With assistance from NCASI The 100-year method for corporate accounting of carbon stored in forest products A Project of the International Council of Forest and Paper Associations (ICFPA) With assistance from NCASI Reid Miner, NCASI

Today’s presentation Overview of carbon in the forest products value chain The importance of carbon in products-in-use Methods for characterizing carbon in products-in-use Real-time changes in current stocks (national inventory method, CCAR-recommended method) Projected future changes in stocks (100-year method) Considerations in using the 100-year method Method acceptance

Sequestered atmospheric carbon in the forest products value chain Large throughput Very small stocks Recycling Forest Mills Users Landfills Large stocks Growth vs. Removals Not normally managed to increase carbon stocks Large throughput Very small stocks Large stocks Change in stocks depends on time-in-use and new production Role of increases in population and standards of living Large stocks Change in stocks depends on discards, rate of decompostion and non-degradable fraction

The importance of carbon in products-in-use Recycling Forest Mills Users Landfills To understand forest carbon, you need to look beyond the forest Is the carbon in products-in-use worth worrying about? Industry’s global GHG emissions = 72 MMTC/yr Global stocks of carbon in products-in-use growing by 40 MMTC/yr Carbon in products-in-use is clearly important Carbon in forests and landfills also important Consensus corporate accounting methods needed

Options for characterizing carbon storage in products-in-use Estimate real-time-changes in current stocks of carbon in products-in-use The “national inventory method” The California Climate Action Registry recommended method Estimate future changes in stocks of carbon in products-in-use The 100-year method

The National Inventory Method IPCC guidelines (Tier 2) Change in stocks equal to difference between annual additions (new products) and losses (removed from service) Additions = new production in year X Losses = fraction of stocks in-use in year X Can sometimes periodically check against Surveys of housing stocks, etc. (additions) Waste management statistics (losses)

Losses usually a function of existing stocks of carbon in-use IPCC Tier 2 method reconstructs existing carbon stocks by going back to 1900 and annually adding new production and removing a fraction of the existing stock. Can check results against estimates of stocks in a given year (surveys, etc.)

Can the national inventory method be used by corporations? Companies know new production, but… Companies don’t know losses from existing stocks No way to estimate or reconstruct current stocks attributable to company’s past production Corporate mergers, spin-offs, etc. National inventory is retrospective Does not recognize future impacts of current production Not useful for examining opportunities for improvement

California Climate Action Registry recommended method CCAR recommends variation on national inventory method, but acknowledges that other methods exist and may be used CCAR method begins accumulating stocks when a company enters the program Avoids problem with not knowing the size of the pool of carbon associated with past production, but… Results in troublesome “start-up effect”

CCAR recommended method - The start up effect Consider annual production of 10 and losses from use = 10% of existing stocks at start of year Year one: 10 in, 0 out, stock change = +10 Year two: 10 in, 1 out, stock change = +9 Year three: 10 in, 1.9 out, stock change = +8.1 Year ten: 10 in, out 6.9, stock change = +3.1 Year twenty: 10 in, out 8.6, stock change = +1.4 Very undesirable feature of corporate accounting method

Estimating future changes in carbon stocks – The 100-year method Use time-in-use information to estimate the amount of carbon in new production that is expected to remain in use for at least 100-years First used by S. Galeano, Georgia-Pacific Corp. Requires no information on stocks attributable to past production Reflects attributes of new production, not impacted by past production (improvement opportunities) Simple, transparent, reproducible Industry has proposed use under 1605b in U.S.

Half-life of carbon (years) Half lives for primary products IPCC Defaults (IPCC 2003a) Saw wood 35 Veneer, plywood and structural panels 30 Non-structural panels 20 Paper 2 Half lives for specific end uses in the U.S. (Skog and Nicholson 1998) Single-family homes (post-1980) 100 Multifamily homes 70 Mobile homes Nonresidential construction 67 Pallets 6 Furniture 1 to 6 Half-lives for Canadian inventory (Kurz et.al. 1992) Construction lumber 60 Other lumber < 1 1

Possible issues related to the 100-year method Why 100 years? Some want shorter times Short-term impacts/mitigation opportunities More accurate estimates, less uncertainty Bigger numbers Some want longer times Address concerns regarding temporary sequestration Recognize time frames to allow societal transformation to a low-carbon future Smaller numbers 100 years a reasonable compromise

Possible issues related to the 100-year method Not consistent with national inventory methods Not intended for national inventories 100-year method could still be used in national policies intended to encourage sequestration, which would improve national inventory results Not clearly integrated with forest/landfill carbon Additional calculation tools needed Lack of information on time-in-use Information quality varies Good data for some nations and products In other cases, new data needed –national inventory time-in-use curves sometimes not appropriate for 100-year projections

Analysis of US Housing data US National inventory assumes 0.3 to 0.5 remaining

All forest products

Software for 100-year method

Gaining acceptance of the 100-year method Accepted by International Council of Forest and Paper Associations Discussions initiated with WRI and WBCSD to gain acceptance under the GHG Protocol Proposed as option under 1605(b) Ready for use in areas where reliable time-in-use data are available – e.g. U.S. Other areas may require additional documentation Integrating corporate accounting tools that cover the other pieces of the forest carbon value chain

Thank you Questions?