British Columbia Sets Very Low Standard for Forest Carbon Offsets

The government of British Columbia in Canada has just released a draft forest carbon offset protocol for use in the province. The scope of eligibile activities is surprising and troubling:

• Afforestation: increasing the size and number of BC forests by planting land that has not been forested since December 31, 1989;
• Select Seed Use: planting seedlings selected for specific traits to promote faster growth, increased timber volume and carbon content, and resistance to insects and disease; and
• Fertilization: adding nutrients to increase tree growth on sites deficient in one or more soil nutrients.

Afforestation is fine, but the other two activities will not yield benefits in the short-term and fertilization in particular will have negative environmental outcomes. Conspicuously absent are any forest management activities with environmental co-benefits. What about forest protection? What about lengthened rotation ages?

Also conspicuously absent is any test of the impact of projects on other environmental social values.

This protocol is out for comment until July 10. Please send in your comments!

Dealing with impermanence of forest carbon offsets

The Canadian government released new draft details about the proposed federal offset system a couple of weeks ago. The guide includes the government's current thinking on how to deal with the impermanence of forest carbon offsets. Here it is:

"Biological sink projects carry a risk of carbon reversals, in which the sequestered carbon is released back into the atmosphere; for example, through forest fires or intentionally changing farm management practices. Since an offset credit must represent a permanent removal of carbon from the atmosphere, there must be a mechanism in place to address this risk of reversals.

The permanence of biological sink offset credits is ensured in the Offset System by requiring the replacement of credits in the event of a reversal anytime throughout the project’s registration periods and for a further 25-year liability period after the project’s final reporting period in its final registration period.

Furthermore, to address the risk that a Project Proponent may not be able to replace the credits when a reversal occurs, the Project Proponent is required to apply a discount factor to offset credits claimed for biological sink projects. The discount factor will be specified in the Offset System Quantification Protocol and will reflect the risk of defaulting on a replacement obligation for different project types. The Project Proponent will be required to replace credits if a reversal occurs any time during a 25-year liability period. Project Proponents are required to provide evidence to the Minister on a regular basis during the liability period and provide a certification statement that the sink has been maintained. However, verifications will not be necessary during the liability period." Page 27

My understanding is that the current draft of the Waxman-Markey Bill in the U.S. proposes instead to deal with impermanence through a 'buffer reserve' approach, which would set aside a percentage of each forest carbon offset...if the carbon is reversal is unintentionally, 50% could be covered by this reserve. I'm not sure what the liability period is.

Both these approaches differ from that used for afforestation projects within the Clean Development Mechanism (CDM), which only issues temporary credits for forest projects. This seems the most robust approach, but it doesn't appear to be taken very seriously in any of the offset regimes that are under development... apparently because people doubt the market demand for temporary offsets.

Anybody know of any other approaches being considered out there?

Using cap-and-trade auction revenue to finance forest and peatland protection

I posted a few days ago about a piece of legislation in the U.S. that aims to use government funds (from cap-and-trade auction revenues?) to finance the protection of forest carbon stocks.

What are other jurisdictions thinking about this? I'm reminded that the Western Climate Initiative Partners actually made a very concrete recommendation about using auction revenue set asides for 'forestry':

8.2. The WCI Partner jurisdictions agree that a portion of the value represented by each WCI Partner jurisdiction’s allowance budget (for example, through set-asides of allowances, a distribution of revenues from the auctioning of allowances, or other means) will be dedicated to one or more of the following public purposes which are expected to provide benefits region wide:

• Energy efficiency and renewable energy incentives and achievement;
• Research, development, demonstrations, and deployment (RDD&D) with particular reference to carbon capture & sequestration (CCS); renewable energy generation, transmission and storage; and energy efficiency;
• Promoting emission reductions and sequestration in agriculture, forestry and other uncapped sources; and
• Human and natural community adaptation to climate change impacts.

A couple of other examples...

1. The Province of Ontario's discussion paper on cap-and-trade references WCI's recommendation to use set asides to reduce emissions in uncapped sectors.
2. The EU Emission Trading Directive very strongly supports the use of at least 50% of auction revenues (and they intend auctioning to be the rule for distribution of allowances) for various uses aimed at reducing the impacts of climate change and funding adaptation. It also specifically mentions reducing emissions from deforestation and degradation in developing countries, but does not specifically mention domestic forest programs.

It strikes me that the forest sector, especially forest protection, is an especially good fit for the use of set-asides:

• The sector is not covered by the cap;
• There are adaptation benefits as well as mitigation benefits (helping communities and biodiversity adapt to climate change through ecosystem protection);
• Forest offsets present problems, like permanence, that other sectors don't present - so it should be a priority to get at this mitigation in another way.

What do others think? Does anyone have examples from other jurisdictions?

Watching U.S. Climate Bills - Money to Forest Carbon Protection

The American Clean Energy and Security Act of 2009 (The 'Waxman-Markey bill' (summary)) includes provisions to use 13% of money from allowance auction revenues to support additional investments in clean energy and energy efficiency. Although protecting forest carbon isn't included in this list, a parallel piece of legislation attempts to fix this: The Buy American Carbon Incentives Program of 2009. The aim of this bill is "to establish a carbon incentives program to achieve supplemental greenhouse gas emissions reductions on private agricultural and forestland of the United States, and for other purposes."

Funds would be delivered through climate mitigation contracts for activities that:

• "measurably increase carbon sequestration and storage over a designated contract period through management activities on eligible lands; and
• maintain carbon sequestration and storage and avoid future emissions through permanent avoided conversion agreements on eligible lands."

This scheme is complementary to offsets and projects/activities would not be eligible for both.

Any thoughts on this? Has this kind of thing been proposed in any other jurisdictions? I certainly think it would be a great policy option for Canada's federal and provincial governments: finance forest carbon protection through the use of auction revenue set asides from cap-and-trade systems.

Media article on forests and climate from Bonn Climate Change Talks

Bloomberg published this article on the use of forests and land use to help meet national climate change mitigation commitments. Jeremy van Loon interviewed a number of delegates to the recent climate change talks in Bonn.

I think the article is helpful because it raises alarm about using false reductions in emissions from forests to undermine real action on climate change. I'd like to add some depth to the story by pointing out that this spectre is not created by land use accounting per se, but by the bad ideas dominating these talks. You can view a Climate Action Network presentation about this on the UN Climate Change Convention's website. Search for "Climate Action Network Canada" on Tuesday June 2 to find the presentation link.

For some thoughts on how the accounting for land use, land use change and forestry should be done, you can check out the CPAWS Kyoto Resources list. Most recent submissions/publications are at the bottom of the list.

Photo: This picture shows carbon emissions from both fossil fuels and deforestation!

Zero Sense - A forest carbon accounting proposal from the EU

This is a reprint of an article written for Climate Action Network's newsletter ECO:

Zero Sense

The current LULUCF negotiations cause ECO to reflect on a question asked by some Parties with all seriousness: should a country be excused from accounting LULUCF debits from its national forest as long as it remains a sink? Isn’t it wrong to penalize a country as long as its forest is still removing CO₂ from the atmosphere, and therefore helping to mitigate climate change? Should we only assign LULUCF debits from forest management after the value of the forests sink becomes zero and it becomes a net source of greenhouse gases to the atmosphere?’ The answer to these questions must be no.

The issue is not whether a national forest is removing CO₂ from the atmosphere, but how much. Forests currently represent a large global sink, helping reduce the impact of fossil fuel emissions. A decline in the size of that sink would be of great concern.

Eco did an analysis[1]: what would be the effect if all Annex 1 Parties were allowed to reduce their forest sink to zero without accruing any LULUCF debits? The result speaks for itself: 2.4 billion tons of CO_2e[2] in lost sequestration without even a blip in any Party’s account; 2.4 billion tons of CO_2e that represent a net emission if not compensated by greater emission reductions elsewhere; 2.4 billion tons of CO_2e in lost sequestration that would be hidden behind a newly proposed LULUCF accounting rule called “the band from zero to the bar.”

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[1] Using convention reporting data for all Annex 1 Parties from 1990 – 2006. 1990 was used as the default bar and 2002-2006 was used as a hypothetical commitment period.

[2] This corresponds to roughly four percent of total emission allowances for the first commitment period

Wake up call to countries trying to abuse forests

At the Climate Change Talks in Bonn, some Parties are using the forest and land use negotiations to try to entrench a system that is designed to give them make-believe credits rather than actually reduce emissions. The European Union and Russia were today awareded a 'fossil' by the International Climate Action Network for a proposal that would allow countries to eradicate their forest sinks without having to account for it.

An article in the daily newsletter, ECO explains the dynamic well ("Just Imagine").

Discussion between Environmentalists and Governments

The Climate Action Network just held a very successful 'side event' here at the Bonn Climate Change talks with roughly 60 people in attendance, most of them government representatives. Among those present were the US, Canada, Japan, Iceland, Ireland, Slovakia, The European Commission, Austria, France, the United Kingdom, Senegal, Bulgaria, the Holy See, Sweden, Denmark, Germany, etc.

The most lively discussion was a debate about whether countries should be excused from accounting any emissions from their forests as long as they remain net sinks. My view was, though these forests may still be helping with climate change as long as they remove carbon from the air, the governments owning these forests are not helping with climate change if their actions reduce the size of this sink (e.g. through accelerated harvest).

The presentation can be viewed online. Look for the June 2 event by Climate Action Network Canada.

Latest views from Parties on LULUCF within the Climate Negotiations

The Bonn Climate Change Talks kicked off today.

Coming into these meetings, several Parties expressed their views on the treatment of land use, land-use change and forestry. You can find these submissions online in two parts (part 1; part 2).

I have pulled out what I feel are the main points of the submissions. This is rough (especially the formatting), but I thought you might find it a useful summary/guide. But don't quote me, read them yourselves! (Please note that part 2 is not included in this summary (submission from Chile)).

Australia:
- Full factoring out of all non-anthropogenic emissions
- Land-based planning in 3 CP
- Account for forest management in national totals (Annex A)
- Using rolling averages for LULUCF accounting

Belarus:
- Include wetland restoration
- Also include wetland conservation

Canada:
- Forward-looking baseline to project business-as-usual emissions and remove all natural disturbance emissions
- Set emissions to zero for carbon-saturated croplands
- Include HWP
- Consider no limits on use of LULUCF CDM

Coalition of Rainforest Nations
- Mandatory land-based accounting
- Debit rule for carrying over debits to future commitment periods
- Any standard of methodology as long as you can demonstrate you aren’t over-estimating credits
- Use production method for HWP

China
- Use current rules
- No new activities
- Keep 1990 base year
- LULUCF rules do not need to be completed before targets discussion

EU
- Bar including country-specific bars
- Band (including band to zero)
- Land-based accounting option (still includes discounts, limits, bar)
- HWP: production approach option; stock approach option; restricted stock approach option (only accounting HWP of domestic origin)
- Factoring out focused on Force Majeure

Iceland
- Wetland restoration
- Devegetation as part of revegetation

India
- Limit on LULUCF (preferably same limit for all activities)
- No Kyoto amendments
- No new activities unless they plug loopholes
- Force Majeure could be applied in a restricted way
- No to land-based accounting

Indonesia
- Don’t link directly to targets
- Add devegetation to revegetation
- Forest management definition should include forest degradation
- Wetland restoration and degradation unless for food production
- Support planted production forest definition
- Supports limited force majeure definition, consistent with Tuvalu
- Supports introducing SFM certification

Japan
- Gross-net
- Strict activities-based accounting approach to deal with factoring out
- Mandatory accounting and continued accounting in subsequent CPs must be reviewed based on changes in rules
- HWP only products from forest accounting under 3.4 (but this also excludes existing stocks)
- Country-specific bar based on a number of factors including ‘continuation of national forest policies’
- Criteria for factoring out (prefer restricted approach)
- No to land-based accounting

Malaysia
- No loopholes
- Limit
- Alternatives to temporary credits

New Zealand
- Credit/debit rule; planted production forests
- Factoring out should relate to extraordinary disturbances…could be based on threshold percentage of total AAUs
- Support bar as best articulation of business as usual
- HWP:
o ‘Emissions to atmosphere approach’
o Factor out but keep HWP credits!!
o Not support instant oxidation of exports
o Not support instant oxidation of short-lived products
o Include in CDM
- No to land-based accounting
- CDM: A-1 Parties could take on the responsibility for impermanence as an alternative to temporary credits

Russia
- Support split between forests and planted production forests
- Restricted forest definition (larger areas, 30-50 percent canopy cover)
- ARD area threshold changed (from 1 ha to 100,000 ha)
- Support bar
- Support band (including band to zero)
- Forward-looking baseline as a bar option

Saudi Arabia
- Use full LULUCF mitigation potential

Singapore
- AR should be eligible on wetlands
- Peat fires should be treated as anthropogenic
- Broad definition of HWP to include other products (e.g. resins)
- Support option 2 (land-based) with phased approach

Switzerland
- Support addition of wetland management with minor variation
- Compulsory 3.4 accounting
- Discount rate to all LULUCF credits/debits
- HWP
o Don’t accounting existing pools
o Don’t account imported non-A1 pools
o Can claim exported if importer doesn’t