Transcript Gt C - Carbon Finance at the World Bank

Carbon Dynamics in the Kyoto Context:
Sinks and the Science-Policy Nexus
Robert T. Watson, IPCC, Chair
Ian Noble, CRC for Greenhouse Accounting
Adapted for
World Bank PCF Sinks seminar,
Washington, 11/15/01
Variations of the Earth’s Surface
Temperature: 1000 to 2100
Atmosphere
3.2
750
63.0
The
Global
Carbon
Cycle
(1990s)
6.3
1.6
60
500 Plants
Soil
Fossil Deposits
About 4,100
91.7
90
2000
0.7
Oceans
38,400
Units
Gt C
Gt C y -1
Global Carbon Cycle
 For every 1 t of carbon emitted from fossil
fuels
10 t are taken up and emitted by terrestrial
ecosystems
7 t are taken up and emitted and by ocean
ecosystems
¼ t is emitted from land clearing
The Balance
each year...
 6.3 Gt from fossil emissions
 ca. 1.6 Gt emitted from land-clearing
 1.7 Gt net uptake into ocean systems
and c. 3.0 Gt into terrestrial systems
 Leaving a net 3.2 Gt in the
atmosphere
 We cannot ignore sinks in UNFCCC
Emissions and uptakes since
1800
(Gt C)
140
Land use
change emissions
115
Oceans Uptake
110
265
Fossil
emissions
Terrestrial Uptake
180
Atmosphere Uptake
Carbon budget
Atmospheric increase
Fossil emissions
Ocean - Atmosphere flux
Land – Atmosphere flux
Land-use Change
Residual terrestrial sink
1980s
+3.3 ± 0.1
+5.4 ± 0.3
-1.9 ± 0.6
-0.2 ± 0.7
1.7 ± ?
-1.9 ± ?
1990s
+3.2 ± 0.1
+6.3 ± 0.4
-1.7 ± 0.5
-1.4 ± 0.7
?1.6 ± 0.8 ?
?-3.0 ??
The terrestrial carbon sink appears to be
increasing
Why is the Terrestrial
Carbon Pool Increasing?
 CO2 fertilization
 Warming
 Nitrogen deposition
 Age structure changes
Fan et al (1998) - Inverse analysis
USA (south of 51 deg N) is net sink
of 1.4 Gt C / y
Emissions & sinks from land-use in USA

Houghton et al (2000). Global Ecology &
Biogeography 9, 145
Sink
The US Terrestrial Carbon
budget
 Fan et al 1998 (88-92)
1,400 Mt C / y
 Houghton et al 2001 (70-90s)
300 Mt C / y
 Pacala et al 2001 (80-90) 370 to 710 Mt C / y
Inverse results
 Bousquet
(North America)
-400 to 1600 Mt C / y
700 to 800 Mt C / y
 Schimel et al [CO2 effect]
(80-93)
c. 80 Mt C / y
Why is the Terrestrial
Carbon Pool Increasing?
 USA is a net sink of 300 to 700+
Mt C / y
 Most sink capacity comes from
changes in age structures, fire
reduction etc
 Is this true elsewhere?
China, Australia, Europe
Are forests responding to
elevated CO2?
 Many small scale experiments show
variable but often positive responses
 Results from Duke FACE experiment
Most additional carbon enters short-lived
pools, thus the increase in carbon density is
not as substantial as some may have
assumed
Nutrient limitations may limit continued
growth enhancement
Can we improve estimates
of carbon sinks?
 Kyoto Protocol requires transparency
and verifiability
 Inverse techniques
 Huge inconsistencies and debate
 Future improvements, multiple
constraints and [CO2] column
estimates
 Challenge for IGBP Carbon Project
How will uptakes and
emissions from terrestrial
ecosystems change over
the next century?
IGBP model comparison
Sink
Gt C / y
Changes in terrestrial “can” dwarf the changes brought about by Kyoto processes
Hadley Models
 Large feedback with drying out of tropical
(Amazonian) forests and subsequent release of
carbon in fires and soil respiration
Does this mean that planting trees
could “backfire” on us?
 Efforts to establish woody vegetation on
areas of low carbon will almost always
yield a net carbon gain for many
decades to centuries
Exceptions include
heavy use of fertilisers (leading to other GHGs)
major soil disturbance at establishment
creating fire hazards that affect other
vegetation
Does this mean that planting trees
could “backfire” on us?: 2
 Opportunities for carbon sequestration
in vegetation are likely to be modest
 Reforestation and other revegetation
will rarely take place for its carbon
value alone
 Even a few tonnes of carbon per
hectare can make major differences to
some land rehabilitation projects
What does sink saturation mean to
the Kytoto Protocol arrangements?
 From about the middle of this century it
will become increasingly difficult to
maintain or reduce greenhouse gas
concentrations in the atmopshere
We have a 1.6 to 3.0 Gt C /y “free-ride” that
may peak at about 5 Gt C / y
 After that it will become increasingly more
difficult to maintain the status quo
Challenges in Modelling
 Processes
Interactions of CO2, temperature, nitrogen
and water
 Scaling
Landscape issues & disturbances
 Global base-data
Carbon Ecology
 Will ecosystems
Collapse
Migrate
Modify in situ?
 How will carbon storage change as
ecosystems change?
 Can carbon fluxes be measured “topdown” - e.g. inverse approaches?
The Kyoto Protocol
The Challenge of Mitigation
 The near-term challenge is to achieve the
Kyoto targets
 The longer-term challenge is to meet the
objectives of Article 2 of the UNFCCC, i.e.,
stabilization of GHG concentrations in the
atmosphere at a level that would prevent
dangerous anthropogenic interference with
the climate system
food security
ecological systems and
sustainable economic development
Kyoto Process: meeting
greenhouse gas reduction targets
 UNFCCC Convention: Rio, 1992
 Kyoto Protocol: December 1997
 Kyoto: 5.2% reduction below 1990 baseline by
1st period of 2008-12. Targets for developed
countries and countries with economies in
transition (“Annex I”). No target for dev’g ctries.
 Reduction: About 0.2 GtC/y below 1990 but 0.7
GtC/y below “business-as-usual” projections
The Short-term Challenge
Percentage Change in Emissions from 1990 to 2010
130%
125%
120%
Parties' projections
115%
SRES A1F1
110%
SRES A1T
Evolution in %
Annex II
105%
SRES A1B
100%
SRES A2
Annex I
95%
SRES B1
SRES B2
90%
OECD
85%
IEA
EIT
US source LG
80%
US source REF
75%
US source HG
70%
EU source
65%
Average
60%
55%
50%
1990
1995
2000
2005
2010
The Long-term Challenge
Carbon emissions and stabilization scenarios
The Challenge of Mitigation
 If governments decide to stabilize the atmospheric
concentration of carbon dioxide at 550ppm (about twice
the pre-industrial level), global emissions would have to
peak by about 2025 and fall below current levels by
2040 to 2070.
 This would mean that all regions would have to deviate
from most “business-as-usual”scenarios within a few
decades
Key Issues for the Kyoto Protocol
Flexible Mechanisms
 There are three flexibility mechanisms
Article 6 - Joint Implementation among Annex I Parties
- these are project-based activities
Article 12 - The Clean Development Mechanism project-based activities between Annex I Parties and
developing countries
Article 17 - Emissions rights trading among Annex I
countries
 Because carbon abatement costs are much lower in
most developing countries, carbon trading allows:
reduced costs for industrialized countries
technology transfer to developing countries
financial flows to developing countries
Key Issues for the Kyoto Protocol
Flexible Mechanisms (Art. 6, 12 and 17)
 Capped or uncapped?
(EU and many developing countries
want a cap in contrast to the US: will affect the size of market and
the cost to Annex I countries) - current text states that
obligations should be chiefly met through domestic actions
 Should hot-air trading with Russian Federation
be allowed? - allowed within a strict trading cap
 Eligibility of LULUCF activities in CDM? - limited to
afforestation and reforestation
 liability? (if a seller fails to deliver, i.e., seller vs buyer beware)
 adaptation fee - CDM or all three mechanisms?
(affects size of adaptation fund, hence the ability to mainstream
climate change into relevant sectors) - currently limited to CDM
Key Conclusions of IPCC WG III
 Without trading, Annex B costs of complying with the
Kyoto Protocol, range from $150-600/tC (i.e., 0.2 - 2%
loss of GDP). With full Annex B trading, the costs are
reduced to $15-150/tC (i.e., 0.1 - 1% loss of GDP)
 These costs could further reduced with use of:
the Clean Development Mechanism
sinks
mixture of greenhouse gases
ancillary benefits and
efficient tax recycling
 If all cost reduction activities could be realized then
GDP growth rates would only have slowed by a few
hundreds of a percent per year
Key Issues for the Kyoto Protocol
Land-Use, Land-Use Change and Forestry
 Topics covered in this presentation include:
How have LULUCF activities been included in the
Kyoto Protocol?
What are the key decisions?
What is the potential of LULUCF activities to
reduce net emissions
Key Issues for the Kyoto Protocol
Land-Use, Land-Use Change and Forestry
 Definitions of a forest, afforestation, reforestation and
deforestation
 How to address the harvesting/regeneration cycle and
aggradation/ degradation (Art. 3.3 or 3.4)
 How to deal with permanence under Articles 3.3 and 3.4
 What activities are eligible under Article 3.4
 whether to limit credits under Article 3.4
 whether business-as-usual uptake can be credited
 What needs to be monitored
 Which, if any, LULUCF activities are eligible in the CDM
 afforestation, reforestation, slowing deforestation, forest/rangeland/cropland management, agroforestry
 how to address the issues of permanence, baselines, leakage and
sustainability criteria under the CDM
Interpretations of Article 3.4
Narrow definition
Broad definition
Forest Management
Cropland Management
Grazing land Management
USA definition
Full carbon accounting
 All stocks across all carbon pools
 If applied to all land in all countries then the
accounting would produce the “Net terrestrial uptake”
of about 1.4 GtC y-1 (IPCC TAR) without any additional
effort to reduce emissions or increase sinks
 Assuming emissions from tropical deforestation are
1.6 GtC y-1, suggests global uptake of about 3 GtC y-1
Assuming 50% of the uptake is at mid- and high latitudes, this
would allow Annex I Parties to claim an annual credit of between
about 1.5 GtC y-1 due to the residual uptake because of improved
management practices pre-1990, carbon dioxide and nitrogen
fertilization effect and climate change. Current text would limit this
credit by discounting by 85%.
Direct Human-induced
 “For activities that involve land-use changes (e.g., from
grassland/pasture to forest) it may be very difficult, if
not impossible, to distinguish with present scientific
tools that portion of the observed stock change that is
directly human-induced from that portion that is caused
by indirect and natural factors.”
 Emissions and removals from natural causes such as El
Niño may be large compared with commitments
 For land-management changes (e.g., tillage to no-till
agriculture), it should be feasible to distinguish between
direct and indirect human-induced components, but not
to separate out natural factors
Permanence
 “Sinks” are potentially reversible
through human activities, disturbances, or
environmental change, including climate change.
 This is a more critical issue than for activities
in other sectors, e.g., the energy sector.
 A pragmatic solution... (consistent with the
current text) ensure that any credit for
enhanced carbon stocks is balanced by
accounting for any subsequent reductions in
those carbon stocks, regardless of the cause.
Annual C sequestration potential (GtC/y)
improvement of management within cover type new activities since 1990
I
Annex 1
Urban land management
Global
Rice Paddies
Agroforestry
Grazing land management
Cropland management
Forest management
0
0.1
0.2
0.3
Contains a best estimate of the rate of uptake of these
activities by 2010 (vary between 3% to 80%) -- current
text would inhibit investment under Article 3.4 because
forest management because is discounted 85%
Annual C sequestration potential (GtC/y)
Transformation between cover types
Annex 1
Degraded land restoration
Global
Wetland restoration
Degraded agriculture to agroforest
Cropland to grassland
0
0.1 0.2 0.3 0.4 0.5
Key Issues for the Kyoto Protocol
Article 12: CDM
Emission reductions ... shall be certified by operational entities
to be designated by the Conference of the Parties... on the
basis of:
(a) Voluntary participation approved by each Party involved;
(b) Real, measurable, and long-term benefits related to the
mitigation of climate change; and
(c) Reductions in emissions that are additional to any that
would occur in the absence of the certified project activity.
Does this include sinks? Does it refer to gross or net emissions?
Current text suggests allowing afforestation and reforestation,
but no other LULUCF activities
Key Issues for the Kyoto Protocol
The Clean Development Mechanism
 What will be included:
COP-7 text allows afforestation and reforestation
But rules & modalities need be agreed first
Not allow avoided deforestation or other land management Key
issues, especially for avoided deforestation, include:
baselines - issue of additionality
local, regional or national sectoral
business-as-usual or ??????
permanence
time-limited credits, avoiding national sovereignty issues
leakage
local, regional or national sectoral baselines (does not avoid
transboundary leakage)
sustainable development criteria
monitoring
project-based or national systems will need to be developed
Sustainable Development Criteria
 LULUCF activites and projects can have a broad range of
environmental, social and economic impacts, e.g.
biodiversity
forests, soils, water resources
food, fiber, fuel
employment, health, poverty, equity
 System of criteria and indicators (c&i) could be valuable to
compare sustainable development impacts across LULUCF
alternatives
 If sustainable development criteria vary significantly across
countries or regions, may be incentives to locate activities and
projects in areas with less stringent criteria.
Potential for international trading in sinks
(Pronk proposal Apr 2001, using Aug 1 submitted data)
Credits under Art 3.4
Unlikely Purchases
Potential Purchases
70
Mt C per year
60
50
40
30
20
10
0
Estimated potential trade of about
20 MtC/yr through all three
mechanisms
Conclusion
 Climate change is occurring, in part because of human activities, and
further human-induced climate change is inevitable
 Most people will be adversely affected by climate change, particularly
the poor within developing countries
 Climate change is a serious environmental/development issue that
requires action to limit greenhouse gases now, recognizing both
short-and long-term objectives
 Climate change mitigation and adaptation technologies and policies
need to be integrated into national development plans
 Technologies and policies are available to address climate change in a
cost-effective manner
 Governments, the private sector,civil society, the media and the
scientific community all have critical roles in addressing the issue of
climate change
 Policy-relevant research and assessments are needed for informed
policy formulation - need to communicate results in a clearer manner