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lead.jpg (22302 bytes)    Volume 3 
   Number 4
   26 October 1998 


Dr. Mark C. Trexler
Rebecca Gibbons
Trexler and Associates, Inc.


As the fourth Conference of the Parties (COP-4) to the U.N. Framework Convention on Climate Change approaches, a key area requiring clarification is the role that land-use change and forestry (LUCF) mitigation efforts will play under the Kyoto Protocol or any successor instrument. While the Protocol clearly builds biotic sources and sinks into the "netting" of Annex B countries’ emissions under Article 3.3, the treatment of LUCF projects for project-level mitigation interventions undertaken under Articles 3, 6, and 12 has been left more ambiguous and is the subject of vigorous debate.

To a significant extent, the ambiguous treatment of sinks in the Protocol is the result of policy and technical issues being raised by interest groups and countries who are skeptical or critical of relying on forestry and related mitigation interventions to help achieve the Protocol’s reduction targets. Concerns commonly expressed by these groups fall into several categories:

Can LUCF projects be reliably quantified, monitored, and verified?

Will land use-based mitigation measures be prematurely lost, leading to reversal of their mitigation benefits?

Will pursuit of LUCF projects impede economic development or result in negative environmental impacts in developing countries?

Will pursuit of LUCF mitigation efforts impede progress on achieving emissions reductions and technology transfer objectives in the energy sector?

At the same time that these questions are being asked, many studies, including those of the Intergovernmental Panel on Climate Change (IPCC), have concluded that LUCF interventions (including slowing deforestation, reforestation, assisted regeneration, agroforestry, and sustainable forest management) have an important role to play in mitigating greenhouse gas (GHG) emissions and climate change.

In anticipation of COP-4, this paper briefly reviews the status of forestry and land use-based mitigation efforts under the Protocol and identifies key issues and questions facing decisionmakers in this area.

The Importance of Land-Use Change to Achieving the Kyoto Protocol’s Objectives

Since before the Industrial Revolution, first temperate and then tropical land-use change has been a key contributor to rising levels of GHGs in the atmosphere; almost one-third of the incremental CO2 now in the atmosphere is the result of such change. Although the relative importance of land use-based emissions is declining as fossil fuel emissions continue to rise, even today human activities are estimated to emit between 1-2 GT of carbon annually from the world's forests and soils, approximately 20 percent of total anthropogenic emissions. In many developing countries, land use-related emissions significantly exceed fossil fuel emissions. Land-use change also contributes to methane and nitrous oxide emissions, primarily as a byproduct of biomass burning.

The links between land-use trends and potential climate change go beyond the fact that deforestation and forest degradation are an ongoing and significant source of GHG emissions, accelerating the buildup of GHGs in the atmosphere. Other important linkages, which continue to be the focus of intensive scientific and policy debate, are:

The apparent importance of CO2 fertilization to slowing the buildup of CO2 in the atmosphere. The CO2 fertilization effect – in which rising levels of atmospheric CO2 contribute to enhanced plant growth – is believed to be responsible for the sequestration of a billion tons of additional carbon per year in the world’s forests. There is some question, however, as to how long this fertilization effect will play this role.

The potential importance of intentionally undertaken forestry and other land use-based climate change mitigation measures. Numerous studies have confirmed the potential importance of mitigation measures in this sector. One notable example is the potential role biomass energy could play in substituting for fossil fuel emissions in industrialized and developing nations.

The potential for increased land use-based GHG emissions in future years due to climate change-induced alterations in temperatures, fire regimes, soil carbon oxidation rates, and other variables. It may require great effort in some areas just to maintain the forest cover we already have.

There is no reason to believe that the absolute contribution of deforestation and forest degradation to global GHG emissions will decline significantly any time soon under business-as-usual. Vast stretches of tropical forest, currently a storehouse for hundreds of billions of tons of carbon, remain threatened by deforestation or degradation. According to the IPCC’s 1995 Second Assessment Report, more than 650 million hectares of forest are likely to be lost by 2050. From deforestation alone, more than 75 GT of carbon are likely to be emitted. In addition, hundreds of millions of additional hectares of forest and agricultural land will be degraded, releasing more carbon to the atmosphere. Such statistics lead many observers to argue that LUCF issues are crucially important to the larger issue of climate change mitigation.

Mitigating Climate Change Through Forestry and Land-Use Change Interventions

Many studies over the last 10 years have discussed the role forestry measures could play in climate change mitigation efforts in both industrialized and developing countries. These studies have included work by the IPCC, government agencies, research institutes, and nongovernmental organizations. Much of this research supports forestry as a mitigation strategy not only for its climate change potential, but also for the environmental and socioeconomic co-benefits that would accompany reduced deforestation rates and expanded reforestation programs on suitable lands. Forestry and land use-based interventions that have the potential to significantly contribute to climate change mitigation options fall into several major categories:

Protecting existing carbon reservoirs from losses associated with deforestation, forest and land degradation, urbanization, and other land management practices.

Enhancing carbon sequestration and expanding carbon stores in forests, other biomass, soils, and wood products (including through reforestation, afforestation, and forest management efforts).

Using biomass to substitute for fossil-fuel use, whether directly (production of biomass energy) or indirectly (substituting wood for steel, cement, or other fossil fuel-intensive products).

Reducing emissions of other greenhouse gases, primarily methane (CH4) and nitrous oxide (N2O), from land use and agricultural interventions ranging from fire management to more efficient use of nitrogen-based fertilizers.

International policymakers have repeatedly called for slowing the loss of forests and restoring forest or tree cover. In 1989, 68 environmental ministers from around the world signed the Noordwijk Declaration in the Netherlands, calling for a net increase in global forest cover of 12 million hectares per year to help slow climate change. Similar thinking is reflected in other international policy initiatives, including the Tropical Forestry Action Plan, the Global Forestry Program, the Intergovernmental Panel on Forestry, and the Convention on Biological Diversity, among others. The U.N. Framework Convention on Climate Change and the Kyoto Protocol also explicitly mention these objectives.

Forestry an Early Mitigation Choice

Since the late 1980s, more than two dozen pilot climate change mitigation projects have been carried out in the forestry sector, involving a commitment of over US$50 million. Although this figure is small by the standard of international aid and capital flows, it is a significant figure in forestry and land-use spending. There are several reasons that forestry projects, and to a lesser extent other land-use change projects, have been so popular during this first phase of climate change mitigation efforts:

early offset funders wished to clearly differentiate their offset projects from day-to-day business activities (mostly in the energy sectors);

forestry-based offsets are seen as cost-effective and can easily be pursued at pilot project scale; and

in a strictly voluntary mitigation regime, the co-benefits of forestry projects have been particularly important to offset funders.

Projects pursued through the "activities implemented jointly" pilot phase based on LUCF interventions are underway around the world. Over a dozen projects are underway in Annex B countries, including the United States, Canada, Russia, the Czech Republic, and the Netherlands. More are underway in a number of developing countries. Projects being pursued involve a range of forestry and other land-use change interventions:

reforestation, natural regeneration and agroforestry;

protected area establishment and reinforcement;

promotion of sustainable forestry;

reduced impact logging;

soil carbon enhancement;

use of wood-waste and fast-growing crops for biomass energy.

In addition to individual project-based interventions, countries are pursuing broader innovative forestry initiatives and programs for climate change purposes. These programs include Costa Rica's certified tradeable offsets (CTOs) program, which is based on a national system of forest protection and reforestation incentives, and the Forest Resource Trust in the state of Oregon in the United States. Other countries are expected to follow suit in putting forward national programs.

Much has been learned from these projects regarding the use of forestry for climate change mitigation. These experiences have also helped clarify questions needing resolution regarding forestry’s use for climate change mitigation purposes.

The Treatment of LUCF Mitigation Obligations and Options Under the FCCC and the Kyoto Protocol

Reducing LUCF-based GHG emissions and enhancing LUCF sinks are important components of the FCCC and the Kyoto Protocol. The FCCC calls upon countries to take measures that would mitigate climate change by "protecting and enhancing its greenhouse gas sinks and reservoirs" (Article 4(2)(a)), and to "promote sustainable management, and promote and cooperate in the conservation and enhancement, as appropriate, of sinks and reservoirs of all greenhouse gases not controlled by the Montreal Protocol, including biomass, forests and oceans as well as other terrestrial, coastal and marine ecosystems" (Article 4)(1)(d)).

At the third Conference of the Parties to the FCCC in December 1997, in Kyoto, Japan, forestry and land-use change issues were one of the most-discussed topics. The results were ambiguous, a prime example of "constructive ambiguity" to make the Protocol palatable to key interest groups. This explains how different governments’ perspectives on what was agreed on in Kyoto can differ so significantly.

Forestry’s treatment in the Kyoto Protocol can be summarized as follows:

Article 2.1(a)(ii) requires Annex B Parties to implement policies and measures relating to protection and enhancement of sinks and reservoirs, and promotion of sustainable forest management practices, afforestation, and reforestation.

Article 3.3 requires Annex B countries to net sources and sinks associated with reforestation, afforestation, and deforestation activities since 1990 against their non-biotic emissions.

Article 3.4 provides for expanding the list of sources and sinks covered by Article 3.3, with such action to take place at or after the first Meeting of the Parties following ratification of the Protocol.

Article 3.7 allows Annex B Parties for whom land-use change and forestry formed a net source of GHG emissions in 1990 include those emissions in their 1990 baseline.

Under the joint implementation language of Article 6, "Any Annex I Party may transfer or acquire emission reduction units from projects aimed at reducing anthropogenic emissions by sources or enhancing anthropogenic removals by sinks." Projects are required to meet an unspecified "but for" test to be eligible for crediting, but until the start of the first budget period.

The Clean Development Mechanism’s (CDM) language of Article 12 does not refer to biotic sources or sinks. Article 12 provides for crediting of "certified emissions reductions," but does not define what types of emissions reductions will be included.

In effect, LUCF issues under the Protocol fall into two broad categories:

issues associated with national-level "netting" of selected land use-based emissions under Article 3.3; and

issues associated with definition and implementation of measures pursued at the project-level, whether under Articles 3, 6, 12, or 17.

Whether left purposefully vague to postpone ongoing disagreements, or simply the result of a chaotic last minute negotiating process, the sinks language of the Kyoto Protocol in some sense raises more questions than it answers in both categories. It is important to note that most of the discussions in Kyoto regarding sinks focused on the netting issues associated with Article 3.3, rather than on project-based mitigation issues. There is, however, a fundamental difference between thinking about the netting of landscape level estimates of biotic sources and sinks, as Annex B countries are required to engage in pursuant to the provisions of Article 3.3, and the quantification and verification of project-level mitigation interventions under the Protocol’s flexibility mechanisms.

Sinks questions created by the Protocol’s language include:

How will many key Protocol terms be defined, including forests, afforestation, reforestation, deforestation, carbon stocks, and (direct) human-induced activities?

How will net changes "since 1990 . . . to meet the commitments" of Article 3 be interpreted?

How will "additional activities" referred to in Article 3.4 be determined? There are many potential LUCF activities that could be added to the current Article 3.3 list.

What is meant by the terms uncertainty, transparency in reporting, and verification in Article 3.4?

Does the scope of Article 6 include only the LUCF activities specified in Article 3.3, thus limiting the scope of joint implementation projects to those involving reforestation and afforestation? Observers have raised the concern that should Article 6 be interpreted differently, an alleged paradox could arise in which country A could pursue a project within country B and country B could pursue the same kind of project within country A, while both receive more credits than if they had each pursued the same projects within their own borders.

Does the scope of Article 12 include biotic sources and sinks, and if so, does it cover only those LUCF activities specified in Article 3.3? Article 12 mentions certified emission reductions accruing from projects, but does not refer to sequestration by sinks, as does Article 6. Some observers argue that LUCF projects are thus specifically excluded from Article 12. Other participants to the Kyoto negotiations argue that the Parties intended for LUCF projects, at least types specified in Article 3.3, to be included within the scope in the CDM. Yet others argue that LUCF projects generally are included, without regard to the limitations of Article 3.3. It is worth noting, in the context of the language everyone points to in Article 12, that curbing deforestation is an accepted mean of reducing GHG emissions, and there is no inherent reason such reductions could not be "certified."

How will sinks projects eventually be treated under the emissions trading auspices of Article 17? This Article is still being thought of primarily in the context of national-level trading of emissions against national baselines, rather than through development of a project-based crediting and trading system. In the long-term, however, it will be important to define how projects fit into the international trading system being considered under Article 17.

The New Role of the IPCC

The first consideration of many of these issues came at the first post-Kyoto climate change negotiations held in June 1998 in Bonn. A primary outcome of the Bonn meetings of the Convention’s subsidiary bodies was a request that the IPCC be charged with preparing a special report on land use and forestry (FCCC/SBSTA/1998/INF1). This special report, in conjunction with the IPCC’s treatment of sinks in its ongoing Third Assessment Report, should significantly contribute to defining the role sinks will play under the Kyoto Protocol or any successor instrument.

The IPCC recently approved the outline for the special report. A wide range of scientific and technical issues and options associated with Article 3.3 will be addressed by region and will be limited to issues relevant to afforestation, reforestation, and deforestation. Particular attention will be given to carbon accounting rules and the availability of data relevant to carbon quantification requirements at the project, biome, and national inventory scale. Regional and global potentials and the associated impacts of afforestation, reforestation, and deforestation activities will be covered. With respect to Article 3.4, the special report will include definition and analysis of forestry options, their sequestration potential, and ancillary benefits. Special attention is to be given to the issues associated with project-based activities related to the Protocol, but it remains unclear how much project-level issues will ultimately factor into the report.

A Quick Look at the Issues

The debate over forestry’s potential role in climate change mitigation efforts has ranged widely over the last decade, from the assertion by some observers that forestry could virtually solve the climate change problem to the arguments by others that forestry has no role to play in a portfolio of mitigation policies and measures. Although many issues have been raised in this debate, they can be grouped into the several categories flagged at the beginning of this paper.

Addressing questions raised by critics of forestry and other LUCF interventions for climate change mitigation purposes is beyond the scope of this short review. It is interesting to note, however, that LUCF measures are often characterized as if they raise fundamentally different issues and concerns than other mitigation interventions, including those undertaken in the energy arena. It is being increasingly recognized that this is an inaccurate perception. As one participant to a recent workshop focusing on forestry mitigation issues noted, "we [forestry experts] have done some damage in getting too involved in technical discussions. As a result, we have confused policymakers. The technical issues for forestry are no more perplexing than they are for energy offsets." Voicing support for this view, another participant said that "the central issue we need to address is not what our confidence level in our forestry measurements is, but to make it clear that forestry offsets can accomplish the same levels of accuracy as energy at equivalent levels of effort. The issue is comparability."

When looking at whatever criteria are chosen by which to define and evaluate mitigation projects, clearly different types of LUCF interventions, and even individual projects within a given type, will perform differently. The same can be said of many energy-based projects. To advance the project-based objectives of the Kyoto Protocol, what is most important is to identify the criteria for a good project and see which projects in whatever sector can meet these criteria.

COP-4 and Treatment of the LUCF Issue

It is difficult to predict how discussions of the LUCF issue will develop at COP-4. Discussions are scheduled to begin on specification of the CDM, a particularly important step if rules are to be in place to guide banking of CDM credits starting in the year 2000. On the other hand, with referral of key methodological issues to the IPCC, there will be a natural tendency among some participants to argue that consideration of LUCF issues should be postponed until the IPCC issues its special report and its Third Assessment Report. Given the increasing priority attached to LUCF measures by many developing countries, this would be a mistake. It is important that flexibility be built into development of the CDM to accommodate a variety of potential mitigation measures, even while IPCC work progresses.

The COP-4 agenda, happily, does not postpone consideration of forestry issues. Indeed, LUCF issues are given immediate attention under the planned agenda. Articles 6, 12 and 17 will also be addressed, although it is unclear whether forestry as a mitigation option will be included in these discussions. Beyond these detailed agenda items, however, the Parties need to grapple with larger policy issues that are relevant to incorporation of LUCF measures into a framework by which the objectives of the FCCC and the Kyoto Protocol can be achieved:

the fundamental need to address LUCF emissions (almost 20 percent of current totals) as part of global emissions reduction efforts;

the need to systematically separate discussion of methodological issues associated with national emissions inventories, whether energy-based or biotic, from methodological issues involved in the pursuit of project-level mitigation interventions under Articles 6, 12, and 17 of the Kyoto Protocol;

the need to grapple with additionality and other project-level analytical issues that are more policy-based than technical;

the need to develop project-based mitigation policy in a comprehensive manner, rather than dealing separately with individual project categories that really have much more in common than not;

the need to advance the goal of maintaining the environmental integrity of the Protocol’s flexibility mechanisms, without imposing requirements that undercut the flexibility to pursue interventions with climate change mitigation and other environmental benefits.

Given the complexities of the issues involved, COP-4 could likely be termed a success if processes were initiated for grappling with many of these issues over the next couple of years. There is much for the Parties to think about.

Trexler and Associates Inc. (TAA) is a climate change mitigation firm based in Portland, Oregon, in the United States. TAA’s president, Dr. Mark C. Trexler, became actively involved in assessing forestry’s potential in climate change mitigation while at the World Resources Institute from 1988-1991, where he participated in the development of the first carbon offset project, the CARE Guatemala project funded by AES Corp. Since its founding in 1991, TAA has worked extensively in the energy and land-use mitigation arenas, participating in the implementation of more than half a dozen domestic and international mitigation projects, including domestic and international forestry projects. TAA directs the Land Use and Biotic Mitigation Policy Project (Biotic Project), a policy research effort working to identify technically and politically credible answers to issues being raised regarding forestry and land use-based mitigation efforts. This paper is largely based on TAA’s work under the Biotic Project