FO:APFC/2000/11

FOREST AND THE UNFCCC

1. The UN Framework Convention on Climate Change (UNFCCC) was adopted in 1992 as a consequence of worldwide concern over global warming. It aims at stabilizing the concentration of greenhouse gases (GHGs) in the atmosphere in an effort to prevent human-induced disturbances to the global climate system. The Convention commits the Parties to carry out national inventories of greenhouse gas emissions and sinks, and to work toward meeting voluntary goals in the reduction of emissions. A Conference of Parties (CoP) was established - parties being the signatory countries mentioned in Annex B of the Convention - to promote the effective implementation of the Convention.

2. Under the UNFCCC a pilot phase of "activities implemented jointly" (AIJ) was started to test and evaluate the feasibility of achieving the Convention's objectives. AIJs are cooperative projects between the Parties designed to avoid, sequester or reduce GHG emissions. Forests play a significant role in moderating the net flux of some GHGs between land and atmosphere and act as reservoirs by storing carbon in biomass and soils. They act as carbon sinks when their area or productivity is increased, resulting in greater uptake of atmospheric carbon dioxide (CO₂). Conversely, they act as a source of GHGs when burning and decay of biomass or disturbances to soil result in emissions of CO₂ and other GHGs. Changes in land use (primarily deforestation in tropical areas) currently constitute about 20 percent of global anthropogenic CO₂ emissions. Appropriate forest management decisions can result in cost-effective net reductions in GHG emissions, either by diminishing the contribution of forests to global net emissions, or by enhancing their importance as carbon sinks. By providing renewable materials and fuels - thereby reducing reliance on fossil fuels - and still maintaining their role as carbon reservoirs, forests can make a long-term contribution to mitigating climate change.

3. The magnitude of benefits available through the activities of the forestry sector will depend upon the amount of land available, improvements in forest productivity, and technical developments that allow more efficient harvesting and use of forest products.

4. Various forestry practices play a significant role in helping to slow down the accumulation of CO₂ in the atmosphere:

• Conservation management: maintaining existing stocks of carbon in forests through forest protection, conservation and sustainable harvesting; and activities to reduce the rate of deforestation and forest degradation, and prevent associated CO₂ emissions.
• Storage management: increasing net uptake of CO₂ from the atmosphere through carbon storage in forests and forest products, by enlarging the forest area, increasing the forest carbon stored per unit area through silvicultural measures (e.g. longer rotations, greater tree stocking densities, reduced impact logging), and extending the time over which the harvested wood remains in use.
• Substitution management: substituting fossil fuels with biomass energy from sustainably managed forests, and using wood products instead of energy-intensive alternatives (such as steel and concrete). The use of sustainably harvested biofuels produces a CO₂ benefit when the emissions from biomass combustion are offset by biomass growth, and emissions from fossil fuel combustion are avoided.

5. The quantification of the contribution of forests to the limitation of CO₂ emissions will require a comprehensive accounting of the associated carbon sources and sinks over time, and a comprehensive analysis of other environmental and socioeconomic criteria that influence forest management choices.

6. The Intergovernmental Panel on Climate Change (IPCC) estimates that, between 1995 and 2050, global carbon sequestration from reduced deforestation, forest regeneration, and increased development of plantations and agroforestry could correspond to 12-15 percent of the amount of carbon emissions from fossil fuels.

KYOTO PROTOCOL

7. Some 10 000 delegates, observers and journalists participated in the CoP3 event hosted in Kyoto, Japan, in December 1997. The CoP adopted by consensus an additional legally binding commitment, the so-called "Kyoto Protocol" (KP). Its salient points are:

• 39 developed countries and countries with economies in transition (Annex B countries) commit themselves to reduce their GHG emissions between 2008 and 2012 by an overall 5.2 percent compared to 1990 levels.
• Three "flexibility mechanisms" for the mitigation of climate change were agreed upon: (1) Trading with quantified emission limitations and reduction obligations (QUELRO, between industrialized countries); (2) Joint Implementation (JI, emission reduction projects between industrialized countries); and (3) the Clean Development Mechanism (CDM, between industrialized and developing countries).

CLEAN DEVELOPMENT MECHANISM

8. The mechanism of relevance for developing countries is CDM, defined in art. 12 of the KP. It permits Annex B countries to buy emission reduction units from non-Annex B (developing) countries and thus meet industrial emissions commitments through reductions achieved elsewhere.

9. CDM also intends to assist countries not listed in Annex B in implementing sustainable development and in obtaining funds to carry out project activities resulting in certified emission reductions (CER) of GHG.

10. Participation in CDM is voluntary, the benefits related to the mitigation of climate change have to be real, measurable and of a long-term nature. The reduction in emissions will only be certified if they are additional to any that would occur in absence of the project activity.

11. These Certified Emission Reductions can be banked or sold by the respective developing countries from the year 2000 up to the beginning of the first reporting period (2008- 2012) , i.e. for eight year.

ISSUES REQUIRING CLARIFICATION

12. Consideration of forestry has, until now, been limited to afforestation, reforestation and deforestation (art.3.3). Forest management or conservation have not been included in the discussions and negotiations, and many uncertainties still have to be clarified, such as the following points:

13. The extent to which forestry is included in the CDM is still unclear, since it is not expressly mentioned in art.12.

14. Furthermore,

• reforestation in relation to forest management and practices is not defined;
• the use of forests (tree harvesting, conversion to different land uses) is not accounted for;
• the protection of natural forests, wetlands and soils in general as natural carbon sinks is not actively promoted;
• degradation of forests is not accounted for.

15. Many of the terms applied are not defined with sufficient accuracy and no guidelines exist on how to apply the mechanism.

16. No linkage to other initiatives in the context of the international forestry debate (e.g. criteria and indicators initiatives) or other relevant conventions is foreseen.

17. Carbon sinks are only taken into account for the period 2008-2012. It is unclear how the impact of forestry activities during the period between 1990 and 2008 will be handled. Similarly, setting 1990 as an arbitrary baseline for measurement of GHG emissions may confer an advantage to countries that had cleared substantial tracts of forests prior to 1990.

18. The time frame for the measurement of carbon sequestration in forestry projects is not yet clear. Different measurement times will lead to different results.

19. No internationally accepted guidelines and standards for measurement and accounting systems have been adopted by the IPCC.

20. It is not clear which changes in carbon stocks are referred to in article 3.3 and the inclusion of additional human-induced activities (article 3.4) will it make more difficult to verify carbon accounting.

21. Since the IPCC rules do not specify minimum values, it will be difficult to apply them from a legal point of view (article 5).

22. The issue of carbon storage in forest products is not considered and it is unclear if the storage of carbon in wood products will be included.

23. The establishment of plantations to serve as carbon sinks could promote the conversion of secondary or primary forests.

24. The short commitment periods of five years each could promote the establishment of fast-growing plantation trees which would not guarantee sustainable carbon stocks.

25. While some countries want an open market for trading certificates, others prefer limiting purchases by Annex B countries to 50 percent of their agreed-upon reductions in emissions, so that each country would have to limit its own emissions by the remaining 50 percent. A fear was expressed by some parties that JI and CDM could be an incentive to continue polluting the atmosphere, rather than a motivation to reduce industrial emissions.

26. To clarify some of these issues, IPCC is preparing a " Special Report", which will be ready in May 2000. It can be assumed that at the next CoP in November 2000 some of these open questions will be addressed.

FAO'S ROLE

27. FAO has established an interdepartmental Ad Hoc Group on Climate in Relation to Agriculture and Food Security to ensure the Organization's contribution to technical issues as well as to the international debate on climate change.

28. With regard to forestry issues, a departmental Task Force for the Role of Forestry in Carbon Sequestration and Substitution was established. It works in close cooperation with the Ad Hoc Group and addresses forestry issues in the context of climate change.

29. FAO assisted the IPCC and the Secretariat of the UNFCCC with advice regarding terminology and consistency of definitions and methodologies and in the review of the Special Report to be submitted in May 2000, and is participating as an observer in the various CoP meetings.

30. FAO is disseminating information to member countries on the prospects for the forestry sector under the Kyoto Protocol. Two regional publications have been prepared: Carbon dioxide offset investment in the Asia-Pacific forestry sector: Opportunities and constraints, published in May 1998; El Protocolo de Kyoto y el Mecanismo para un Desarrollo Limpio, published in April 1999; and a third publication for Africa is under preparation.

31. Projects to support countries interested in developing activities under the Kyoto Protocol are being formulated, such as the Estrategia Forestal para América Central for the Central American sub-region.

32. FAO conducts national and regional workshops on the subject, e.g. in Honduras in October 1999.

33. Based on its international mandate, FAO will position itself as a partner contributing:

• as a forum to discuss land-use changes and forestry activities, as well as the other pending issues;
• baseline data at national, regional, ecosystem and global level (e.g. through Forests Resources Assessment (FRA), State of the World's Forests (SOFO), Global Fibre Supply Model (GFSM), Unified Wood Energy Terminology (UWET), Wood Energy Information System (WEIS), etc.);
• studies in relation to specific issues;
• methodology development and dissemination/training;
• technical know-how, when and where required;
• information and advice to member countries.

34. An expert meeting is planned to be hosted by FAO in cooperation with other donors in the year 2000. The meeting is to address some of the issues mentioned in this section.

SUMMARY AND OUTLOOK

35. The validity of the Kyoto Protocol will depend on its ratification by at least 55 signatory countries, accounting together for at least 55 percent of total 1990 carbon dioxide emissions by industrialized countries. Nevertheless, a number of developments in the direction of implementing the CDM can already be witnessed.

36. In 1997, the World Bank set up a Carbon Investment Fund amounting initially to US$ 150 million. The World Business Council for Sustainable Development set up a clearing house for companies interested in carbon offset ventures. As of 30 August 1998, 97 AIJ projects were under way, 14 of which are in the forestry sector.

37. The issue of carbon sequestration has already been incorporated into the operational programme of the Global Environment Facility (GEF/c.1314). The requirements of the Conventions on Biodiversity and Water, as well as sound forest management principles are prerequisites for assisting carbon offset projects.

38. Up to now, about 4 million hectares of forests worldwide are managed with GHG mitigation funding.

39. It is estimated that the potential annual value of CDM tropical carbon offsets is at least US$ 840 million. Thus, even if the process of clarification and legalization takes a considerable time, carbon offset trading will surely become one of the tools for financing certain forest operations in the tropics.

40. An important issue, particularly for forestry projects under the CDM, will be to make sure that it is implemented in harmony with the concepts of sustainable forest management and other relevant forestry internationally agreed, legally binding instruments and conventions such as those on Biodiversity (CBD), Wetlands (RAMSAR), and Desertification (UNCCD). Once fully operational, CDM may offer funding possibilities for African countries interested in reforestation.

GUIDANCE SOUGHT

41. In view of the current and future importance of the subject, FAO's Forestry Department endeavors to increase its activities addressing the contribution of forests to mitigating climate change. It intends to strenghten its capacity to advise and guide member countries to make the best use of the new opportunities offered through the Kyoto Protocol.

42. The Commission's comments and recommendations are sought.