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1. Introduction

Forest managers face two basic concerns linked to human-induced climate change. One is adaptation: Can forest managers reduce the damage to forests from climate change? The other is mitigation: Can forest managers help reduce climate change itself? Forestry harbours this possibility via conservation of forests, via management of forests as carbon sinks to offset greenhouse gases emitted elsewhere, through its capacity to produce renewable, carbon-neutral energy, and through its products, which not only store carbon for appreciable times but can substitute for high-energy materials. This paper addresses mitigation.

It is an appealing proposition to turn harmful emissions of carbon dioxide, the main cause of climate change, via photosynthesis into new forests, thereby replacing some of the 16 million hectares of natural forests that the planet loses annually. Almost three decades after Dyson (1977) published this concept, 188 Parties to the United Nations Framework Convention on Climate Change have painstakingly elaborated rules and guidelines to put his idea into practice through the Kyoto Protocol.

Negotiating the role of forests in mitigating climate change has proved time consuming and contentious. The rules are complicated and procedures costly to the point that they may prevent some countries from using the full range of forestry options to temper climate change. Now countries face the formidable challenge of creating national frameworks to implement the Kyoto Protocol regarding forests, and little time remains until 2008 – the start of the first commitment period. Three main tasks lie ahead.

The paper traces the growing international law on climate change and examines what issues may come before national legislatures concerning forests. The first section of the paper offers some basic information on climate change and the international legal response. The second section reviews some early national responses related to forests. The third section considers some of the general legal issues that may emerge regarding forests and climate change mitigation.

Greenhouse gases and forests

Greenhouse gases (GHGs) play a key role in the Earth’s climate. Energy from the sun that passes through our atmosphere warms the surface of the Earth. Some of that energy radiates back towards space from the surface as infrared light. GHGs absorb or reradiate the infrared light, preventing the energy from travelling out into space, thereby trapping heat. Without GHGs, the planet would be too cold to sustain its current life. Increases in GHG levels could make the planet grow warmer. According to the current understandings of world climate, such warming would also change patterns of precipitation, the frequency and intensity of storms and extreme weather, sea levels and a plethora of related parameters of terrestrial ecology. Human understanding of the global climate system is still imperfect, so it is impossible to predict with precision how the climate will change in particular places. However, most scientists studying the subject predict that warming will significantly and for the most part adversely affect human society (IPCC, 2001).

The concentrations of GHGs, notably of carbon dioxide (CO2), are clearly increasing owing to human activity. Industry now adds about 6.3 gigatonnes of carbon as CO2 to the atmosphere each year, and the destruction of forests contributes at least another gigatonne. The current concentration of CO2 in the atmosphere, 370 parts per million (ppm), is about 35 percent higher than it was in pre-industrial times (280 ppm). Although the total amount of carbon in the atmosphere is enormous (around 750 gigatonnes), anthropogenic activities are clearly causing very significant increases (American Petroleum Institute, 1999).

In nature, GHGs are constantly entering and leaving the atmosphere. The oceans exchange CO2 and other GHGs with the atmosphere and hold CO2 dissolved or precipitated out in sediments. Actively growing trees and other plants capture CO2 from the atmosphere, combine it with water through photosynthesis and create sugars and more stable carbohydrates. They may store a significant part of the carbon absorbed for appreciable lengths of time, from years to millennia. Carbohydrates become the building blocks and energy supply for most of life on Earth. Eventually, when plants and animals die, CO2 returns to the atmosphere. When wood products or other organic materials burn or decompose, they also release CO2.

The effect of GHGs on climate is truly international. The most damaging effects from many other air pollutants are short term and local, causing most harm near where they are released. Therefore, control of these effects is a local or regional concern. In contrast, GHGs cause global changes to climate. No matter where GHG emissions originate, they disperse throughout the atmosphere. To control GHG-induced climate change, we must curb GHG sources and enhance carbon sinks on a global scale.

Justifiably, most attention has focused on fossil fuels and cement as the major source of greenhouse gases. However, forests have also received attention.

Three classes of forest-related activity can affect GHG concentrations. The first is the establishment, enhancement or protection of forest ecosystems. Afforestation and reforestation of non-forested lands can increase, and prevention of deforestation can maintain, the amount of carbon held in forests. These are widely acknowledged as potential means of offsetting or reducing a part of anthropogenic GHG emissions. Their relatively low cost, compared with non-forest offset options, may make them economically attractive (Dayal, 2000). Humans can also vary the way they manage existing forests to increase the carbon storage on site. For example, selective cutting schemes, lengthened rotations, reduced-impact logging, and species choice may achieve a higher average level of sequestered carbon. Simply postponing or eliminating harvesting can sometimes be a short- to medium-term means to keep carbon sequestered (Schulze, Wirth and Heimann, 2000).

The second is the enhanced use of forest products. Using wood in buildings and other long-lived objects effectively sequesters carbon for the life of the object. Substituting essentially carbon-neutral wood for energy-intensive materials such as brick, aluminium or steel may significantly reduce the use of fossil fuels, which of course release carbon dioxide when burned.

The third is sustainable production of wood fuel from forests, which can displace fossil fuels. Although burning of biomass fuels releases CO2, the regrowth of a sustainably managed forest offsets that release. Thus, forest fuels can supply energy virtually without net contribution to GHG levels.

Climate change agreements: origins and status

The international community has responded to the challenge of climate change with a series of agreements. The United Nations Framework Convention on Climate Change (UNFCCC) was signed at the United Nations Conference on Environment and Development in 1992 and entered into force in March 1994. As of May 2004, 188 nations had ratified or acceded to the Convention (UNFCCC Secretariat, 2004a). The UNFCCC sets goals and objectives and outlines basic mechanisms for the climate change regime, but lacks many specifics, in particular quantified GHG reduction obligations. It calls for annual Conferences of the Parties (COPs) to work out further details of the international response. The first COP met in 1995; the ninth in December 2003 in Milan, Italy.

The Kyoto Protocol was the product of the third COP (COP-3). The Protocol sets specific reduction targets and timetables for reducing net GHG emissions from industrialized nations. It has not yet entered into force. Article 25, paragraph 1 requires that the Protocol be ratified, approved, accepted or acceded to by at least 55 Parties, including developed nations (listed in Annex I of the UNFCCC) responsible for at least 55 percent of 1990 Annex I CO2 emissions. In March 2001, after a change of presidential administrations, the United States president declared that the United States was withdrawing its support for the Kyoto Protocol and that he would not seek to ratify it. The United States was responsible for about 36 percent of 1990 emissions from Annex I Parties. As a practical matter, if the United States continues to withhold support, the Russian Federation must ratify the Protocol or it will not enter into force. As of May 2004, 122 Parties had ratified the Protocol, but they represent only 44.2 percent of 1990 Annex I CO2 emissions (UNFCCC Secretariat, 2004b). In late May 2004, the Russian president stated that the Russian Federation was likely to ratify the Protocol. (For current ratification status, consult the UNFCCC Internet site .)

The COPs continue to meet and produce agreements and draft agreements for the first session of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol (COP/MOP 1). The United States has not withdrawn from the UNFCCC and participates in the COPs, attending discussions on the Protocol as an observer. Forest issues have surfaced most prominently in COP-6, COP-6bis, COP-7 and COP-9, dubbed the “forest COP”. Meeting in The Hague, the Netherlands, in November 2000, COP-6 failed to reach agreement, mainly over several issues relevant to Land Use, Land-Use Change and Forestry (LULUCF). The Parties took the issues up again in July 2001 in Bonn, Germany (UNFCCC COP, 2001), in a meeting known as COP-6bis. This meeting produced a draft agreement (the Bonn agreement), which the Parties added to and adopted at COP-7 in Marrakesh, Morocco, in November 2001 as the so-called Marrakesh Accords. The decisions of COP-7 can be found in the four main documents produced at COP-7 (UNFCCC COP, 2002a; 2002b; 2002c; 2002d). The central agreement concerning LULUCF is Decision 11/CP.7 (UNFCCC COP, 2002a, pp. 54–63). This agreement is a recommendation, and the Parties to the Protocol must formally adopt it after the Protocol enters into force. However, like the Protocol itself, the agreement represents a working consensus of the Parties on these issues. The next section of this paper discusses forest-related obligations of the Parties as stated in the UNFCCC and the Kyoto Protocol. The subsequent section looks at some of the questions that the UNFCCC and the Protocol left open, and how COP-6, COP-7 and COP-9 have dealt with them.

Forests under the UNFCCC and the Kyoto Protocol

Understanding how the climate change agreements may affect forests is a complicated task. First, forests are integral to the global carbon cycle. Almost any reference to sinks or net emissions could have implications for forests. Second, the agreements themselves can be obscure. In the negotiations, consensus has at times been more important than clarity. Where the negotiators encountered controversial issues, they sometimes deferred decisions to later agreements or used ambiguous language. Third, although the later agreements add content to the earlier ones, the documents have no master index or table of cross-references to guide the researcher. As a result, the texts require patient cross-checking and careful scrutiny to understand.

The discussion in this section outlines provisions relevant to forests in the UNFCCC and the Kyoto Protocol. The next section looks at the issues still open after Kyoto and how the Parties addressed them from COP-6 to COP-9. The reader wishing to have a more thorough understanding of the role of forests should investigate the full set of documents, all available on the UNFCCC Internet site ( In addition, the documents on the Intergovernmental Panel on Climate Change (IPCC) site ( ) address some of the technical issues concerning using, managing and measuring the carbon sink potential of forests.

General obligations that may touch on forests

The UNFCCC casts a broad net over the issue of climate change. Its Article 1 definitions illustrate that breadth. “Climate system” means “the totality of the atmosphere, hydrosphere, biosphere and geosphere and their interactions”. “Reservoir” means “a component of the climate system where a greenhouse gas or a precursor of a greenhouse gas is stored.” Clearly, forests and wood products are reservoirs. The terms “source” and “sink” also have broad definitions. Sources are processes or activities that contribute GHGs to the atmosphere, and sinks are processes, activities, or mechanisms that remove them. Forests may qualify as either or both depending on whether they are releasing, removing or both releasing and removing GHGs. The term “emissions” is defined without regard to the nature of the source, so that a forest may be a source of emissions just as surely as a factory or a vehicle.

Article 3 of the UNFCCC declares the basic principles of the Convention, and again it paints in broad strokes. Under paragraph 3, it declares that policies and measures to combat climate change should “be comprehensive, cover all relevant sources, sinks and reservoirs of greenhouse gases … and comprise all economic sectors”. Clearly, this language covers forests and forest management.

For most nations looking to adopt implementing legislation, the key provisions of the UNFCCC begin with Article 4, dealing with commitments of the Parties. Article 4 contains two sets of commitments. The first set, in paragraph 1, applies to all Parties. The second set, in the subsequent paragraphs, largely describes commitments of “Annex I” or “Annex II” nations. Annex II of the UNFCCC lists the major nations of Western Europe, plus Australia, Canada, Japan, New Zealand, Turkey and the United States. Annex I lists the Annex II nations plus several European nations that were in transition to a market economy in 1992 when the treaty was written: from the former Union of Socialist Soviet Republics, the Russian Federation, Belarus, Estonia, Latvia, Lithuania and Ukraine; and from Eastern Europe, Bulgaria, Czechoslovakia, Hungary, Poland and Romania.

Under Article 4, paragraph 1 of the UNFCCC, all Parties must:

Obligations of developed country Parties

The UNFCCC drafters reasoned that because the Annex I nations were responsible for most of the increases in atmospheric GHG concentrations, they should bear a greater burden in reducing GHG emissions and increasing sinks. Under Article 4 of the UNFCCC, these nations committed themselves to adopting policies to limit GHG emissions and protect and enhance sinks and reservoirs. Specifically, these policies were originally aimed at returning net emissions to 1990 levels.

Obligations under the Kyoto Protocol are stronger and much more specific. Kyoto Protocol Article 2 directs Annex I nations to protect and enhance sinks and reservoirs; promote sustainable forest management, afforestation and reforestation; and reduce incentives and subsidies that run counter to the objectives of the UNFCCC. Kyoto Protocol Article 3 tightens the UNFCCC’s emissions goal, calling for a reduction of aggregate emissions of the countries listed in Annex B to 5 percent below 1990 levels during a first commitment period. Annex B of the Kyoto Protocol contains a slightly revised list of UNFCCC Annex I nations.1 Each nation in Annex B has a specific net emissions target expressed as a certain percentage of 1990 emissions. For most countries the reduction target lies between 92 and 94 percent, while the Russian Federation and New Zealand committed themselves to a stabilization of emissions, and Australia, Iceland, and Norway are allowed to increase their emissions by a certain percentage above the 1990 level. (Member States of the European Community have agreed to achieve compliance jointly [Council of the European Community Decision of 25 April 2002] and have internally redistributed assigned net emissions under a burden-sharing agreement, which allows increases for some members but reduces permissible emissions of others by more than 20 percent.)

Further, Article 3 of the Kyoto Protocol sets out a time frame for achieving these reductions. The formal commitment period is the five-year span from 2008 through 2012. Parties must show progress towards the goal by 2005.

What role may forests play in meeting these reductions? The Protocol limits which forestry activities count towards fulfilment of treaty obligations. Article 3, paragraph 3 of the Kyoto Protocol states:

The net changes in greenhouse gas emissions by sources and removals by sinks resulting from direct human-induced land-use changes and forestry activities, limited to afforestation, reforestation and deforestation since 1990, measured as verifiable changes in carbon stocks in each commitment period, shall be used to meet the commitments under this Article of each Party included in Annex I [emphasis added].

Other kinds of forest activity might affect net GHG emissions. One example is forest management. Longer rotations, specific tree species and silvicultural systems, selective harvesting, maintenance of large trees on-site as soil shelter or exclusion of fire and disease might make a forest a larger and more permanent carbon sink. Another example is forest protection. By legal or institutional controls over land use, a government can protect land that would otherwise be likely to be deforested. Article 3, paragraph 4 of the Protocol states:

The Conference of the Parties [shall decide] how, and which, additional human-induced activities related to changes in greenhouse gas emissions by sources and removals by sinks in the agricultural soils and the land-use change and forestry categories shall be added to, or subtracted from, the assigned amounts for Parties included in Annex I.… Such a decision shall apply in the second and subsequent commitment periods [i.e. after 2012]. A Party may choose to apply such a decision on these additional human-induced activities for its first commitment period [2008 to 2012], provided that these activities have taken place since 1990.

As is discussed below, COP-7 reached a decision that the additional human-induced forest activities under Article 3, paragraph 4 include forest management, cropland management, grazing land management and revegetation (UNFCCC COP, 2002a, p. 59, ¶ 6).

Flexible mechanisms

Several provisions in the UNFCCC and Kyoto Protocol allow nations to achieve GHG emission reductions or enhancement of sinks cooperatively. As a general matter, the UNFCCC commits the most highly developed nations, listed in Annex II, to give developing countries financial and technical assistance to implement the Convention and deal with the effects of climate change. UNFCCC Article 4, paragraphs 3 through 5, obligates the developed nations to assist developing nations through funding for emissions reductions, funding for adaptation to adverse effects and transfer of environmentally sound technologies.

The UNFCCC offers the possibility that Parties can satisfy some of their own obligations to reduce GHG emissions by helping other Parties reduce emissions. The UNFCCC states that Annex I Parties can return to their 1990 GHG emission levels “individually or jointly” (Article 4, subparagraph 2[b]) and that Parties could implement national climate change mitigation policies jointly (Article 4, subparagraph 2[a]). The European Union has employed this article in setting up its internal burden-sharing system (see EU Council Decision of 25 April 2002 [2002/358/CE]). At the time it was signed, the Parties had some internal disagreements about the role of Joint Implementation (JI). The Convention expressly directed the Conference of the Parties to develop criteria for JI (Article 4, subparagraph 2[d]). The Parties agreed to a pilot phase to test the feasibility of activities implemented jointly (AIJ).

The Kyoto Protocol begins to set up a framework for the transfer of emission permits between Parties, but it leaves some uncertainties. Articles 4, 6, 12 and 17 of the Protocol contemplate flexible mechanisms of compliance. Article 4 deals with the possibility that a group of Annex I Parties or a regional economic integration organization could jointly fulfil their reduction commitment and how such a so-called “bubble” affects the reduction obligations of the Protocol. Article 6 allows Annex I Parties to transfer “emission reduction units” generated through JI projects and allows Parties to authorize “legal entities” to participate in these transfers. Eligible JI projects include all LULUCF activities allowed under Article 3, paragraphs 3 and 4.

Kyoto Protocol Article 12 introduces the Clean Development Mechanism (CDM), originally a part of AIJ. The CDM is an instrument under the authority of the COP and supervised by an Executive Board. CDM projects will typically involve Annex I countries as investors and non-Annex I Parties as hosts, essentially joint ventures between developed and developing countries. However, the trading rules do not explicitly require CDM projects to be financed by developed countries; developing countries can initiate their own projects to create certified emission reductions and then sell them to Annex I Parties (Unilateral CDM). Reductions resulting from these projects, beginning in the year 2000, count towards satisfying an Annex I Party’s obligations to reduce aggregate emissions during the years 2008 to 2012. An “operational entity” accredited by the COP must validate the project before implementation and verify the project’s emission reductions before the Executive Board can issue credits for the emission reductions achieved. CDM projects can be implemented in the energy sector as well as in the LULUCF sector. In the CDM, however, the latter are restricted to afforestation and reforestation projects only. Forest management and conservation, as well as carbon sequestration in agriculture, remain excluded from the CDM for the first commitment period.

Finally, Kyoto Protocol Article 17 directs the COP to define the rules for emissions trading among Annex B Parties.

Clarifications from COP-6 to COP-9

The UNFCCC and Kyoto Protocol left open some important questions concerning LULUCF activities:


How to measure the carbon removed through forest activities is largely a technical matter, although it has policy implications. Human knowledge of the carbon cycle is imperfect, and so policy-makers face uncertainties. How does forest management affect carbon in forest soils? If trees are harvested and the wood is used for fibre, how long will the carbon in the wood remain out of the atmosphere? If we cannot answer questions like these with certainty, how should we grant credit for forestry activities that raise these kinds of question?

COP-6 and COP-7 did not offer complete answers to these questions, but they did provide some basic guiding principles and relevant definitions, and they mapped out a means for filling in missing details. Eight policy principles governing the treatment of LULUCF activities (UNFCCC COP, 2002a, p. 56, ¶ 1) can be found in the COP-7 Decision 11/CP.7 and include the following:

On technical matters of carbon measurement and reporting, COP-7 adopted in principle accounting methods set out in the IPCC’s Revised 1996 Guidelines for National Greenhouse Gas Inventories (UNFCCC COP, 2002a, p. 57, ¶ 3, adopting IPCC, 1996). COP-7 also invited the IPCC to elaborate such guidelines for the land use and forestry sector and develop special reports on good practice guidance and uncertainty management, human-induced forest degradation and separation of direct human-induced effects from indirect and natural effects to be submitted for consideration and adoption by COP-9 (UNFCCC COP, 2002a, p. 55, ¶ 3).2 COP-9 only partially adopted the IPCC’s Good Practice Guidance for Land Use, Land-Use Change and Forestry (GPG-LULUCF)3 in December 2003 (UNFCCC COP, 2004a, pp. 31–32, adopting IPCC, 2003, in part). No agreement could be reached on the Kyoto-relevant chapter relating to Article 3, paragraphs 3 and 4, Article 6 (Joint Implementation) and Article 12 (Clean Development Mechanism). COP-10 will reconsider the matter.

COP-7 also adopted a series of definitions and guidelines for Kyoto Protocol Article 3, paragraphs 3 and 4 (UNFCCC COP, 2002a, pp. 58–64). These address both accounting and activity questions (the relevance of the definitions for activity questions is discussed further below).

For accounting purposes, a key definition is that of “forest” (UNFCCC COP, 2002a, p. 58, ¶ 1[a]):

“Forest” is a minimum area of land of 0.05 to 1.0 hectares with tree crown cover (or equivalent stocking level) of more than 10 to 30 percent with trees with the potential to reach a minimum height of 2 to 5 metres at maturity in situ. A forest may consist either of closed forest formations where trees of various storeys and undergrowth cover a high proportion of the ground or open forest. Young natural stands and all plantations which have yet to reach a crown density of 10 to 30 percent or tree height of 2 to 5 metres are included under forest, as are areas normally forming part of the forest area which are temporarily unstocked as a result of human intervention such as harvesting or natural causes but which are expected to revert to forest…

Where the definition specifies ranges, such as 0.05 to 1.0 hectares, the COP intends each Party to select a figure within the range and then apply it consistently in its accounting. The COP directs each Party to report the figures it selects, but does not specify how a Party should make its selection, apart from requesting a plausible explanation if Parties deviate from parameters for minimum area, crown cover, and height previously chosen for reporting forest area to FAO (see UNFCCC COP, 2002a, p. 61, ¶ 16). For many Parties, the selection will be an administrative matter and will follow existing law or practice. However, Parties could also make their selection directly through legislation. Even Parties making the choice administratively may wish to indicate in legislation which administrator has the authority to make the selection, which formalities should be followed to make it or which standards should guide the administrator’s choice.

The above definitions and principles all appear in a single decision of COP-7, Decision 11/CP7, which focuses on LULUCF. Other COP-7 decisions deal with general matters but also have strong implications for forestry activities, as the procedures and rules applying to forestry must match the general regime of climate change mitigation established for other sectors.

COP-7 Decisions 16/CP.7, 17/CP.7, 18/CP.7 and 19/CP.7 provide common definitions for a set of cooperative implementation terms that may eventually be used generally in accounting and compliance reports (UNFCCC COP, 2002b, p. 8, ¶ 1; p. 26, ¶ 1; p. 52, ¶ 1; p. 57, ¶ 1). These terms include “assigned amount unit” (AAU), “emission reduction unit” (ERU), “certified emission reduction” (CER) and “removal unit” (RMU). AAUs represent the amount of net GHG emissions assigned to the respective Annex I country by its emissions target. CERs and ERUs are offsets resulting from project-based emission reductions. While CERs are created under the CDM (Article 12), ERUs result from Joint Implementation projects (Article 6). RMUs apply to sequestration achieved domestically in Annex I countries.

The Marrakesh Accords identified issues concerning definitions and modalities for including afforestation and reforestation under the CDM to be elaborated by the Subsidiary Body for Scientific and Technological Advice (SBSTA) and considered for adoption by COP-9. One of the issues addressed was non-permanence4 of carbon sequestration in forests, which made it necessary to distinguish between credits generated by energy and forestry projects in the CDM. At COP-9, the Parties decided to account for this non-permanence by creating temporary credits that will have to be replaced if the stored carbon is released back into the atmosphere. Two different types of temporary credits have been created in the Kyoto framework: “temporary CERs” (tCERs) and “long-term CERs” (lCERs).

These can both be used towards meeting Annex I commitments for the commitment period for which they were issued, and cannot be carried over to a subsequent commitment period. Verification of tCERs and lCERs occurs at five-year intervals. While a tCER expires at the end of the commitment period subsequent to the commitment period for which it was issued, an lCER is valid until the end of the project’s crediting period.5 If the carbon remains sequestered until the next verification, the same amount of tCERs can be issued for use in the following commitment period.6 Should the carbon, however, be released back into the atmosphere, the tCERs will have to be replaced by other credits at the end of the first commitment period. Should verification of carbon under the lCER approach show a decrease in carbon stocks since the previous certification report, the Annex I country holding the lCERs will have to replace the CO2 equivalents lost by an equal amount of other credits.7 In case no reverification is carried out, the respective lCERs expire immediately. Factors such as the respective project risks and market expectations will determine which of the two credit types will be preferred by the project participants. The relevant text concerning tCERs and lCERs can be found in UNFCCC SBSTA (2003) p. 5, ¶ 1 and pp. 13–15, ¶¶ 36–50.

The basic unit of measurement for all these terms will be the same, unless modified by later decisions. In each case, the unit “is equal to one metric tonne of carbon dioxide equivalent, calculated using global warming potentials defined by [Decision 2 of COP-3] or as subsequently revised in accordance with Article 5” of the Protocol (UNFCCC COP, 2002b, p. 8, ¶ 1; p. 26, ¶ 1; p. 52, ¶ 1; p. 57, ¶ 1). This uniformity will make it easier to trade and track credits.

Note that the COPs adopted these terms to apply to obligations of Parties. National laws, concerning the rights and obligations of individuals within a nation, may use other terms and units. However, Parties will need to be able to demonstrate compliance using the COP terms and units.

COP-7 Decisions 19/CP.7, 20/CP.7, 21/CP.7 and 22/CP.7 deal with the annual reports and inventories of emissions and sources required under the Protocol. Decision 19/CP.7 requires Parties to submit a report describing some basic choices the Party has made regarding its compliance. These choices include the figures for minimum area, tree crown cover and height for use in defining “forest”; whether the Annex I Party will claim credits for forest management, grazing land management, cropland management and revegetation during the first commitment period (see the discussion of forest management and revegetation under “Activities” below); and whether the Annex I Party will report the net effect of LULUCF activities annually or for the entire five-year (2008–2012) commitment period (UNFCCC COP, 2002b, pp. 58–59, ¶ 8).

Decision 19/CP.7 also requires each Party to establish a national registry to track ERUs, CERs, AAUs and RMUs (UNFCCC COP, 2002b, pp. 61–68, ¶¶ 17–48). As is discussed below in the section on market-related legal and institutional issues, national law could take a variety of approaches to the issue of who may claim to own forest removal credits. For example, the credits could be the property of no one yet claimed by the nation, or they could be private property that anyone could own. Each Party will want to organize its registry to reflect its ownership laws and institutions. The purpose of the registry requirement is to ensure accurate accounting of the various units, and the decision includes several provisions of potential interest to legislative drafters to discourage fraud and error. For example, registries must provide each RMU, CER or ERU with a unique serial number. Registries must coordinate with an international transaction log, which will track trades between Parties. Every Party’s registry must be open to public inspection through an Internet interface.

Decision 22/CP.7 deals with supplementary information that Parties must include in their inventories to demonstrate compliance with the Protocol. Paragraphs 5 through 9 specifically address LULUCF activities (UNFCCC COP, 2002c, pp. 22–24). Most of the reporting requirements tie directly back to the principles and definitions in Decision 11/CP.7. For example, Parties must demonstrate that the claimed reductions resulted directly from human-induced activities. To address concerns about the reversible nature of LULUCF carbon sequestration, Parties must identify the location of lands involved and inventories in subsequent commitment periods must report on emissions and removals from those lands.

COP-7 also adopted some general rules on trading of credits that will apply to all transactions, including those involving forests. These appear in Decisions 15/CP.7 through 18/CP.7, in the second volume of the COP-7 decisions (UNFCCC COP, 2002b). For a discussion of the implication of these rules for forests, see EcoSecurities Ltd (2001).


Article 3, paragraph 4 of the Kyoto Protocol directs the COP to decide which LULUCF activities, besides afforestation, reforestation and deforestation, ought to be counted towards the Parties’ net emission reduction commitments. COP-6 took up this issue, as well as the matter of defining afforestation, reforestation and deforestation more clearly. The issue of activities, in particular the issue of crediting for forest management of existing forests since 1990, proved to be highly controversial, and contributed greatly towards COP-6’s failure to reach overall agreement. COP-6bis and COP-7 took up these issues again and finally produced an agreement (for the status of issues at the end of COP-6, see UNFCCC COP, 2000; for more on the politics of these issues, see Vespa, 2002).

The key decision of COP-7 regarding sink activities was that besides afforestation, reforestation and deforestation Parties could claim credit for net removals of GHGs from “forest management”, “cropland management”, “grazing land management” and “revegetation” (UNFCCC COP, 2002a, p. 59, ¶ 6). The principles and definitions that COP-7 adopted help explain what this means.

COP-7 adopted a general environmental protection principle in response to concerns that managing lands for carbon sequestration could lead to short-sighted, unsustainable forest uses, including the destruction of natural forests: “That the implementation of [LULUCF] activities contributes to the conservation of biological diversity and sustainable use of natural resources” (UNFCCC COP, 2002a, p. 56).

COP-7’s definition of “forest management” reflects this principle (UNFCCC COP, 2002a, p. 58). Forest management is:

a system of practices for stewardship and use of forest land aimed at fulfilling relevant ecological (including biological diversity), economic and social functions of the forest in a sustainable manner…

This definition seems to cover forestry for timber production and also many kinds of management for non-commodity uses. It seems to include protective management of natural forests, but excludes carbon stock changes in truly unmanaged forests from accounting. For the proper understanding of the environmental impact of the forest management activity in the Marrakesh Accords, it is essential to realize that additional management activities, for example, specific projects that enhance carbon sequestration in Annex I domestic forests, are not a prerequisite for obtaining credits. Credits may accumulate from business-as-usual forest management, as long as Parties choose forest management as an activity under Article 3, paragraph 4. On the other hand, countries may establish an internal national regime, where they allocate credit and payments to forest owners commensurate with the carbon sequestered above and beyond business-as-usual management through additional activities, such as lengthening of rotations, species choice or underplanting of existing stands.

COP-7 also adopted definitions of afforestation, reforestation and deforestation (UNFCCC COP, 2002a, p. 58). For the most part, these definitions are broad. Where they exclude some activities, the excluded activities often fall within
the definition of another term. For example, the definition of “afforestation” is limited to:

direct human-induced conversion of land that has not been forested for a period of at least 50 years through planting, seeding and/or the human-induced promotion of natural seed sources.

If the land has been forested within the last 50 years, planting or seeding may qualify as “reforestation”, defined as:

the direct human-induced conversion of non-forested land to forested land through planting, seeding and/or the human-induced promotion of natural seed sources, on land that was forested but that has been converted to non-forested land. For the first commitment period, reforestation activities will be limited to reforestation occurring on those lands that did not contain forest on 31 December 1989.

If the land did contain forest on 31 December 1989, the activity still might fall under the term “forest management”, as defined above. The phrase “human-induced promotion of natural seed sources”, probably meant to cover human-assisted natural succession on non-forest land to forest, may reflect a poor or deliberately ambiguous choice of words. Applied literally, it would exclude natural forest re-establishment through root sprouting or branch layering, common in many species.

COP-7 also decided to allow Parties to claim credit for GHG removal from “revegetation”. Revegetation includes any increase in carbon stocks on sites of 0.05 hectares or greater through human-induced establishment of vegetation. This opens the door for claiming credit for scattered urban tree planting, roadside tree management, and some forms of agroforestry that do not result in “forest”. It would also allow crediting the establishment of shrubs and non-woody vegetative cover, for example, soil amendment through lupines.

The one common requirement of these definitions is that the activity be directly human-induced. Parties may not claim credit for purely natural changes to forest.

As mentioned above, cropland management and grazing land management are also eligible LULUCF activities under Article 3, paragraph 4.


At COP-6, Parties debated forest management’s role in meeting emission reduction commitments. Some Parties opposed allowing forest management activities to count towards the initial Kyoto Protocol commitments. They argued that the Protocol drafters assumed that the Parties would meet the commitments largely through emission reductions at the sources. To allow Parties with large forest holdings to meet commitments through forest management would be unfair and only marginally helpful to the purpose of the UNFCCC. The nations with large forest holdings argued strongly that they would have difficulty ratifying the Protocol if the COP excluded forest management.

In the end, COP-6 and COP-7 reached a compromise, allowing forest management to count, but limiting the amount of credit that a Party could claim from forest management during the first commitment period (the years 2008 through 2012) (Vespa, 2002). Debits under Article 3, paragraph 3 can be offset through forest management up to a limit of 9 Mt of carbon per year times five (UNFCCC COP, 2002a, p. 60, ¶ 10). Beyond these 9 megatonnes (Mt) of carbon per year, forest management activities can be accounted for up to certain limits negotiated individually for each Party, which are listed in the Marrakesh Accords (UNFCCC COP, 2002a, p. 60, ¶¶ 10–12 and pp. 63 & 64). As the size of each country’s cap is a product of a political negotiation process, some countries fared better than others. Notably, Canada, Japan and the Russian Federation may include large quantities of sink credits in their GHG emissions accounts, whereas other countries generally received a maximum credit of about 15 percent of the carbon sequestration in the nation’s managed forests, as estimated in the FAO Global Forest Resource Assessment for the year 2000.

Can a Party carry over unused credits from LULUCF removals to subsequent commitment periods? In general, if a Party’s emissions are less than the assigned amount under the Protocol in one commitment period, it can claim credit for that better-than-required performance in a subsequent commitment period (Protocol Article 3, paragraph 13). However, the Protocol language only refers to emissions. COP-7 decided that the language excludes removals. A Party cannot carry over unused offsets from carbon removals8 into subsequent commitment periods (UNFCCC COP, 2002b, p. 61, ¶ 16). Since all the different offsets are fungible, Parties will probably use the non-bankable removal offsets for compliance in the first commitment period and carry over to the next commitment period the bankable offsets. Thus, the restriction on the bankability of removal offsets should not substantially limit the carrying over of offsets.

Clean Development Mechanism

COP-6bis and COP-7 addressed one key flexible instrument as it specifically applies to forests: acquiring credits under the Clean Development Mechanism (CDM), described in Article 12 of the Kyoto Protocol. When the Protocol was drafted, developing nations saw Article 12 as encouraging developed nations to share modern, efficient industrial technology as a means of gaining credits. However, investments in forestry yield credits more cheaply than investments in industrial technology. Developing countries feared that the CDM could result in large areas of their lands being committed to forest use, slowing rather than speeding their economic development. Worse, the conversion could cause harm if rare non-forest habitats became forests, if diverse natural forests became uniform managed plantations, or if new forest plantations excluded rural populations from traditional land uses.

The agreement drafted at COP-6bis and adopted at COP-7 limits CDM LULUCF projects to afforestation and reforestation. Furthermore, for the first commitment period (the years 2008 through 2012), the credit that a Party can claim from LULUCF projects under the CDM is 1 percent of the Party’s base year (1990) emissions, times five. The “times five” language reflects the five-year length of the commitment period. The Kyoto Protocol calls for Parties to
reduce their annual emissions 5 percent below 1990 emissions. The COP agreement means that over the five years, one-fifth of the reduction can come from CDM LULUCF projects. Future COPs must decide how to treat CDM LULUCF projects after 2012. (The relevant language on these issues is in UNFCCC COP, 2002a, pp. 60–61, ¶¶ 13–15, echoed in UNFCCC COP, 2002b, p. 22, ¶ 7.)

Overview of rules and modalities relating to LULUCF
under the Kyoto Protocol

A four-tier system capping system limits the extent to which Parties can account for emissions and removals from LULUCF activities:

      1. If a Party’s activities under Article 3.3 lead to a debit, meaning that afforestation, reforestation and deforestation activities cause more emissions than removals, the Party is allowed to offset the emissions through forest management up to a limit of 9 Mt of carbon per year times five (UNFCCC COP, 2002a, p. 60, ¶ 10).

      2. Beyond these 9 Mt of carbon per year, forest management activities can be accounted for up to an individual cap for each Party that is listed in the Marrakesh Accords (UNFCCC COP, 2002a, p. 63).

      3. Emissions and removals from cropland management, grazing land management and revegetation can be accounted for on a net basis (UNFCCC COP, 2002a, pp. 59–60, ¶ 9).

      4. Under the Clean Development Mechanism, only afforestation and reforestation are eligible. The use of forestry credits generated under the CDM by Annex I Parties is limited to 1 percent of the respective Party’s base year emissions for each year of the commitment period (UNFCCC COP, 2002a, p. 61, ¶ 14).

Although COP-7 produced general definitions of afforestation and reforestation, it requested the SBSTA to recommend “definitions and modalities for including afforestation and reforestation projects under [the CDM] in the first commitment period [2008–2012]” to the COP (UNFCCC COP, 2002a, pp. 5–6, ¶ 2 and 2002b, p. 22, ¶ 10). Issues for the SBSTA to address included definitions, non-permanence, leakage, additionality, uncertainties and socio-economic and environmental impacts, including impacts on biodiversity and natural ecosystems. In decision 19/CP.9 (UNFCCC COP, 2004b, pp. 13–31), COP-9 adopted the SBSTA recommendations (UNFCCC SBSTA, 2003), thus paving the way for the implementation of CDM forestry projects. The following summarizes the most important COP-9 decisions regarding forestry in the CDM:

Complications for potential national legislation

What approach might legislatures use to promote and regulate the use of forests as carbon sinks, reservoirs and sources of environmentally friendly products and renewable energy? The complexities of the UNFCCC and Kyoto Protocol and the nature of forest mitigation make it difficult to give a general answer to this question.

First, the UNFCCC and the subsequent Kyoto Protocol create different obligations for different Parties. Because the developed nations have historically emitted the majority of GHGs believed to drive climate change, they bear the primary burden of reducing emissions or sequestering carbon under the UNFCCC. Some of the more extensive legal reforms will probably have to occur in these nations.

The developing nations will face different sets of compliance questions, many arising out of projects undertaken in the framework of the CDM or in the context of reporting on forest carbon stock changes in national communications. Solving these questions may require a wide set of legal and institutional approaches. Some of the issues may be conventional matters of improving forest conservation protection and assessment. Some may involve new ways of looking at property ownership, land use, social and environmental impact, forest management and forest inventories.

Second, questions remain about the longer-term role of forestry as mitigation. COP-7 and COP-9 have gone a long way to answer some open questions, especially as they apply to the first commitment period of the Kyoto Protocol, 2008 to 2012. But technical issues and issues concerning the treatment of forests in subsequent commitment periods remain completely open.

Third, the legal issues concerning mitigation through forests will overlap with the legal issues concerning mitigation and compliance generally. For example, a Party may wish to set up a GHG emissions trading system that deals with all kinds of sinks and all kinds of sources, from farms to factories, not just forests. As discussed in more detail in the third chapter of this paper, countries will encounter some legal issues that are unique to forests and others that apply to a broad range of sources and sinks. Some legal issues may be seen as “forest law” matters while others may be considered issues of property law or laws governing investments and financial transactions.

Fourth, the direction of legislation will vary depending on the local legal system and institutions. A legal system that recognizes social property and community ownership will offer different options from one that does not. In a society where the fiscal institutions are weak or untested, it may be impractical to establish mitigation programmes based on market trading. These kinds of problem are familiar to legislative drafters, but GHG mitigation may raise them in new contexts.

Fifth, the role of national legislation in compliance is still unclear. Do countries really need new laws? Only a few countries have made legislative changes in response to climate change concerns. Others have responded through policy changes and administrative acts under existing laws rather than through new legislation. As the international response continues, with experience gained and deadlines approaching, legislation may become more important.

1 Not listed in Annex B are Belarus and Turkey.

2 Only the part on factoring out direct human-induced changes from indirect human-induced changes and natural effects will be considered for possible adoption by COP 10.

3 The GPG-LULUCF includes the methods to estimate, measure, monitor and report changes in carbons stocks and anthropogenic emissions and removals from LULUCF, as well as the Good Practice Guidance and uncertainty management relating to these.

4 Other issues include additionality, leakage, uncertainties and socio-economic and environmental impacts, including impacts on biodiversity and natural ecosystems.

5 In case a renewable crediting period was chosen, it expires at the end of the last crediting period of the project activity. Considering the available options for the length of the crediting period, the maximum validity of an lCER can be 60 years.

6 If the sequestration has increased since the last verification, the amount of tCERs issued will increase by that amount.

7 If the sequestration has increased since the last verification, new lCERs valid until the end of the project’s crediting period are issued.

8 Carbon credits from removals include RMUs, tCERs and lCERs.

9 For energy projects the crediting period is either seven years with the option to renew twice (maximum of 21 years) or a ten-year period without renewal.

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