Forestry projects: lessons learned and implications for CDM modalities

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Forestry projects lessons learned and
implications for CDM modalities

• Jane Ellis, OECD

Bonn, June 2003
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Background and scope

• Modalities and procedures (MP) for A/R projects
  to be agreed at COP9
• Some experience gained to date with COP7 MP for
  emission reduction projects
• Paper examined several A/R projects underway and
  made recommendations for additionality, baselines
  and leakage MP
• Presentation will outline conclusions of paper

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Experience with additionality

• COP7 definition of additionality for emission
  reduction projects has two interpretations
• Would a less-GHG friendly project have been
  implemented instead of the proposed project
  activity? OR
• Would the proposed project activity have occurred
  even if it were not registered as a CDM project
  activity?
• Both interpretations have been used by CDM
  project developers.

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Assessing additionality

• 13 CDM-type A/R project/project components
  studied
• Treatment of additionality very variable
• 2 gave no additionality assessment
• 1 compared C sequestration with project to
  baseline
• 3 gave persuasive argument
• 3 gave economic/financial arguments
• 4 outlined a mixture of reasons

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Why A/R activities are different

• Undertaken in large amounts under BAU
• Can result in emissions as well as removals
• Changes in carbon stocks can be
  naturally-occurring as well as human-induced
• Can have multiple environment, economic, social
  impacts
• CDM A/R activities are required to have multiple
  goals (SD, GHG, natural resources)

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Defining additionality for A/R

• Definition of additionality in MP will need to
  take into account differences between A/R and
  emission reduction projects
• Can be worded so as to reduce importance of
  free-riders
• Additionality tests or screens other than the
  baseline may also be needed
• These could be based on objectively verifiable
  data/information

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Baselines used in different A/R projects
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Baselines

• General approach similar for different projects
• Identify current land use/land-use trends
• Assess likely future land use without
  intervention
• Calculate carbon stocks of likely land use
• Assess whether any emissions from baseline land
  use, and whether these activities will be
  displaced as result of proj.
• Assess if natural regeneration will occur on the
  site

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Baselines (2)

• Definition will need to
• allow for the differences between A/R and
  emission reduction projects
• ensure that baseline chosen will not result in
  credits for ineligible LULUCF activities
• Identifying the most likely prospective land use
  could be a promising approach

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Leakage

• Different types of leakage possible from A/R
  projects, at different geographical scales
• Some types of leakage could be significant but
  not all can be controlled by the project
  developer
• What is included in leakage influenced by
  definition of project baseline and boundary

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Leakage (2)

• Little experience with quantifying leakage to
  date, although some projects have analysed the
  key indicators that cause leakage
• Leakage types under the control of the project
  developer are easier to control and reduce
  through project design

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Conclusions

• Changes needed to definitions of additionality,
  baseline, baseline approaches, leakage
• Additionality could be defined to help reduce
  potential free-riders
• Separate additionality tests may be needed
• Baseline, baseline approaches need to allow
  for characteristics/eligibility of LULUCF in CDM
• Importance of leakage can be reduced through
  careful project design

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Further information

• OECD/IEA information papers, including Forestry
  projects lessons learned and implications for
  CDM modalities are available at
• http//www.oecd.org/env/cc