On the Durban COP17 Outcome for LULUCF

Since 2008, the AWG-KP (the Ad hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol) has conducted discussions on how to revise carbon accounting rules for LULUCF (Land use, land use change and forestry). Several options to replace the current rules were proposed. For the most part, these concerned carbon accounting under Forest management (FM) (Art. 3.4 of the Kyoto Protocol)—in particular strategies for replacing the “cap" with an alternative rule—and whether FM should be mandatory. Up to Durban, the fallback position has been to keep the rules as they are.

Ahead of COP 17 several options for Forest management (FM) accounting still remained on the negotiating table. However, most support was given to the reference level approach (historical or projected), which attempted to set a baseline to which the reported numbers would be compared. A party would gain credits if reported removals were higher than the reference level net removal. If removals were lower, the party would be debited. During the meeting in Durban, a group of parties proposed an approach combining projected reference levels with historical baselines. This represented an attempt to introduce a compromise that could attract all parties. However, the complexity of the approach made evaluation difficult.

To further the parties´ interests in making FM mandatory, a mechanism for adjusting accounting for natural disturbances was also suggested. The idea was to exclude areas affected by forest fires or other natural disturbances from accounting. This was an important issue for parties with large disturbances (e.g. Canada and Australia) and was crucial for motivating these parties to either elect FM or accept FM as a mandatory activity.

The inclusion of Harvested Wood Products (HWP) in carbon accounting has also been intensively discussed. Up until Durban, reporting assumed the instant oxidation of all harvested biomass. Accounting for HWP, however, has the potential to enhance the accuracy of reporting when and where emissions occur and to further enhance incentives to substitute HWP products for more carbon intensive complements (e.g. steel, cement), thus reducing GHG-emissions.

Though some parties have further proposed making all voluntary activities mandatory, including FM, mandatory reporting under article 3.3 (Af-, Re and Deforestation) and for voluntary activities under KP Art. 3.4 (Cropland management, Grazing land management and Revegetation) was not originally under negotiation in Durban. A new activity for the inclusion of wetland management was however proposed. Finally, some specific issues of interest to individual parties were also under discussion. One such example was the degree to which surplus credits from FM should be made available for offsetting emissions in Art. 3.3 (ARD).

The Incentive Gap model presented in Cancun and Durban by Future Forest researchers David Ellison, Hans Petersson, Mattias Lundblad and now also Per-Erik Wikberg proposes the merging of carbon reporting across all activities into one, all inclusive framework (collapsing Arts. 3.3 and 3.4). The goal is to encourage a more balanced and efficient use of forest-based resources for the purposes of climate change mitigation and adaptation. This can only be achieved if all currently omitted carbon pools (including HWP) are included into one framework and the large and currently un-accounted carbon removals in FM (approximately 75% of total FM removals) are incorporated and incentivized in the carbon accounting framework. The authors favor the urgent closing of the yawning Incentive Gap.

 The COP 17 Outcome
AWG-KP negotiations in Durban were productive and after intensive negotiations over the two-week session, important conclusions were reached in several areas. The most important conclusions are the following:

• Commitment period 2 (CP2) will go into effect starting in 2013 and will end either in 2017 or 2020.
• Art. 3.4 FM activities are now considered mandatory and the addition of Wetland drainage and re-wetting represents a new electable activity.
• FM accounting will now be calculated relative to a baseline reference level plus a new cap of 3.5%. Parties will gain credits if reported removals are higher than the baseline reference level net removal, up to the new cap. Parties will be debited if reported removals are lower than the baseline reference level.
• HWP is now mandatory and can be accounted based either on the current instant oxidation approach, or based on the Production approach. However HWP leading to deforestation will be counted as instant oxidation.
• A new natural disturbances mechanism has been approved that allows Parties to withdraw emissions from land areas associated with natural disturbances from accounting when they exceed a set background level. The background level is set based on historical information on disturbances.
• Finally, a new mechanism has been introduced (under Art. 3.4) that allows countries to trade new afforestation against deforestation.

In a forthcoming follow-up article, the authors will provide a more in-depth analysis of the Durban LULUCF outcome.