1. Tatsushi HEMMI Institute for Global Environmental Strategies COP 9 Decisions related to CDM in forestry sector – An update on implications for Asia IGES-URC Regional Workshop in Asia on Capacity Development for the CDM 24 March 2004, Siem Reap, Cambodia

2. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 1 Institute for Global Environmental Strategies CDM in Forestry Sector What is CDM in Forestry Sector (so called Sink CDM)? CDM in Energy Sector: Emission reduction CDM in Forestry Sector: GHG removals CO 2

3. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 2 Institute for Global Environmental Strategies Rules set before COP9 Sink CDM activities: Only Afforestation and Reforestation activities are allowed Credits from sink CDM: 1% of base year emissions of a Party Estimation: Based on Revised 1996 IPCC Guidelines

4. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 3 Institute for Global Environmental Strategies What are the rules? Base year Trees can only be planted in land which had no forest since 1990 1990 2000 Time Land-use Change e.g. Grassland  Forest Project Definition of forest Min area: 0.05-1.0ha 0.05 ha1.0ha 10 %30 % 2 m 5 m Min crown cover: 10-30 ％ Min tree height of 2-5 m

5. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 4 Institute for Global Environmental Strategies What are the rules? There are 5 carbon pools Below-ground Biomass ： roots Soil organic carbon: organic matter in the soil Above-ground Biomass ： trunk, branches, leaves, etc Litter ： dead branches & leaves Dead wood ： dead standing trees, dead trunks, etc

6. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 5 Institute for Global Environmental Strategies What are the rules? Boundary: May contain more than one discrete area of land Geographically delineates sink project activities

7. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 6 Institute for Global Environmental Strategies Project Baseline Key concepts of sink CDM Additionality Project ≠ Baseline scenario  Additionality CDM project is Additional if GHG removals by sinks are increased above the changes in carbon stocks that would have occurred in the absence of the CDM project activity

8. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 7 Institute for Global Environmental Strategies Key concepts of sink CDM Additionality CDM Executive Board requires proof of additionality for approval of baseline/monitoring methodologies for Energy sector CDM Project proponent need to demonstrate that your project would not occur in the absence of CDM project activity  For example, even if the price CER is ZERO, you would do your project anyway  Not additional

9. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 8 Institute for Global Environmental Strategies Key concepts of sink CDM Additionality – Example from energy sector (a) A flow-chart narrowing of potential baseline options; and/or (b) A qualitative or quantitative assessment of different potential options and an indication of why the non- project option is more likely; and/or (c) A qualitative or quantitative assessment of one or more barriers; and/or (d) An indication that the project type is not common practice (e.g. occurs in less than [<x%] of similar cases) in the proposed area of implementation, and not required by a Party’s legislation/regulations.

10. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 9 Institute for Global Environmental Strategies Key concepts of sink CDM Baseline Scenario that represents the changes in carbon stocks that would have occurred in the absence of the proposed project activity TIME tCO2 / ha

11. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 10 Institute for Global Environmental Strategies Key concepts of sink CDM Non-permanence CO2 sequestered in forest may be released in the atmosphere in the occasion of fire, harvesting and die back from pests On contrary, once emission reductions from energy sector CDM are achieved, it would not be released back again Non-permanence: Dealt with 2 types of CERs “Temporary CER – tCER” “Long-term CER – lCER”

12. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 11 Institute for Global Environmental Strategies Key concepts of sink CDM CO2 Time BAU ER Time BAU RM Energy Sink FIRE Start of the project Non-permanence

13. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 12 Institute for Global Environmental Strategies Key concepts of sink CDM Monitoring Many provisions are given but most similar to those of emission reductions CDM project Monitoring refers to collection and archiving of all data for determining the baseline, measuring removal by sinks of GHG in the project boundary involves : Data for estimating the actual net GHG removals by sinks during the crediting period Data for determining the baseline net GHG removals during the crediting period

14. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 13 Institute for Global Environmental Strategies Key concepts of sink CDM Leakage Leakage is the increase in GHG emissions which occurs outside the boundary, which is measurable and attributable to AR-CDM

15. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 14 Institute for Global Environmental Strategies Key concepts of sink CDM EIA and SIA Project participants: Submit to DOE the analysis of the socio-economic and environmental impacts, including impacts on biodiversity and natural ecosystems, and impacts outside the project boundary of the proposed sink CDM projects

16. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 15 Institute for Global Environmental Strategies Other rules decided at COP9 Small Scale CDM: Less than 8,000 tons of CO2/year Developed or implemented by low-income communities CO 2 > 8,000 tCO2/ year

17. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 16 Institute for Global Environmental Strategies Implications for Asia Base year In many Asian countries, land use is very complicated (Small land owners, integrated agroforestry systems, shifting cultivation, etc). Many countries do not have land use record or history data.  Proof of land use in 1990 can be done via combination of multiple approaches: Administrative data, scientific literatures, airphoto, interviews, etc

18. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 17 Institute for Global Environmental Strategies Implications for Asia Additionality: Systematic approaches to demonstrate Barrier test: Financial/Investment: Lower IRR, low financial incentives Risks: Land dispute, natural disasters (fire, wind, pests, etc) Technological/environmental constraints: High mortality rate, soil conditions Common practice: Commonality of your project type in relation to what is practiced normally

19. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 18 Institute for Global Environmental Strategies Implications for Asia Baseline: Regional data base for BL setting Data for estimating BL removal is available in some countries e.g. Indonesia (study on vegetation, human impacts on vegetation, soil carbon content, etc)

20. IGES-URC Regional Workshop in Asia on Capacity Development for the CDM, 24 March 2004 19 Institute for Global Environmental Strategies Conclusion Rules are set to go forward! Sink CDM project development can be costly  Need for regional collaboration in data exchange to facilitate project development (baseline setting). For additionality test, baseline/monitoring methodologies, we can learn from examples of energy sector CDM. Some argue sink CDM can harm environment and local society  Not necessarily! If done properly, it can provide firewood, fruit and possibly revenue from CER as an income source (reducing pressure on other resources)  Incentives for rehabilitation of degraded land