Decision Playbooks

Overview

  • Purpose
    • Use emissions data and reduction opportunities to guide investment, operations, and compliance decisions.
  • Lenses
    • Investment: M&A, capital allocation.
    • Operations: efficiency and reduction planning.
    • Compliance: thresholds, reporting, audit risk.

Investment lens

  • When to use
    • Evaluating acquisition or partnership targets.
    • Prioritizing capital for reduction projects.
    • Screening operators for M&A pipelines.
    • Building decarbonization investment theses.
  • Metric: marginal abatement cost (MAC)
    • Definition: cost per tonne reduced.
    • Formula: MAC = (CAPEX + NPV(OPEX)) / total_CO2e_reduced.
    • Use: rank projects by cost-effectiveness.
  • Metric: net present value (NPV)
    • Definition: value of savings minus CAPEX.
    • Formula: NPV = Σ(annual_savings / (1 + r)^t) - CAPEX.
    • Typical: discount rate and horizon are configurable.
    • Use: screen for high value opportunities.
  • Metric: payback period
    • Definition: years to recover CAPEX.
    • Formula: payback = CAPEX / annual_savings.
    • Use: highlight quick wins vs long-term projects.
  • Metric: investment score (0–100)
    • Definition: normalized return metric from NPV / CAPEX.
    • Steps:
      • Compute raw ROI: (NPV / CAPEX) × 100.
      • Convert to 0–100 using percentile ranks.
    • Notes: null when CAPEX is zero or missing; risk handled separately.
  • Risk–return quadrants
    • High NPV, low risk: priority target, move first.
    • High NPV, high risk: conditional target, deeper diligence.
    • Low NPV, low risk: monitor, opportunistic.
    • Low NPV, high risk: avoid.

Operations lens

  • When to use
    • Finding operational improvement opportunities.
    • Prioritizing technology deployments.
    • Setting reduction targets.
    • Designing operational excellence programs.
  • Metric: efficiency score (0–100)
    • Basis: emissions intensity vs peers.
    • Use: categorize performance as excellent, good, average, or needs improvement.
  • Metric: reduction potential (kt CO2e)
    • Definition: estimated achievable reductions by source.
    • Typical components:
      • Venting: large share, easiest reductions.
      • Flaring: medium difficulty.
      • Fuel: harder, capital intensive.
    • Use: estimate total opportunity size.
  • Metric: opportunity priority score
    • Definition: ease-weighted priority for action.
    • Example: priority = venting_score × high_weight + flaring_score × medium_weight + fuel_score × low_weight.
    • Use: emphasize easy, high-impact changes first.
  • Technology patterns (by profile)
    • High venting: vapor recovery, tank improvements, control of tank vents.
    • High flaring: gas conservation, pipelines, flare gas recovery.
    • High fuel use: efficiency upgrades, cogeneration, process changes.

Compliance lens

  • When to use
    • Planning compliance strategies.
    • Preparing for audits.
    • Managing reporting obligations.
    • Assessing regulatory risk.
  • Metric: reporting obligation
    • Definition: whether emissions exceed reporting thresholds.
    • Output: reporting required vs below threshold.
  • Metric: threshold buffer
    • Definition: distance to threshold.
    • Formulas:
      • buffer_kt = threshold - current_emissions.
      • buffer_pct = buffer_kt / threshold.
    • Use: detect safe, watch, and high-risk zones.
  • Metric: compliance risk category
    • Definition: categorical risk level from buffer and thresholds.
    • Levels: low, watch, reporting required.
  • Metric: audit readiness score (0–100)
    • Inputs: data quality, documentation, historical reporting (weights configurable).
    • Use: gauge preparedness for audits and reviews.
  • Action triggers (example pattern)
    • Large buffer: periodic monitoring.
    • Medium buffer: more frequent tracking and planning.
    • Small or negative buffer: active management and full compliance program.

Composite decision

  • Metric: composite score (0–100)
    • Definition: combined view across lenses.
    • Example formula:
      • composite = investment_score × w_inv + efficiency_score × w_ops + audit_readiness × w_comp.
    • All weights sum to 1; score bounded to 0–100.
  • Bands and recommendations
    • High score: priority target, act now.
    • Mid score: consider, deeper analysis.
    • Low score: avoid, document rationale.
  • Workflow
    • Step 1: filter by composite score.
    • Step 2: inspect each lens to understand drivers.
    • Step 3: run scenarios on prices and rules.
    • Step 4: balance a portfolio of opportunities across risk and return.

Metric groups (operator_decision_metrics)

  • Investment metrics
    • Total emissions and reduction potential.
    • Cost factors and estimated CAPEX.
    • MAC, annual value, payback, NPV.
    • Investment score.
  • Risk and compliance metrics
    • Scale, intensity, venting/flaring risk components.
    • Composite regulatory risk score and category.
    • Reporting flags and threshold buffers.
    • Audit readiness and related quality signals.
  • Efficiency and operations metrics
    • Performance vs median and best quartile.
    • Efficiency score and performance category.
  • Opportunity metrics
    • High venting, flaring, fuel-use flags.
    • Source-level reduction potentials.
    • Total opportunity and priority score.
  • Composite decision metrics
    • Composite score.
    • Opportunity score and performance score.
    • Final recommendation tier.