LULUCF: on the verge of a bad deal

7 June 2010

Will the LULUCF roller coaster end in a train wreck? Last week was LULUCF week here in Bonn. It all started with a KP Chair intent on finalizing the LULUCF rules, despite the existence of enormous loopholes.  In particular, the approach to forest management accounting favoured by Annex I Parties would allow developed countries to increase their annual emissions without accounting for it. In Saturday’s contact group, the G77 and China presented a two-part proposal to try to limit the damage of this approach: a review process to allow independent scrutiny of how each developed country calculates its reference level, and the proposal for a cap on credits from forest management. The Group’s proposal includes an expert review that would have the power to make adjustments if the assumptions and methods of a country’s reference level were found to be flawed, if the projection contradicts historical data collected for the first commitment period, or if there are accounting inconsistencies that result in hidden emissions (e.g., not accounting for emissions from bioenergy use). The Group is clearly trying its best to close the loophole, but this effort is severely limited by a group of Annex I Parties who are uninterested in rigorous accountability and actual emission reductions.  Rather than Parties agreeing to an honest accounting framework, the G77 and China are being forced onto the back foot to develop partial fixes to limit the damage. Further evidence of this was provided in the follow-up proposal from Russia that it should have no cap on credits and no obligation to account for increased net emissions until the forest sink is wiped out. These talks are in dire need of some leadership from developed countries. ECO maintains that accounting must be based on comparisons to the long-term historical average before the start of the first commitment period (i.e., 1990-2007), and that the goal of LULUCF must be to reduce net anthropogenic emissions, not let them increase. And lest we forget our natural forest ecosystems, they must be protected! Unless Annex 1 Parties adopt fair reference levels based on historical average emissions, a cap on credits may be needed as a second-best solution for LULUCF rules that are on the verge of becoming even weaker.  But the cap should not be applied to debits; even as every effort is being made to exclude emissions from the accounting, it would be even more perverse to further limit a Party’s obligation to account for emissions by also capping debits. Finally, accounting for Forest Management must be mandatory. After bending over backwards to accommodate the national interests and aversion to real debits by Annex I Parties, voluntary accounting would simply ensure that no good could ever come of this framework.