The EPA Corporate GHG
Goal Evaluation Model
A Model for Benchmarking GHG Reductions and
Evaluating Corporate Climate Performance
User's Manual
U.S. Environmental Protection Agency
August 2014
-------
Table of Contents
TABLE OF CONTENTS
Page Number
1.0 GENERAL INFORMATION. 2
1.1 Organization of the Manual 2
1.2 Acronyms and Abbreviations 2
1.3 Greenhouse Gas Goals and EPA Climate Leaders 3
1.4 Information Needed to Use the Model 4
1.4.1 NAICS Codes 4
1.4.2 Base Year and Target Year 5
2.0 HOW TO ENTER DATA 8
2.1 Download Software 8
2.1.1 Analytica Player 8
2.1.2 Model 8
2.2 Welcome Screen 8
Figure 2-1 Goal Evaluation Model - Welcome Screen 9
2.3 Goal Analysis (For Users) 9
2.3.1 User Inputs: Company or Scenario Name, Revenue by NAICS Code, Base Year, and Target Year 9
Figure 2-2 Goal Evaluation Model - User Inputs Screen 10
Step 1 - Insert Name of Company or Scenario: 10
Figure 2-3 Goal Evaluation Model - First Data Input Screen 11
Figure 2-6 Goal Evaluation model - Calc User Input Screen 14
Figure 2-7 Goal Evaluation Model - NAICS Weight Verification Screen 15
Figure 2-8 Goal Evaluation Model - User Input Base Year and Target Year Screen 15
Figure 2-9 Goal Evaluation Model - Specify Base Year and Target Year Screen 16
Figure 2-10 Goal Evaluation Model - Verify Base Year and Target Years User Input Screen 17
Figure 2-11 Goal Evaluation Model - Verify Base Year and Target Years Result Screen 18
Figure 2-12 Goal Evaluation Model - Add Documentation or Scenario Identifier Table 18
Figure 2-13 Goal Evaluation Model - Check Default Emission Factors Table 19
2.4 Model Updates and Input Data (For Modelers) 21
Figure 2-14 Goal Evaluation Model - Modeling Diagram 21
2.4.1 Understanding the Diagram 21
3.0 ANALYZING MODEL RESUL TS 24
Figure 3-1 Goal Evaluation Model - Welcome Screen 24
3.1 Goal Evaluation Results 24
Figure 3-2 Goal Evaluation Model - Goal Evaluation Results 25
3.1.1 Intensity Results 25
Figure 3-3 Goal Evaluation Model - Composite Intensities by Fuel 25
Figure 3-4 Goal Evaluation Model - Composite Intensities, Base and Target Years 26
Figure 3-5 Goal Evaluation Model - Percent Change in Intensity, Base to Target 26
Figure 3-6 Goal Evaluation Model - Graphic View of Results 27
3.1.2 Output Results 27
Figure 3-7 Goal Evaluation Model - Output in Selected Years 27
Figure 3-8 Goal Evaluation Model - Output in Selected Years with Percentage Change 28
Figure 3-9 Goal Evaluation Model - Weighted output in selected years with change 28
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page i
-------
Table of Contents
3.2 Next Steps of Analysis 29
3.2.1 Reduction Goal Analysis 29
Figure 3-10 Model Results for Acme Paint 29
Figure 3-11 Acme Paint Base Year Intensity Calculation 30
Figure 3-12 Acme Paint Target Year Intensity Calculation 30
Figure 3-13 Acme Paint Target Year BAU Emissions Calculation 31
3.2.2 Forecasting past 2022 31
Figure 3-14 Acme Paint Calculation of Annual Percentage Change in Intensity and Revenue 32
3.2.2 Intensity-Based Goal Analysis 32
4.0 Other manuals and guides 37
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page ii
-------
1.0 General Information
1.0 GENERAL INFORMATION
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 1
-------
1.0 General Information
1.0 GENERAL INFORMATION
This document provides the user with important information on the U.S. Environmental
Protection Agency's (EPA) Corporate GHG Goal Evaluation Model (the model), the software
and data needed in order to use the model, and general guidance on how to analyze the
outputs from the model.
1.1 Organization of the Manual
¦ Section 1 - General Information: This section provides the user with program and
model overviews, details on the three main pieces of information needed to use the
model, points of contact, and a list of acronyms/abbreviations.
¦ Section 2 - How to Enter Data: This section provides a step-by-step walkthrough to
familiarize the user with how to enter the data into the model and the basic structure of
the model.
¦ Section 3 - Analyzing Model Results: This section helps the user understand the
summary data output produced by the model and provides suggestions on how to
further analyze the data provided by the model.
¦ Section 4 - Other Manuals and Guides: This section includes information on where to
find other related EPA program and model information.
1.2 Acronyms and Abbreviations
• Annual Energy Outlook (AEO)
• Calendar Year (CY)
• EPA Corporate GHG Goal Evaluation Model (the model)
• Greenhouse Gas (GHG)
• Manufacturers Energy Consumption Survey (MECS)
• North American Industry Classification System (NAICS)
• Non-Governmental Organization (NGO)
• Office of Management and Budget (OMB)
• Standard Classification (SIC)
• State Energy Data System (SEDS)
• U.S. Environmental Protection Agency (EPA)
• U.S. Energy Information Administration (EIA)
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 2
-------
1.0 General Information
1.3 Greenhouse Gas Goals and EPA Climate Leaders
From 2002 to 2011, Climate Leaders was an EPA industry-government partnership that
worked with companies to develop comprehensive climate change strategies. Partner
companies committed to reducing their impact on the global environment by completing a
corporate-wide inventory of their greenhouse gas (GHG) emissions, setting long-term
reduction goals, and annually reporting their progress to EPA.
EPA worked closely with Climate Leaders partners to help them in setting aggressive, long-
term, individualized GHG emissions reduction goals. These goals were individualized
because every company has a unique set of GHG emissions sources and reduction
opportunities. Despite these nuances, however, each company's goal had to be:
• Corporate-wide (including at least all U.S. operations);
• Based on the most recent Base Year for which data were available;
• Achieved over four to six years. Longer goal periods may have been acceptable based
on a partners' capital planning cycle;
• Expressed as an absolute GHG reduction;1 and
• Aggressive compared with the projected GHG performance for the partner's sector.
What EPA considered an aggressive goal varied for different sectors and for different
companies depending on several factors:
• Sector Issues: GHG intensity tends to decrease over time in most sectors as
equipment is replaced with newer, more efficient technology. This trend can be
rapid in sectors in which capital stock turns over quickly, but much slower in
traditional manufacturing sectors. The rate of intensity improvement can also be
affected by the growth rate of the sector.
• Company Issues: Partners within the same sector can have different GHG emissions
sources and a wide range of reduction opportunities. For example, partners in the
same sector may use different technologies with varying levels of energy
consumption, or have control over the type of energy combusted onsite instead of
consuming electricity from a utility with more limited control over energy sources.
In addition, some partners had undertaken considerable GHG reduction activities
prior to joining Climate Leaders. These actions were taken into consideration when
evaluating a partner's proposed goal.
To address this variability, Climate Leaders conducted an iterative goal evaluation and
1 Aggressive intensity (or normalized) goals were acceptable throughout most of the program's tenure. In early
2010, EPA modified its approach to goal setting to require absolute goals only.
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 3
-------
1.0 General Information
approval process based on a performance benchmarking methodology to ensure that all
Climate Leaders goals were aggressive enough to receive EPA approval and recognition. To
do this, EPA created a model that would help determine whether proposed reduction
targets met the designation of aggressive when compared with business-as-usual forecasts.
An additional purpose of the model was to enable EPA to evaluate goals submitted by a
diverse set of companies from a variety of sectors across the economy using a consistent
method. Once the decision was made to shutter the Climate Leaders program, EPA decided
to make a version of this model available for public use in order to help users evaluate
individual corporate GHG reduction goals on their own. Detailed information on how to use
this model is provided in Sections 2 and 3 of this manual.
1.4 Information Needed to Use the Model
EPA's Corporate GHG Goal Evaluation Model was built using Lumina Decision Systems'
Analytica software. In order to use the model, users must first download the Free Analvtica
Player from Lumina's website—which allows viewing and running of existing models—and
then download the actual model from EPA's website.
http://www.lumina.eom/products/analytica-editions/#users.
In order to successfully use the model, users will need to know two pieces of basic
information about the organization whose goal is being analyzed: its North American
Industry Classification System (NAICS) code(s) and the appropriate Base Year and Target
Year for the goal.
1.4.1 NAICS Codes
NAICS codes are the standard used by Federal statistical agencies in classifying business
establishments for the purpose of collecting analyzing and publishing statistical data
related to the U.S. Business Economy. NAICS was developed under the purview of the Office
of Management and Budget (OMB) to replace the Standard Industrial Classification (SIC)
system to allow for a high level of comparability in business statistics among North
American countries. The NAICS numbering system employs a six-digit code at the most
detailed industry level. The first two digits designate the largest business sector, the third
digit designates the subsector, the fourth designates the industry group, the fifth digit
designates particular industries, and the sixth digit designates a particular North American
country: United States, Canada, or Mexico.
In order to use the model, a user must know the organization's four-digit NAICS code. An
organization may be a company, a division of a company, or another corporate association.
Many companies have multiple NAICS codes indicating they are involved in several
subsectors of industry; in this case a user must know the organization's percentage of
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 4
-------
1.0 General Information
revenue by NAICS code, as illustrated in examples below.
Single NAICS Code Example
Acme Paint, NAICS Code 2211
22 = Utilities
2211 = Electric Power Generation Transmission and Distribution
Relevant NAICS Codes
Revenue (million U.S. dollars')
Percent
Revenue
2211
10.5
100%
Multiple NAICS Code Example
Diverse Company, NAICS Code 1133,115, 2122, 2211
1133 = Logging
115 = Support activities for agriculture and forestry
2122 = Metal ore mining
2211 = Electric power generation, transmission and distribution
Relevant NAICS Codes
Revenue (million U.S. dollars')
Percent
Revenue
1133
2.5
25%
115
2.5
25%
2122
2.5
25%
2211
2.5
25%
Total
10.0
100%
A user, who does not know the organization's NAICS code, can use the search feature at
www.census.gov/naics. In the "2007 NAICS Search" box on the left side of the page, enter a
keyword that describes the entity. A list of primary business activities containing that
keyword and the corresponding NAICS codes will appear. Choose the one that most closely
corresponds to the entity's primary business activity, or refine the search to obtain other
choices.
If the percentage of revenue by NAICS code is unknown, some places to look include:
• A Company's Form 10-K
• Annual Reports
• Financial Statements
• Entity's Financial Officer
1.4.2 Base Year and Target Year
The model will also require that the user select a Base Year and a Target Year. The Base Year
is the year that future reductions are measured against. The Target Year is the year in which
the entity expects to achieve the reduction goal. The time period from the Base Year to the
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 5
-------
1.0 General Information
Target Year is referred to as the organization's Goal Period. Please keep in mind that the
best Base Year for an organization is typically the most recent year for which data are
available and which represents standard business-as-usual GHG emissions levels. However,
other Base Years could be used, and the model allows for multiple scenarios to be analyzed.
For example, a company may want to measure the impacts of installing a solar array two
years prior against the "business-as-usual" scenario for the company's sector. Target Years
currently cannot extend beyond 2022 due to limitations on data contained in the model. If
using Target Years beyond 2022, please refer to section 3.3 Next Steps of Analysis.
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 6
-------
2.0 How to Enter Data
2.0 HOW TO ENTER DATA
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 7
-------
2.0 How to Enter Data
2.0 HOW TO ENTER DATA
This section provides step-by-step guidance on how to use the model. Screenshots are used
to help illustrate the instructions.
2.1 Download Software
2.1.1 Analytica Player
As described in Section 1.4, in order to use the model users must first download the Free
Analytica Player from Lumina's website which allows viewing and running of existing
models. If the user chooses to download the free player from Analytica's "Downloads" page,
be sure to download the Analytica 32-bit (AnaSetup.exe) version.
2.1.2 Model
Once the Analytica Player has been downloaded and installed, users should download the
model which is available on the Goal Setting page of EPA's Center for Corporate Climate
Leadership website and save it to a local folder. To open the model, first launch the
Analytica Player and then open the model from the folder to which it was saved.
2.2 Welcome Screen
Figure 2-1 illustrates the model's Welcome screen. From this screen, users can access three
separate areas of the model by double-clicking on each one:
• User Inputs - For users, this yellow object collects user-entered data required by the
model to calculate a company's performance benchmark.
• Goal Evaluation Results - For users, this green object contains the model's
performance benchmark results.
• Modeling - For modelers, this blue object contains the background data and
calculations the model utilizes to compute the performance benchmarks.
Each modeling screen will contain different elements that the user can interact with. Figure
2-1 contains labels and nodes. Square boxes are labels (such as the title and white boxes on
the Welcome screen) and do not have any functionality. Rounded rectangular boxes in a
modeling screen are nodes and are functional when double-clicked. A single click will
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 8
-------
2.0 How to Enter Data
highlight a node but not open it. Examples of nodes include the yellow User Inputs, blue
Modeling, and green Goal Evaluation Results nodes shown in the Welcome screen below.
Buttons, as shown in Figure 2-2, require only a single click on the mouse to activate.
Figure 2-1 Goal Evaluation Model - Welcome Screen
Diagram - CLJo
The EPA Corporate GHG Goal Evaluation Model:
A Model for Benchmarking GHG Reductions and Evaluating
Corporate Climate Performance
Goal Analysis
(For Users)
User Inputs:
Company or Scenario Name
Revenue by NAICS Code
Base Year & Target Year
Model Updates and Input Data
(For Modelers)
Modeling
Goal Evaluation Results
s jL|
2.3 Goal Analysis (For Users)
2.3.1 User Inputs: Company or Scenario Name, Revenue by NAICS Code, Base Year,
and Target Year
Double-clicking the yellow "User Inputs" button under the label "Goal Analysis (For Users)"
on the Welcome Page (displayed in Figure 2-1) brings the user to this diagram.
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 9
-------
2.0 How to Enter Data
Figure 2-2 Goal Evaluation Model - User Inputs Screen
Diagram - User Inputs: Company or Scenario Name Revenue by NAICS Code Base Year & Target Year
Insert Name of Company or Scenario
Enter Revenue by NAICS or Subsector
Specify Base Year and Target Year
Add Documentation or Scenario Identifier
Select Company or Scenario
Verify Correct Weighted Revenue by NAICS
Verify Base Year and Target Years
Default Emission Factors (kg / MMBTU) [Edit Table]
Step 1 - Insert Name of Company or Scenario:
In order to enter the company's name, first click the purple button labeled "List," as
indicated by the blue arrow in Figure 2-2.
r^ii s ii^i
&
Edit Table
[Edit Table]
[Edit Table]
Diverse Company
[' Calc | mid
[ Result | mid
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 10
-------
2.0 How to Enter Data
Figure 2-3 Goal Evaluation Model - First Data Input Screen
Object - Insert Name of Company or Scenario
E3 Index ^ lnsert_name_of_compa
H \^2m
Units:
Title: Insert Name of Company or Scenario
Description:
Definition:
Acme Paints
Acme Scenario 2
Diverse Company
Yet another
Even one more
Outputs: O Add_documentation_or Add Documentation or Scenario Identifiei
O Btyears BTyears
O Enter_revenue_by_na2 Enter Revenue by NAICS or Subsector
O Revselco Revenues for Selected Company
O Select_company_or_sc Select Company or Scenario
O Speci1y_base_year_an Specify Base Year and Target Year
LlI
Once on the next screen, click in the cell next to "Definition," as indicated in Figure 2-3 with
the blue arrow, and type in the company's name. Up to five company names or scenario
identifiers can be entered into the model at one time. The "Outputs" area lists all the objects
within the model that pull the information listed in the "Definition". The user does not need
to enter any data in this area or open any of the listed output objects. Once complete, the
user may close this screen by clicking the "X" in the upper right corner.
Step 2 - Enter Revenue by NAICS or Subsector:
Next, the user must enter the percentage of company revenues received in each sector or
subsector. See Section 1.4.1 for more information on NAICS codes and Subsector Revenue
Weighting. To enter weighted revenue by NAICS, click the "Edit Table" button in the main
User Inputs screen as shown in Figure 2-4.
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 11
-------
2.0 How to Enter Data
Figure 2-4 Goal Evaluation Model - NAICS User Input Screen
Q> Diagram - User Inputs: Company or Scenario Name Revenue by NAICS Code Base Year & Target Year
Insert Name of Company or Scenario
Enter Revenue by NAICS or Subsector
Specify Base Year and Target Year
Add Documentation or Scenario Identifier
Ed t Tab e
Edit Table
Select Company or Scenario
Verify Correct Weighted Revenue by NAICS
Verify Base Year and Target Years
Diverse Company
[ Calc r
[ Result | r
Default Emission Factors
(kg / MMBTU) [Edit Table|
1 ±1
~ r
As illustrated in Figure 2-5, "Diverse Company" receives revenues from four sectors of equal
weight. Users will use the company NAICS codes to determine the row in which percentage
of revenue belongs. Once complete, close this screen by clicking the "X" in the upper right
corner.
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 12
-------
2,0 How to Enter Data
Figure 2-5 Goal Evaluation Model - User Input of Revenue by NAICS or Subsector
Qj Edit Table - Enter Revenue by NAICS or Subsector
1'° IB IUE3J
o_
Edit Table of Enter Revenue by NAICS or Subsector
X
| Industry Sector ~ J
X7
Insert Name of Company or Scenario |[>
Acme Paints
Acme Scenario 2
Diverse Company.
Even one more
-
Crop production (BLS 1; NAICS 111)
0
0
y >
0
Animal production (BLS 2; NAICS 112)
0
0
\ / 0
0
Forestry (BLS 3; NAICS 1131, 1132)
0
0
o\
0
Logging (BLS 4; NAICS 1133)
0
100
25
]x>^ \ 0
—
Fishing, hunting and trapping (BLS 5; NAICS 114)
0
0
0
/ ^ 0
Support activities for agriculture and forestry (BLS 6; NAICS 115)
0
0
25
0
0
Oil and gas extraction (BLS 7; NAICS 211)
0
0
0
K>^\ 0
Coal mining (BLS 8; NAICS 2121)
0
o
0
/ 3
Metal ore mining (BLS 9; NAICS 2122)
0
0
25
Nonmetallic mineral mining and quarrying (BLS 10; NAICS 2123)
0
0
0
\ 0
Support activities for mining (BLS 11; NAICS 213)
0
0
0
0
Electric power generation, transmission and distribution (BLS 12; NAICS 2211)
0
0
25
X 0
0
Natural gas distribution (BLS 13; NAICS 2212)
0
0
o
0
0
Water, sewage and other systems (BLS 14; NAICS 2213)
0
0
0
0
0
Construction (BLS 15; NAICS 23)
0
0
0
0
o"
Animal food manufacturing (BLS 16; NAICS 3111)
0
0
0
0
0
Grain and oilseed milling (BLS 17; NAICS 3112)
0
0
0
0
0
Sugar and confectionery product manufacturing (BLS 18; NAICS 3113)
0
0
0
0
0'
Fruit and vegetable preserving and specialty food manufacturing (BLS 19; NAICS 3114)
0
0
0
0
0
Dairy product manufacturing (BLS 20; NAICS 3115)
0
0
0
0
0
Animal slaughtering and processing (BLS 21; NAICS 3116)
0
0
0
0
0
Seafood product preparation and packaging (BLS 22; NAICS 3117)
0
0
0
0
0"
Bakeries and tortilla manufacturing (BLS 23; NAICS 3118)
0
0
0
1)
0
Other food manufacturing (BLS 24; NAICS 3119)
0
0
0
0
0
Beverage manufacturing (BLS 25; NAICS 3121)
0
0
0
0
0
Tobacco manufacturing (BLS 26; NAICS 3122)
0
0
0
0
0
Textile mills and textile product mills (BLS 27; NAICS 313314)
0
0
0
0
0
r
izr
i i
Data can be entered in multiple ways using the screen shown in Figure 2-5. For example,
entering a value of 1 for each of the four NAICS codes would have the same effect as
entering the value of 25 into each of the four boxes. The model interprets these data in
comparison to the other entries for the same company or scenario, not out of a base value
of 100. So if you enter a value of 2 for one NAICS code and a value of 1 for another NAICS
code, the model will weigh the NAICS code with the 2 value twice as much as the NAICS
code with the 1 value, or 66.6666 percent vs. 33.3333 percent. The drop-down in the top-
left corner of this screen toggles the table structure, listing the BLS sectors either on the
vertical (as shown in Figure 2-5) or horizontal axis with the listing of company names or
scenarios as defined in Figure 2-1 of the previous step on the vertical axis.
Users can check to ensure they have entered their NAICS code weights correctly by clicking
the "Calc" button across from the label "Verily Correct Weighted Revenue by NAICS" as seen
in Figure 2-6.
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 13
-------
2.0 How to Enter Data
Figure 2-6 Goal Evaluation model - Calc User Input Screen
Diagram - User Inputs: Company or Scenario Name Revenue by NAICS Code Base Year & Target Year
r^ii a ii-b.1
Insert Name of Company or Scenario
Enter Revenue by NAICS or Subsector
Specify Base Year and Target Year
Add Documentation or Scenario Identifier
[ List 1
(i
3
[Edit Table]
(e
3
Select Company or Scenario
Verify Correct Weighted Revenue by NAICS
Verify Base Year and Target Years
Diverse Company
( Calc ]
[ Result ]
Default Emission Factors
(kg I MMBTU) [Edit Table]
~J7
The verification results will appear as displayed in Figure 2-7. If any changes need to be
made to these weighted revenues they must be completed in the "Enter Revenue by NAICS
or Subsector" tab (Figure 2-5); they cannot be changed in the screen shown in Figure 2-7.
Any changes made should be verified by repeating Step 2 to ensure the desired result was
achieved. If you entered multiple scenarios, you may verify each scenario's weighted
revenues by selecting the desired scenario from the drop-down listed beside the "Select
Company or Scenario" label. In all Results screens there is an option to show the total by
checking the box labeled "Totals" in the top of the screen. The default setting has the total
displayed; un-checking the box will cause the total row at the bottom to disappear (see
example in Figure 2-7).
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 14
-------
2,0 How to Enter Data
Figure 2-7 Goal Evaluation Model - NAICS Weight Verification Screen
Result - Verify Correct Weighted Revenue by NAICS
1 ~ || s IMs.il
michr
P.lid Value of Verify Correct Weighted Revenue by NAICS
nisi
| subsectors ~ | & Totals
ui
-10
d
Logging (BLS4; NAICS 1133)
25%
Support activities for agriculture and forestry (BLS 6; NAICS 115)
25%
Metal ore mining (BLS 9; NAICS 2122)
25%
Electric power generation, transmission and distribution (BLS 12; NAICS 2211)
25%
Totals
100%
•n
Step 3 - Specify Base Year and Target Year:
Next, the user must specify the Base Year and Target Year. See Section 1.4.2 for more
information on selecting a Base Year and Target Year. To enter these data, click the "Edit
Table" button across from the label "Specify Base Year and Target Year" in the main User
Inputs Screen as shown in Figure 2-8.
Figure 2-8 Goal Evaluation Model - User Input Base Year and Target Year Screen
(xf Diagram - User Inputs: Company or Scenario Name Revenue by NAICS Code Base Year & Target Year
F^1Fa~||^|
Insert Name of Company or Scenario
Enter Revenue by NAICS or Subsector
Specify Base Year and Target Year
Add Documentation or Scenario Identifier
1 List 1
[Edit Table)
[Edit Table]
[Edit Table)
Select Company or Scenario
Verify Correct Weighted Revenue by NAICS
Verify Base Year and Target Years
Diverse Company
Calc H r
[ Result | r
Default Emission Factors
(kg I MMBTU) [Edit Table]
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 15
-------
2.0 How to Enter Data
The screen shown in Figure 2-9 will appear and the user must enter their Base and Target
Years as shown. Occasionally the Analytica software will show you the object box as an
interim step between the screen in Figure 2-8 and the one shown in Figure 2-9. If you click
on the "edit table" option in this object box, it will take you to the edit table screen shown in
Figure 2-9, where you can enter your Base Year and Target Year.
Figure 2-9 Goal Evaluation Model - Specify Base Year and Target Year Screen
0? Edit Table - Specify Base Year and Target Year
I a || E l|—S3—|
Edit Table of Specify Base Year and Target Year
x
| Insert Name of Company or Scenario |
V
Base and Target
Base Year
Target Year
A
Acme Paints
2008
2018
Acme Scenario 2
2010
2018
yi
Diverse Company
2010
2020
Yet another
2005
2015
I N
Even one more
0
0
I
Once complete, you may close this screen by clicking the "X" in the upper right corner. The
"Result" button next to "Verify Base Year and Target Year" on the main User Inputs screen,
as shown in Figure 2-10, will lead you to the Verification screen for the Base and Target
Years. The Base Year and Target Year should match what was entered in the "Specify Base
Year and Target Year" tab described above. If you entered multiple scenarios, you may
verify each scenario's Base and Target Years by selecting the desired scenario from the
drop-down listed beside the "Select Company or Scenario" label. If any changes need to be
made to either the Base Year or Target Year they must be done in the "Specify Base Year and
Target Year" tab in the main "User Inputs" window. Once complete, you may close the
"Verify Base Year and Target Year" screen by clicking the "X" in the upper right corner.
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 16
-------
2.0 How to Enter Data
Figure 2-10 Goal Evaluation Model - Verify Base Year and Target Years User Input
Screen
Diagram - User Inputs: Company or Scenario Name Revenue by NAICS Code Base Year & Target Year
r^~l fallal
Insert Name of Company or Scenario
Enter Revenue by NAICS or Subsector
Specify Base Year and Target Year
Add Documentation or Scenario Identifier
I List 1
[Edit Table]
[Edit Table]
[Edit Table]
Select Company or Scenario
Verify Correct Weighted Revenue by NAICS
Verify Base Year and Target Years
Drverse Company
[ Calc [ mid
[ Result | mid
Default Emission Factors
(kg / MMBTU) [Edit Table]
a iL
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 17
-------
2,0 How to Enter Data
Figure 2-11 Goal Evaluation Model - Verify Base Year and Target Years Result Screen
Result - Verify Base Year and Target Years
mid*
Ike]
0 [-£&.
Mid Value of Verify Base Year and Target Years
f~ Totals
Verify Base Year and Target Years '
2010
2020
4
Step 4 - Add Documentation or Scenario Identifier (Optional):
Figure 2-12 Goal Evaluation Model - Add Documentation or Scenario Identifier Table
(JJ Edit Table - Add Documentation or Scenario Identifier
Edit Table of Add Documentation or Scenario Identifier
<3 ! K3-
Insert Name of Company or Scenario '
Acme Paints
Acme Scenario 2
Diverse Company
Yet another
Even one more
'Our basic goal"
Possible other time frame'
This is a diverse company indeed'
Type description here. |
Type description here !
±1
\A
This tab on the main "User Inputs" window is not required in order to run the model;
however, it does allow the user an opportunity to provide additional information, Because
the information entered in this table (shown in Figure 2-12) is not used in any other object
or result in the model, the user should use this table as a centralized area to store
documentation concerning the company's reduction goal. Examples include, but are not
limited to, specific information about the company such as revenue, number of employees,
total owned square footage, specific assumptions about any one scenario, and background
information on reduction goals. Please note the cells in this table do not have text
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 18
-------
2.0 How to Enter Data
wrapping; therefore, to enter a large amount of additional information, the user must hard-
enter to get to the next line by hitting Alt-Enter. Once complete, close this screen by clicking
the "X" in the upper right corner.
Important: If using Analytica's free player to view the model and a license has not been
purchased, any information entered in the "Add Documentation or Scenario Identifier" table
will be lost once the model is closed. If working with multiple goals, this page can still be
helpful during a single session to keep different scenarios or goals organized, however,
documentation of each goal or scenario should be kept elsewhere by the user for future
reference.
Step 5 - Check and modify default emissions factors:
Figure 2-13 Goal Evaluation Model - Check Default Emission Factors Table
Result - Default Emission Factors ~ || 0
mid*
EH
un
Mid Value of Default Emission Factors (kg 1 MMBTU)
BLS Fuels ~ l~ Totals
V
- [>
¦A.
Petroleum and coal products manufacturing (BLS 36; NAIC5 324)
74.064
' I
Natural gas distribution (BLS 13; NAICS 2212)
53.11
r i
Coal mining (BLSS; NAICS 2121)
95.42
i
Electric power generation, transmission and distribution (BLS 12; NAICS 2211)
220.07
S i
«i ' ^
The "Results" button next to "Default emission factors" on the "User Inputs" screen will lead
you to the Default Emissions Factor screen, shown in Figure 2-13, which is based on
previous inputs. Emission factors are in units of kg C02e per MMbtu.
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 19
-------
2.0 How to Enter Data
Emission Factors Used bv the Goal Evaluation Modeling System
Emission
Factor
Units
Source
URL
Petroleum and
coal products
manufacturing
74.064
Kg C02e
/MMbtu
Emission Factors for Greenhouse Gas
Inventories. Updated April 4, 2014.
Average of factors for Distillate Fuel Oil
#1 and #2, and Residual Fuel Oil #5 and
#6. Factor includes contributions from
C02, CH4 and N20.
http://www.epa.gov/clima
teleadership/inventory/gh
g-emissions.html
Natural gas
distribution
53.11
Kg C02e
/MMbtu
Emission Factors for Greenhouse Gas
Inventories. Updated April 4, 2014.
Factor includes contributions from C02,
CH4 and N20.
http://www.epa.gov/clima
teleadership/inventory/gh
g-emissions.html
Coal
95.42
Kg C02e
/MMbtu
Emission Factors for Greenhouse Gas
Inventories. Updated April 4, 2014.
Factor for "Mixed (Industrial Sector)."
Factor includes contributions from C02,
CH4 and N20.
http://www.epa.gov/clima
teleadership/inventory/gh
g-emissions.html
Electric power
generation,
transmission
and
distribution
220.07
Kg C02e
/MMbtu
Emission Factors for Greenhouse Gas
Inventories. Updated April 4, 2014.
Factor for US Average, Non-Baseload
Emissions Factor. Factor includes
contributions from C02, CH4 and N20.
http://www.epa.gov/clima
teleadership/inventory/gh
g-emissions.html
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 20
-------
2,0 How to Enter Data
2.4 Model Updates and Input Data (For Modelers)
The "Modeling" button under "Model Updates and Input Data (For Modelers)" on the
Welcome screen brings the user to the diagram shown in Figure 2-14.
Figure 2-14 Goal Evaluation Model - Modeling Diagram
OldModel
Data
Final
Result
L Modeling
Energy
Prices
\
C02
Emissions
J
f
BLS
Data
2.4.1 Understanding the Diagram
To better understand the five main modules of the model, see the descriptions of each
below:
• BLS Economic Data: The expenditure data for each sector come from the Bureau of
Labor Statistics (BLS), and are located in this module. These BLS data include
historical and projected input/output for 202 sectors and show the flow of
commodities from production through purchases by final users.
• Energy Prices: The price data are available in three datasets from the U.S. Energy
Information Administration (EIA). The datasets are the Annual Energy Outlook
(AEO), The State Energy Data System (SEDS), and the Manufacturers Energy
Consumption Survey (MECS). These three datasets are combined in this module to
create a data series containing historical and forecasted energy price data for a
vari ety of sectors.
• Old Model Data: This module compares the resul ts from this model to those of a
previous model. A summary text field describes differences between the models that
may cause users to receive different results.
• COz Emissions: This module translates the fuel consumption for each sector into
carbon dioxide emissions normalized by revenue output.
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 21
-------
2.0 How to Enter Data
• Final Result Modeling: This module pulls information from the user-inputs and the
modules described above to calculate the company's benchmarks. These results are
shown as outputs in the model's "Goal Evaluation Results."
For more information on the data series the model utilizes and how the model calculates
the performance benchmarks, please refer to the document Overview of the EPA Corporate
GHG Goal Evaluation Model located on the Goal Setting page of EPA's Center for Corporate
Climate Leadership website.
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 22
-------
3.0 Analyzing Model Results
3.0 ANALYZING MODEL RESULTS
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 23
-------
3.0 Analyzing Model Results
3.0 ANALYZING MODEL RESULTS
This section provides the user information on how to best analyze the results calculated by
the model based on the information entered. From the Welcome screen, double-click on the
green "Goal Evaluation Results" object, which will take you to the Results screen, as shown
in Figure 3-1.
Figure 3-1 Goal Evaluation Model - Welcome Screen
Diagram - CLJo
I ° II 13 ll^l
The EPA Corporate GHG Goal Evaluation Model:
A Model for Benchmarking GHG Reductions and Evaluating
Corporate Climate Performance
Goal Analysis
(For Users)
User Inputs:
Company or Scenario Name
Revenue by NA1CS Code
Base Year & Target Year
Model Updates and Input Data
(For Modelers)
Modeling
Goal Evaluation Results
s ±L
3.1 Goal Evaluation Results
The screen shown in Figure 3-2 illustrates the goal evaluation results available to the user.
To obtain each result, click the "Calc" button next to each result identifier. Please note that
once the user selects a "Calc" tab, the name of the tab will change from "Calc" to "Result."
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 24
-------
3.0 Analyzing Model Results
Figure 3-2 Goal Evaluation Model - Goal Evaluation Results
- Goal Evaluation Results
Select Company or Scenario | Diverse Company^
Intensity Results
Composite Intensities by Fuel
Composite Intensities, Base and Target Years
Percent Change in Intensity, Base to Target
Output Results
Output in Selected Years
Output in Selected Years with % Change
Weighted Output in Selected Years with Change
(Kg C02 / CY2012 output-$) [ Calc ] "*>
(Kg C02 / CY2012 output-$) [ Calc ] "*>
[ Calc ]md
(Million CY2012 $) [ Calc |
(Million CY2012 $) [ Calc ] m"
(Million CY2012 $) [ Calc |
3.1.1 Intensity Results
Figure 3-3 Goal Evaluation Model - Composite Intensities by Fuel
Result - Composite Intensities by Fuel | m> || (D |*3"|
mid*
Mid Value of Composite Intensities by Fuel (Kg C02j'CY2012 output-})
IHI
Fuel 'w I7 Totals
U1
^7
Verify Base Year and Target Years [> I Totals
2010 2020
Petroleum
0.09991 0.06055
Natural Gas
0.1202 0.09244
Coal
0.7992 0.157
/ 1
Electricity
0.27SS 0.2114
N 1
Totals
1.29S 0.5214
111
±n
Figure 3-3 shows a calculation of the fuel-specific annual intensities for the composite
sector. It reflects the estimated fuel-specific emission intensity (kg CO2 per $ output in
2012 U.S. dollars) for a composite NAICS sector that is a revenue-weighted average of the
company's sub-sectors:
Annual Composite Intensity [ACI) = I Subsector Annual Intensity x Subsector
Revenue Weighting
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 25
-------
3.0 Analyzing Model Results
Figure 3-4 Goal Evaluation Model - Composite Intensities, Base and Target Years
Result - Composite Intensities, Base and Target Years | 1=1 | [=1 |^3—|
mid*
Mid Value of Composite Intensities, Base and Target Years (Kg C02 1 CY2012 output-J)
ED
Ul
Verify Base Year and Target Years * I- Totals
2010
1.29S
\ 1
2020
0.5214
N
Li
Figure 3-4 shows a calculation of the annual intensities for the composite sector for the Base
Year and Target Year. It reflects the estimated Base Year and Target Year emission intensity
(kg CO2 per $ output in 2012 U.S. dollars).
Figure 3-5 Goal Evaluation Model - Percent Change in Intensity, Base to Target
Intensity Results
Composite Intensities by Fuel
(Kg C02 / CY2012 output-S) (_
Calc mi<|
Composite Intensities, Base and Target Years
(Kg C02 / CY2012 output-$) Q
CalC mid
JL
Percent Change in Intensity, Base to Target
C
Calc mi
-------
3.0 Analyzing Model Results
Figure 3-6 Goal Evaluation Model - Graphic View of Results
Result - Composite Intensities by Fuel
Mid Value of Composite Intensities by Fuel (Kg C02 / CY2012 output-S)
Horizontal Axis:! Verify Base Year and Target Years I Key:
Fuel
£- o
0> CM
— o
2013 2014 2015 2016 2017
Verify Base Year and Target Years
Fuel
— Petroleum — Natural Gas — Coal Electricity
2019
2020
3.1.2 Output Results
Figure 3-7 Goal Evaluation Model - Output in Selected Years
Result - Output in Selected Years
Mid Value of Output in Selected Years (Million CY2012 $)
M | Subsectors ~ | P" Totals
a MM
Ul
Verify Base Year and Target Years ~][) f- Totals
"d
2010
2020
Logging (BLS 4; NAICS 1133)
3739
3730
Support activities for agriculture and forestry (BLS 6; NAICS 115)
1568
1926
Metal ore mining (BLS 9; NAICS 2122)
34-46
2977
Electric power generation, transmission and distribution (BLS 12; NAICS 2211)
31.37K
21.03K
Totals
40.12K
29.66K
\A
In the calculation result shown in Figure 3-7, estimates of total industry output—in
millions of calendar year (CY) 2012 U.S. dollars—depict the industry-wide growth or
contraction between the Base Year and the Target Year. This metric is used to estimate
market growth and expected company expansion or change in revenue, over the goal
period.
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 27
-------
3.0 Analyzing Model Results
Figure 3-8 Goal Evaluation Model - Output in Selected Years with Percentage Change
of Result - Output in Selected Years with % Change
mid*
Mid Value of Output in Selected Years with % Change (Million CY2012 $)
lis]
| Subsectors ~ I & Totals
UA
V
Result
~ ID r
Totals
2010
2020
Total change
Change per year
Logging (BLS 4; NAICS 1133)
3739
3730
-2.333m
-233.3u
Support activities for agriculture and forestry (BLS 6; NAICS 115)
1568
1926
0.2283
0.02283
Metal ore mining (BLS 9; NAICS 2122)
3446
2977
-0.1358
-0.01358
Electric power generation, transmission and distribution (BLS 12; NAICS 2211)
31.37K
21.03K
-0.3297
-0.03297
Totals
40.12K
29.66K
-0.2396
-0.02396
f"~ Totals
2010
2020
Total change
Change per year
Logging (BLS 4; NAICS 1133)
934.7
932.5
-2.333m
-233.3u
Support activities for agriculture and forestry (BLS 6; NAICS 115)
392
481.5
0.2283
0.02283
Metal ore mining (BLS 9; NAICS 2122)
861.4
744.4
-0.1358
-0.01358
A
Electric power generation, transmission and distribution (BLS 12; NAICS 2211)
7842
5257
-0.3297
-0.03297
/
Output-weighted Sum
10.03K
7415
-0.2607
-0.02607
<
<1 117
For companies that are involved in several subsectors of industry, the result shown in
Figure 3-9 provides output that is weighted based on the company's percentage of revenue
by sector. Therefore, the forecasted growth or decline of any sector will be captured
proportionally to its contribution to the company's revenue. The last column of the results
table contains the sum of the weighted output across all sectors for the Base Year, Target
Year, percent of total change from Base Year to Target Year and the change per year (shown
with a blue arrow in Figure 3-9).
These values are important indicators of how and where goal targets should be achieved. If
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 28
-------
3.0 Analyzing Model Results
a company's reduction goal is based primarily in a business sector that is expected to
decline and the reductions are coming from reduced production rather than from actual
process improvements, then the goal would not be considered aggressive or sufficient by
climate leadership standards.
These output values are also useful in converting between absolute reduction goals,
benchmarks, and intensity- based goals, allowing companies with different types of goals to
use the model results. Companies whose intensity-based goals are related to a metric other
than revenue (which was recommended by EPA's Climate Leaders program) will need to
complete additional analysis to convert production- employee- or workspace-based metrics
into revenue so that a valid comparison can be made. Examples of these types of analyses
are provided in Section 3.2 Next Steps of Analysis.
3.2 Next Steps of Analysis
The resulting intensity and economic output data provided by the model can be used in
several ways to help a company establish or evaluate a GHG reduction goal.
Important Note: Process emissions are not addressed fully by the model. For companies
with significant GHG emissions from industrial processes it is very important to take these
into consideration when using the model to establish or evaluate a company's GHG target.
3.2.1 Reduction Goal Analysis
There are different levels of goal analysis that can be performed using the model's output. If
you have not yet established a GHG reduction goal, the resulting percent change in CO2
intensity may be used as a starting benchmark. As mentioned in Section 3.1, the model
provides the percent change in intensity and revenue in the "Goal Evaluation Results." For
example, the model returned the results shown in Figure 3-10 for "Acme Paint", which is
defined as having output in one BLS sector: "Paint, coating, and adhesive manufacturing",
which is BLS sector 41, and corresponds to NAICS 3255.
Figure 3-10 Model Results for Acme Paint
Acme Paint Results
2010
2020
% change
(to tall
Intensity (kgCOz/ $US~)
0.3872
0.3425
-11.53%
Output (million $US] for sector
25,750
30,660
19.08%
The results above show that the "typical" company within Acme Paint's sector will see a
11.53 percent decrease in CO2 intensity between 2010 and 2020. If Acme Paint would like
to establish an aggressive GHG reduction goal compared to its competitors, it should work
towards reducing their CO2 intensity by a percentage significantly greater than 11.5 percent
over the same time period.
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 29
-------
3.0 Analyzing Model Results
To take this a step further, the model results can be used in combination with a company's
GHG inventory and revenue for the Base Year to obtain the company's revenue, intensity
and CO2 emissions for the Target Year. Because the model's output is based on a BAU
forecast for the sector, the analysis shown in Figure 3-11 can be considered a BAU scenario
for the company. For example, Acme Paint would like to estimate their expected emissions,
assuming the sector's BAU growth rate. To do this, Acme Paint calculates its Base Year
intensity by dividing its Base Year GHG emissions by its revenue for the same year, as
shown in Figure 3-11.
Figure 3-11 Acme Paint Base Year Intensity Calculation
Acme Paint Data
2010
GHG emissions (kg CO2]
4,100,000
Revenue[$US]
10,000,000
CO2 intensity (metric tons CC>2/miUion $US] = Revenue (,$US) ^
CO2 intensity (kg CO2/ $US)
0.41
As described above, the model's results estimate that CO2 intensity within Acme Paint's
sector will decrease by 11.5 percent. In other words, if Acme Paint does not undertake any
special GHG related reduction measures, Acme Paint can still expect its CO2 intensity to
decrease by 11.5 percent. Anticipated trends that affect a sector's expected emissions over
time could include: shifting fuel consumption to more natural gas in the place of coal;
equipment upgrades or additions to meet growing business demand; process changes or
technology improvements in the sector that lead to efficiency improvements; and changes
in the fuel mix of electricity consumed off the grid. By applying the sector's forecasted
intensity growth or decline to a company's baseline intensity, the company can obtain a
BAU intensity that is specific to its own operations.
Figure 3-12 Acme Paint Target Year Intensity Calculation
Acme Paint Target Year Intensity- BAU
C02 intensity (kg C02/ $US)
2010
0.41
Base Year Intensity x f 1.0 -11.5%) = BAU Target Year Intensity
2020
0.363
The results shown in Figure 3-12 estimate Acme Paint's BAU intensity as 0.41 kg C02 per
US dollar. The same calculation can be applied to calculate Acme Paint's BAU revenue
growth over the goal period. Using this concept, Acme Paint's revenue in 2020 is estimated
to increase 19 percent to 11.9 million dollars under this BAU scenario. By multiplying these
two results, Acme Paint can estimate its BAU CO2 emissions in the Target Year. As shown in
Figure 3-13, Acme Paint can expect an increase of 5.3 percent in their absolute CO2
emissions between 2010 and 2020 if the company follows its sector's forecasted trends.
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 30
-------
3.0 Analyzing Model Results
Figure 3-13 Acme Paint Target Year BAU Emissions Calculation
Acme Paint Target Year C02 emissions (kg}
2020
CO2 intensity (kgCC^/ $US~)
0.363
Revenue ($US~)
11,900,000
CO2 emissions (metric tons) = CO2 intensity (kg CO2/$US) x Revenue ($US)
CO2 emissions (kg]
4,317,915
C02 emissions (kg}
2010
4,100,000
2020
4,317,915
% Difference
5.3%
Many companies forecast revenue for internal purposes or to include in annual reports or
other publications. These data can be used instead of the model's revenue output to obtain
a more accurate BAU forecast for your company
From here, Acme Paint can evaluate its forecasted BAU CO2 emissions and intensity along
with other company information, to establish an absolute or normalized CO2 reduction goal
that is aggressive compared to its sector, yet attainable.
Absolute emission reduction goals are preferable to intensity-based reduction goals, as they
target actual emission reductions regardless of other Acme Paint activities. In the case of an
intensity-based emission reduction goal, a company may increase its absolute GHG
emissions while achieving a reduction in its intensity measurement. For example, a
company may realize increased revenues in one year due to inflation or other price
changes, causing its measure of emission intensity to decline (measured in emissions per
unit revenue, the number will become smaller as the denominator, revenue, increases)
regardless of whether it reduced GHG emissions.
3.2.2 Forecasting past 2022
Due to constraints in background data, the model can only forecast performance
benchmark results out to 2022.2 However, it is possible to use the model's outputs in 2022
to calculate results for years 2023 onward by making certain assumptions. The most typical
of these is assuming a constant growth rate for both CO2 intensity and revenue. For
example, Acme Paint may want to evaluate a potential reduction goal from 2010 to 2025
instead of from 2010 to 2020. To do so, Acme Paint must calculate the annual percent
change in CO2 intensity and revenue based on the model output by dividing the total
2 As certain data inputs to the model are revised and made publically available, EPA will continue to update the goal
model so that forecasts can go beyond 2022.
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 31
-------
3.0 Analyzing Model Results
percent change by the number of years between the Base Year (2010) and 2020 (10 years,
see calculation in Figure 3-14):
Figure 3-14 Acme Paint Calculation of Annual Percentage Change in Intensity and
Revenue
% change (annual) = [% chan
ge total] -r 10
Acme Paint Results
% change (total]
% change (annual]
2010
2020
Intensity (kg CO2/ $US]
0.41
0.363
-11.53%
-1.15%
Output (million $US] for sector
25,750
30,660
19.08%
1.91%
By assuming constant growth between 2020 and 2025 for both factors, Acme Paint can
apply these annual percent changes to the 2020 data and obtain results for 2025, as shown
in Figure 3-15.
Figure 3-15 Acme Paint Calculation of Intensity and Output in Year 2025
2025 Result = 2020 Result x [1 + (5x % change, annual)]
Acme Paint Results
2010
2025
% change (total]
Intensity (kg CO2/ $US]
0.41
0.335
-18.3%
Output (million $US] for sector
25,750
33,588
30.4%
Once these factors are calculated for your Target Year, you may proceed with your
company's goal analysis as described in Section 3.2.1.
Additionally, you may use assumptions regarding factors such as your company's expected
production efficiency (emissions per unit production), expected capital expansion
(emissions per square foot), or expected headcount (emissions per employee), among
others, to estimate GHG emissions over the course of the goal period. These estimates may
be held constant over the goal period, or they may be shifted to reflect expected changes
such as efficiency of machinery, number and size of buildings owned by the company, or
number of people employed by the company. An assumption of constant change is valid
only in the near term; medium or long term estimates not covered by the model should take
other factors into account.
3.2.2 Intensity-Based Goal Analysis
While the model provides performance benchmark results based on output (revenue),
several other normalizing factors may be more useful for your company. These factors
include per unit of production, number of employees, or square foot of owned or
operational space. There are advantages and disadvantages of using normalized goals.
Advantages include:
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 32
-------
3.0 Analyzing Model Results
• Ability to reflect GHG performance improvements independent of organic growth or
decline;
• Ability to target Base Year calculations for structural changes are usually not
required; and
• Possibility of increasing the comparability of GHG performance among companies.
Disadvantages of establishing a normalized goal include:
• No guarantee that GHG emissions to the atmosphere will be reduced—absolute
emissions may rise even if intensity declines and output increases;
• Companies with diverse operations may find it difficult to define a single common
business metric; and
• If a monetary variable is used for the business metric, such as dollar of revenue or
sales, it must be recalculated for changes in product prices and product mix, as well
as inflation, adding complexity to the tracking process.
It is possible to analyze a normalized CO2 reduction goal using the model output, but
additional data are required. If adopting a normalized CO2 reduction goal, you should have
an understanding of how that normalized metric is expected to change over the goal period.
Projections of the normalizing factor can be used to estimate its relationship with your
company's or the model's revenue projections. By understanding how these two factors
interact over the goal period for your company, the mass of CO2 per normalizing factor can
be converted to its equivalent mass of CO2 per dollar output.
For example, let's now assume that Acme Paint decided to implement a short term goal of
reducing CO2 emissions by 20 percent per ton of production between 2010 and 2016. As
described above, the model estimates that Acme Paint's BAU change in emissions intensity
(kg CO2/ U.S. dollars) to be a reduction of 11.53 percent from 2010 to 2020; the estimated
reduction in intensity from the model for the period 2010 to 2016 turns out to be just 2.8
percent. To compare this BAU metric to its proposed goal, Acme Paint needs to obtain
projected production data over the entire goal period (ideal) or part of the goal period. The
result from the following calculations will tell you "If Acme Paint reduces CO2 per ton of
production by 20 percent, the equivalent of X percent in metric tons CO2 per million dollar
of revenue will be achieved." This CO2 intensity equivalent factor can then be compared to
the BAU intensity factor estimated by the model. If projected data are available for only part
of the goal period, the average annual percent change over the available years can be used
to forecast through the end of the goal period.
Step 1
Calculate annual revenue for the goal period based on the growth rate provided by the
model or company results (shown in Figure 3-16).
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 33
-------
3.0 Analyzing Model Results
Figure 3-16 Calculation of Annual Revenue for Goal Period
2010
2011
2012
2013
2014
2015
2016
% Change
Revenue (million
$US)
3,200
3254.0
3308.8
3364.6
3421.3
3479.0
3523.7
10.12%
Note: values colored in red are assumed to be provided by the company
Step 2
Forecast production data for any missing years by calculating the average annual change
with available data. For example, Acme Paint had a projection of production data for years
2010 through 2013. The average annual percent change was applied to years 2014 through
2016 (shown in Figure 3-17).
Figure 3-17 Forecast of Production Data for Goal Period
2010
2011
2012
2013
2014
2015
2016
% Change
Production (ton)
2,800
2,890
2,930
2,990
3,057.6
3,126.8
3,197.5
14.2%
Step 3
Calculate the annual revenue-production factor (revenue per ton of product) by dividing
revenue by production for each year in the goal period (shown in Figure 3-18), results
shown in the gray row in Figure 3-18.
Figure 3-18 Calculation of Annual Revenue-Production Factor
2010
2011
2012
2013
2014
2015
2016
% Change
Revenue (million
$US)
3,200
3254.0
3308.8
3364.6
3421.3
3479.0
3523.7
10.12%
Production (ton)
2,800
2,890
2,930
2,990
3,057.6
3,126.8
3,197.5
14.2%
Revenue per ton
production
1.14
1.13
1.13
1.13
1.12
1.11
1.10
-3.6%
Step 4
Calculate the CO2 production factor (kg C02/ton production) for the Base Year by dividing
the Base Year CO2 emissions (4.1 million kg C02, as cited in Figure 3-11) by the production
of that year (shown as 2800 tons in Figure 3-17). The result comes to 1464 kg C02 per ton
of product in this example.
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 34
-------
3.0 Analyzing Model Results
Calculate kg C02/ton production in the Target Year (2016) by applying the company's
reduction goal (20 percent) to the Base Year value (shown in Figure 3-19). Target year
(2016) kg CO2 per ton production = (100% - 20%) x 1464 kg CO2 = 1171 kg CO2 per ton
production.
Figure 3-19 Calculation of CO2 Emissions per Ton of Production
2010
2011
2012
2013
2014
2015
2016
% Change
Revenue (million
$US)
3,200
3254.0
3308.8
3364.6
3421.3
3479.0
3523.7
10.12%
Production (ton)
2,800
2,890
2,930
2,990
3,057.6
3,126.8
3,197.5
14.2%
Revenue per ton
production
1.14
1.13
1.13
1.13
1.12
1.11
1.10
-3.6%
BAU CO2 Emissions
(kg)
4,100,000
3,745,642
-8.6%
kg COz/ton
production
1464
1171
-20.0%
Step 5
Calculate the equivalent intensity factor for the goal's Target and Base Years by dividing the
CO2 production factor (kg CO2 per ton production, calculated in Step 4) by the revenue-
production ratio (calculated in Step 3). The result will be in kg CO2 per million dollars of
revenue. The result is 1281 in the Base Year and 1063 in the Target Year for this example, as
shown in the gray row in Figure 3-20.
The percent change in these two values (negative 17.0 percent, as seen in Figure 3-20) can
be used to show equivalent revenue based goals. It could be said for this example that a 20
percent reduction in CO2 per ton of production is equivalent to a 17 percent reduction in
CO2 per million dollars of revenue. This can then be compared to the -2.8 percent BAU
change in CO2 per million dollars of output. This type of analysis allows for different
intensity metrics to be compared.
Figure 3-20 Calculation of Base Year and Target Year Intensity Values
2010
2011
2012
2013
2014
2015
2016
% Change
Revenue (million
US$)
3,200
3254.0
3308.8
3364.6
3421.3
3479.0
3523.7
10.12%
Production (ton)
2,800
2,890
2,930
2,990
3,057.6
3,126.8
3,197.5
14.2%
Revenue per ton
production
1.14285
1.13
1.13
1.13
1.12
1.11
1.102017
-3.6%
BAU CO2 Emissions
(kg)
4,100,000
3,745,642
-8.6%
kgCOz/ton
production
1464
1171
-20.0%
kgC02/ million
US$ Revenue
1281
1063
-17.0%
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 35
-------
4.0 Other Manuals and Guides
4.0 OTHER MANUALS AND GUIDES
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 36
-------
4.0 Other Manuals and Guides
4.0 OTHER MANUALS AND GUIDES
The following are links to documents intended to compliment this document:
• Overview of the EPA Corporate GHG Goal Evaluation Model: A Model for Benchmarking
GHG Reductions and Evaluating Corporate Climate Performance. U.S. EPA, August 2014
• The EPA Corporate GHG Goal Evaluation Model: Update Process Manual. U.S. EPA, August
2014
• Evaluating Corporate Climate Performance: A Model for Benchmarking GHG Reductions.
Bella Tonkonogy, Jim Sullivan, and Gregory A. Norris, American Council for an Energy
Efficient Economy Summer Study Paper, Summer 2007
U.S. EPA Corporate GHG Goal Evaluation Model - User's Manual
Page 37
------- |