Carbon and the Science - Policy Nexus The Kyoto Challenge

Robert T. WatsonIPCC, Chair

Global Change Open Science ConferenceNetherlands

July 10th

Variations of the Earth’s Surface Temperature: 1000 to 2100

Climate change threatens our ability to:

• alleviate poverty for the 1.3 billion people who live on less than $1 per day and the 3 billion people who live on less than $2 per day - livelihoods threatened because of degradation of ecological systems (e.g., agriculture, forests, fisheries, coral reefs)

• provide adequate food, especially for the 800 million people who are malnourished today— decreased agricultural productivity in tropics and sub-tropics

• provide clean water for the 1.3 billion people who live without clean water and provide sanitation for the 2 billion people who live without sanitation - decreased water availability and quality in many arid and semi-arid areas

• provide a healthy environment for the 1.4 to more than 2 billion people who are exposed to dangerous levels of outdoor pollution and water- and vector-borne diseases - increased pollution and exposure to water- and vector-borne diseases

• provide safe shelter for those that live in areas susceptible to civil strife due to environmental degradation and those vulnerable to natural disasters and sea level rise - degraded natural resources, sea level rise and increased extreme weather events

Global Climate ChangeA Threat to Sustainable Development, especially in Developing Countries

Emissions and uptakes since 1800 (Gt C)

180

110

115

265

140Land use change

Fossil emissions

Atmosphere

Oceans

Terrestrial

The Kyoto ProtocolThe 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

The Kyoto Protocol

Signed December 1997

A commitment for industrialized countries (OECD countries and Economies in Transition - called Annex I) to reduce overall emissions of six greenhouse gases (or families of gases) by on average 5.2 per cent below 1990 levels in 2008 - 2012

No quantitative obligations on developing countries to reduce their emissions

50%

55%

60%

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100%

105%

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115%

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130%

1990 1995 2000 2005 2010

Evo

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%

Parties' projections

SRES A1F1

SRES A1T

SRES A1B

SRES A2

SRES B1

SRES B2

OECD

IEA

US source LG

US source REF

US source HG

EU source

Average

Annex II

Annex I

EIT

The Short-term Challenge

Percentage Change in Emissions from 1990 to 2010

The Long-term ChallengeCarbon 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

Mitigation Options Technologies

Supply Side Demand Side Land-Use, Land-Use Change and Forestry Waste Management and Reduced Halocarbon Emissions

Policies Energy pricing strategies and taxes Removing subsidies that increase Greenhouse gas emissions Internalizing the social costs of environmental degradation Tradable emissions permits--domestic and global Voluntary programs Regulatory programs including energy-efficiency standards Incentives for use of new technologies during market build-up Education and training such as product advisories and labels

Research and Development energy efficiency technologies and low-carbon technologies

Selected key issues to be discussed include:

Differentiated responsibilities - obligations of industrialized and developing countries

Flexibility mechanisms - carbon trading

Land-Use, Land-Use Change and Forestry activities

Key issues for the Kyoto Protocol

It has argued by some that the Kyoto Protocol is neither fair nor effective because developing countries are not obligated to reduce their emissions Fairness - This is an equity issue - the Parties to the Kyoto

Protocol will have to decide what is fair and equitable, recognizing that: about 80% of the total anthropogenic emissions of greenhouse

gases have been emitted from industrialized countries; per capita emissions in industrialized countries far exceed those

from developing countries, now and for the for-seeable future; developing countries do not have the financial, technological and

institutional capability of industrialized countries to address the issue; and

increased use of energy is essential for poverty alleviation and for long-term sustainable economic growth

Effectiveness - Long-term stabilization of the atmospheric concentration of greenhouse gases cannot be achieved without global reductions, hence the issue is whom should do what in the short-term recognizing the long-term challenge

Differentiated Obligations

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 ProtocolFlexible Mechanisms

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 (see later slide)

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 Issues for the Kyoto ProtocolFlexible Mechanisms (Art. 6, 12 and 17)

Key Conclusions of IPCC WG III In the absence of trading, Annex B costs of complying

with the Kyoto Protocol, range from $150-600/tC (i.e., 0.2 - 2% loss of GDP), where-as 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 slow by a few hundreds of a percent per year

Key Issues for the Kyoto ProtocolLand-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

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

Which, if any, LULUCF activities are eligible in the CDM afforestation, reforestation, slowing deforestation,

forest/range-land/cropland management, agroforestry how to address the issues of permanence, baselines,

leakage and sustainability criteria under the CDM

Key Issues for the Kyoto ProtocolLand-Use, Land-Use Change and Forestry

Article 3.3 The net changes in greenhouse gas emissions from sources and removals by sinks resulting from direct human-induced land-use change and forestry activities, limited to afforestation, reforestation, and deforestation since 1990, measured as verifiable changes in stocks in each commitment period shall be used to meet the commitments in this Article of each Party included in Annex I. The greenhouse gas emissions from sources and removals by sinks associated with those activities shall be reported in a transparent and verifiable manner and reviewed in accordance with Articles 7 and 8.

Which stock changes? All, or only those directly human induced - what is included?

Can we separate the growth increment due to “normal” forest growth from that due to carbon dioxide, nitrogen fertilization? -- IPCC has been asked to assess this possibility

Key Issues for the Kyoto ProtocolArticle 3.3

Article 3.4 … Such a decision shall apply in the second and subsequent commitment periods. A Party may choose to apply such a decision on these additional human-induced activities for its first commitment period, provided that these activities have taken place since 1990.

The key issue is whether these activities must commence after 1990 or whether activities initiated before 1990, but that are continued after 1990, are eligible -- a key issue with respect to the current residual terrestrial uptake -- finessed by discounting for the first commitment period

Contrasts with Article 3.3 refers to “direct human-induced activities

Key Issues for the Kyoto ProtocolArticle 3.4

Key Issues for the Kyoto ProtocolArticle 12

(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.

Emission reductions resulting from each project activity shall be certified by operational entities to be designated by the Conference of the Parties serving as the meeting of the Parties to this Protocol, on the basis of:

Does this include sinks? Does it refer to gross or net emissions? Current text suggests allowing afforestation and reforestation, but no other LULUCF activities

Article 3.3

Key Issues for the Kyoto Protocol

Definitions of a Forest Most definitions are based in part on a single

threshold of minimum canopy cover

0% Canopy Cover 100%

The current text allows each Party to chose a canopy cover between 10 and 30%, a minimum tree height between 2-5 m, and a spatial extent between 0.05 - 1 ha -- aggradation and degradation is dealt with through forest management -- biome specific definitions may be used after the first commitment period

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Percent cover

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Australia

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Brazil

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Scandinavia

Western Europe

World

Prepared I.R. Noble, O'Brien & RoderickBased on DeFries et al

J.Geophys.Res. 100,20867-82

Proportion of wooded land captured by a percentage cover threshold

Potential net emissions from forestsArt. 3.3 Annex 1 Countries

Mt C yr -1 AR DIPCC definitions 26 -90

Annex 1

Note the qualifications about these estimates.•Data often uncertain (carbon content, growth and areas affected)•Based on assumption that current rates of ARD continue through to 2012•Assumptions about the shape of the growth curve greatly affect the outcome

Article 3.4

Key Issues for the Kyoto Protocol

What may be covered by Art 3.4

Forest management other than that covered by Art 3.3 (ARD)

Changes in management practices which do not lead to a change in cover type, e.g., conservation tillage

Changes in land management which do lead to a change in land cover type, e.g., reversion of cropland to grassland

Interpretations of Article 3.4

Narrow definitionNarrow definition

Broad definitionBroad definition

USA definitionUSA definition

Forest Management

Cropland Management

Grazing land Management

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, this suggests a 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 activities that involve land-management changes (e.g., tillage to no-till agriculture), it should be feasible to distinguish between the 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.

I

0 0.1 0.2 0.3

Forest management

Cropland management

Grazing land management

Agroforestry

Rice Paddies

Urban land management Annex 1 Global

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) improvement of management within cover type -

new activities since 1990

Annual C sequestration potential (GtC/y)Transformation between cover types

0 0.1 0.2 0.3 0.4 0.5

Cropland to grassland

Degraded agriculture to agroforest

Wetland restoration

Degraded land restoration Annex 1 Global

Article 12

Key Issues for the Kyoto Protocol

What will be included: Current text would allow afforestation and

reforestation Current text would not allow avoided deforestation or other

land management practices 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

Key Issues for the Kyoto ProtocolThe Clean Development Mechanism

Potential emissions reductions from forests under CDM (using Art. 3.3 rules) in non-Annex 1 Countries

Mt C yr-1 AR DIPCC definitions 373 -1600

Non-Annex 1

Avoided deforestation not allowed under current text

- concern about baselines, leakage, permanence

- multiple benefits, including biodiversity, water resource management

LULUCF ACTIVITES AND PROJECTS CAN HAVE A BROAD RANGE OF ENVIRONMENTAL, SOCIAL AND ECONOMIC IMPACTS, e.g.

biodiversityForests, soils, water resourcesFood, fiber, fuelEmployment, 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.

Sustainable Development Criteria

The current text

discounts credits for forest management under Article 3.4 by

85%, and

limits the use of sinks to 50% of total

reductions

Maximum USA & Japan purchases

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Forest mgmt discount (Pronk = 85%)

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Cap on the use of sinks (Pronk 50%)

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Accounts for pre-1990 activities, does not separate direct from indirect human activities, and accepts broad definitions

Potential for international trading in sinks (Pronk proposal Apr 2001, using Aug 1 submitted data)

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anyJapanU

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Credits under Art 3.4 Unlikely Purchases Potential Purchases

Estimated potential trade of about 20 MtC/yr through all three

mechanisms

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

Conclusion