It is good practice for each country to identify its national key categories in a systematic and objective manner, by performing a quantitative analysis of the relationships between the level and the trend of each category's emissions and removals and total national emissions and removals.

Two Approaches for performing the key category analysis have been developed. Both Approaches identify key categories in terms of their contribution to the absolute level of national emissions and removals and to the trend of emissions and removals.

In Approach 1, key categories are identified using a pre-determined cumulative emissions threshold. Key categories are those that, when summed together in descending order of magnitude, add up to 95 percent of the total level4. The method is described in more detail in Section 4.3.1, Approach 1 to identify key categories.

4 The pre-determined threshold has been determined based on an evaluation of several inventories, and is aimed at establishing a general level where 90% of inventory uncertainty will be covered by key categories.

Approach 2 to identify key categories can be used by inventory compilers, if category uncertainties or parameter uncertainties are available. Under Approach 2, categories are sorted according to their contribution to uncertainty. This approach is described in more detail in Section 4.3.2, Approach 2 to identify key categories. Results of Approach 2 are additional to Approach 1. If both the Approach 1 and the Approach 2 assessment have been performed, it is good practice to report the results of the Approach 2 analysis in addition to the results of Approach 1. Results of both Approach 1 and 2 should be used when setting priorities to inventory preparation. Figure 4.2, Decision Tree to identify key categories, illustrates how inventory compilers can determine which Approach to be used for the identification of key categories.

Figure 4.2 Decision Tree to identify key categories

Figure 4.2 Decision Tree to identify key categories

Any country that has developed a greenhouse gas inventory can perform Approach 1 Level Assessment to identify the categories whose level has a significant effect on total national emissions and removals. Those inventory compilers that have developed inventories for more than one year will also be able to perform Approach 1 Trend Assessment and identify categories that are key because of their contribution to the total trend of national emissions and removals.

Approach 1 to identify key categories assesses the influence of various categories of sources and sinks on the level, and possibly the trend, of the national greenhouse gas inventory. When the inventory estimates are available for several years, it is good practice to assess the contribution of each category to both the level and trend of the national inventory. If only a single year's inventory is available, a level assessment should be performed.

Approach 1 can readily be accomplished using a spreadsheet analysis. Tables 4.2 and 4.3 in the following sections illustrate the format of the analysis. Separate spreadsheets are suggested for the level and trend assessments because it is necessary to sort the results of the analysis according to two different columns. It is more difficult to track the process if the analyses are combined in the same table. In both tables, columns A through D are inputs of the national inventory data. Section 4.5 illustrates the application of the Approach 1 to the Finnish inventory.

LEVEL ASSESSMENT

The contribution of each source or sink category to the total national inventory level is calculated according to Equation 4.1:

Equation 4.1 Level Assessment (Approach 1)

Key category level assessment = I source or sink category estimate I / total contribution

Where:

Lx,t

y y.t level assessment for source or sink x in latest inventory year (year t).

= absolute value of emission or removal estimate of source or sink category x in year t

= total contribution, which is the sum of the absolute values of emissions and removals in year t calculated using the aggregation level chosen by the country for key category analysis. Because both emissions and removals are entered with positive sign5, the total contribution/level can be larger than a country's total emissions less removals.6

Key categories according to Equation 4.1 are those that, when summed together in descending order of magnitude, add up to 95 percent of the sum of all Lxt.

Table 4.2 Spreadsheet for the Approach 1 analysis - Level Assessment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||

A |
B |
C |
D |
E |
F |
Category |
Greenhouse Gas |
Latest Year Estimate Ex,t [in CO2-equivalent units] |
Absolute Value of Latest Year Estimate Lx,t |
Cumulative Total of Column F | ||||||||||||||||||||||||||||||||||||||||||||||||||

Total |
y |
1 |
Where: Column A: code of IPCC categories (See Table 8.2 in Chapter 8, Reporting Guidance and Tables.) Column B : description of IPCC categories (See Table 8.2 in Chapter 8.) Column C : greenhouse gas from the category 5 Removals are entered as absolute values to avoid an oscillating cumulative value Lx,t as could be the case if removals were entered with negative signs, and thus to facilitate straightforward interpretation of the quantitative analysis. This equation can be used in any situation, regardless of whether the national greenhouse gas inventory is a net source (as is most common) or a net sink. Column D : value of emission or removal estimate of category x in latest inventory year (year t) in CO2-equivalent units Column E : absolute value of emission or removal estimate of category x in year t Column F : level assessment following Equation 4.1 Column G: cumulative total of Column F Inputs to Columns A-D will be available from the inventory. The total of Column D presents the net emissions and removals. In Column E, absolute values are taken from each value in Column D. The sum of all entries in Column E is entered in the total line of Column E (note that this total may not be the same as the total net emissions and removals). In Column F, the level assessment is computed according to Equation 4.1. Once the entries in Column F are computed, the categories in the table should be sorted in descending order of magnitude according to Column F. After this step, the cumulative total summed in Column F can be calculated into Column G. Key categories are those that, when summed together in descending order of magnitude, add up to 95 percent of the total in Column G. Where the method is applied correctly, the sum of entries in Column F must be 1. The rationale for the choice of the 95 percent threshold for the Approach 1 builds on Rypdal and Flugsrud (2001) and is also presented in GPG2000, Section 7.2.1.1 in Chapter 7. It is also good practice to examine categories identified between threshold of 95 percent and 97 percent carefully with respect to the qualitative criteria (see Section 4.3.3). The level assessment should be performed for the base year of the inventory and for the latest inventory year (year t). If estimates for the base year have changed or been recalculated, the base year analysis should be updated. Key category analysis can also be updated for other recalculated years. In many cases, however, it is sufficient to derive conclusions regarding methodological choice, resource prioritisation or QA/QC procedures without an updated key category analysis for the entire inventory time series. Any category that meets the threshold for the base year or the most recent year should be identified as key. However, the interpretation of the results of the key category analysis should take longer time series than the most recent year into account if key category analyses are available. Because some categories having emissions/removals that fluctuate from year to year may be identified as key categories in one year but not in the next year. Therefore, for categories between thresholds of 95 and 97 percent it is suggested to compare the most recent key category analysis with the assessments for three or more previous years. If a category has been key for all or most previous years according to the either level or trend assessments or both (the two assessments should be considered separately), they should be identified as key in the latest year estimate except in cases where a clear explanation can be provided why a category may no longer be key in any future years. These additional categories should be addressed in the reporting table for key categories by using a column for comments (see Table 4.4 and reporting table for key categories in Section 4.4 for more information). The qualitative criteria presented in Section 4.3.3 may also help to identify which categories with fluctuating emissions or removals should be considered as key categories. ## TREND ASSESSMENTThe purpose of the trend assessment is to identify categories that may not be large enough to be identified by the level assessment, but whose trend is significantly different from the trend of the overall inventory, and should therefore receive particular attention. The Trend Assessment can be calculated according to Equation 4.2 if more than one year of inventory data are available. Equation 4.2 Trend Assessment (Approach 1) Where: Txt = trend assessment of source or sink category x in year t as compared to the base year (year 0) IeJ = absolute value of emission or removal estimate of source or sink category x in year 0 Ext and Ex0 = real values of estimates of source or sink category x in years t and 0, respectively £ Ey t and £ E 0 = total inventory estimates in years t and 0, respectively y y y The trend of category refers to the change in the source or sink category emissions or removals over time, computed by subtracting the base year (year 0) estimate for source or sink category x from the latest inventory year (year t) estimate and dividing by the absolute value of the base year estimate. The total trend refers to the change in the total inventory emissions (or removals) over time, computed by subtracting the base year (year 0) estimate for the total inventory from the latest year (year t) estimate and dividing by the absolute value of the base year estimate. In circumstances where the base year emissions for a given category are zero, the expression may be reformulated to avoid zero in the denominator (see Equation 4.3).
The trend assessment identifies categories whose trend is different from the trend of the total inventory, regardless whether category trend is increasing or decreasing, or is a sink or source. Categories whose trend diverges most from the total trend should be identified as key, when this difference is weighted by the level of emissions or removals of the category in the base year.
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