The elephant in the room – A comparative study of uncertainties in carbon offsets

The clean development mechanism (CDM) is a flexible mechanism under the Kyoto Protocol, which makes it possible for developed countries to offset their emissions of greenhouse gases through investing in climate change mitigation projects in developing countries. When the mitigation benefit of a CDM project is quantified, measurable uncertainties arise that can be minimised using established statistical methods. In addition, some unmeasurable uncertainties arise, such as the rebound effect of demand-side energy efficiency projects. Many project types related to land use, land-use change and forestry (LULUCF) have been excluded from the CDM in part because of the high degree of statistical uncertainty in measurements of the carbon sink and risk of non-permanence. However, recent discussions within the United Nations Framework Convention on Climate Change (UNFCCC) have opened up for the possibility of including more LULUCF activities in the future. In the light of this discussion, we highlight different aspects of uncertainties in LULUCF projects (e.g. the risk of non-permanence and the size of the carbon sink) in relation to other CDM project categories such as renewables and demand-side energy efficiency. We quantify the uncertainties, compare the magnitudes of the uncertainties in different project categories and conclude that uncertainties could be just as significant in CDM project categories such as renewables as in LULUCF projects. The CDM is a useful way of including and engaging developing countries in climate change mitigation and could be a good source of financial support for LULUCF mitigation activities. Given their enormous mitigation potential, we argue that additional LULUCF activities should be included in the CDM and other future climate policy instruments. Furthermore, we note that Nationally Appropriate Mitigation Actions (NAMAs) are currently being submitted to the UNFCCC by developing countries. Unfortunately, the under-representation of LULUCF in comparison to its potential is evident in the NAMAs submitted so far, just as it has been in the CDM. Capacity building under the CDM may influence NAMAs and there is a risk of transferring the view on uncertainties to NAMAs.     

National forest policy as a platform for biosphere carbon management: the case of community forestry in Cameroon

Little attention has been given to the development of national policies relevant for the uptake, development and implementation of Clean Development Mechanism (CDM) projects. In this paper we examine the compatibility between forestry and related policy provisions in Cameroon and the CDM provisions for Land Use, Land Use Change and Forestry (LULUCF). For each CDM requirement such as eligibility, additionality, impact assessment and sustainable development, relevant national forestry policy questions are identified. These relevant policy questions are applied to community forestry policy instruments in Cameroon to analyse the likelihood that they can enhance or inhibit the uptake and implementation of biosphere carbon projects. We found that choosing a single crown cover value (from between 10 and 30%) presented a serious dilemma for Cameroon given its diverse vegetation cover. Adopting any single value within this range is unlikely to optimize national carbon management potential. The current forest institutional and regulatory policy framework in Cameroon is inadequate for promoting carbon forestry under current CDM rules. We conclude that national policy in Cameroon would need to recognise the need for and adopt a pro-active approach for biosphere carbon management, engaging in institutional development, integrated planning, project development support and providing adequate regulatory frameworks to enhance sustainable development through CDM projects. The need for CDM/Kyoto capacity building support for proactive national and local policy development is highlighted.     

Economic Assessment of Mitigation Options for Enhancing and Maintaining Carbon Sink Capacity in Indonesia

Land use, land-use change and forestry (LULUCF) projects may becomeeligible under Article 12 of the United Nations Framework Convention onClimate Change (UNFCCC) Kyoto Protocol's Clean DevelopmentMechanism (CDM). Some of the issues, which need to be addressed,include identifying the types of greenhouse gas (GHG) mitigation activitiesin LULUCF, which could be undertaken as CDM projects. Other issuesinvolve evaluating the mitigation potential and cost effectiveness of theactivities, as well as their likely socio-economic impacts and their influenceon the national carbon (C) stock. Three broad categories of mitigationactivities in LULUCF analyzed in this study include managing Cstorage, C conservation and carbon substitution. The C intensityof the activities was estimated to range from 37 to 218 Mg C per ha. The highest is in reforested land with slow growing species and the lowestin short-rotation plantations. At a real discount rate of 10%, investmentcosts required to implement the mitigation activities ranged from US$0.07 to 0.88 per Mg C, with life cycle costs ranging from US$ 0.07to 3.87 per Mg C, and benefits ranging from US$ –0.81 to 6.57 perMg C. Mitigation options with negative benefits are forest protection,reforestation, reduced impact logging and enhanced natural regeneration,while those with positive benefits are short rotation timber plantation, andbio-energy. Reforestation gave negative benefit since no revenue fromwood as trees are left in the forest for conservation, while Reduced ImpactLogging (RIL) and Enhanced Natural Regeneration (ENR)gave negative benefits because additional cost required to implement theoptions could not be compensated by the increase in round-hardwoodyield. Other factor is that the local price of round-hardwood is very low,i.e. US$ 160 per m³, while FOB price is between 250–400 US$ per m³. Total area available for implementing mitigationoptions (planting trees) in 1997 was 31 million hectares (× 10⁶ha) (about 40% are critical lands, 35% grasslands and 25%unproductive lands).Total area being considered for implementing the options under baseline,government-plans and mitigation scenarios in the period 2000–2030 is12.6, 16.3 and 23.6 × 10⁶ ha respectively. Furthermore, total area of production forest being considered for implementing reduced impactlogging and enrichment planting under the tree scenarios is 9, 26 and 16 × 10⁶ ha respectively, and that for forest protection is 2.1, 3.7, 3.1× 10⁶ ha respectively. The cumulative investment for implementingall mitigation activities in the three scenarios was estimated at 595, 892and 1026 million US$ respectively. National C stock under thebaseline scenario will continuously decline through 2030, while undergovernment-plans and mitigation scenarios the carbon stock increases. In2030, national C stock of the government and mitigation scenarios isalmost the same, 13% higher than that of baseline. However, the increasein national carbon stock in both scenarios could not offset carbon emissionsdue to deforestation.     

Community and farm forestry climate mitigation projects: case studies from Uttaranchal,India

The methodologies for forest mitigation projects still present challenges to project developers for fulfillment of criteria within the Clean Development Mechanism (CDM) or other such mechanisms for the purpose of earning carbon credits. This paper systematically approaches the process of establishing carbon (C) stocks for baseline (BSL) and mitigation scenario (MSL) for two case studies i.e., community and farm forestry projects in Uttaranchal, India. The analysis of various interventions shows that both projects present high carbon mitigation potential. However, the C reversibility risk is lower in long-rotation pine and mixed species plantation on community lands. The project is financially viable though not highly lucrative but the carbon mitigation potential in this ‘restoration of degraded lands’ type of project is immense provided challenges in the initial phase are adequately overcome. C revenue is an essential driver for investors in community projects. The short-rotation timber species such as Eucalyptus (Eucalyptus), Poplar (Populus) have high internal rates of return (IRR) and high carbon benefit reversibility potential due to fluctuations in market prices of commodities produced. The land holdings are small and bundling is desired for projects to achieve economies of scale. The methodological concerns such as sampling intensities, monitoring methodologies, sharing of benefits with communities and bundling arrangements for projects need further research to make these projects viable.     

A synopsis of land use,land-use change and forestry (LULUCF) under the Kyoto Protocol and Marrakech Accords

The complexities inherent in land use, land-use change and forestry (LULUCF) activities have led to contentious and prolonged debates about the merits of their inclusion in the 2008–2012 first commitment period of the Kyoto Protocol. Yet the inclusion of these activities played a key role in agreement on the general framework of the Kyoto Protocol, and LULUCF will likely continue to play a substantial part in negotiations on national commitments post-2012. The Marrakech Accords dictate which LULUCF activities are to be included under the Kyoto Protocol and provide rules on how they are to be accounted in the first commitment period. However, these rules have limitations and drawbacks that may be avoided in the structure of future commitments beyond 2012. Through adherence to the objectives of the United Nations Framework Convention on Climate Change (UNFCCC), and the incorporation of several critical features, a future framework can more effectively address the mitigation challenges and opportunities of this sector.     

Including land use,land-use change,and forestry in future climate change,agreements: thinking outside the box

This paper presents a framework that encompasses a full range of options for including land use, land-use change, and forestry (LULUCF) within future agreements under the United Nations Convention on Climate Change (UNFCCC). The intent is to provide options that can address the broad range of greenhouse gas (GHG) emissions and removals as well as to bring the broadest possible range of nations into undertaking mitigation efforts. We suggest that the approach taken for the Kyoto Protocol's first commitment period is only one within a much larger universe of possible approaches. This larger universe includes partially or completely “de-linking” LULUCF commitments from those in other sectors, and allowing commitments specified in terms other than tonnes of greenhouse gases. Such approaches may provide clarity and transparency concerning the role of the various sectors in the agreements and encourage participation in agreements by a more inclusive, diverse set of countries, resulting in a more effective use of LULUCF in addressing climate change.     

‘Benefit–Cost Analysis’ Of Disaster Mitigation: Application As a Policy And Decision-Making Tool

Many proponents of disaster mitigation claim that it offers potential benefits in terms of saved lives and property far exceeding its costs. To provide evidence for this, and to justify the use of public funds, agencies involved in mitigation can use benefit–cost analysis (BCA). Such analysis, if well done, offers a testable, defensible means of evaluating and comparing projects, helps decision-makers choose between mitigation projects, and provides a means to assess the way we spend public funds. In this critical overview of the more contentious issues and latest developments in BCA, I emphasize the pragmatic choices that one can make in accordance with good practice in project evaluation.     

Land use change and forestry climate project regional baselines: a review

Climate change programs have largely used the project-specific approach for estimating baseline emissions of climate mitigation projects. This approach is subjective, lacks transparency, can generate inconsistent baselines for similar projects, and is likely to have high transaction costs. The use of regional baselines, which partially addresses these issues, has been reported in the literature on forestry and agriculture projects, and in greenhouse gas (GHG) mitigation program guidance for them (e.g., WRI/WBCSD GHG Project Protocol, USDOE’s 1605(b) registry, UNFCCC’s Clean Development Mechanism). This paper provides an assessment of project-specific and regional baselines approaches for key baseline tasks, using project and program examples. The regional experience to date is then synthesized into generic steps that are referred to as Stratified Regional Baselines (SRB). Regional approaches generally, and SRB in particular explicitly acknowledge the heterogeneity of carbon density, land use change, and other key baseline driver variables across a landscape. SRB focuses on providing guidance on how to stratify lands into parcels with relatively homogeneous characteristics to estimate conservative baselines within a GHG assessment boundary, by applying systematic methods to determine the boundary and time period for input data.

Drivers of deforestation and REDD+ benefit-sharing: A meta-analysis of the (missing) link

REDD+ (reducing emissions from deforestation and forest degradation and related forest activities) is a climate change mitigation mechanism currently being negotiated under the United Nations Framework Convention on Climate Change (UNFCCC). It calls for developed countries to financially support developing countries for their actions to reduce forest-sector carbon emissions. In this paper, we undertake a meta-analysis of the links, if any, between multiple and diverse drivers of deforestation operating at different levels and the benefits accruing from and being shared through REDD+ projects. We do so by assessing the nature of this link in (a) scholarly analysis, through an in-depth analysis of the posited relationship between drivers and REDD+ benefit-sharing, as examined in the peer-reviewed literature; and (b) in policy practice, through analysing how this link is being conceptualised and operationalised, if at all, in REDD+ project design documents. Our meta-analysis suggests that while some local, direct drivers and a few regional indirect drivers of deforestation and forest degradation are being targeted by specific REDD+ interventions and associated benefit-sharing mechanisms at the project-level, most national and international indirect drivers are not. We conclude that the growing academic analyses of REDD+ projects do not (as yet) advance viable theories of change, i.e. there is currently little focus on how REDD+ benefits could play a transformative role in catalysing action on drivers.     

Carbon benefits from Amazonian forest reserves: leakage accounting and the value of time

Amazonian forest reserves have significant carbon benefits, but the methodology used for accounting for these benefits will be critical in determining whether the powerful economic force represented by mitigation efforts to slow global warming will be applied to creating these reserves. Opportunities for reserve creation are quickly being lost as new areas are opened to deforestation though highway construction and other developments. Leakage, or the effects that a reserve or other mitigation project provokes outside of the project boundaries, is critical to a proper accounting of net carbon benefits. Protected areas in the Amazon have particularly great potential mitigation benefits over an extended time horizon. Over a 100-year time frame, virtually no unprotected forest is likely to remain, meaning that potential leakages (both leakage to the vicinity of the reserves and that displaced by removing protected areas from the land-grabbing market) should not matter much because any short-term leakage would be “recovered” eventually. The effect of the value attributed to time greatly influences the impact of leakage on benefits credited to reserves. Simple assumptions regarding leakage scenarios illustrate the benefits of reserves and the critical areas where agreement is necessary to make this option a practical component of mitigation efforts. The stakes are too high to allow further delays in reaching agreement on these issues.     

Bamboo in climate change and rural livelihoods

Climate change negotiations, assessments, and greenhouse gas inventory guidelines have all but bypassed bamboo. Disallowing stands of tree-like bamboos as forests disparages their function in the carbon (C) cycle, and disregards pillars of smallholder livelihoods. Exposing bamboo not as a panacea, but as an overlooked option for C conservation, sequestration, and adaptation, we screen details of distribution, morphology, growth, physiology, and impacts for pertinence to climate change. Additional to 40 million hectares of existing bamboo forests, many potential host countries for C projects harbor suitable sites. Definitions, methods and default values, such as the root/shoot- ratio, biomass conversion factors, allometric equations and sampling variables need adjusting. Rapid maturation, persistent rhizomes, a rich palette of species, and wind-firmness may mitigate risk. Bamboos can accommodate agro-and urban forestry, and reign in unsustainable shifting cultivation. Distribution functions of bamboo biomass stocks and growths do not deviate drastically from those of trees. If anything, bamboo stocks are slightly lower, and growths slightly higher, with medians of 87 t*ha⁻¹ and 10.5 t*ha⁻¹*yr⁻¹, respectively. However, bamboo’s outstanding socio-economic effects might well determine its future in mitigation and adaptation. Early, continuous yields, selective harvesting on even small parcels of land, low capital and high labor intensity, virtually 100% conversion efficiency to about 1,500 products, and, typically, 75% of economic returns benefiting rural people are advantageous attributes. Regional studies on suitability, silviculture, yields, economics, risk, and C assessment would strengthen bamboo’s function as ‘the poor man’s timber’ and promote its niche as the smallholder’s C sink.     

Exploring socioeconomic impacts of forest based mitigation projects: Lessons from Brazil and Bolivia

This paper aims to contribute new insights globally and regionally on how carbon forest mitigation contributes to sustainable development in South America. Carbon finance has emerged as a potential policy option to tackling global climate change, degradation of forests, and social development in poor countries. This paper focuses on evaluating the socioeconomic impacts of a set of forest based mitigation pilot projects that emerged under the United Nations Framework Convention on Climate Change. The paper reviews research conducted in 2001–2002, drawing from empirical data from four pilot projects, derived from qualitative stakeholder interviews, and complemented by policy documents and literature. Of the four projects studied three are located in frontier areas, where there are considerable pressures for conversion of standing forest to agriculture. In this sense, forest mitigation projects have a substantial role to play in the region. Findings suggest however, that all four projects have experienced cumbersome implementation processes specifically, due to weak social objectives, poor communication, as well as time constraints. In three out of four cases, stakeholders highlighted limited local acceptance at the implementation stages. In the light of these findings, we discuss opportunities for implementation of future forest based mitigation projects in the land use sector.     

Towards an efficient and low carbon economy post-2012: opportunities and barriers for foreign companies in the Russian energy market

Russia is one of the most energy- and carbon-intensive countries in the world. The high level of technical abrasion and a low level of investments into modernization of the Russian energy industry cause huge energy wastage and carbon emissions. This situation is regarded by countries relying on energy imports from Russia as an increasing threat to security of supply and as a major barrier to global climate change policy. This paper provides an overview of the current and future Russian energy efficiency and greenhouse gas mitigation policies. The focus is laid on the detailed investigation of the progress and future potential of the market-oriented mechanisms Joint Implementation (JI) and Green Investment Scheme (GIS), being considered as two possible channels for FDI in transnational energy efficiency and carbon mitigation projects. The analysis was conducted by reviewing the relevant scientific and non-scientific literature including a variety of theoretical and practice-oriented arguments. Based on this assessment, we conclude that JI and GIS are confronted with numerous barriers in the Russian energy market. We further scrutinize the ability of Energy Service Companies (ESCOs), as one of the market intermediary models, to overcome some of these barriers in the process of effectively integrating JI and GIS in their long-term business strategies. Due to the compatibility of the main features of JI and GIS with the working procedures under the ESCO model we conclude that numerous synergy effects can be generated and that the majority of transaction barriers specific for the Russian energy market can be overcome. Such an integrative framework for international energy efficiency and carbon mitigation projects would contribute to the modernization of the Russian energy industry and enable a “win-win” situation for foreign companies seeking to invest in a sustainable manner.     

The role of carbon sequestration and the tonne-year approach in fulfilling the objective of climate convention

Carbon can be sequestered from the atmosphere to forests in order to lower the atmospheric carbon dioxide concentration. Tonne-years of sequestered carbon have been suggested to be used as a measure of global warming impact for these projects of finite lifetimes. It is illustrated here by simplified example cases that the objective of the stabilisation of the atmospheric greenhouse gas concentrations expressed in the UN Climate convention and the tonne-year approach can be in contradiction. Tonne-years generated by the project can indicate that carbon sequestration helps in the mitigation of climate change even when the impact of the project on the CO₂ concentration is that concentration increases. Hence, the use of the tonne-years might waste resources of fulfilling the objective of the convention. The studied example cases are closely related to the IPCC estimates on global forestation potentials by 2050. It is also illustrated that the use of bioenergy from the reforested areas to replace fossil fuels can in the long term contribute more effectively to the control of carbon dioxide concentrations than permanent sequestration of carbon to forests. However, the estimated benefits depend on the time frame considered, whether we are interested in the decadal scale of controlling of the rate of climate change or in the centennial scale of controlling or halting the climate change.     

Consistency and comparability of estimation and accounting of removal by sinks in afforestation/reforestation activities

The Kyoto Protocol accounting system and its market mechanisms, Clean Development Mechanism (CDM) and Joint Implementation (JI), are built on the key principle that emission and emission reduction units generated by afforestation/reforestation activities under national systems and projects are fully comparable, no matter their origin. Lack of consistency in the quality of emission and emission reduction units can undermine the environmental integrity of the climate stabilization actions. Therefore, it is the ambition that units generated in the land-use, land-use change and forestry (LULUCF) sector are of similar quality with those from non-LULUCF sectors. In this paper, the authors pose the question of whether there is full estimation and accounting consistency between Annex I Party’s national GHG systems and CDM projects methodologies in the LULUCF sector, in terms accuracy, completeness, levels of uncertainty and permanence risk. We focus on methodological aspects related to the applicability and practicability of using approved afforestation/reforestation CDM methodologies; estimation, reporting and accounting rules; the small pools and sources issue, uncertainty of removal estimate; leakage and handling of non-permanence risk. We conclude that there is significant scope for improving the consistency of greenhouse gas emission accounting from land use activities in the post-2012 climate change agreement, between Annex I domestic and project activities. As well, we conclude that the preparation and implementation of project activities has to be made simpler by a project framework guideline, which is then adapted to any project circumstances.     

Ancillary impacts of energy-related climate change mitigation options in Africa’s least developed countries

This article analyses the debate associated with the ancillary impacts of climate change mitigation options in developing countries, with a particular focus upon Africa’s 34 least developed countries. While these countries’ emissions of greenhouse gases are relatively small (and they do not have emission limitation commitments in the current international regime), inattention to the mitigation agenda would mean that developing countries both miss potential funding opportunities and fail to ‘climate-proof’ their development strategies. A focus, therefore, upon the short-term, local, developmental impacts that serve to change the relative attractiveness of different mitigation options from the perspective of the developing country is in these countries’ current strategic interests. In this article, I examine three energy-related climate change mitigation options: improved cookstoves, carbon-free electricity and improved energy efficiency in industry. Key ancillary impacts are better indoor air quality, better outdoor air quality and job creation (respectively). Further work to strengthen the evidence base regarding these impacts needs to be undertaken, potentially drawing upon broader work that has already been completed. Thus, in conclusion, a call for cross-fertilisation of information between heretofore disparate research communities is made. Additionally, the development of an integrated research agenda, forging linkages among cookstoves, indoor air quality and climate change mitigation research communities in Africa’s least developed countries, is identified as a priority.     

A virtual “field test” of forest management carbon offset protocols: the influence of accounting

Of the greenhouse gas (GHG) mitigation options available from U.S. forests and agricultural lands, forest management presents amongst the lowest cost and highest volume opportunities. A number of carbon (C) accounting schemes or protocols have recently emerged to track the mitigation achieved by individual forest management projects. Using 50-year C cycling data from the Calhoun Experimental Forest in South Carolina, USA, C storage is estimated for a hypothetical forest management C offset project operating under seven of these protocols. After 100 years of project implementation, net C sequestration among the seven protocols varies by nearly a full order of magnitude. This variation stems from differences in how individual C pools, baseline, leakage, certainty, and buffers are addressed under each protocol. This in turn translates to a wide variation in the C price required to match the net present value of the non-project, business-as-usual alternative. Collectively, these findings suggest that protocol-specific restrictions or requirements are likely to discount the amount of C that can be claimed in “real world” projects, potentially leading to higher project costs than estimated in previous aggregate national analyses.     

Domestic UNFCCC Kyoto Protocol Mechanisms Project Supply Coordination Through Tendering – Lessons from the New Zealand Experience

A United Nations Framework Convention on Climate Change (UNFCCC) Joint Implementation (JI) host country has to make sure that JI projects are additional to avoid extra costs to generate the reductions necessary to cover the deduction of Emission Reduction Units (ERUs) from the country’s Kyoto Protocol emissions budget. A tender of ERUs by the government allows to generate additional reductions beyond the ERUs issued if it thoroughly checks project additionality. The government of New Zealand is running a tender for JI projects under the title “Projects to Reduce Emissions” since 2003. In two rounds, 10 million ERUs have been awarded and several projects have already entered into contracts with European buyers. The ratio of ERUs awarded to reductions achieved was 0.8 in the second tender. However it remains to be seen whether the additionality test of this tender is sufficient to exclude clearly non-additional projects.     

Implications of climate change on mitigation potential estimates for forest sector in India

Climate change is projected to impact forest ecosystems, including biodiversity and Net Primary Productivity (NPP). National level carbon forest sector mitigation potential estimates are available for India; however impacts of projected climate change are not included in the mitigation potential estimates. Change in NPP (in gC/m²/yr) is taken to represent the impacts of climate change. Long term impacts of climate change (2085) on the NPP of Indian forests are available; however no such regional estimates are available for short and medium terms. The present study based on GCM climatology scenarios projects the short, medium and long term impacts of climate change on forest ecosystems especially on NPP using BIOME4 vegetation model. We estimate that under A2 scenario by the year 2030 the NPP changes by (−5) to 40% across different agro-ecological zones (AEZ). By 2050 it increases by 15% to 59% and by 2070 it increases by 34 to 84%. However, under B2 scenario it increases only by 3 to 25%, 3.5 to 34% and (−2.5) to 38% respectively, in the same time periods. The cumulative mitigation potential is estimated to increase by up to 21% (by nearly 1 GtC) under A2 scenario between the years 2008 and 2108, whereas, under B2 the mitigation potential increases only by 14% (646 MtC). However, cumulative mitigation potential estimates obtained from IBIS—a dynamic global vegetation model suggest much smaller gains, where mitigation potential increases by only 6% and 5% during the period 2008 to 2108.     

The Potential of Brazil's Forest Sector for Mitigating Global Warming under the Kyoto Protocol

Activities in Brazil's forest sector have substantial potential for mitigating global warming as well as additional environmental and other benefits. Silvicultural plantations of different types, reduced impact logging, and deforestation avoidance all have potential mitigation roles. The magnitude of the annual emission from recent rates of deforestation in Amazonia presents an opportunity for carbon (C) benefits through reducing current rates of deforestation. Measures related to Amazonian deforestation have greater potential carbon benefits than do options such as plantation silviculture, but much depends on how benefits are calculated. Procedures are needed for assessing the environmental and social impacts of Clean DevelopmentMechanism (CDM) projects.