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Speaker 1: Welcome to Fearing Greed Q and A, where we ask

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Speaker 1: and answer questions about business, investing, economics, politics and more.

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Speaker 1: I'm Suan Aylmer. Today's question has come from Peter, who

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Speaker 1: got in touch via the website Fearinggreen dot com dot au.

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Speaker 1: He says, I quote, who measures emissions? How are they measured?

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Speaker 1: Is the number auditored checked off on? And by who

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Speaker 1: is it measured? The same way? In every country? BHP

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Speaker 1: and fortesqu can measure their emissions. I'm assuming they have budgets,

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Speaker 1: but what about for smaller companies that aren't listed. I'm

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Speaker 1: no believer in conspiracy theories, however, this has always fascinated me,

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Speaker 1: the accuracy and validity of emissions measurements. It is a

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Speaker 1: great question and when it came in, I had no

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Speaker 1: idea the answer to it. So we've gone to an

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Speaker 1: expert in this space. Thomas Hodgson is a director at

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Speaker 1: ant Thesis, a sustainability consultancy. Thomas, Welcome to Fear and

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Speaker 1: Greed Q and A.

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Speaker 2: Thanks for having me, Sean, how lovely to be here.

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Speaker 1: I don't know where to start. I mean, I kind

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Speaker 1: of know about scope one, two and three emissions, but

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Speaker 1: how do they measure them. Where do we start?

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Speaker 2: Yeah, great, great question. I mean even scope one, two,

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Speaker 2: three is not necessarily the most straightforward of concepts. So

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Speaker 2: just to summarize, Scope one emissions of the emissions, for example,

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Speaker 2: directly coming out of the back of your car if

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Speaker 2: you're driving an internal combustion engine and burning fossil fuel.

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Speaker 2: Scope two emissions would be the emissions associated with generating

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Speaker 2: electricity somewhere else that then you use in your car

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Speaker 2: or your home. And Scope three emissions would be emissions

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Speaker 2: that are attributable to the manufacture of that car in

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Speaker 2: another country, for example. So collectively, that's the primary focus

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Speaker 2: of emissions. And there is scopes above Scope three, but

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Speaker 2: they're not something that I work with closely, okay.

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Speaker 1: So the idea is sort of things that you can

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Speaker 1: directly impact the car, the scape one. The next level

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Speaker 1: is two, the next level is three. And you know

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Speaker 1: when we talk about big business or business generally, we

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Speaker 1: talk about them working out the emissions ast escape three

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Speaker 1: emissions is the result of their third parties, their supplies

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Speaker 1: or that type of thing. To the nub of the question,

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Speaker 1: how do you measure it? Is there a measuring scope

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Speaker 1: or something?

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Speaker 2: I mean, yeah, well, it's a fascinating field and I

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Speaker 2: personally started this journey, you know, following my conclusion of

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Speaker 2: my environmental engineering degree, I worked for the Federal Department

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Speaker 2: of Climate Change measuring Scope one two emissions for large

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Speaker 2: businesses in Australia under what's called the National Greenhouse and

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Speaker 2: Energy Reporting Scheme. So that's our federal scheme, and I

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Speaker 2: would say it's one of the best and most accurate

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Speaker 2: globally to measure scope on in two emissions. And the

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Speaker 2: way that you do it in that framework is that

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Speaker 2: you first choose which method within scope one that you're

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Speaker 2: going to use, so method two, three four, Method one

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Speaker 2: being the most simple way you, for example, apply a

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Speaker 2: default emissions factor for a killer liter of diesel used

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Speaker 2: or coal burnt or gas burnt, for example. And that's

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Speaker 2: the way that most companies estimate emissions.

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Speaker 1: That's some sort of benchmarks that has been kind of

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Speaker 1: created and sourced scientifically. Yes, saying it broadly, if this

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Speaker 1: is the amount of diesel we use, this is the

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Speaker 1: amount of missions we put out.

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Speaker 2: Yes, So for Scope one it's it's in the order

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Speaker 2: of two point seven tons of emissions per killer liter.

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Speaker 2: One thousand. Leaders of diesel burnt, and that's a pretty

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Speaker 2: common basis of estimation. And from there you would go

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Speaker 2: to a heart what's called a higher order method, so

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Speaker 2: you would you move up the accuracy but also the

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Speaker 2: administrative burden ranks, so method two, three, four, with method

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Speaker 2: four being the highest complexity, and that's where instead of

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Speaker 2: estimating emissions associated with your consumption by applying default factors,

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Speaker 2: you would actually measure what's coming out of your tailpipe

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Speaker 2: or of your industrial stack. We work a lot with combines,

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Speaker 2: for example, and we use method for what's called continuous

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Speaker 2: emissions monitoring or periodic emissions monitoring to measure the gas,

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Speaker 2: the methane and sere two coming out of underground coal mine,

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Speaker 2: for example. That's most accurate, but also the most burdensome

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Speaker 2: to implement.

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Speaker 1: Okay, you're gonna have to dumb it down even further

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Speaker 1: for me, not anyone like you measure in terms of diesel.

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Speaker 1: But what if you're not using diesel? Is that a

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Speaker 1: really stupid question? I'm cringing here, Thomas as I ask

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Speaker 1: you that question.

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Speaker 2: No, no, great question. So what are we measuring? Fundamental

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Speaker 2: is the question? And what's coming out the back of

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Speaker 2: a diesel burning car is not diesel. It's carbon dioxide,

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Speaker 2: which has a global warming potential of one. There's also hydrosoxide,

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Speaker 2: which is formed when you burn fossil fuel in the

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Speaker 2: presence of air, which is mostly nitrogen so the end too. Oh,

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Speaker 2: and that has a really high global warming potential. I

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Speaker 2: think it's two hundred and sixty five times CO two,

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Speaker 2: so really really persent. And there's also methane that comes

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Speaker 2: out of the back of your diesel car. And that

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Speaker 2: methane is basically a function of unburnt hydrocarbons or diesel

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Speaker 2: that didn't fully combust and it comes out as methink gas,

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Speaker 2: which itself has a high global warming potential of about

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Speaker 2: twenty eight.

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Speaker 1: Okay. And so when we talk about agriculture, when we

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Speaker 1: talk about farming and cattle and methane emissions and it's

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Speaker 1: a big challenge to kind of produce feed to reduce

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Speaker 1: methane emissions. We use diesel as a catsual, but in

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Speaker 1: actual fact, what it is it's different elements that you're

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Speaker 1: measuring and you're putting their potential towards hurting the ozone layer.

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Speaker 2: Well broadly, yes, so ozone depleting substances an entirely distinct

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Speaker 2: sort of concept and concern. There is some degree of overlap,

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Speaker 2: and that's because things that are ozone depleting and the

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Speaker 2: traditional classic case of this is CFCs. CFCs are ozone

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Speaker 2: depleting and also very very posent greenhouse gases. But the

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Speaker 2: primary focus of organizations in Australia is around the global

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Speaker 2: warming potential or the climate change impact of their owns.

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Speaker 1: Yeah, okay, So going back to my cow question is

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Speaker 1: you know, farmers broadly, if you got you know, you're

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Speaker 1: one of the big Australian Pastoral company or something like that,

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Speaker 1: and you've got tens of thousands of cattle, you have

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Speaker 1: a rule of thumb do you for methane emissions based

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Speaker 1: on what the cattle are grazing on? And that's kind

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Speaker 1: of how you work it out.

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Speaker 2: Yes, So agricultural emissions that are not captured by the

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Speaker 2: National Greenhouse and Energy Reporting Scheme, so there's not such

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Speaker 2: a formal and curate framework to measure those emissions. There

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Speaker 2: are many agricultural organizations they seek to quantify emissions associated

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Speaker 2: with the agricultural activities, including livestock husbandry. To estimate those missions,

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Speaker 2: the general approach is to apply a default emissions factor

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Speaker 2: per head of cuttle. That's quite common.

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Speaker 1: Okay, what about carbon capture and storage? So that's you know,

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Speaker 1: if we're going to hit some of our targets, I

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Speaker 1: don't see how we can avoid going big on carbon

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Speaker 1: capture and storage. Maybe we miss our targets. Maybe that's

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Speaker 1: the answer. How do you measure that?

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Speaker 2: Yeah, so the carbon culture and storage, Like, the classic

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Speaker 2: way this works is that you get a stream of

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Speaker 2: CO two, so carbon dioxide coming out the top of

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Speaker 2: a C core power station. You compress that gas and

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Speaker 2: you put it through a pipe, and you put it

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Speaker 2: into an underground reservoir where it stays in perpetuity. And

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Speaker 2: there's a range of men mechanisms that you would utilize

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Speaker 2: to quantify the mass flow rate of that gas. But

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Speaker 2: in really short terms, in simple terms, it's a little

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Speaker 2: bit like measuring the water coming through your tarp at home,

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Speaker 2: and the government has a meter out the front of

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Speaker 2: your house to understand how much water you're consuming. In

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Speaker 2: a similar way, you would measure how much CO two

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Speaker 2: is going through the pipe ultimately for sequestration in the

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Speaker 2: carbon culture and storage facility, and so.

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Speaker 1: You basically need that close to wherever the carbon is

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Speaker 1: being emitted.

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Speaker 2: Yeah, the closer the better, so you can do it

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Speaker 2: further away, but that adds to cost because you need

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Speaker 2: to put pipelines in place, and you need to expand

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Speaker 2: energy to move the carbon dioxide from where it originates

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Speaker 2: to where it's going to be sequestered.

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Speaker 1: Thomas, I reckon I've learned more in the last nine

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Speaker 1: or ten minutes than most interviews I do, because I

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Speaker 1: now kind of get the idea that you can measure it,

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Speaker 1: because I've always been suspect on that, but you really can.

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Speaker 1: Even if it's a rule of thumb, it certainly is

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Speaker 1: a pretty good guiding principle.

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Speaker 2: Absolutely, And the way I see it is that decarbonization

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Speaker 2: and heading towards NAT zero twenty fifties is a big

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Speaker 2: challenge for all industry, and it's really a journey. You know,

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Speaker 2: it's a journey that's going to go across decades, and

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Speaker 2: the start of that journey is measuring your emissions and

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Speaker 2: the next step in that journey is measuring them more accurately,

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Speaker 2: and then you seek to obey to mitigate those emissions.

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Speaker 1: Thomas, thank you for talking to fear and greed.

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Speaker 2: No worries great, Thank you for having me.

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Speaker 1: That was Thomas Hodson, director of a Thesis, a sustainability consultancy.

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Speaker 1: If you've got something you'd like to know, then send

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Speaker 1: through your question, just as listen Peter did, via the

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Speaker 1: website Fearangreed dot com dot au, or on LinkedIn, Instagram

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Speaker 1: or at Facebook. I'm Sean Almer and this is Fear

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Speaker 1: and Greed Q and day