Land Use, Land-Use Change and Forestry

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Land use, land-use change, and forestry (LULUCF) activities aimed at mitigating greenhouse gas emissions are often organized as projects. An LULUCF project may integrate one or more activities aimed at reducing greenhouse gas emissions or enhancing greenhouse gas sinks in terrestrial ecosystems and related sectors. LULUCF projects are confined to a specific geographic location, time period, and institutional framework to allow changes in carbon stocks or greenhouse gas emissions to be monitored and verified. There are three broad types of LULUCF projects: (i) avoiding emissions via conservation of existing carbon stocks, (ii) increasing carbon storage by sequestration, and (iii) substituting carbon for fossil fuel and energy-intensive products. Each of these types of project has a variety of subtypes. Integrated multi-component projects may combine many of these subtypes.

LULUCF projects have raised specific concerns regarding duration, additionality, leakage, risks, accounting, measuring and monitoring, and verification of greenhouse gas benefits. These concerns include the ability to construct reasonable, empirically based, without-project baselines; the ability to quantify and reduce potential leakage of greenhouse gases across project borders to other areas or markets; and the ability to cope with natural or human-induced risks that may reduce or eliminate accrued greenhouse gas benefits. Many of these issues are also applicable to climate mitigation projects in other sectors. There are further questions about the degree to which projects can be designed to contribute to sustainable development and improved rural livelihoods. This chapter addresses each of these concerns.

Assessment of the experience of LULUCF projects is constrained by the small number of such projects, their limited activity and geographic scope, and the short period of field operations since the first greenhouse gas mitigation project began in 1988. About 3.5 Mha of land are currently included in 27 LULUCF greenhouse gas mitigation projects being implemented in 19 countries. In addition, LULUCF project experience to date has focused only on mitigating carbon (as carbon dioxide) emissions.

Because no internationally agreed set of guidelines or methods yet exists to quantify carbon benefits, costs, and the carbon and financial efficiency of project activities, projects have used a wide range of methods to estimate changes in carbon stocks or greenhouse gas emissions and financial indicators. Few of the results of these projects have been independently verified, which makes comparative assessments difficult. Using data reported by projects that have been reviewed, average carbon sequestration or emissions avoidance per unit area ranges from about 4-440 t C ha-1; there is wide variation across regions and specific project types. The cost of greenhouse gas mitigation effects in these projects ranges from $0.1-28 per t C, based on dividing the total financial commitment by the estimated long-term greenhouse gas mitigation effect.

A fundamental component of project assessment is to determine whether changes in carbon stocks or greenhouse gas emissions associated with a project are "additional" to "business as usual." The first step in determining additionality has been to develop a without-project (baseline) scenario against which carbon stocks in the project can be compared. Currently there is no standard method for developing baselines. Approaches for developing and applying baselines include: project specific, established through a case-by-case exercise, or generic-based on regional, national, or sectoral aggregated data. These baselines may remain fixed throughout the duration of a project, or they may be periodically adjusted in light of new data or evidence. Methods to quantify (or estimate) carbon stocks in the baseline scenario include the use of models to project the fate of land in the project area in combination with data on carbon stocks from proxy or control areas or from the literature.

Experience shows that reducing access to food or fiber resources without offering alternatives or substituting for the activity leading to greenhouse gas emissions may result in project leakage as people move elsewhere to find needed supplies. A few pilot projects to date have been designed to reduce leakage by explicitly incorporating components that supply the resource needs of local communities (e.g., planting fuelwood plantations to reduce pressures on other forests) and provide socioeconomic benefits that create incentives to maintain the project.

Project accounting and monitoring methods could be matched with project conditions to address leakage issues. For example, if flows of LULUCF products or people across project boundaries are negligible, leakage is likely to be small, and the monitoring area can be roughly equal to the project area. Conversely, where flows are significant and leakage is likely to be large, the monitoring area will need to be expanded beyond the project area to account for the leakage. Alternative approaches for accounting and monitoring leakage may be required where monitoring and project areas cannot be easily matched. Potential options include national or regional LULUCF sectoral benchmarks (empirically derived values that relate leakage levels to activities and/or regions) that could capture and report leakage outside the project area, and standard risk coefficients developed by project or activity type and region, with adjustments to project greenhouse gas benefits made accordingly. However, the effectiveness of these approaches is untested.

Implementation of projects in countries without assigned amounts for national emissions presents specific concerns regarding baselines, greenhouse gas accounting, leakage, and monitoring. Unlike Annex I countries, non-Annex I countries are not required to account for emissions on a national level. Therefore, leakage and emissions arising after the project has been completed will not be detected.

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