LULUCF ConceptsLULUCF Concepts
Training Seminar for BioCarbon Fund ProjectsTraining Seminar for BioCarbon Fund ProjectsFebruary 8February 8thth 2008 2008
Timothy Pearson and Sarah WalkerWinrock International
Key carbon trading Key carbon trading concept:concept:
ReduceReduce GHG emissions (or GHG emissions (or enhance enhance removalsremovals by sinks) by sinks) in one country to in one country to permit an permit an equivalentequivalent quantity of GHG quantity of GHG emissions in another country, without emissions in another country, without changing the global emission balance.changing the global emission balance.
Basic requirements of emissions Basic requirements of emissions reductions or removals under the reductions or removals under the CDMCDM
CreateCreate ““realreal, , measurablemeasurable, and, and long-long-termterm benefits related to the mitigation benefits related to the mitigation of climate change” (KP, art. 12.5b)of climate change” (KP, art. 12.5b)
Be “Be “additionaladditional to any that would occur to any that would occur in the in the absenceabsence of the certified project of the certified project activity” (KP, art. 12.5c)activity” (KP, art. 12.5c)
Be Be certifiedcertified by operational entities by operational entities designated by the Conference of the designated by the Conference of the Parties (KP, art. 5)Parties (KP, art. 5)
Basic requirements of emissions Basic requirements of emissions reductions or removals under the reductions or removals under the CDMCDM Real, measurableReal, measurable
Long-termLong-term
AdditionalAdditional
In absence of projectIn absence of project
CertifiedCertified
Monitoring (methodology + Monitoring (methodology + plan)plan)
Expiring CERs to deal with Expiring CERs to deal with non-permanence of C non-permanence of C storagestorage
BAU activities not eligible, BAU activities not eligible, must be human-inducedmust be human-induced
Baseline (methodology+ Baseline (methodology+ assessmentassessment
Validation, Verification, and Validation, Verification, and Certification by accredited Certification by accredited entityentity
What is a forest?What is a forest?
Host country must define a forest within Host country must define a forest within the following guidelines:the following guidelines: Minimum tree crown cover between 10 and Minimum tree crown cover between 10 and
30%30% Minimum land area between 0.05 and 1.0 Minimum land area between 0.05 and 1.0
hectarehectare Minimum tree height between 2 and 5 mMinimum tree height between 2 and 5 m
Values once chosen must remain fixedValues once chosen must remain fixed
1990 Rule for 1990 Rule for AfforestationAfforestation
No land meeting national definition of No land meeting national definition of forest be present within project forest be present within project boundaries between 31 December 1989 boundaries between 31 December 1989 and start of projectand start of project
Different dates for other standards eg Different dates for other standards eg VCSVCS
Eligibility ToolEligibility Tool
Demonstrate the project area is not already Demonstrate the project area is not already forestforest
a.a. Tree heightTree height
b.b. AreaArea
c.c. Tree coverTree cover
Eligibility ToolEligibility Tool
Demonstrate that the activity is an Demonstrate that the activity is an afforestation/reforestation activityafforestation/reforestation activity Cadastral mapsCadastral maps Satellite / aerial photographySatellite / aerial photography Local interviewsLocal interviews
Additionality—key stepAdditionality—key step A project activity is additional if the activity only A project activity is additional if the activity only
takes place takes place because of the anticipation of a because of the anticipation of a potential sale ofpotential sale of Certified Emission Reduction Certified Emission Reduction units (CER)units (CER) e.g. Activity such as forest restoration would not e.g. Activity such as forest restoration would not
have taken place without outside funds paying have taken place without outside funds paying for the planting, etc. in anticipation of receiving for the planting, etc. in anticipation of receiving carbon offsetscarbon offsets
Additionality ToolAdditionality Tool
Step 0: Preliminary screening on starting Step 0: Preliminary screening on starting datedate
Step 1: Alternative land use scenariosStep 1: Alternative land use scenarios Step 2: Investment analysisStep 2: Investment analysis Step 3: Barriers analysisStep 3: Barriers analysis Step 4: Common practice analysisStep 4: Common practice analysis
BaselinesBaselines What would have happened in the What would have happened in the
absence of the CDM project activityabsence of the CDM project activity Must be Must be project specificproject specific and prepared in and prepared in
a a transparenttransparent and and conservativeconservative manner manner
Baselines – Baselines – avoided emissions example:avoided emissions example:
Credits from a project is:Credits from a project is:Difference between C stocks with project Difference between C stocks with project and baseline C stocksand baseline C stocks
Time (years)
Ca
rbo
n S
tocks
With Project
Baseline
Carbon Credits
Time (years)
Ca
rbo
n S
tock
s
Baselines – A/R example:Baselines – A/R example: Credits from a project is:Credits from a project is:
Difference between C stocks with project Difference between C stocks with project and baseline C stocksand baseline C stocks
With Project
Baseline
Carbon Credits
Baselines - three Baselines - three approachesapproaches
1.1. Existing or historical changes in stocks in the Existing or historical changes in stocks in the carbon pools within the project boundarycarbon pools within the project boundary
2.2. Changes in stocks in the carbon pools within Changes in stocks in the carbon pools within the project boundary from a land use that the project boundary from a land use that represents an economically attractive course of represents an economically attractive course of actionaction
3.3. Changes in stocks in the pools within the Changes in stocks in the pools within the project boundary from the most likely land use project boundary from the most likely land use at the time the project starts.at the time the project starts.
CoP-7 defined baseline for CoP-7 defined baseline for CDMCDM
MA CDM (44) MA CDM (44) The baseline is the scenario thatThe baseline is the scenario that:: ““reasonably represents GHG emissions that reasonably represents GHG emissions that would would
occur in the absence of the proposed project occur in the absence of the proposed project activityactivity”;”;
is derived using an is derived using an approved baseline methodologyapproved baseline methodology..
MA CDM (45) MA CDM (45) The baseline shall be established:The baseline shall be established: (b) “in a transparent and conservative manner” (b) “in a transparent and conservative manner”
regarding the choices of approaches, assumptions, regarding the choices of approaches, assumptions, …”…”
(c) “on a project-specific basis”;(c) “on a project-specific basis”; (d) in accordance with simplified procedures for (d) in accordance with simplified procedures for
small scale projects.small scale projects.
Combined ToolCombined Tool
Simultaneous consideration of land use Simultaneous consideration of land use alternatives and barriers and financial alternatives and barriers and financial considerationsconsiderations
Allows determination of alternatives and Allows determination of alternatives and proof of additionality of project scenarioproof of additionality of project scenario
LeakageLeakage Leakage is the unanticipated loss in Leakage is the unanticipated loss in
carbon benefits carbon benefits outsideoutside of the of the project’s boundary as a result of the project’s boundary as a result of the project activitiesproject activities Carbon emissions from leakage could Carbon emissions from leakage could
offset gains from a carbon project, offset gains from a carbon project, resulting in a reduction of the carbon resulting in a reduction of the carbon “credits” “credits”
Leakage: activity shiftingLeakage: activity shifting Activity shifting: activities that would have Activity shifting: activities that would have
occurred inside project area occur in another occurred inside project area occur in another location outside of project area location outside of project area
Can be minimized by engaging communities in Can be minimized by engaging communities in project and providing alternative lifestylesproject and providing alternative lifestyles E.g.—reforest with multi-purpose tree species, E.g.—reforest with multi-purpose tree species,
employ people to plant and maintainemploy people to plant and maintain
Relates to the phrase in the CDM “..achieving Relates to the phrase in the CDM “..achieving sustainable development” sustainable development”
2007
Project Area
2007
Nearby the Project Area
Leakage – Leakage – avoided emissions exampleavoided emissions example
BaselineCO2 emissions
2013CO2 emissions
Baseline
Project Area
2007
Nearby the Project Area
Leakage – A/R exampleLeakage – A/R example
2013 2013CO2 emissions
Time (years)
Ca
rbo
n S
tock
sLeakageLeakage
Area outside of project area:Area outside of project area:
Carbon stocks without existence of project
Carbon stocks because of project
Carbon stocks reduced = Project Leakage
Time (years)
Cha
nge
in C
arbo
n S
tock
s
LeakageLeakage Area outside of project area:Area outside of project area:
Change in carbon stocks because of project
Carbon stocks reduced = Project Leakage
Time (years)
Ca
rbo
n S
toc
ks
Leakage – Leakage – avoided emissions exampleavoided emissions example
Carbon creditsCarbon credits= Project – Baseline – Leakage= Project – Baseline – Leakage
Put in place measures to reduce leakagePut in place measures to reduce leakage
Carbon credits
With Project
Baseline
Baseline+Leakage
Time (years)
Ca
rbo
n S
toc
ks
Leakage – A/R exampleLeakage – A/R example Carbon creditsCarbon credits
= Project – Baseline – Leakage= Project – Baseline – Leakage Put in place measures to reduce leakagePut in place measures to reduce leakage
Carbon credits
With Project
Baseline
Baseline+Leakage
LeakageLeakage
Vehicle and machinery useVehicle and machinery use Displacement of fuel wood collectionDisplacement of fuel wood collection Fence post use !Fence post use !
Market effectsMarket effects Investment crowding-inInvestment crowding-in Investment crowding-outInvestment crowding-out
Non-permanenceNon-permanence Land-based systems subject to reversal Land-based systems subject to reversal
by human and natural disturbancesby human and natural disturbances Addressed by concept of “rental” of the Addressed by concept of “rental” of the
service service For CDM project two options exist:For CDM project two options exist:
temporary certified emission reduction units temporary certified emission reduction units (tCER)(tCER)
long-term certified emission reduction units long-term certified emission reduction units (lCER)(lCER)
Temporary certified Temporary certified emission reductions- tCERsemission reductions- tCERs
Allotted tCER = net anthropogenic Allotted tCER = net anthropogenic GHGGHG
Issued at each verification and Issued at each verification and certification period – when carbon certification period – when carbon stocks exist on landstocks exist on land
Expire at next certification periodExpire at next certification periode.g. issued 2012 e.g. issued 2012 expire 2017 expire 2017
tCER – ex. One 30 year tCER – ex. One 30 year crediting periodcrediting period
0
20
40
60
80
100
2007 2012 2017 2022 2027 2032 2037YearN
et S
eque
ster
edt
CO
2e
0
20
40
60
80
100
tCE
R20
12
tCE
R20
17
tCE
R20
22
tCE
R20
27
tCE
R20
32
tCE
R20
37
Year
Ne
t S
eq
ue
ste
red
t C
O2
e
tCER – ex. One 30 year tCER – ex. One 30 year crediting periodcrediting period
02040
6080
100
2007 2012 2017 2022 2027 2032 2037YearN
et S
eque
ster
edt
CO
2e
0
20
40
60
80
tCE
R20
12
tCE
R20
17
tCE
R20
22
tCE
R20
27
tCE
R20
32
tCE
R20
37
Year
Net
Seq
uest
ered
t C
O2e
Long-term certified Long-term certified emission reductions-lCERsemission reductions-lCERs
lCERs issued = net anthropogenic GHG lCERs issued = net anthropogenic GHG
removals achieved by the project activity removals achieved by the project activity
between two certification periodsbetween two certification periods
Issued at each verification and certification Issued at each verification and certification
period period
Expire at end of crediting periodExpire at end of crediting period
e.g. project start date: 2007, e.g. project start date: 2007,
lCER issued 2012 lCER issued 2012 expire 2038 expire 2038
lCER – ex. One 30 year lCER – ex. One 30 year crediting periodcrediting period
020406080
100
2007 2012 2017 2022 2027 2032 2037
YearNet
Seq
uest
ered
C
arbo
n (t
C)
0
20
40
60
80
100
2012 2017 2022 2027 2032 2037
lCER 2032
lCER 2027
lCER 2022
lCER 2017
lCER 2012
Net
Seq
uest
ered
Car
bon
(t C
)
Non-PermanenceNon-Permanence
For non-CDM registries?For non-CDM registries? VCS has a buffer, a proportion of the credits VCS has a buffer, a proportion of the credits
are held in the buffer as an insurance are held in the buffer as an insurance against non-permanenceagainst non-permanence
Legal guarantees in USLegal guarantees in US
Thank You!Thank You!
For more information see:For more information see: http://www.winrock.org/Ecosystems/tools.asphttp://www.winrock.org/Ecosystems/tools.asp
Or contact us:Or contact us: [email protected]@winrock.org [email protected]@winrock.org