Counting carbon

29th September 2017

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Jamie Hughes

John Lanchbery believes there are real opportunities to fix the land use accounting rules in tackling national emission reduction targets

National emission reduction targets should cover all human-induced emissions from a country – but they do not. Some emissions are excluded by so-called carbon accounting rules, notably those from agriculture, forestry and other land use (AFOLU). While there are historical reasons for this anomaly, it really must stop. Countries should account comprehensively for what the atmosphere sees from land use if we are to make best use of this key sector in tackling climate change.

Currently, there are opportunities to fix the land use accounting rules. Globally, all types of accounting rules are being negotiated as part of the Paris Agreement’s rule book, due to be agreed at the end of 2018. In the EU, land use accounting is part of the 2030 climate and energy package, with a key decision due to be made by the European Council this October.

Before going into the details and evolution of accounting rules, it is worth emphasising the vital part that AFOLU can and must play in reaching the Paris Agreement’s goal of keeping global temperature rise to 1.5˚C. Land-based vegetation is one of only two natural systems that actively remove carbon dioxide from the atmosphere, together with the oceans. We will need to conserve and enhance natural sinks and reservoirs of greenhouse gases, such as forests, if we are to get anywhere near the 1.5˚C goal. Yet we are far from attaining net removals of greenhouse gases at present. The UN’s climate science body, the Intergovernmental Panel on Climate Change (IPCC), estimates that 24% of all human-induced emissions come from AFOLU; their main sources are shown in the bar chart (opposite).

There is clearly a long way to go to attain net removals of carbon dioxide. Hiding emissions behind faulty accountancy rules is not the way to do it.

The international debate about how to include emissions and removals from land use in carbon reduction targets has a long history. It began in the run-up to the Kyoto Protocol in 1997. At that time, the subject was called land use, land use change and forestry (LULUCF) and there was a lot of discussion about whether to include it in the protocol targets at all.

Quantification of most emissions outside heavy industry and power stations was then pretty unreliable, and uncertainties were often large. Estimating emissions from factory chimneys or vehicle tail pipes was much easier than gauging emissions and removals from large diffuse areas, such as agriculture or forestry. Many countries proposed that emissions from unreliable sources should be excluded from national targets, arguing that only those emissions that could be reliably estimated should be included. They also maintained that the imperative in tackling climate change was to cut emissions from energy first, because that was by far the largest source of emissions, and to perhaps include land use later. In addition, there was widespread concern about including agriculture in targets because many felt that it might hinder food security. Some still use these arguments today.

Fair measurement

After four years of tortuous negotiations, LULUCF accounting rules were agreed in Marrakesh in 2001. They applied only to developed countries in the Kyoto Protocol and they were complicated. On the final evening, I asked a minister how things were going as he emerged from the negotiating room. “I have no idea,” he said. “It is like fighting in a fog and the civil servants have all of the weapons.” Many others felt the same.

The most harmful features of the Kyoto land use rules were that accounting was voluntary both for agricultural activities and for forest management and, in addition, the term ‘forest management’ was poorly defined. The reason why accounting was voluntary rather than mandatory had its origins in the fact that the uncertainties on emission estimates were high in almost all LULUCF categories. However, because countries did not have to account, there was no incentive to improve reliability, and so data quality usually remained poor. Worse, voluntary accounting tempted countries to account for things that gave them credits (emission reductions or removals) and not things that gave them debits (emission increases). By not defining forest management more precisely, it was left open to countries to choose what a ‘managed forest’ was. So Russia, with by far the largest forest in the world, decided that it was all managed, which it clearly is not. Other countries did the same.

The Kyoto LULUCF rules were revisited in 2008 with the aim of improving them for the second period of the protocol starting in 2013. After another four-year negotiating period, another complex set of rules emerged. Accounting remained optional for agricultural activities but, critically, accounting for forest management (by far the largest category) was made mandatory. This should have been a big step forward, but it was undermined by a new mechanism called a projected reference level.

For all other emissions, countries account against a so-called base year, traditionally 1990; so a target is often set as an emission reduction from 1990. In forest management, a ‘business as usual projection’ is made, which includes policy assumptions like increased logging. Anything below the reference level is not accounted for, which means that countries can, and do, legally hide their emissions from forestry.

If this reasoning was applied to the energy sector, then a country that had a policy to build 100 new, huge, coal-fired power stations would not have to account for any of its emissions. Dismayed by this trick, Brazil (backed by all other developing countries) capped the amount of removals that developed countries could claim at 3% of their total emissions.

Although the EU played an important part in negotiating the UN accounting rules for land use, it made them better within the EU by agreeing that accounting for all agricultural activities should be mandatory rather than voluntary after 2020. However, it did not include LULUCF in its 2020 climate and energy package. It has now decided to include a limited amount of LULUCF in the so-called Effort Sharing Regulation, which is part of its 2030 climate and energy package. So far, the European Parliament has voted to limit the amount of LULUCF credits to 28 million tonnes per year, which is quite small in the context of the overall package.

Seeing the wood for the trees

A key decision is likely to be made by the European Council of Ministers in October this year, when member states will try to agree on a way forward on forest management accounting. Eight countries, including Germany, Italy and the UK, have proposed that policy assumptions should not be included in reference levels and that “forest reference levels of member states must be based on historic and verifiable data”. If this is agreed it would be a huge step forwards. Unfortunately, other countries with large forest areas, including Finland, Sweden and Austria, want to carry on as before.

Work on the Paris Agreement’s accountancy rules only began last May in Bonn. Unlike the Kyoto rules, these will apply to all countries, not just developed ones, and so will probably be ‘guidance’ rather than legally binding rules. Nevertheless, there does seem to be a desire for common guidance, if only to be able to compare national efforts. Given their previous rejection of business-as-usual reference levels for forest management, it seems likely that the developing countries will push for something more honest. One way forward, at least for forests, would be to use a historical reference level. This would employ a base period of several years, to iron out annual variability. It has the huge advantage that it is already used by many developing countries for forest projects.

John Lanchbery is principal climate change adviser at RSPB

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