Foresty offsets in emissions trading systems: a link between systems?

An important aspect in the linking of different emissions trading schemes is the degree to which these systems allow (or ban) external offset project categories. The EU Emission Trading Scheme (EU ETS) currently allows the use of credits from energy and industry projects developed under the Kyoto Protocol’s Joint Implementation (JI) and Clean Development Mechanism (CDM) but excludes the use of carbon credits from forestry projects for compliance in the EU ETS. Forestry credits generated by the CDM have a limited lifetime and expire at the end of a project’s crediting period, or earlier if the carbon stock for which the credits have been issued ceases to exist. According to the recently adopted amendment of the EU ETS Directive forestry credits will remain to be excluded until 2020. The present article reviews how the New South Wales Greenhouse Gas Abatement Scheme (Australia), the Regional Greenhouse Gas Initiative (US) and the voluntary scheme of the Chicago Climate Exchange integrate forestry offsets into the respective system and how they deal with the risk of losing stored and credited biomass. By comparing the results of different scenarios this article shows how differences in the treatment of forestry offsets could impact the efforts to link various emission trading systems in future.

Bioenergy and the CDM in the Emerging Market for Carbon Credits

This paper analyses the eligibility of different types of biomass energy projects in developing countries for funding under the Kyoto Protocol's Clean Development Mechanism and related funds. Specifically, GHG emission reductions through the replacement of non-renewable types of biomass with renewable energy, or the improvement of the efficiency of energy systems based on non-renewable biomass, is discussed in more detail, as it is currently difficult if not impossible for these to qualify as CDM projects under current rules. These problems are caused by the categorical exclusion of land-use from the CDM (with the exception of afforestation and reforestation projects). The paper offers some possible solutions for both small-scale and large-scale CDM projects. These limitations hold for a number of carbon funds. The paper covers of the major funds operated by the World Bank and that are already operational, to point out differences between existing funds in order to identify the best opportunities for different biomass sources and technologies. This systematic, comparative analysis covers the characteristics of the different funds in terms of eligible technologies, geographical foci, and size (targets and completed and ongoing transactions, CO₂ equivalents, project asset values). To provide the context for the analysis of the carbon funds, the regulatory drivers and frameworks influencing the demand side of the market are discussed. This first of its kind analysis for the specifics of the carbon market regarding bioenergy enables decision makers and project managers active or planning to become active in the area, to identify and target the most promising funds for their specific purposes.     

Forest Management for Mitigation of CO2 Emissions: How Much Mitigation and Who Gets the Credits?

Forestry projects can mitigate the net flux of carbon (C) to the atmosphere in four ways: (1) C is stored in forest biomass—trees, litter and soil, (2) C is stored in durable wood products, (3) biomass fuels displace consumption of fossil fuels, and (4) wood products often require less fossil-fuel energy for their production and use than do alternate products that provide the same service. We use a mathematical model of C stocks and flows (GORCAM) to illustrate the inter-relationships among these impacts on the C cycle and the changing C balance over time. The model suggests that sustainable management for the harvest of forest products will yield more net C offset than will forest protection when forest productivity is high, forest products are produced and used efficiently, and longer time periods are considered. Yet it is very difficult to attribute all of the C offsets to the forestry projects. It is, at least in concept, straightforward to measure, verify, and attribute the C stored in the forests and in wood products. It is more challenging to measure the amount of fossil fuel saved directly because of the use of biomass fuels and to give proper attribution to a mitigation project. The amount of fossil fuel saved indirectly because biomass provides materials and services that are used in place of other materials and services may be very difficult to estimate and impossible to allocate to any project. Nonetheless, over the long run, these two aspects of fossil fuel saved may be the largest impacts of forestry projects on the global C cycle.     

The Kyoto Protocol: provisions and unresolved issues relevant to land-use change and forestry

This paper describes the relevant text of the Kyoto Protocol and its implications for land-use change and forestry (LUCF) activities and addresses some of the technical issues that merit further consideration and clarification before the treaty comes into force. Although the phrasing of the Protocol is sometimes ambiguous and the opportunities limited, the Protocol does provide for some selected forest-related activities to be used to meet national commitments for the reduction of greenhouse gas emissions. To implement the forest-related portions of the Protocol, most importantly: (1) a clear definition for the word ‘reforestation' is required, (2) contradictory wording in Article 3.3 needs to be clarified to establish how credits are to be measured, (3) further thought should be given to the sentence in Article 3.7 which provides that countries with a net carbon sink in LUCF in 1990 cannot include emissions from land-use change in their 1990 baseline, whereas countries with a net carbon source in LUCF can include those emissions in their 1990 baseline, (4) the rules and baseline issues for joint implementation and the clean development mechanism need to be clarified and (5) inclusion of additional forest management activities needs to be considered.     

Land-based carbon storage and the European union emissions trading scheme: the science underlying the policy

Climate change is occurring with greater speed and intensity that previously anticipated. All effective environmentally and socially sound mitigation efforts need to be employed to effectively address this global crisis. Land Use, Land Use Change and Forestry (LULUCF) projects can provide significant climate change mitigation benefits as well as poverty alleviation and biodiversity conservation benefits. The policies of the European Union Emissions Trading Scheme (EU-ETS), the world’s largest carbon market exclude LULUCF. Scientific support for this exclusion was presented in a briefing paper published by the Climate Action Network—Europe (CAN) that puts forward the proposition that land based storage of carbon is ineffective. A careful review of the scientific papers cited in support of CAN’s position indicates that, while the papers themselves are scientifically sound, they do not support the continued exclusion of LULUCF projects from the EU-ETS. At the same time some important recent research papers that describe the carbon storage and social benefit potential of such projects are not included in the analysis. An in-depth consideration of the scientific evidence is necessary in evaluating this policy option. Based on this evidence a case can be made for the inclusion of LULUCF projects in the EU-ETS.