Carbon and the Science - Policy Nexus The Kyoto Challenge Robert T. Watson IPCC, Chair Global Change Open Science Conference Netherlands 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 Change A Threat to Sustainable Development, especially in Developing Countries

Emissions and uptakes since 1800 (Gt C)

The Kyoto Protocol The Challenge of Mitigation wThe near-term challenge is to achieve the Kyoto targets wThe 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 8food security 8ecological systems and 8sustainable economic development

The Kyoto Protocol w Signed December 1997 w 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 w No quantitative obligations on developing countries to reduce their emissions

The Short-term Challenge Percentage Change in Emissions from 1990 to 2010

The Long-term Challenge Carbon emissions and stabilization scenarios

The Challenge of Mitigation wIf 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 wThis would mean that all regions would have to deviate from most “business-as-usual”scenarios within a few decades

Mitigation Options wTechnologies ÞSupply Side ÞDemand Side ÝLand-Use, Land-Use Change and Forestry ÝWaste Management and Reduced Halocarbon Emissions wPolicies ÝEnergy pricing strategies and taxes ÝRemoving subsidies that increase Greenhouse gas emissions ÝInternalizing the social costs of environmental degradation ÝTradable emissions permits--domestic and global ÝVoluntary programs ÝRegulatory programs including energy-efficiency standards ÝIncentives for use of new technologies during market build-up ÝEducation and training such as product advisories and labels wResearch and Development Ýenergy efficiency technologies and low-carbon technologies

wSelected key issues to be discussed include: 8Differentiated responsibilities - obligations of industrialized and developing countries 8Flexibility mechanisms - carbon trading 8Land-Use, Land-Use Change and Forestry activities Key issues for the Kyoto Protocol

wIt has argued by some that the Kyoto Protocol is neither fair nor effective because developing countries are not obligated to reduce their emissions 8Fairness - 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 8Effectiveness - 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

wThere are three flexibility mechanisms 8Article 6 - Joint Implementation among Annex I Parties - these are project-based activities 8Article 12 - The Clean Development Mechanism - project-based activities between Annex I Parties and developing countries 8Article 17 - Emissions rights trading among Annex I countries wBecause carbon abatement costs are much lower in most developing countries, carbon trading allows: 8reduced costs for industrialized countries 8technology transfer to developing countries 8financial flows to developing countries Key Issues for the Kyoto Protocol Flexible Mechanisms

wcapped 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 wshould hot-air trading with Russian Federation be allowed - allowed within a strict trading cap weligibility of LULUCF activities in CDM - limited to afforestation and reforestation (see later slide) wliability ( if a seller fails to deliver, i.e., seller vs buyer beware) wadaptation 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 Protocol Flexible Mechanisms (Art. 6, 12 and 17)

Key Conclusions of IPCC WG III w In the absence of trading, Annex B costs of complying with the Kyoto Protocol, range from $ /tC (i.e., % loss of GDP), where-as with full Annex B trading the costs are reduced to $15-150/tC (i.e., % loss of GDP) w These costs could further reduced with use of: 8 the Clean Development Mechanism 8 sinks 8 mixture of greenhouse gases 8 ancillary benefits and 8 efficient tax recycling w 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 Protocol Land-Use, Land-Use Change and Forestry wTopics covered in this presentation include: 8How have LULUCF activities been included in the Kyoto Protocol? 8What are the key decisions? 8What is the potential of LULUCF activities to reduce net emissions

wDefinitions of a forest, afforestation, reforestation and deforestation wHow to address the harvesting/regeneration cycle and aggradation/ degradation (Art. 3.3 or 3.4) wHow to deal with permanence under Articles 3.3 and 3.4 wWhat activities are eligible under Article 3.4 8whether to limit credits under Article 3.4 8whether business-as-usual uptake can be credited wWhich, if any, LULUCF activities are eligible in the CDM 8afforestation, reforestation, slowing deforestation, forest/range- land/cropland management, agroforestry 8how to address the issues of permanence, baselines, leakage and sustainability criteria under the CDM Key Issues for the Kyoto Protocol Land-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 Protocol Article 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 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 Protocol Article 3.4

Key Issues for the Kyoto Protocol Article 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 wMost 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 ha -- aggradation and degradation is dealt with through forest management -- biome specific definitions may be used after the first commitment period

Percent cover Proportion Australia USA Brazil Canada Indonesia New Zealand South Africa Scandinavia Western Europe World Prepared I.R. Noble, O'Brien & Roderick Based on DeFries et al J.Geophys.Res. 100, Proportion of wooded land captured by a percentage cover threshold

Potential net emissions from forests Art. 3.3 Annex 1 Countries Mt C yr ARD IPCC definitions26-90 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 wForest management other than that covered by Art 3.3 (ARD) wChanges in management practices which do not lead to a change in cover type, e.g., conservation tillage wChanges 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 definition Broad definition USA definition Forest Management Cropland Management Grazing land Management

Full carbon accounting wAll stocks across all carbon pools wIf 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 wAssuming 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 w“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.” wEmissions and removals from natural causes such as El Niño may be large compared with commitments wFor 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 w“Sinks” are potentially reversible 8through human activities, disturbances, or environmental change, including climate change. wThis 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 Forest management Cropland management Grazing land management Agroforestry Rice Paddies Urban land management Annex 1Global 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

Article 12 Key Issues for the Kyoto Protocol

wWhat will be included: 8Current text would allow afforestation and reforestation 8Current text would not allow avoided deforestation or other land management practices wKey issues, especially for avoided deforestation, include: 8baselines - issue of additionality ;local, regional or national sectoral ;business-as-usual or ?????? 8permanence ;time-limited credits, avoiding national sovereignty issues 8leakage ;local, regional or national sectoral baselines (does not avoid transboundary leakage) 8sustainable development criteria 8monitoring ;project-based or national systems will need to be developed Key Issues for the Kyoto Protocol The Clean Development Mechanism

Potential emissions reductions from forests under CDM (using Art. 3.3 rules) in non-Annex 1 Countries Mt C yr ARD IPCC definitions 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.  biodiversity  Forests, soils, water resources  Food, fiber, fuel  Employment, 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 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) Germany Japan UK Ukraine Italy France USA Poland Spain Russian Fed Romania Netherlands Czech Rep Bulgaria Belgium Australia* Greece Other Nations Mt C per year Credits under Art 3.4Unlikely PurchasesPotential Purchases Estimated potential trade of about 20 MtC/yr through all three mechanisms

wClimate change is occurring, in part because of human activities, and further human-induced climate change is inevitable wMost people will be adversely affected by climate change, particularly the poor within developing countries wClimate change is a serious environmental/development issue that requires action to limit greenhouse gases now, recognizing both short-and long-term objectives wClimate change mitigation and adaptation technologies and policies need to be integrated into national development plans wTechnologies and policies are available to address climate change in a cost-effective manner wGovernments, the private sector,civil society, the media and the scientific community all have critical roles in addressing the issue of climate change wPolicy-relevant research and assessments are needed for informed policy formulation - need to communicate results in a clearer manner Conclusion