PAF Fact Sheet #4 - Methane

At a Glance

  • Methane is a highly potent greenhouse gas with a global warming potential 25 times that of carbon dioxide. 
  • Methane reduction actions alone could lead to approximately 0.3°C in avoided global warming by 2050.
  • Methane reduction initiatives lead to global and local improvements in air quality and food security.
  • Methane reduction projects already exist, but many are on hold due to the low carbon credit prices.
  • The additional revenue required to support these methane projects is generally relatively small.

Why Methane?

Methane, a by-product of a range of industrial and agricultural processes – is a highly potent greenhouse gas with a global warming potential 25 times that of carbon dioxide.  Thus, the reduction of one ton of methane is equivalent to 25 tons of carbon dioxide. Therefore, for every ton of methane reduced, 25 carbon credits are issued by the Clean Development Mechanism
 
Methane reduction actions alone could lead to approximately 0.3°C in avoided global warming by 2050.  Implementation of technically feasible and cost-effective methane reduction measures would not only slow the rate of climate change over the next decades, but also contribute to improvements in local air quality and food security. Additionally, captured methane can be burned for cooking or electricity generation, contributing to increased access to clean energy.
 
Over the next 20 years methane emissions are expected to grow by 19 percent, accounting for nearly half of all warming over this period.  In its Global Non-CO2 GHG Emissions 1990-2030 report released in December 2012, the US EPA estimates that 7,196 million tons of CO2e of methane was emitted globally in 2010.  In the absence of concerned action, this figure is expected to grow to 7,888 million tons by 2020 and 8,586 million tons by 2030. 
 

The Pilot Auction Facility for Methane and Climate Change Mitigation (PAF)

The PAF will target specific sectors, starting with technologies such as methane-capture projects at landfill, animal waste, and wastewater sites. A large number of these projects exist in developing countries, and in many cases they are struggling financially.  The Methane Finance Study Group identified 1,200 such projects in 2013.  Yet the additional revenue required to unlock these investments, and/or allow them to continue their operation, is often small. It has been estimated by the same Study Group that, across all developing countries, methane-reducing opportunities could reduce as much as 8,200 million tons of carbon dioxide equivalent at less than $10 per ton in incremental cost financing.
 
In the future, the PAF is expected to consider other sectors and technologies. And outside of its immediate scope, the PAF approach has the potential to be replicated well beyond emission reductions, to target other types of results such as access to energy or health benefits.