1. LULUCF Concepts Training Seminar for BioCarbon Fund Projects February 8 th 2008 Timothy Pearson and Sarah Walker Winrock International

2. Key carbon trading concept:  Reduce GHG emissions (or enhance removals by sinks) in one country to permit an equivalent quantity of GHG emissions in another country, without changing the global emission balance.

3. Basic requirements of emissions reductions or removals under the CDM  Create “real, measurable, and long- term benefits related to the mitigation of climate change” (KP, art. 12.5b)  Be “additional to any that would occur in the absence of the certified project activity” (KP, art. 12.5c)  Be certified by operational entities designated by the Conference of the Parties (KP, art. 5)

4. Basic requirements of emissions reductions or removals under the CDM  Real, measurable  Long-term  Additional  In absence of project  Certified  Monitoring (methodology + plan)  Expiring CERs to deal with non-permanence of C storage  BAU activities not eligible, must be human-induced  Baseline (methodology+ assessment  Validation, Verification, and Certification by accredited entity

5. Eligibility

6. What is a forest?  Host country must define a forest within the following guidelines:  Minimum tree crown cover between 10 and 30%  Minimum land area between 0.05 and 1.0 hectare  Minimum tree height between 2 and 5 m  Values once chosen must remain fixed

7. 1990 Rule for Afforestation  No land meeting national definition of forest be present within project boundaries between 31 December 1989 and start of project  Different dates for other standards eg VCS

8. Eligibility Tool Demonstrate the project area is not already forest a.Tree height b.Area c.Tree cover

12. Eligibility Tool  Demonstrate that the activity is an afforestation/reforestation activity  Cadastral maps  Satellite / aerial photography  Local interviews

14. Additionality

15. Additionality—key step  A project activity is additional if the activity only takes place because of the anticipation of a potential sale of Certified Emission Reduction units (CER)  e.g. Activity such as forest restoration would not have taken place without outside funds paying for the planting, etc. in anticipation of receiving carbon offsets

16. Additionality Tool:

17. Additionality Tool  Step 0: Preliminary screening on starting date  Step 1: Alternative land use scenarios  Step 2: Investment analysis  Step 3: Barriers analysis  Step 4: Common practice analysis

18. Baselines

19. Baselines  What would have happened in the absence of the CDM project activity  Must be project specific and prepared in a transparent and conservative manner

20. Baselines – avoided emissions example:  Credits from a project is: Difference between C stocks with project and baseline C stocks With Project Baseline Carbon Credits

21. Baselines – A/R example:  Credits from a project is: Difference between C stocks with project and baseline C stocks With Project Baseline Carbon Credits

22. Baselines - three approaches 1.Existing or historical changes in stocks in the carbon pools within the project boundary 2.Changes in stocks in the carbon pools within the project boundary from a land use that represents an economically attractive course of action 3.Changes in stocks in the pools within the project boundary from the most likely land use at the time the project starts.

23. CoP-7 defined baseline for CDM MA CDM (44) The baseline is the scenario that:  “reasonably represents GHG emissions that would occur in the absence of the proposed project activity”;  is derived using an approved baseline methodology. MA CDM (45) The baseline shall be established:  (b) “in a transparent and conservative manner” regarding the choices of approaches, assumptions, …”  (c) “on a project-specific basis”;  (d) in accordance with simplified procedures for small scale projects.

24. Combined Tool:

25. Combined Tool  Simultaneous consideration of land use alternatives and barriers and financial considerations  Allows determination of alternatives and proof of additionality of project scenario

26. Combined Tool

29. Leakage

30. Leakage  Leakage is the unanticipated loss in carbon benefits outside of the project’s boundary as a result of the project activities  Carbon emissions from leakage could offset gains from a carbon project, resulting in a reduction of the carbon “credits”

31. Leakage: activity shifting  Activity shifting: activities that would have occurred inside project area occur in another location outside of project area  Can be minimized by engaging communities in project and providing alternative lifestyles  E.g.—reforest with multi-purpose tree species, employ people to plant and maintain  Relates to the phrase in the CDM “..achieving sustainable development”

32. 2007 Project Area 2007 Nearby the Project Area Leakage – avoided emissions example Baseline CO 2 emissions 2013 CO 2 emissions

33. Baseline Project Area 2007 Nearby the Project Area Leakage – A/R example 2013 CO 2 emissions

34. Leakage  Area outside of project area: Carbon stocks without existence of project Carbon stocks because of project Carbon stocks reduced = Project Leakage

35. Leakage  Area outside of project area: Change in carbon stocks because of project Carbon stocks reduced = Project Leakage

36. Leakage – avoided emissions example  Carbon credits = Project – Baseline – Leakage  Put in place measures to reduce leakage Carbon credits With Project Baseline Baseline+Leakage

37. Leakage – A/R example  Carbon credits = Project – Baseline – Leakage  Put in place measures to reduce leakage Carbon credits With Project Baseline Baseline+Leakage

38. Leakage  Vehicle and machinery use  Displacement of fuel wood collection  Fence post use !  Market effects  Investment crowding-in  Investment crowding-out

39. Permanence

40. Non-permanence  Land-based systems subject to reversal by human and natural disturbances  Addressed by concept of “rental” of the service  For CDM project two options exist:  temporary certified emission reduction units (tCER)  long-term certified emission reduction units (lCER)

41. Temporary certified emission reductions- tCERs  Allotted tCER = net anthropogenic GHG  Issued at each verification and certification period – when carbon stocks exist on land  Expire at next certification period e.g. issued 2012  expire 2017

42. tCER – ex. One 30 year crediting period

44. Long-term certified emission reductions-lCERs  lCERs issued = net anthropogenic GHG removals achieved by the project activity between two certification periods  Issued at each verification and certification period  Expire at end of crediting period e.g. project start date: 2007, lCER issued 2012  expire 2038

45. lCER – ex. One 30 year crediting period

46. Non-Permanence  For non-CDM registries?  VCS has a buffer, a proportion of the credits are held in the buffer as an insurance against non-permanence  Legal guarantees in US

48. Thank You!  For more information see:  http://www.winrock.org/Ecosystems/tools.asp http://www.winrock.org/Ecosystems/tools.asp  Or contact us:  tpearson@winrock.org tpearson@winrock.org  swalker@winrock.org swalker@winrock.org