1. Land use, land-use change and forestry projects under JI in theory and practice B. Schlamadinger and N. Bird Joanneum Research, Austria C. Streck and R. O’Sullivan Climate Focus, The Netherlands Z. Somogyi Forest Research Institute, Hungary UNFCCC TECHNICAL WORKSHOP ON JOINT IMPLEMENTATION Bonn, February 2007
Contact:

2. Outline JI LULUCF Permanence LULUCF Transactions
Why AAU  ERU conversion is essential
Examples
Conclusions

3. JI LULUCF is more than afforestation / reforestation:
Also possible:
Reducing deforestation
Revegetation
Improving Cropland Management (CM)
no-till agriculture
Improving Grazing Land Management (GM)
grassland restoration
Improving Forest Management (FM)
forest fire management
enhanced regeneration after harvest
etc.

4. Project that enhance removals
Carbon stocks
Time

5. Improved FM

6. Some potential types of JI projects
CM:
Switching
to no-till management

7. Potential is limited during CP-1
Carbon stocks
“slow in”
CP-1
Further CPs?
Time

8. Reducing emissions (“fast out”)
Carbon stocks
Reduction due to project activity
CP-1
time

10. LULUCF JI projects to date
Afforestation Project / Romania
PCF
6 thousand ha million US$ -
1.6 Mt CO2 eq
Chernobyl Reforestation / Ukraine
BCF
15 thousand ha Mt CO2e by 2012
No project documents yet

11. Permanence risk
CDM: buyer liability (tCERs, lCERs). Temporary credits have to be replaced in case
there is a loss in carbon and
at the end of a project’s crediting period
JI: seller (country) liabitility
ERUs (permanent credits) are transferred without passing any liability to the recipient country.
The liability is with host country which has to account for the loss in carbon.
Intentionally left blank to make the point that there are (almost) no projects

12. JI LULUCF transactions: What the Marrakech Accords say
AAUs or RMUs can be converted into ERUs
AAUs = emissions rights at national level (can be enhanced by reducing emissions / losses of carbon)
RMUs = generated by increases in carbon stock within an Art 3.3 or Art 3.4 category
Intentionally left blank to make the point that there are (almost) no projects

13. ITL only allows conversion RMUs  ERUs
The current ITL rules reverse the decision of the COP/MOP to allow all LULUCF project classes under JI, by excluding the conversion from AAUs to ERUs
This table says: RMUs must be converted for LULUCF JI activities, on the basis that:
(a) LULUCF JI projects must conform to definitions, accounting, modalities and guidelines under Article 3.3 and 3.4 and
(b) ERUs converted from RMUs cannot be carried over.
Intentionally left blank to make the point that there are (almost) no projects

14. Why AAU  ERU conversion is essential (1)
The following LULUCF activities will not be backed by RMUs
Reduction of Art 3.3 deforestation
Projects in category not elected as an Art 3.4 activity
Projects in category elected under Art 3.4, but category turns out to be a net source (only known ex post!)
All Track 2 JI, where RMUs will not be issued due to non-compliance in Art 3.3 / 3.4 reporting
If Art 3.3 / 3.4 only accounted at end of commitment period, then no ERUs can be issued until that time.
Thus, it is essential that AAUs can be converted into ERUs
Intentionally left blank to make the point that there are (almost) no projects

15. Why AAU  ERU conversion is essential
In addition: According to the MA, Track 2 JI does not require Art 3.3 / 3.4 reporting and RMU issuance
Therefore, ITL ruling is in contradiction of Track 2 JI
Intentionally left blank to make the point that there are (almost) no projects
Note: No reference to para. (f)

16. Example 1: JI Project to reduce emissions from deforestation
Great potential on per hectare basis (“fast-out”)
Could be examples for RED mechanism
No RMUs generated by Art 3.3 Deforestation
Only if country produces RMUs in Art 3.3 AR, or Art 3.4 activities, has it the RMUs to convert into “avoided deforestation” ERUs.
Thus, RED project depends on ability of country to generate RMUs under Art 3.3 AR, or Art 3.4
Intentionally left blank to make the point that there are (almost) no projects

17. Example 2: JI forest fire prevention project
The project (under Art 3.4 FM) reduces emissions from forest fire
Another part of the country experiences a drought which reduces forest growth, and thus, the country becomes a source under Art 3.4
AAU are consumed, no RMUs are produced
no ERUs can be generated even though without the project the country would be more of a source.
Projects are exposed to a country-wide risk
Intentionally left blank to make the point that there are (almost) no projects

18. Conclusions
JI offers potential to test LULUCF project types other than AR
“ITL interpretation” poses a severe barrier; may eliminate most of this sector from the market
Underlying cause seems to be the thinking
LULUCF (“sinks”) = removals (ALWAYS)
other sectors = emissions
Possible solutions:
“repair” the ITL rules
Green Investment Schemes (but may exclude the private sector)

19. Further Reading Point Carbon - CDM & JI Monitor 24 January
Will Joint Implementation LULUCF projects be impossible in practice?
Climate-L announcement 17.Dec.2006
lists.iisd.ca:81/read/?forum=climate-l
Proposed workshop in Budapest in May
LULUCF: Joint Implementation, Green Investment Schemes, and other domestic LULUCF activities by Annex I countries