Author: Tracy Johns

Tracy Johns of Joanneum Research tells the Ecosystem Marketplace why new efforts are needed to include avoided deforestation in the evolving carbon market.



Reducing greenhouse gas emissions worldwide requires addressing all sources of emissions. This principle is incorporated into the mandate of both the UNFCCC and the Kyoto Protocol. While fossil fuel use is the leading source of global emissions, deforestation is the primary source of emissions for many developing countries, often dwarfing national emissions from the energy or transportation sectors. Emissions from deforestation comprise 20-25% of total anthropogenic emissions. Ignoring this important source only limits the potential for emissions reduction worldwide, and inhibits the participation of developing countries in the international effort to avoid dangerous anthropogenic interference with the climate system.

Currently, only developed countries have accepted targets on emissions reduction, but under the Clean Development Mechanism, these countries are allowed to meet a portion of their emission reduction commitments by investing in emission-reducing activities in developing countries. Until now, the reduction of emissions from deforestation was excluded from the list of eligible activities, thereby preventing financial support for developing countries to address deforestation through the Kyoto Protocol.

In November 2005, at the latest meeting of Parties to the climate change convention in Montreal, the governments of Papua New Guinea and Costa Rica, supported by several developing countries, submitted a proposal for the consideration of reducing emissions from deforestation in developing countries under the UNFCCC. Parties agreed to a two-year process of evaluation of the issue, beginning with negotiations of the Subsidiary Body for Scientific and Technological Advice (SBSTA), which provides recommendations to the Parties of the convention. SBSTA met in Bonn in mid-May, where the issue was discussed briefly, and agreed upon the scope of an official workshop on the subject which will take place in Rome on August 31st.

Beyond Semantics

Prior to the meeting in Bonn, over 70 experts from country delegations, non-governmental and intergovernmental organizations, and research institutions met at a workshop in Bad Blumau, Austria. This workshop, hosted by Joanneum Research, provided a timely forum for an exchange of ideas and an assessment of methodological and policy approaches for reducing emissions from deforestation. Workshop participants discussed the drivers and countermeasures of deforestation, related scientific and methodological issues, and national and international implementation of mechanisms to reduce emissions from deforestation in developing countries. Several key issues and recommendations were highlighted, beginning with the scope of terms such as "deforestation" in the context of emission reductions.

Focusing exclusively on deforestation, narrowly defined as the transition of forest to non-forest land, omits many activities which cause emissions from forests. Forest degradation, for example, where there is no change in land classification but potentially high emissions from forest disturbance and harvest, is not covered under this definition. Forest degradation from activities such as selective logging or other anthropogenic disturbances should also be considered, and mechanisms to address them should ideally reflect a continuum of inclusion, beginning with coverage of emissions reductions from deforestation only (i.e., forest to non-forest), to the inclusion of degraded carbon stocks in forests, to a full comprehensive forest and land use accounting system which would cover emissions from all kinds of land use and land use change. Such a continuum approach focuses on emissions rather than on definitional issues.

Governed vs. Ungoverned Activities

In order to effectively address both deforestation and degradation, a comprehensive understanding of locally relevant drivers is essential. For both processes it is useful to distinguish between "governed" (e.g., logging concessions) and "ungoverned" (e.g., illegal logging) activities. Industrial-scale, governed, land use changes are a normal part of the development process and may not be avoidable in all cases. Industry-driven deforestation is often larger in scale than forest degradation, so it may be feasible to link the reduction of these activities to international CDM-type project-based approaches.

In comparison, degradation often tends to be driven by a larger number of smaller causes, and is frequently related to subsistence and livelihood needs. Potential measures to address degradation include empowerment of local communities, establishment of clear and secure land tenure arrangements, and inclusion of stakeholders in planning and implementation. This suggests that a suite of countermeasures at the national scale is needed to be effective in stopping degradation.

Methodological issues related to reducing emissions from deforestation will depend on whether deforestation is addressed under the UNFCCC regime or another unspecified emissions trading system. The concept of a historical trend or base period is critical, however, a single year may not be a viable option since levels of deforestation vary from year to year. A base period of perhaps 5-10 years (depending on data availability and trends) would address this variability. A national trend or projection effectively eliminates the potential for displacement of deforestation within the country from one monitored region to a less monitored or unmonitored area – known as "leakage" However the potential for leakage to occur outside national boundaries would still exist. International leakage is potentially high for some deforestation drivers and regions (e.g., logging for timber trade or cattle ranching for beef). International leakage is not explicitly addressed in rules for developed countries under the Kyoto Protocol; therefore, to address it for developing countries only would disadvantage these countries if participation were through a market mechanism with links to the Kyoto Protocol or a similar trading mechanism.

The Work Ahead

To expedite assessment of reducing emissions from deforestation, pilot programs should be undertaken in several regions representing major drivers of deforestation (e.g., logging in SE Asia, cattle ranching and soy expansion in Brazil, fuelwood and charcoal demand in Africa) and major ecological attributes (e.g. dry and moist forests).

A key policy principle for any international mechanism is that participation should be voluntary, and the level and means of participation should be flexible. Additionally, the mechanism should promote the principles of equity and sustainable development. A voluntary, flexible, step-wise approach likely offers the best potential for consensus and broad participation. Such an approach would include a suite of options that would allow for increasing levels of participation, climate benefits, potential rewards, and stringency of regulation. Developing countries could choose an option that best represents their capacity to participate. Ideally, participation in one of the options would inherently build capacity for the next level of participation, and improve the ability of the Party to assess, monitor and achieve reductions of GHG emissions.

For example, countries with limited or no capacity to conduct an inventory of forest land and identify areas of land being deforested could participate through a mechanism which builds capacity for the development of an inventory, including the necessary institutions and monitoring programs to maintain such an inventory. Those countries with some capacity for assessing deforestation could begin with project-level emissions reduction programs, aimed at addressing deforestation/degradation hotspots. The highest level could be a national or sub-national quantifiable emissions limitation program, for example, including historical emissions, trends or projections, and the earning of market-based credits for emission reductions below an established amount.

While several alternatives exist for financing the reduction of emissions from deforestation in developing countries, the potential scale of the carbon market makes it the most promising funding source for international mechanisms. Other funding sources such as additional Official Development Assistance (ODA) or a dedicated fund would be important in the context of a step-wise approach, for the support needed in the capacity-building levels of participation. The use of a success-based mechanism for distribution of non-market funding as opposed to traditional means of ODA assistance could provide better results. For example, a country which chooses to participate at the level of capacity-building for an inventory might receive some up-front funding and other funds once capacity is appropriately improved. This provides an incentive for countries that may be absent from more traditional approaches.

Additionally, in a market-based approach, the financing is based on the emission reduction commitments of developed countries. Deeper commitments by developed countries to reduce emissions would be necessary in order to create the demand for credits from activities such as reduced emissions from deforestation. Thus the success of a market-based approach depends upon continued and increased participation of developed countries beyond the Kyoto Protocol first commitment period. While there are significant challenges to the use of a market-based approach, such as the instability of market prices, and the need for parallel/additional funding to cover land opportunity costs and other initial establishment costs, the amount of potential financing is much larger than with non-market alternatives.

Tracy Johns may be reached at: Tracy.Johns@joanneum.at.

These conclusions are based on contributions from workshop participants, but do not necessarily signify a unified position on all issues by all participants. The organizers wish to thank the workshop sponsors: Union of Concerned Scientists, Center for International Forestry Research, INSEA, and the Global Carbon Project. Further information on the workshop, including presentations and conclusions may be found on the web at http://joanneum.at/redd/

First published: July 27, 2006

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