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Open Letter to Mr. Asger Olesen & DG Climate Action (European Commission) Integrating LULUCF into the EU Climate Policy Framework

2012.10.06. 08:44 Világgazdasági Intézet

Dear Mr. Asger Olesen and DG Climate Action,

My colleagues write to you regarding the EU’s current plans to move ahead with greater integration of LULUCF (land use, land use change and forestry) into the general EU climate policy framework (COM(2012) 93 final). On the one hand we strongly welcome this effort. The harmonization of LULUCF carbon accounting practices across the EU Member states and the inclusion of additional “activities” (crop and grazing land management) represent very significant steps forward. On the other hand, we express our concern that the process is moving forward much too slowly and simply does not go far enough. Having just returned from Peru and the heart of the Amazon, where a group of 6 mostly Latin American countries gathered to discuss the incoporation of LULUCF in their general mitigation scenario strategies, I am reminded again that the EU’s resistance to LULUCF integration in the climate policy and carbin trading framework is one of the more important stumbling blocks to progress on the REDD+ initiative. Finding adequate financing for REDD+ is of course one of the principal elements of the program’s potential success. Without the equal and committed integration of LULUCF into national, EU and international level carbon trading frameworks, this will surely never be forthcoming.

Where the EU has otherwise been a trendsetter in international negotiations, it is most unfortunate that even California and the California Forest Protocol (though certainly not the US), seem to have outpaced the EU on the balanced and equal integration of developing world forests into the carbon trading framework. The EU’s failure to include timetables for future steps along with its current initiative, or even to launch a further and continued debate on how LULUCF will be integrated into the EU climate policy framework, are cause for concern. Given the timing of the Kyoto cycles, progress on the next EU step after harmonization is not likely to be agreed earlier than for the beginning of the 3rd Commitment Period in 2021 (assuming international negotiations get this far). We assume it will be next to impossible for the EU to make a decision on LULUCF integration that could be introduced mid-stream during the 2nd Commitment period, though we would be happy to be convinced otherwise.

Further, forests and their mitigation potential will not be weighted equally with other mitigation pathways in the power, industry or non-ETS sectors and, regrettably, will not be freely tradeable across the different EU action frameworks (EU ETS and non-ETS sectors). One unit of climate change mitigation must equal one unit of climate change mitigation, regardless of where such improvements occur. And all carbon credits must be fully tradable across the different segments of the climate policy framework. If this is not the case, then investors will not be free to choose the most efficient and effective mitigation strategies and climate change mitigation itself will move forward more slowly.

As noted clearly in the recent International Energy Association (IEA, 2011) report, among many other sources, there is simply no time to waste. The extreme urgency of the climate challenge simply cannot be postponed any further. The IEA has stated that if further action does not occur by 2017, there is no chance the globe will be able to remain within the boundaries of the IPCC’s 450 scenario. Since this is in fact a very “conservative” scenario, the EU and now international goal of keeping rising temperatures within the +2°C target seems increasingly unlikely and EU (and international) action ever more urgent.

Forests offer tremendous opportunities, both as carbon sequestration and as fossil fuel substitution resources. Moreover their value as biodiversity anchors, planetary lungs and their crucial importance as regulators of the terrestrial hydrologic cycle render them both invaluable and irreplaceable resources. Thus the excessive limitations placed on the ability of Parties to the Kyoto Protocol to take full advantage of the opportunities forest resources provide represent important obstacles to current and future goals of climate change mitigation and adaptation. While the new “cap” chosen in Durban increases the potential incentives driving action at the national level, we find there is simply no justification for limitations such as the cap and would strongly prefer to see all such limitations removed from the carbon accounting system. Even as is, with the new slightly larger cap, the Incentive Gap (that share of potential carbon sequestration not incentivized in the LULUCF carbon accounting system) remains unacceptably large.

While individual parties might all the same strive to increase forest cover and raise their total forest carbon sinks, the incentive structure currently in place will in fact do very little to encourage this behavior (and perhaps more to discourage it). Moreover, we think that all forest carbon mitigation efforts should ultimately be combined into one pool and all forest-related “activities” merged into one all-encompassing framework. Only in this way is it possible to create equal incentives be created across the entire range of forest-related activities.

We recognize that much of what we say above is driven by decisions at the international level at UNFCCC Conference of the Party meetings, the failure to develop a more vigorous EU bargaining position means that international progress on these issues will also most likely be by stymied or thwarted. We firmly believe and hope that a more effective and efficient international and EU level framework for the integration of LULUCF into the climate policy framework is possible. In the interest of rapidly putting a stop to global deforestation, forest degradation, desertification and making continued and impressive progress on raising the forest carbon sink in the developed countries, a more effective and efficient LULUCF carbon accounting strategy is required.

The current EU strategy represented in COM(2012) 93 final represents and important first step. We certainly regard the lack of consistent LULUCF carbon accounting procedures across the EU Member states (not to mention all the Parties to the Kyoto Protocol) as an important obstacle to the future, more encompassing integration of LULUCF into the EU and international climate policy framework. But much still remains to be done. At the very least, a timetable in the current EU policy effort would set the stage for important and timely future action. The Amazon would thank you for it. The world would certainly thank you for it. And the goals of future climate change mitigation and adaptation would be enhanced. 

Respectfully,

David Ellison, Institute for World Economics, Research Centre for Economic and Regional Studies, Hungarian Academy of Sciences, Budapest, HU
Hans Petersson, Department Forest Resource Management, SLU, Umeå, SE.

Mattias Lundblad, Department of Soil and Environment, SLU, Uppsala, SE.

Oct. 2nd, 2012

This op-ed blog piece has been previously published here.

 

For further reading: 

COM(2012) 94 final (addresses the rational for the Commission proposal and some detail on further possible steps

SWD(2012) 41 final (provides detail on the various options for the future of LULUCF into the EU climate policy framework)

Ellison, David, Mattias Lundblad and Hans Petersson (2011). “Carbon Accounting and the Climate Politics of Forestry”, Environmental Science & Policy. 14, 1062-1078.

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