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Should We Include Avoidance of Deforestation
in the International Response to Climate Change?

Bernhard Schlamadinger, Lorenzo Ciccarese, Michael Dutschke, Philip M. Fearnside, Sandra Brown, Daniel Murdiyarso.

Why has deforestation avoidance been excluded to date?
The Marrakech Accords exclude deforestation avoidance projects under the CDM because of concerns by several parties related to:
+ leakage, which refers to indirect effects of the mitigation project on GHG emissions outside the project or even country boundaries;
+ non-permanence, which occurs when carbon sequestered in a forest restoration project, or carbon “protected” through deforestation avoidance, is released to the atmosphere at a future date due to natural or anthropogenic disturbance;
+ uncertainties of estimates of how much deforestation has actually been avoided, compared to a business-as-usual baseline;
+ scale of possible emission reductions, resulting in industrialized countries putting less effort into emission reductions from burning of fossil fuels.Santilli et al. point out that their proposal would address leakage and nonpermanence. We largely agree with this assessment, but there are a few caveats.

Avoidance of Deforestation

First, if deforestation emissions increase above the target level at a certain point in the future, would the host country then have to foot the bill for making up for these emissions as implied by Santilli et al. (“Once having received compensation, countries would agree not to increase, or to further reduce, deforestation in future commitment periods”)? Or who else would be held liable, if not the host country? Non-permanence is an issue specifi c to land-based activities because carbon sequestration at one point can lead to greater carbon emissions at a later time and because protection of carbon stocks now can lead to greater emissions from these carbon stocks in the future. Nonpermanence can be addressed in at least two ways:
+ The country where the land-use activity takes place assumes full responsibility for managing the carbon stocks in the future, and is liable for any enhanced emissions in the future. This is the approach used for Annex I countries under the KP. For this approach to be successful, it is essential that the commitment periods be contiguous (no gap between commitment periods), and that land areas, once accounted for, remain in the accounting system over time.
+ The country where the land-use activity takes place is not liable for any reemission. This is the case in CDM AR projects, because the developing countries do not actually have a national cap on their GHG emissions. In this case, nonpermanence has been addressed by means of temporary or long-term CERs, meaning that the investor company or country is liable for any re-emission of the carbon that has been credited as net sequestration at an earlier time (UNFCCC, 2003).

The second approach makes sense only at the level of individual projects, but not at the level of national accounting of GHG emissions and removals. Otherwise, the investor would be held liable for the possible failure of policies and measures introduced by the host countries. Therefore, to deal with non-permanence in the context of the compensated reduction proposal, it is a prerequisite that the host country assumes full liability for the carbon stocks, not only in the commitment period during which the credits are issued, but also in future commitment periods, and for all the lands that were monitored and accounted for from the outset. That is, the initial decision to participate in the regime is voluntary, but the subsequent rules and liabilities would need to be made mandatory. Slight modifi cations of this regime could apply in countries with decentralized governance over their forests.

There may be cases where deforestation avoidance (interpreted in a narrow way, based on the downward crossing of a crown cover threshold between 10% and 30% as defi ned under the KP (UNFCCC 2002a; UNFCCC 2003) leads to increased forest degradation through harvesting of the largest trees or other land management such as partial grazing. In these areas, the emission balance improvement may not be as great as estimated and degradation in a given year might lead to increased deforestation in future years as suggested by Nepstad et al. (1999). A possible solution might be a “deforestation and degradation avoidance” policy, rather than focusing on deforestation only. In fact, the issue of degradation in the context of climate change has already been subject to methodological work by the IPCC in its report on Defi nitions and Methodological Options to Inventory Emissions from Direct Human- Induced Degradation of Forests and Devegetation of Other Vegetation Types (Penman et al. 2003). The report contains defi nitions for direct human-induced degradation of forests and devegetation of other vegetation types, methodological options for accounting of emissions from degradation and devegetation, methods for reporting and documentation, and discussion of implications of methodological and defi nitional options for inclusion under the KP’s Article 3.
Uncertainties of baseline estimates: The proposal replaces the contested projectrelated baselines by a national baseline that assumes a continuation of past emissions. Monitoring deforestation at the national level is often assumed to be less uncertain than at the project level. However, in many developing countries, national data on rates of deforestation and corresponding carbon stocks are poorly known. Thus, it probably makes more sense to develop regional baselines, such as at subnational, administrative levels. Finally, the scale issue can be addressed through caps or discounts applied to the total amount of credits from deforestation avoidance either at the host-country level or at the investor-country level, or both. Also the scale issue should be seen in relation to the total demand for credits, which is highly dependent on the participation of industrialized countries in the regime. There is, however, a valid concern that, with in any particular set up under the KP, the addition of deforestation avoidance at unchanged emission limitation targets will lead to lower emission reductions from combustion of fossil fuels. Santilli et al. state “continued deforestation at current annual rates from Brazil and Indonesia alone would equal four fi fths of the emissions reductions gained by implementing the KP in its fi rst commitment period” and “conversely, were the KP to include incentives for addressing deforestation, countries such as Brazil and Indonesia might lower their substantial current emissions from tropical deforestation”. These statements seem to imply that both the currently expected Kyoto emission reductions and the emission reductions from reducing deforestation could be achieved simultaneously.

Avoidance of Deforestation

This is, of course, only possible if the overall targets of Annex I countries were strengthened. The authors seem to be conscious of this problem; in the Portuguese version of the proposal (Santilli et al. 2003b), they suggest using the credits not in the commitment period they were generated, but at least one commitment period later. However, this may introduce further constraints on fi nancing the deforestation avoidance programs.Overall, the new proposal is interesting, but further refi nements are needed to improve the incentive structure for countries to sign on to this voluntary approach. Firstly, at the international level, it must be ensured that up-front fi nancing is possible. Secondly, the design of national policies and measures must adequately address the underlying causes of deforestation and provide real incentives (or other consequences) that stand a chance of changing the course of events on the ground.

Finally, in the design of such programs, much can be learned by evaluating past development assistance programs aimed at reducing deforestation, many of which addressed the problem inadequately and were not very successful.

Avoidance of Deforestation Avoidance of Deforestation

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Source: Proceedings of Workshop on Carbon Sequestration and Sustainable Livelihoods
Editors :
Daniel Murdiyarso
Hety Herawati


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