The Scale of Impact Negotiated Bars Could Have on National Emissions Accounts

I presented the results of an ititial calculation done today by the Climate Action Network. The presentation of these results begins at about the 6 minute mark of the media conference webcast and resumes with a follow-up question at 16:30.

Here is the text of the statement:

An idea put forward by the European Union (EU) at the Bonn Climate Change Talks could introduce a loophole that would result in countries not being accountable for some of their emissions from forest management. The EU introduced the concept of “The Bar,” which would be a reference against which countries would measure their forestry emissions. The potential loophole results from the option that countries could negotiate their own “bar”. This could be like getting to start a football match with your team four-nil up. So far, no details have been released about how this loophole might be constrained.

Climate Action Network released an initial calculation today illustrating a potentially significant impact of this flexibility on the emission accounts of industrialized countries. In order to calculate the impact this flexibility would have on the scale of forest carbon credits for industrialized countries, CAN looked at sixteen years of historic emissions (1990 – 2006) for thirty-six industrialized nations (not including USA), using the last five years as a hypothetical commitment period.

In measuring the size of the potential loophole, CAN considered the relative impact of setting a weak and an strong bar. The strong bar was set as the lowest level of historic emissions, meaning countries would be expected to do even better than this. The weak bar was the highest level of historic emissions, creating little expectation for improvement. We also compared the accounting impact of these two scenarios to the current accounting rules for forest management.

The accounting difference between the strong bar and the weak bar was roughly seven billion tons of CO₂. This range corresponds to roughly twelve percent of total emission allowances for the first commitment period. The weak bar produced 2.8 billion tons of CO₂ credits more than would be created with the current rules for forest management.[1] This 2.8 billion ton increase corresponds to roughly five percent of total emission allowances for the first commitment period. Our calculation did not consider other improvements in the forest accounting rules that might be made. In all scenarios, the actual emissions to the atmosphere were the same, but the method would make a massive difference in the level of accountability of countries.

Creating a disconnect between accounting and real changes in emissions would not provide the proper signals for governments to unlock the mitigation potential from forest management. These numbers also illustrate the very significant impact that this potential accounting loophole could have on a Party’s overall emission reduction target.

This potential loophole could be most effectively closed by removing the ability of Parties to negotiate their own ‘bar’.

[This has also been published as an article in ECO - see issue 10 from Bonn I, 2009]

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[1] The strong bar resulted in 820 Mt of carbon debits. The weak bar resulted in 1113 Mt credits of carbon. Application of the current rules for forest management, which include gross-net accounting with a cap would result in a credit of approximately 349 Mt of carbon if all countries included in the Appendix of Decision 16/CMP.1elected to account for forest management. Application of net-net accounting with a 1990 base year would result in a credit of 189 Mt of carbon.