Cap Management for LULUCF Options: An economic mechanism design to preserve the environmental and social integrity of forest related LULUCF activities under the Kyoto Protocol

In this paper we identify four main problems that arise from a quantitative cap on land use, land-use change and forestry activities discussed at OP 6. These problems relate to environmental integrity and economic efficiency. First, in stark contrast to the wording of the United Nations Framework Convention for Climate Change and the Kyoto Protocol the proposed provisions for land use, land use change and forestry activities are only about carbon accounting and are devoid of sustainability criteria. This deficiency would make climate actions inconsistent with other international agreements and policy processes. Second, due to lower costs of sequestration activities a quantitative cap produces possibilities for arbitrage in the greenhouse gas market. Third, in a situation of oversupply a fair allocation of highly profitable sequestration projects is unlikely. Fourth, negotiators are overwhelmed by the complexity of the land use, land-use change and forestry issue. The currently proposed mechanisms, such as adaptation levies or discounted crediting of flexibilities, do not provide adequate solutions. In order to solve these problems we propose a tender auction mechanism that could already be applied today for forest sinks. We distinguish between two information components in this economic mechanism. First, a qualifier component in the form of certification for sustainable forest management practices, which is already in use by market actors worldwide. Second, a competitive trait in the form of carbon sequestration intensities per greenhouse gas emission credit. Under such a regime, negotiators simply need to determine a quantitative cap (as they already started to negotiate at COP 6), while an efficient market mechanism guarantees integrity with respect to sustainability and economic efficiency criteria. The complexity of the issues surrounding land use, land use change and forestry activities is transferred to a decentralized decision making process. The proposed mechanism can also serve as a template for clean development mechanism projects and other international flexible mechanisms or subsidy programs

Reducing Emissions from Deforestation and Forest Degradation: A Systematic Approach

As up to 20 percent of global anthropogenic greenhouse gas emissions result from deforestation, the reduction of emissions from deforestation and degradation of forests (REDD) is a major theme of the ongoing negotiations under the UNFCCC. This briefing looks at the fundamental issues and the challenges involved in current proposals to implement a trading scheme for REDD credits

Predicting the deforestation-trend under different carbon-prices

BACKGROUND: Global carbon stocks in forest biomass are decreasing by 1.1 Gt of carbon annually, owing to continued deforestation and forest degradation. Deforestation emissions are partly offset by forest expansion and increases in growing stock primarily in the extra-tropical north. Innovative financial mechanisms would be required to help reducing deforestation. Using a spatially explicit integrated biophysical and socio-economic land use model we estimated the impact of carbon price incentive schemes and payment modalities on deforestation. One payment modality is adding costs for carbon emission, the other is to pay incentives for keeping the forest carbon stock intact. RESULTS: Baseline scenario calculations show that close to 200 mil ha or around 5% of todays forest area will be lost between 2006 and 2025, resulting in a release of additional 17.5 GtC. Today's forest cover will shrink by around 500 million hectares, which is 1/8 of the current forest cover, within the next 100 years. The accumulated carbon release during the next 100 years amounts to 45 GtC, which is 15% of the total carbon stored in forests today. Incentives of 6 US$/tC for vulnerable standing biomass payed every 5 year will bring deforestation down by 50$/year. On the other hand a carbon tax of 12 $/tC harvested forest biomass will also cut deforestation by half. The tax income will, if enforced, decrease from 6 billion US$ in 2005 to 4.3 billion US$in 2025 and 0.7 billion US$ in 2100 due to decreasing deforestation speed. CONCLUSION: Avoiding deforestation requires financial mechanisms that make retention of forests economically competitive with the currently often preferred option to seek profits from other land uses. Incentive payments need to be at a very high level to be effective against deforestation. Taxes on the other hand will extract budgetary revenues from the regions which are already poor. A combination of incentives and taxes could turn out to be a viable solution for this problem. Increasing the value of forest land and thereby make it less easily prone to deforestation would act as a strong incentive to increase productivity of agricultural and fuelwood production, which could be supported by revenues generated by the deforestation tax

On fair, effective and efficient REDD mechanism design

The issues surrounding 'Reduced Emissions from Deforestation and Forest Degradation' (REDD) have become a major component of continuing negotiations under the United Nations Framework Convention on Climate Change (UNFCCC). This paper aims to address two key requirements of any potential REDD mechanism: first, the generation of measurable, reportable and verifiable (MRV) REDD credits; and secondly, the sustainable and efficient provision of emission reductions under a robust financing regime

Advancing the application of systems thinking in health:analysing the contextual and social network factors influencing the use of sustainability indicators in a health system - a comparative study in Nepal and Somaliland

BACKGROUND: Health systems strengthening is becoming a key component of development agendas for low-income countries worldwide. Systems thinking emphasizes the role of diverse stakeholders in designing solutions to system problems, including sustainability. The objective of this paper is to compare the definition and use of sustainability indicators developed through the Sustainability Analysis Process in two rehabilitation sectors, one in Nepal and one in Somaliland, and analyse the contextual factors (including the characteristics of system stakeholder networks) influencing the use of sustainability data. METHODS: Using the Sustainability Analysis Process, participants collectively clarified the boundaries of their respective systems, defined sustainability, and identified sustainability indicators. Baseline indicator data was gathered, where possible, and then researched again 2 years later. As part of the exercise, system stakeholder networks were mapped at baseline and at the 2-year follow-up. We compared stakeholder networks and interrelationships with baseline and 2-year progress toward self-defined sustainability goals. Using in-depth interviews and observations, additional contextual factors affecting the use of sustainability data were identified. RESULTS: Differences in the selection of sustainability indicators selected by local stakeholders from Nepal and Somaliland reflected differences in the governance and structure of the present rehabilitation system. At 2 years, differences in the structure of social networks were more marked. In Nepal, the system stakeholder network had become more dense and decentralized. Financial support by an international organization facilitated advancement toward self-identified sustainability goals. In Somaliland, the small, centralised stakeholder network suffered a critical rupture between the system's two main information brokers due to competing priorities and withdrawal of international support to one of these. Progress toward self-defined sustainability was nil. CONCLUSIONS: The structure of the rehabilitation system stakeholder network characteristics in Nepal and Somaliland evolved over time and helped understand the changing nature of relationships between actors and their capacity to work as a system rather than a sum of actors. Creating consensus on a common vision of sustainability requires additional system-level interventions such as identification of and support to stakeholders who promote systems thinking above individual interests