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.

Lively Discussion and a Draft Text

The side event I had organized yesterday for the Climate Action Network on LULUCF was a huge success. The room was packed with delegates from Japan, Tuvalu, the EU, USA, Korea, Turkey.

The event was billed as an opportunity to come hear CAN's detailed views on LULUCF and also discuss two new proposals on the table here in Bonn: the EU's "bar" and a very interesting submission from Tuvalu which included the idea of mandatory accounting of 'forest biomass decline,' as well as industrialized countries accepting accounting debits or emissions from wood that may have been imported from deforestation in developing countries.

There was lively, open and interesting discussion and debate following the presentations and we were blessed with the participation of the originators of these two ideas from the EU and Tuvalu.

Later in the afternoon there was a closed 'informal' LULUCF discussion amongst the Parties and the co-chairs of this group produced a draft text in the form of a 'non-paper' (just for discussion). It's the first attempt to put all the options in the form of legal text and is in that respect a step forward. But most of the various options for dealing with LULUCF are still represented somehow in this paper.

'The Bar' is there, including the prospect that each country could negotiate its own 'bar' against which forest management compliance is measured. Some of the interesting elements of Tuvalu's proposal are there too, but the 'forest biomass decline' concept is only partly intact.

Parties will meet one more time informally tomorrow morning and then openly in a contact group in the afternoon.

Countries discuss new activities their new ideas for LULUCF

The first 'contact group' on LULUCF was today in Bonn. A contact group is like plenary but smaller... and there's no translation... and usually observers cannot make statements... and its more focused on details.

So today some details came out on some new proposal that Parties have made for changes in LULUCF:

• Tuvalu proposed that devegetation and 'forest biomass decline' be added as new activities. As the name suggests, 'Forest Biomass Decline' is basically any activity that causes a reduction in forest carbon stocks. It is presented as a politically more palatable alternative to 'forest degradation.' You can read Tuvalu's submission, it's really interesting and clever.
• The EU formally presented its idea about The Bar. Here's the summary: a default baseline would be selected for use by all Parties based on historic carbon fluxes (e.g. 1990, 2008, etc.). Increases (credits) and decreases (debits) in the carbon sink would be measured relative to this baseline (it is a form of net-net accounting, explained in a previous post). Here's the big BUT: A Party would be free to negotiate an alternative baseline if this didn't fit their national circumstances, in particular for example if the country was forecast to have a declining rate of carbon sequestration. This is the problem of most concern to my and my colleagues here - negotiating alternate bars could delay the process and would most likely lead to perverse outcomes designed to suit the interests of the Party ('more credits, please'). In the worse case scenario, these bars get negotiated after the Copenhagen deal is struck and they can be used to undo the Party's national target.
• Finally, Canada presented its proposal that it should not account for emissions/removals from croplands if they have become saturated with carbon. There was mixed reaction to this in the room, but I tend to agree with the view that we have to stop engineering outcomes and just account for emissions.

The next meeting will be informal, which means it is closed to observers. All we know for sure is on the agenda is wetland management as a new activity.

Oh, and I should make a note on process: the co-chairs of the discussion proposed to put together a 'non-paper' (unofficial) that attempts to collapse some of the LULUCF options being negotiated so some progress can be made towards an agreement.

Stay tuned!