footprints, energy, and even sustainability,’ he comments.

The company had to build its software programs from scratch at a time when the global financial crisis was causing havoc in the business world.

‘We managed to come through those early high-risk years, and we have now built a good platform, a good team of about 55 people,’ says Mr Solsky.

CSIRO – which aims to become carbon neutral by 2015 – was one of CarbonSystems’ first major government customers.

Mr Solsky says the introduction of the NGER scheme was a proving ground. ‘You are reporting to the government and these reports are being audited, so it gave us some really good insights into how you had to manage data, maintain audit trails: some of the complexities that maybe our competitors didn't get to see operating in more voluntary environments.’

The company moved into overseas markets in 2010. ‘Clients were very impressed by the technology that we had built,’ he explains. ‘A lot of our United States competitors built technology, but didn't have the benefit of operating in a real-world environment.’

David Solsky from CarbonSystems: a ‘green economy’ business that has benefited from Australia’s early initiatives in carbon accounting.

Credit: CarbonSystems

Mathew Nelson is the Oceania Climate Change and Sustainability Services Leader with Ernst & Young. He has seen a significant growth in businesses establishing their greenhouse gas inventory, with larger companies generally having taken the lead.

‘We expect, and are already starting to see, a further increase in focus for some of the largest emitters, as a result of a price being applied to carbon [from 1 July],’ says Mr Nelson.

‘The very large companies typically have the resources available to implement an NGER-style report. However, there are now a number of small-to-medium-size enterprises that will be captured by the [new] legislation, and they find themselves with significant challenges.’

Within his own company, Mr Nelson has noticed that carbon accounting skills already developed in Australia are proving useful overseas. ‘We can learn a lot from what we have done here, and transfer [skilled people] to places in the Americas, Asia or Europe.’

Like Mr Solsky, he believes Australian carbon accounting is ‘up with the most developed in the world’. But, Mr Nelson thinks broader sustainability accounting – for example, carbon footprinting and product/service life-cycle assessment – has ‘a fair way to go in Australia’.

Sumit Lodhia is a senior lecturer in accounting at the University of South Australia, teaching sustainability and carbon accounting. He has worked with major companies on carbon reporting, and has written academic papers on the topic.

Dr Lodhia thinks Australia, after its experience with NGER, will adapt more quickly to a carbon price than did European countries over recent years.

‘The NGER Act feeds into carbon pricing, and that is where we have a massive advantage,’ he says. But, he hesitates to call Australia a world leader in carbon accounting, noting ‘we need evidence on that, but I am an accountant, so I am conservative.’

All three experts agree that carbon accounting prompts companies to look at the bigger picture.

Dr Lodhia says many companies have no idea about their electricity use. But, knowledge gained through carbon accounting can lead to changes. ‘Essentially, what we are doing through carbon accounting is internalising an externality,’ he says. ‘That is something that has benefits. You make changes and you find a better way of doing things.’

Mr Nelson agrees that putting a price on carbon will drive change within both consumer and business communities. ‘They will change their investment decisions, and we are already starting to see that.’

The prospect of continually rising energy prices will make carbon accounting even more attractive to businesses, says Mr Solsky. ‘Sustainability is an issue that is not going to be leaving the corporate agenda and the boardroom any time soon, and people want to save money.’

He says the next challenge for CarbonSystems is to develop real-time energy and sustainability performance management systems. ‘All the drivers are heading in the right direction; for us, it is now a matter of execution. It is a very exciting future.’

CSIRO and the national carbon accounting system

The CSIRO – in partnership with the Australian National University and the Department of Climate Change and Energy Efficiency – has developed and updated an accounting system to estimate land-based carbon stores.

Vegetation changes in farmland near Nyngan, NSW, as monitored using satellite imagery in association with NCAS.

Credit: CSIRO

The National Carbon Accounting System (NCAS) is designed to keep track of Australia’s emissions from all land-based activities. NCAS was selected by the Clinton Climate Initiative as the basis for a global carbon monitoring system aimed at helping all countries comply with international carbon reporting standards.

With the national carbon accounting system now well established in Australia, researchers have moved their focus offshore, with NCAS pilot studies being run in China. Discussions are also under way with developing countries in Africa and Asia.

The system includes a National Carbon Accounting Toolbox (NCAT) – the government-approved method for calculating carbon storage and emissions on vegetated land. It is issued to users by the Australian Department of Climate Change.

NCAT includes satellite images that go back to 1972, although 1990 is the baseline year for greenhouse gas emissions under the Kyoto Protocol .

CSIRO’s Suzanne Furby explains that if a land manager cleared land in 1990, with the land use changing from forest to something else, there would be a time lag in the emissions from that land. ‘If you want to know exactly what your emissions are in 1990, you have to look back to the early 1970s to get an accurate baseline,’ she says.

In the early days of the Kyoto Protocol, the highest levels of uncertainty in relation to Australia’s emissions were associated with land cover and land use change. Ms Furby says carbon emissions from changes in land use, mostly clearing, were estimated to account for about one-third of Australia's emissions in 1990, ‘but [governments] didn't have a handle on it’.

Emissions from land use changes in Australia have since fallen, largely due to changes in state legislation regulating land clearing, and growing environmental concern among landowners.

Ms Furby says Australia is keen to partner developing nations, to assist them in their carbon accounting. Her group has been working on an Indonesian/Australian forest carbon partnership program, which involves local training and technical support and is regarded as ‘hugely significant’ to Indonesia.

In May 2010, Norway agreed to pay Indonesia $US1 billion if it reduced deforestation. The reduction has to be measurable, reportable and verifiable. CSIRO is assisting Indonesia to set up a carbon-reporting system as part of an Australian contribution to the initiative.

‘It is one thing to know have you cleared the forest or not, but then you need to know how much carbon was tied up in that forest and what is involved in the new land-use change,’ says Ms Furby.

More information

Australia's National Carbon Accounting System leads the world

Published: 25 November 2014

Things warm up as the East Australian Current heads south

Jaci Brown

Occasional erratic bursts southward of the East Australian Current (EAC) are thought to have moderated the weather of south-east Australia this autumn and winter and they continue to introduce tropical and sub-tropical marine species to Tasmanian waters.

Tasmania’s east coast: tropical and sub-tropical marine species normally found off NSW are finding their way further south, thanks to changes in the East Australian Current.

Credit: spelio/flickr under CC BY-NC-SA 2.0

Ocean monitoring by Australia’s Integrated Marine Observing System is providing scientists with significant new insights into the changing structure of the EAC. Over the past 50 years sporadic warm bursts have become more common as the EAC moves further south. With global warming, the warm burst we’ve seen this year may also become the norm.

Had our little friend Nemo the clownfish been riding the EAC this year he might have found himself holidaying in Tasmania rather than admiring the Sydney Opera House. He wouldn’t have been on the trip alone, though. Sea nettles (Chrysaora spp.) have headed from their usual home in Sydney to be found for the first time ever in Tasmania and the Gippsland Lakes.

<i>Chrysaora woodbridge</i>, or sea nettle, was found in surprising numbers in Tasmania this year.

Chrysaora woodbridge, or sea nettle, was found in surprising numbers in Tasmania this year.

Credit: copyright Lisa-ann Gershwin

Waters in the EAC travel southward along the east coast of Australia, with most of it splitting from the coast near Sydney and heading for New Zealand. A small part of the current, known as the EAC Extension, works its way southward past Victoria and Tasmania.

A typical signature in this region are the large eddies, around 200 kilometres across and hundreds of metres deep. Some of the warm water is trapped here along with marine life.

The EAC starts at the Great Barrier Reef and travels south to Sydney before turning eastward to New Zealand. Some of the water can still push southward via a series of strong eddies.

Credit: Eric Oliver

This year a larger proportion of the EAC was sent southward instead of breaking away to the east. Winter ocean temperatures off Bass Strait were around 19°C, an increase of 4°C. This impacted local fishing, beach conditions and the weather.

In the video (above) the animation on the left shows the actual sea surface temperature and speed of the ocean currents. The animation on the right shows the difference in the temperature from average conditions.

Through autumn and winter, you can see two interesting changes occur. A strong warm current heads down the coast from Sydney to the coast of Victoria. At the same time, warm water peels off from the EAC and swirls around in large eddies as it meanders toward Tasmania.

An unusual catch down south

One advantage of warm eddies is the refuge they provide for tuna. They congregate in the centre of the eddy where the waters are warm and dine at the nutrient-rich edges.

Local fishers in north-east Tasmania report a remarkable year that allowed them to fish longer than usual, providing game fishers with more opportunities to catch tuna.

Last summer’s (2013–2014) warmth provided an abundance of skipjack and striped marlin, while winter brought a run of bluefin tuna.

Redmap is a website where locals can report sightings of marine species that are unusual for a given area.

Last summer a manta ray, a tropical cartilaginous fish (in a group including rays and skates), was sighted off the north-eastern coast of Tasmania. Previously the southern-most sighting of a manta ray was just south of Sydney.

<i>Manta birostris</i> spotted off north-east Tasmania on Australia Day 2014.

Manta birostris spotted off north-east Tasmania on Australia Day 2014.

Credit: Redmap/Leo Miller

It’s not just new species visiting Tassie either. Local jellyfish such as the Lion’s Mane (Cyanea) – more commonly known as ‘snotty’ – are usually quite elusive, but turned up in unprecedented numbers last summer in Tasmania.

But there’s a catch

This movement south of the EAC may have an impact on other systems, including our health. We rely on fish such as those from the Tasman Sea as a source of omega-3 fatty acids for our brain health. But the concentration of omega-3 fatty acids in the fish is likely to decrease with global warming.

Algae are the original source of fatty acids. As our waters warm, we will see more of the algae from the tropics take up residence in the south-east.

But the algae from the tropics are much smaller, which means more steps in the food chain from the algae to the fish we eat. The more steps in the food chain, the more the omega-3 fatty acids in the fish are replaced by fatty acids that are less favourable to brain health.

The warmer coastal waters also contributed to the balmy autumn and winter in south-eastern Australia this year. Afternoon sea breezes cool coastal temperatures by drawing cool oceanic air onto the coast.

Sydney’s heat wave in May this year had 19 consecutive days of 22°C or more – this is partly due to the sea breezes failing to bring in the usual cooling air.

What’s causing the EAC to move south?

Over the past 50 years the EAC Extension has stretched about 350 km further south. This extension doesn’t happen smoothly but in erratic bursts.

The southward extent of the EAC is controlled by the collective behaviour of the winds between Australia and South America. Over that same 50-year period these winds changed their pattern due to a strengthening of a climate system known as the Southern Annular Mode.

The changes to this mode have been attributed to a combination of ozone depletion and increasing atmospheric CO₂.

One of the most robust and consistent responses of the climate system to increasing CO₂ is a further strengthening of the Southern Annular Mode.

So the result will likely be a further enhancement of the EAC extension southward and even warmer waters in the Tasman Sea.

Dr Jaci Brown is a senior research scientist with the Centre for Australian Weather and Climate Research (CAWCR), a partnership between CSIRO and the Bureau of Meteorology. Her research focuses on the El Nino Southern Oscillation (ENSO) and climate change. This article was originally published on The Conversation. Read the original article.

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