Transcript Slide 1

IUCN Commission on Environmental Law Conference on Climate Change Law and Governance in South Asia – BRICs Law and
Policy Dialogue on Climate Change, Sustainable Energy & Biodiversity
Venue: Auditorium, India International Centre Annex, Lodhi Estate New Delhi August 20-21st, 2010
Carbon offsets and carbon market implications for
private sector: Scientific and ethical perspectives on risk
assessment for carbon offset investments
Prof Brendan Mackey, PhD
Fenner School of Environment & Society
College of Medicine, Biology and Environment
Source of images:
http://cdm.unfccc.int/contest/09/pc09_top25.html
Four sources of carbon offset financing
1. Clean Development Mechanism (CDM)
2. Reducing Emissions from Deforestation and Degradation (REDD)
4. National (Regional) Mitigation Policies (e.g. cape & trade scheme)
3. Voluntary Carbon Offset Schemes
e.g. The CDM allows emission-reduction (or emission removal) projects in developing
countries to earn certified emission reduction (CER) credits, each equivalent to one
tonne of CO2. These CERs can be traded and sold, and used by industrialized countries
to a meet a part of their emission reduction targets under the Kyoto Protocol.
The justification for ‘offsetting is that it stimulates sustainable development and
emission reductions, while giving industrialized countries (or coorporations) some
flexibility in how they meet their emission reduction limitation targets
CDM (LULUCF), & REDD provide opportunities for public and private, formal
and informal carbon offset investments in ‘AFOLU’ projects
Source: Karan Capoor and Philippe Ambrosi (2009) STATE AND TRENDS OF THE CARBON MARKET 2009. The World Bank,
Washington DC
So far, China has lion share of CDM investment…
Source: Karan Capoor and Philippe Ambrosi (2009) STATE AND TRENDS OF THE CARBON MARKET 2009. The
World Bank, Washington DC
…and only 0.1% CDM investments in AFOLU
…Because risks are considered high
1. Risks of mitigation perverse outcomes
‘…concerns about permanence of reductions, accuracy of monitoring and about
“flooding the market” continued to keep LULUCF assets outside the EU ETS, as well as
the proposed AU ETS and NZ ETS. Meanwhile, even governments, which have the
ability to use a limited amount of LULUCF, have barely acquired any of these assets…’
(Capoor and Ambrosi 2009)
2. Risks of sustainable livelihoods perverse outcomes
e.g. where carbon offset projects harm local communities e.g. through loss of
ecosystem services from land conversion or water diversion
3. Risks of biodiversity perverse outcomes
e.g. where carbon offset projects result in loss of wildlife habitat
How minimize risks of carbon offset AFOLU projects?
These risks apply whatever the scheme (CDM, REDD, National
C&T, Voluntary)
Solution: factor in (i) what science says we need to do & (ii) what
ethics says we should do, in arriving at climate change policies
and measures.
But, there are limits to extent risks can be dealt with in UNFCCC
CoP decisions (i.e. international law) as there is pressure to
exclude ‘non-climate change issues’ (!)
What is ethics saying we should do?
Acting ethically requires that we give due consideration to the impact of and
potential for harm from our actions on ‘others’ for whom we are morally
responsible. In the context of climate change, the ‘actions’ are mitigation
policies and measures and the ‘others’ include the greater community of life
(people in all nations, future generation, and ultimately other species).
The UNFCCC contains ethical principles which Parties have a legal obligation
to consider when negotiating policies and measures (principles are echoed and
expanded on by Earth Charter, UDHR, UNDRIP):
oThe prevention principle
o The precautionary principle
o The right to sustainable development
o The ecological integrity principle
o The recognition of common and differentiated responsibilities and capacities
These principles can be used to frame evaluation of whether carbon offset
projects may result (or are resulting) in perverse outcomes w.r.t. mitigation,
sustainable livelihoods, and biodiversity
What is science saying we to do?
1.2
% decay C02 pulse
1
0.8
0.6
0.4
0.2
Approaches zero ~30K yr
0
0
100
200
300
400
500
600
700
Time (years)
The life-time in the atmosphere of the air-borne fraction of a pulse of fossil fuel
C02 is about 300 years for the first 75% and many thousands for the remaining
25%
The black curve shows the ‘pulse-decay’ function which captures the overall carbon dynamics of
the Bern global carbon circulation model. Sources: Prentice et al. (2001) IPCC TAR Chapter 3;
Archer et al. Annu. Rev. Earth Planet (2009)
The corollary is that…
1. A carbon offset project should be treated as a ‘once only’ and ‘forever’
activity. If it not, then the mitigation value of the project should be proportionally
reduced
2. If the offset is an AFOLU project on previously cleared land, then ‘time since
clearing‘ should be factored in as land clearing creates a carbon debt
3. There are tradeoffs as many human land uses cause land carbon
emissions, deplete ecosystem carbon stocks, and prevent the accumulation of
dense organic carbon stocks
Life-time in the atmosphere of the air-borne fraction of a pulse of fossil fuel C02.
The black curve shows the ‘pulse-decay’ function which captures the overall
carbon dynamics of the Bern global carbon circulation model
Source of images: Sarah Rees, Ern Mainka, Brendan Mackey
…and
4. Therefore, we can rank AFOLU offset activities in order of the long term
mitigation benefit they provide:
1. Protection of primary forest (avoided emissions)
2. Ecological restoration of natural forests (repaying carbon debt)
3. More sustainable management of production semi-natural forests
4. Plantation forestry
5. Improved agricultural/agro-forestry practices (e.g. >soil C)
With the mix of possible, feasible and appropriate land mitigation
activities varying with national context and circumstances
Elements of a risk management strategy for land
carbon offset projects…
1. The ecosystem-based approach addresses both the scientific and
ethical imperatives
o
‘Permanent’ in that ‘ecosystems are forever’
o
Most dense and stable kind of carbon stocks
o
Both of which are derived from the resilience and adaptive capacity that biodiversity confers
on ecosystems
The Ecosystem(-based) Approach has been recognized by CBD and the
special mitigation values of natural forest ecosystems is part of REDD
negotiations
Life-time in the atmosphere of the air-borne fraction of a pulse of fossil fuel C02.
The black curve shows the ‘pulse-decay’ function which captures the overall
carbon dynamics of the Bern global carbon circulation model
Elements of a risk management strategy for land
carbon offset projects…
2. Co-benefits are a primary not a secondary consideration
o
If a carbon offset project does not generate co-benefits then it will probably
cause perverse outcomes (mitigation, sustainable livelihoods, biodiversity),
potentially resulting in liabilities for the investor
Carbon Offset
Project
Decision
Health of
People &
Communities
Healthy Planet &
Sustainable
Ecosystems
Figure adapted from: Stephen Boyden, 2008, Our place in nature: past, present and future
UNFCCC CoP as a ‘law making body’ !?
Figure sourced from Mackey B. et al. (in prep.) In the carbon confusion post-Copenhagen, does the world needs a new
universal policy instrument for land carbon emissions
Future of KP (and thus CDM) and REDD subject
to ongoing negotiations on texts:
o
Will safeguards against perverse outcomes be noted and if so specified as
‘requirements’ or ‘advisory?
o
Will the special mitigation qualities of ecosystems and biodiversity be
recognized or lumped in with large scale industrial land uses such as
plantations?
o
Will we get comprehensive AFOLU rules to cover all ecosystems, e.g.
wetlands
o
Will there be enforceable penalties for non-compliance?
What will the implications be of these decisions (new
international climate change law) for carbon offset investments
and their risk management?