Avoiding Emissions Reduction: Terrestrial Carbon Sinks

Abstract

As noted in previous chapters, it is not easy to reduce carbon dioxide emissions – it is technically difficult and the public is willing to pay too little to do so. As a result, governments have looked to land use, land-use change and forestry (LULUCF) activities as a means of removing CO2 from the atmosphere and sequestering it in terrestrial carbon sinks. This chapter considers economic issues related to, among others, discounting of carbon, questions pertaining to additionality and leakage, transaction costs, the process of certifying carbon offset credits, governance, and corruption. Available data suggest that, compared to emissions reductions, LULUCF activities are a costly alternative for mitigating climate change, although forestry activities in some regions might constitute an exception. Carbon sequestration and its costs are examined over a number of forest rotations encompassing 240 years; costs and carbon uptake depend on tree species, growth rates, the post-harvest use of fiber, and the discount rate. As shown in this chapter, tree-planting activities can be used to earn certified emission reduction (CER) credits under Kyoto’s Clean Development Mechanism, but the approach used to determine the CER differs from the actual carbon flux. Finally, although currently not permitted under Kyoto, activities that Reduce Emissions from Deforestation and forest Degradation (REDD) are being promoted as eligible CER credits. This effort has gone even further, however, in the attempt to link the UN’s Framework Convention on Climate Change (FCCC) and the Convention on Biological Conservation – the definition of REDD credits has been extended to include sustainable management of forests, forest conservation and the enhancement of forest carbon stocks, collectively known as REDD+.