1. Land Use, Forestry and Climate Change: Opportunities, Imperatives and Challenges Chris Henschel Canadian Parks and Wilderness Society

2. Table of Contents Land use (forestry) and climate mitigation Forest climate mitigation policy Case studies: – Forest management negotiations for second Kyoto commitment period – North American Forest Carbon Standard – New Zealand Emission Trading System Conclusions

3. LAND USE (FORESTRY) AND CLIMATE MITIGATION

4. Emissions from forestry and land use? Forest harvest = emission Natural forest  managed forest = loss of carbon Forest  non-forest = loss of carbon Wetland drainage or disturbance = emission Soil disturbance = emission Biomass replace fossil fuel emissions = (emission reduction)? Wood replaces materials with higher emission profiles = emission reduction

5. Forests are important to global mitigation efforts 1.3 – 4.2 Gt CO 2 /yr at $100 US/t CO 2 Canada’s forests and peatlands globally significant: store about 232 900 Mt C Examples of human-caused emissions in Canada: – 45 Mt C logging in 2006; – 190 km2 of peatlands disturbed in Canada to date by extraction (7.7 Mt); – 237 km2 of peatlands disturbed to date in Alberta by oil sans operations; Sources: IPCC AR4; Carlson et al. 2010.

6. International commitments to protect and enhance sinks and reservoirs 1992: UNFCCC Article 4.1(d) “All Parties… shall … [p]romote sustainable management, and promote and cooperate in the conservation and enhancement, as appropriate, of sinks and reservoirs of all greenhouse gases not controlled by the Montreal Protocol, including biomass, forests and oceans as well as other terrestrial, coastal and marine ecosystems ….” 1997: Kyoto Protocol Article 2.1(a)(ii) “1. Each Party included in Annex I, in achieving its quantified emission limitation … shall … [i]mplement and/or further elaborate policies and measures … such as … [p]rotection and enhancement of sinks and reservoirs of greenhouse gases …; promotion of sustainable forest management practices, afforestation and reforestation ….”

7. What can management activities contribute to mitigation? Forest Area: maintain or increase Stand-level Carbon Density: maintain or increase by reducing forest degradation and improving management Landscape Carbon Density: maintain or increase through forest conservation Off-site Carbon Stocks: enhance material and bioenergy substitution – Bioenergy: 0.4 – 4 Gt CO 2 e/yr Source: IPCC AR4

8. Maintaining the role of Canada’s forests and peatlands in climate regulation Reduce deforestation and increase afforestation Avoid logging of natural forests Employ forest management practices that enhance carbon storage: Employ forest sector practices to enhance carbon storage and minimize greenhouse gas emissions: Minimize the extraction of peat soils Minimize soil disturbance Reduce the adverse climate impacts of fire and insect disturbances Carlson M., J. Chen, S. Elgie, C. Henschel, A. Montenegro, N. Roulet, N. Scott, C. Tarnocai and J. Wells. 2010. Maintaining the role of Canada’s forests and peatlands in climate regulation. Forestry Chronicle: 86(4) 434-443).

9. FOREST CLIMATE MITIGATION POLICY

10. Examples of forest and wetland policy initiatives Creating a global mechanism to reduce emissions from tropical deforestation, forest degradation (+) (UN and other); Including forest and wetland emissions in commitments of developed countries (UN, Kyoto); Including deforestation liabilities in Emissions Trading System (New Zealand); Including forest projects in carbon offset frameworks (North America); Substituting fossil fuels with biomass in energy production (e.g. EU, forest manufacturing sector, Ontario Power Generation);

11. Barriers to good policy Relative permanence of emission reductions; Additionality problems of offsets; Treatment of “carbon neutrality”; Non-carbon effects – e.g. biodiversity; Politics – expecting forests to make us look good at expense of accurate accounting; Forest sector constraints – e.g. long-term trends and liability;

12. CASE STUDY 1: NEGOTIATION OF NEW FOREST MANAGEMENT ACCOUNTING RULES UNDER KYOTO PROTOCOL

13. Key element of negotiations is choice of a baseline to measure changes in emissions This will determine impact of forestry emissions on compliance under global climate agreement; Could create incentives/pressure for changes in forest management; Option with greatest support allows developed countries to propose their own baselines; Called “Reference Levels”

14. Parties’ Proposed Reference Levels (PRLs) Reference LevelCountriesAccount for growth in emissions? Long-term average historical 0 Base period: 2001 - 2005 Switzerland ~ Base year 1990Norway, Russia Zero sinkJapan Projected reference levels 36 Parties     

15. Projected reference levels hide increased emissions in the baseline; Choosing a baseline from the future rather than the past A projected reference level is designed to measure deviation from planned growth, and does not accurately reflect changes in emissions relative to the current state of the atmosphere Deviation from planned growth is for mitigation in developing countries, where projected growth in emissions is envisioned as part of sustainable development Forest management accounting rules would undermine economy-wide ambition if they fail to account for increasing emissions from forest management relative to historic levels

16. Proposed reference levels will hide significant increase in annual emissions (460 Mt) Source: Climate Action Network

17. Developed Parties are failing to conserve and enhance sinks and reservoirs Proposed Reference Levels do not incentivize activities to reduce forest emissions using mitigation activities identified by IPCC Parties are demonstrating the intention to increase harvest rates and emissions from forest management – These emissions would not be reflected in accounts using the PRL mechanism Parties proposing increased harvest rates: Australia EU27 Japan New Zealand Norway Russian Federation Switzerland

18. Flawed policies and difficult circumstances are driving this flawed approach Policy choices about carbon neutrality National circumstances of forestry sectors – Logging primary forests – Multi-year trends and cycles in harvest rates Belief in the societal/climate benefits of ‘sustainable’ forest management A blindspot for biodiversity

19. CASE STUDY 2: “NORTH AMERICAN FOREST CARBON STANDARD”

20. Voluntary standard designed for uptake by regulators Lead by forestry and forester associations in United Stands and Canada; American Forest & Paper Association is secretariat ANSI/CSA accredited standard Multi-stakeholder in design by dominated by prospective producers and traders of forest carbon credits In third draft

21. Current draft fundamentally undermines key offset principles “Permanence” of emission reduction defined as 50 years Proponents can terminate at any time and only partially replace credits No explicit additionality tests Flexibility with baseline setting No baselines required for manufacturers of harvested wood products (any new wood is good)

22. Interests are driving this flawed approach Fundamental tension between lack of permanence and aversion to liability Desire to reward good behaviour rather than additional emission reductions Belief in the societal/climate benefits of ‘sustainable’ forest management

23. CASE STUDY 3: NEW ZEALAND EMISSION TRADING SYSTEM

24. Deforestation liabilities included in ETS Landowners responsible for deforestation of any land in forest as of January 1 1990 All planted production forests Not responsible for harvest emissions if trees are replanted Credits for growth and liability for emissions voluntary for forests planted after 1990

25. Policy will reduce deforestation and provide handsome reward Deforestation emissions projected to decrease Profits of $343 million to landowners from gifting of emission allowances

26. The downsides and inconveniences of including land use emission liabilities Credits from forest growth will only delay emissions from plantation forests (expected harvest in 2020s) Voluntary participation of post-1990 forests could create big cost to New Zealand government in 2020s New Zealand seeking flexibility in Kyoto rules to allow deforestation of productive lands to allow dairying (shift to less productive lands)

27. CONCLUSIONS

28. Key considerations for policy choices Accountability must exist at the national level (e.g. included in national targets and global compliance) Emissions from bioenergy must be counted Offsets would undermine a regulatory cap (solution: limits/adjust the cap) National policies can be designed to fit – does not need to be carbon market National policies must consider other values including biodiversity

29. Possible national / provincial policy approaches Government purchase of offsets Cap-and-trade auction revenue spending Payment for Ecosystem Services Tax credits Information / Labelling Protected Areas/Reserves Tradable permits Conservation Banking Zoning and land-use planning Sustainable Forest Management Policies From Forest Carbon and Climate Policy in Canada: A Review of Forest Carbon Offset Opportunities, Issues and Alternatives. Mike Kennedy, Chris Henschel. The Pembina Institute / CPAWS