Carbon emissions (2000)

Transcription

1 Carbon emissions (2000) Source: EIA 1 Carbon sequestration Source: WoodsHole 2 1

2 Carbon Sequestration Different land uses store different amounts of carbon per hectare Forests store relatively large amounts of carbon in biomass and in soils (peat) Land use change (deforestation) is a source of CO2 emissions (17.5%) Carbon can be sequestered (removed from the atmosphere and stored) into forests, soils, and wood products Planting new forests or avoiding deforestation would reduce net carbon emissions Carbon Credits or Carbon Trading How to sequester more Expand forest area Afforest/ Reforest (AR) Prevent Conversion (REDD) and/or Improve Forest Management (IFM) the working forest option 4 2

3 $ MNB A MNB F Carbon 0% deforested Deforested 100% deforested UN Framework Convention on Climate Change (UNFCCC) International treaty to address climate change all countries have signed on Goal: 'to achieve stabilization of greenhouse gas (GHG) concentrations in the atmosphere at a low enough level to prevent dangerous anthropogenic interference with the climate system Annual Conference of the Parties (COP) Kyoto (1997) was COP 3 Bali (2007) was COP

4 Kyoto Protocol In force since 2005, but US has not ratified Developed countries (annex I) Reduce GHG emissions 5% below 1990 levels by ~2010 Adjust national accounts with net changes in carbon stocks due to change in forest area Joint implementation projects between countries Developing countries (annex II) No binding commitment CDM (Clean Development Mechanism) projects can be funded by developed countries to off-set emissions Eligible: Afforestation and Reforestation Ineligible: Forest management and avoided deforestation ~ 15 forest projects approved (with more in pipeline) 7 Policy Response Kyoto: Promote and cooperate in the conservation and enhancement of sinks and reservoirs of all greenhouse gases Joint implementation Global Environmental Facility Clean Development Mechanism Coalition for Rainforest Nations Reduced Emissions from Deforestation Stern Report (Review on the Economics of Climate Change by Her Majesty s Treasury, Oct 2006) Bali Roadmap and REDD 4

5 REDD in the copenhagen accord: Guiding principles (para 1) 5

6 The UNFCCC takes note of the Copenhagen Accord Not binding 6

7 US policy discussions Cap: Absolute limit on GHG emissions from regulated emitters during defined time period Trade: Regulated emitters bid among themselves for fixed emission allowances Advantages Efficient Incentive to keep reducing GHG emissions Reductions are made by firms with least cost Fair Polluter Pays 13 Offsets In Example place now: European Cap = 5 billion Trading tons/yr Scheme CO 2 (ETS) Capped Sources Uncapped Sources Plant A Trading within Cap Plant B Emissions = 5.1 billion tons 100 MM Offset credits Reduce emissions or increase sequestration relative to baseline By 100 Mt Plant X Forest owner Y Cap is Met Source: Murray

8 Political /Economic Need: Offsets reduce the cost of mitigation Source: EPA Analysis of HR 2454 Reduce costs of climate policy and provide a bridge to new technology Reduce Costs Including REDD in global carbon market can reduce carbon price by more than 20% More than 40% if afforestation, reforestation and forest management are included Provide a Bridge Cost-effective Result in substantial reductions quickly Buys time for development of new technology and major shifts in infrastructure in other sectors 8

9 Interim policy Registries US Dept of Energy 1605b Voluntary Greenhouse Gas Reporting Program States Private Georgia Forestry Commission California Banked off-sets States RGGI Interim policy Caps emissions from electric utilities Started auctions in the fall Includes afforestation and reforestation California, Hawaii, New Jersey Carbon Cycle: Carbon Policy: Climate Change Sequestration Cap & Trade Off-sets & Credits 18 9

10 Private voluntary Private initiatives Legally binding: CCX Non-binding Forestry is large component How to count the carbon? 15,000 metric tons carbon 10,000 5, b GFC CCX CCAR HFF VCS RGGI Year Cumulative creditable carbon Source: Galik et al

11 Certain Unique Additional Permanent No leakage Off-set standards Carbon Cycle: Carbon Policy: Climate Change Sequestration Cap & Trade Off-sets & Credits 21 Off-sets Certain Real Measurable Independently (3 rd party) verified Unique Not used more than once to offset emissions Additional Over and above what used to be (baseline year) Over and above what would have happened (BAU) Carbon Cycle: Carbon Policy: Climate Change Sequestration Cap & Trade Off-sets & Credits 22 11

12 Off-sets Permanent Track and compensate releases of carbon Reserve (insurance pool) No leakage Offset supplier cannot simply shift emissions to other activities or areas Discount for market effects? Co-benefits Carbon Cycle: Carbon Policy: Climate Change Sequestration Cap & Trade Off-sets & Credits 23 Project and National Approaches Up until recently, the emphasis has been on project-based approaches Transaction between a buyer and a seller Specific location and time period Introduces accounting issues to ensure real reductions Additionality Leakage Permanence National approach Compensation based on national performance relative to a national baseline More below Hybrids/Transitional Could see projects in the near term and national programs in the long term National programs can still deploy project to achieve national performance 12

13 Compensation based on National Performance Establishment of a reference national carbon emissions rate (i.e., baseline) Direct measurement and monitoring of actual rates after policy in place Compensation for going below the reference rate Emissions Rate Observed vs Baseline Emissions Year $ Baseline Observed Helps address major integrity concerns (additionality, leakage, permanence) 13