Land Use, Land-Use Change and Forestry

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6.4.1. Methodological Issues

Several characteristics of projects have implications for reporting. Many of these characteristics are unique to projects but are omitted from the Guidelines. Chapter 5 describes these characteristics in more detail, but we briefly discuss the reporting implications here:

Comprehensive carbon accounting. For comprehensive accounting, an extension beyond the Workbook methods may be required if additional carbon pools are to be credited.

Baselines. The Guidelines can be used to report carbon stock changes in a given year, not for estimating baselines. In the Guidelines, the change in stock is simply derived from estimates of stock at two points in time; this approach may not be sufficient, however, to capture the features discussed in Chapter 5. For example, if the GHG benefits of a project are to be estimated relative to a baseline, further development of the Guidelines would be required. To develop such methods, the Parties would have to decide whether to apply a baseline and, if so, how this baseline would be calculated. The use of baselines in the Guidelines-such as business-as-usual-would deviate from the basic principles of the Guidelines, but it would be technically feasible.

Leakage (off-site impacts). The Guidelines do not currently address issues related to off-site impacts or leakage of GHG benefits. Leakage in LULUCF projects can occur as a result of inappropriately defining project boundaries for estimation; inappropriately defining the lifetime of monitoring activities for the project; forestry and non-forestry sector policies implemented by national/international governments, industry associations, or other entities; market effects; and activity shifting. Such off-site impacts (leakage) may be more difficult to quantify than on-site impacts. Because estimating changes in carbon stock can sometimes be difficult, the level of precision and confidence levels associated with such impacts may also need to be reported. The Guidelines may need to incorporate off-site changes to facilitate estimates of net changes in carbon stocks. Addressing leakage is one of the most challenging issues of significance to project-based activities. Section 5.3.3 discusses several approaches (e.g., benchmarks, risk co-efficients, etc.) to account for and monitor leakage. Each of the approaches implies a differing level of complexity for accounting and reporting.

Permanence. The permanence of carbon sequestration is potentially important for reporting projects. Chapter 2 discusses options for developing a time equivalence factor for reporting permanence. If one of these options were adopted by Parties, there would be implications for reporting: the timeline of a project-how the endpoint of a project is defined (indefinite, 100 years, 50 years, or variable-left up to each Party); accounting for time and the use of discounting; the appropriate carbon accounting methods (carbon stock method, average stock method, and ton-C year); and liability and allocation of responsibilities for ensuring compliance. Many of the foregoing options extend beyond the approach in the Guidelines.

Sustainable development. The CDM may introduce a new set of project-level issues-namely, assessment of net environmental and socioeconomic impacts (Chapter 5). Such issues are not addressed in the current Guidelines. One option is for Parties to take a decision on developing new guidelines for these issues. The absence of such guidelines may result in inconsistent responses to the Protocol and cause projects to be favored in areas with less stringent regulations. Guidelines could be developed to ensure consistency for assessing and reporting for net environmental and socioeconomic impacts; developing a common set of criteria may be difficult, however.

Uncertainties. The ranges of uncertainty of GHG emissions and removals of projects and national inventories are likely to differ. Because the national inventory and projects may be combined in a common reporting framework, however, these differences in uncertainty should be addressed. There is concern that changes in carbon stock at the project level may not be detectable at the national level because the former are too small and fall within the error bounds of a national inventory, or they occur in geographic areas that are not recorded in a national GHG inventory. In the first case, project reporting should be kept in perspective because it may be unnecessary to identify impacts in detail when national and global measurements are much less precise. A concern arises only if the absolute uncertainty around GHG estimates of projects is greater than that of the national inventory. To assess the importance of this issue, reporting of uncertainties of GHG estimates is crucial.

Double-counting/crediting. There are key questions about double-counting/crediting the impacts of projects, as with other sectors. Double-counting/crediting can be separated into three distinct types and can occur between:

The Guidelines were not designed for reporting of these features or for features such as project locations and boundaries, additionality, and biodiversity. The Guidelines do provide a basis, however, for reporting changes in carbon stocks for projects in a single year. To avoid double-counting, projects and national inventories should be reported a consistent way in space and time. Ideally, national reporting for the Protocol and the UNFCCC could be integrated.

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