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Carbon Crediting Challenges
Richard Tipper
Edinburgh Centre for Carbon ManagementNovember 2002
4 specific issues: • Bureaucratic barriers!• Double-counting danger!• Confounding definitions!• Crediting confusion!
Bureaucratic Barriers
• Project preparation requires:– Rigorous technical assessment– Environmental and social impact– Legal issues– Accounting issues– Government approvals– Monitoring and verification systems
• All these factors work against small-scale, community type projects
Bureaucratic Barriers
Smallholder agriculturalists have / are:• Diverse land use systems that do not fall
into convenient categories• Small areas• Limited access to technical, financial and
legal services• Less political power• Difficult to manage
Double-counting Danger
Torren Energy: Woodchip fired HW boilers (100kw) replacing fuel oil
• Torren install and maintain ownership of plant
• Retain ownership of carbon credit (in sales agreement)
• But how does customer account for drop in purchase of oil?
• What if electricity was generated?
Double-counting Danger
ERU
substitution
surplus permits
Confounding Definitions
• CDM LULUCF = afforestation only
• Conservation excluded
• What if renewable energy substitutes for non-sustainable biomass harvesting?
Woody biomass260 MtC
timber
81125
energydeforesOil
0.5
Example: Uganda > 90% GHG emissions are from LU sector (figs in MtC)
Confounding Definitions
Crediting Confusion
National inventory1990
National inventory1990
?
projects
Crediting Confusion
• One ERU / CER will almost never = one unit less national emission
• One unit less national emission will often not equal one less unit global emission
Tentative solutions
• Bureaucratic barriers
The Plan Vivo System
- managing the supply of carbon offsets from small scale activities in a way the
promotes rural livelihoodsECCM
The EDINBURGH CENTRE for
CARBON MANAGEMENT Ltd.
Plan Vivo System
• Streamlined system for registering carbon assets from smallholders and communites
• Standard technical specifications• Monitoring• Carbon accounting
Plan Vivo implementation
• Preliminary discussions– How does the plan vivo system work– What is carbon sequestration– Responsibilities– Work programme
ECCM
The EDINBURGH CENTRE for
CARBON MANAGEMENT Ltd.
Plan Vivo Planning
Plan Vivo Forestry Systems
• Tuangya plantations of Spanish cedar can offset 111 tC per ha.
• Live fences of pine and cypress can offset 27 tC per ha.
• Restoration by enrichment planting and fencing can offset 45 tC per ha.
Plan Vivo Monitoring and technical support
Monitoring• Conducted through the rotation• Easy to measure indicators • in technical specifications• Carried out by local technicians• Verified by technical team
Plan Vivo Administration• Payments
– Based on the results of monitoring– staged over 5-10 years to increase
security• Carbon accounting
– Producer account books– Trust Fund database– Carbon reserve
• Reporting– Website and annual purchaser report
Tentative solutions
• Double-counting danger
Double-counting Danger
• Labelling of carbon intensity should be standard – (kgCO2/kwh supplied)
• Legal framework for ownership of emission credits needs to recognised right of claim over reductions
• Build into purchasing contracts
Tentative Solutions
• Confounding Definitions
Tools 1: ILEW Projects
Loss of forests reduces catchment’s buffer capacity
Increased energy demand for pumping as water table falls
Inefficient use of fuelwood
CH4 emissions increased from poorly nourished livestock and sub-optimum paddy irrigation
Loss of agricultural productivity and C from soil erosion
Unsustainable export of charcoal to towns
Inefficient transmission of power to rural areas
Increased requirement for fertilizer as soil quality drops
Tentative Solutions
• Crediting confusion
Crediting confusion
• Do not mix permit and credit based systems
• Use existing tax system to encourage production of credits – e.g. by addition to products
• Where systems overlap – e.g. companies with permits also create credits ensure separate accounting
Scale 1/3 Estimated non-discounted CERs from Forestry and Land Use Projects in the CDM during the 1st Commitment Period (MtC per year) Min interpretation of
socio-ecological constraints
Maximum interpretation of socio-ecological constraints
Afforestation & reforestation only
25 to 100
15 to 50
5 to 10
1 to 5
Avoided deforestation
20 to 40
10 to 20
Forest management & other land use
20 to 60
10 to 20
10 to 20
5 to 15
Small-scale land, energy, water projects
n.a.
<5
10 to 20 5 to 15
Forest
Biomass 398
Fossil fuel reserves
Uganda Oil, Natural Gas and Coal –
Crop biomass 2
Existing Forests 2
New Plantationsn.s.
Deforestation 4
Fertiliser 3Livestock 2
Fossil fuels & Cement 0.3
Industrial timber 0.6
Fuelwood 3
6
5
0.3
TOTAL NET EMISSIONS
11
All figures are in MtC
1 Includes emissions from production and application of fertilisers2 Excluding emissions from fertiliser productionns – not significant
Imports –
Agric biomass 2
UGANDA
CARBON STOCKS
Crop biomass 241
Forest Biomass
1,898
Fossil fuel reservesIndia Oil,
Natural Gas and Coal
89,328
Crops 241
Existing Forests 18
New Plantations 1
Deforestation 45
Fertiliser 35Livestock 93
CH4 rice 26
Fossil fuels and cement 238
Timber 6
Fuelwood 5285
154
238
TOTAL NET EMISSIONS
477
Imports – 73
INDIA
Options for modifying flexibility 3/3
Option C: Give CDM executive / SBSTA power to approve some new categories of activities as methodologies become developed: e.g. management of Miombo woodlands for sustainable fuelwood and charcoal supply
• Could increase CER generation to 25 MtC/yr
• Could be used to enhance social benefits and address leakage problems
Tools 2: Standard Baseline Method
1. Quantify historic emissions
2. Map driving factors Pop
density
(p/km2)
Distance to Road (m)<500 500-
1500>1500
>40 63 55 41
20-40 56 46 37
>0-20 46 35 25
0 41 28 8
Tools 3: Permanence
• Buffering is preferable to discounting for scientific and equity reasons
• Columbian proposal of buyer liability could work (James Cameron; Rachel Bennett)
Tools 4: Assurance of socio-ecological benefits
• Existing schemes, such as FSC can work effectively for large-scale projects
• Adaptations for specific country situations required (development assistance may be necessary)
• Group certification and streamlined processes required for small-scale project
• Many CDM projects will have modest / benign socio-ecological impact
ConclusionsTo create socio-ecological benefits, while
maintaining environmental integrity CoP should consider:
• Allowing small-scale integrate land, energy water projects in fast-track
• Strict interpretation of additionality• Allow CDM executive some freedom to modify
eligible project categories• Scale of CDM LUCLUCF will not compromise
overall Kyoto targets unless rampant free-riding occurs
• Most of a these proposals are achievable with minor changes to neg. text
• Forestry activities are naturally slow to get started, so early experience is essential
