Forestry projects in the voluntary
market
92. While forestry's place in international efforts
to avert climate change is becoming more and more prominent in
climate change negotiations, the voluntary offset market is seeing
something of a shift away from forestry projects towards renewable
energy projects or other areas of carbon saving. Most major offset
companies (many smaller companies still rely exclusively on forestry
credits) now retail portfolios of credits of which frequently
no more than 20% are drawn from forestry schemes. Additionally,
many of those establishing projects or schemes relying on forestry
now as a matter of course plant more than they need to to allow
for losses or insure against under-performance.[99]
If this trend continues, perversely, an increasing proportion
of CERs in the future may represent forestry savings while a decreasing
proportion of VERs might do so.
93. Undoubtedly there has been bad publicity—and
bad practice—concerning a number of forestry based offset
schemes or the way in which they were sold. The Advertising Standards
Authority had cause in October 2006 to order the cessation of
the offset claims made by the Scottish and Southern Energy Group
(SSE) about its tree-planting schemes.[100]
Much press coverage has also centred on the Coldplay-promoted
project in Karnataka, India, where for various reasons the number
of mango trees that should have been planted were not, and many
of those that were planted died through lack of water.[101]
Clearly, the message has got out that forestry projects are unreliable,
while being supposedly inexpensive, superficially attractive to
consumers, and thus a 'quick earner' for unscrupulous companies.
Concerned individuals or commercial bodies interested in offsetting
may as a result be seeking to avoid this sector of the market
in favour of renewable energy or energy efficiency projects. Offset
companies themselves, aware of this perception, and themselves
anxious about other aspects of forestry projects (such as costs
and permanence), may continue to develop more and more alternative,
non-forestry, projects as a result.
94. Many of these suspicions raised about forestry
projects are unfair. For example, the most recent uncertainties
expressed in the general media about the merits of forests in
mitigating climate change have been founded upon an imprecise
understanding of the scientific studies into the balance of GHG
and climatic impacts from temperate forests. None of the science
for the relationship between forests and climate is simple, but
the current state of research unequivocally indicates that, despite
methane emissions, tropical forests store more GHGs than they
emit. This is also the case for temperate forests, although the
figures are less pronounced, partly on account of trees storing
carbon more slowly in colder climes.
95. Recent studies for temperate forests have revealed
that, due to what is known as the albedo effect, some forests
in climes where there is otherwise ample snowfall end up storing
more heat than the land around them and thus produce local warming.[102]
In essence the issue is not one of the balance between methane
emissions and carbon retention but of the reflectivity of light
from snowfields as opposed to its non-reflectivity from forests.
The greater the area of unforested zones where there is a high
prevalence of snow cover the greater the amount of light and heat
reflected: the greater the area forested in such zones the more
heat is stored and climate change subtly encouraged. The afforestation
or reforestation of land currently unforested and thus open to
snow cover might have deleterious climatic effects, although no-one
appears yet to be encouraging the deforestation of those northern
temperate zones where snow abounds in order to encourage greater
reflectivity and local cooling. While the overall effect is seen
as marginal (and temperate forests in such colder areas evidently
have other benign effects from which this possible, marginal impact
should not detract), uncertainty has been thrown up in the minds
of many of those who purchase or consider offsets since the extensive
reporting of this scientific information began at the beginning
of the year.
96. Other issues of uncertainty over the exact
magnitude of the carbon or GHG benefits from forests (rather than
their existence) are certainly more real than concerns over the
albedo effect. Carbon credits need to represent definite
amounts of carbon stored or saved in order to be the sort of commodity
which companies and individuals will want to purchase, in which
financial and other bodies will want to invest, and which will
be acceptable within an international framework for meeting national
GHG targets. Methodologies for measurements of carbon saved by
or stored in forests are complex and there is clearly a lot of
unease about how precise the calculation is of the number of credits
produced by forestry schemes really is. Although there are CDM
methodologies available which some voluntary schemes or projects
can decide to follow, voluntary offset schemes often follow their
own, proprietary methodologies: not all of these can be considered
sufficiently robust to create and maintain the confidence that
the voluntary offset market needs to prosper. In evidence to
us, Mitch Feierstein of Cheyne Capital Management Ltd. said that
at present his company did not invest in any forestry credits,
but would consider so doing once it was convinced about the solidity
of the methodologies and audit processes involved. Some of those
connected with offsets do not seem to consider imprecision in
the measurement of GHG savings from forestry (or other schemes)
a problems since they believe that some people offset in the same
way in which they give to charitable body - they are not concerned
for precise measurement but for general benefit.[103]
97. While the absence of rigorous methodologies plays
a part in anxieties about the validity of credits from trees and
forestry offsets in general, there is perhaps greatest concern
over the impermanence of forests. Clearly, a forest can only act
as a carbon sink for as long as it exists. While the carbon locked
in the tree may be preserved if the timber is felled and the wood
used in buildings, furniture or other goods, and a successor tree
may continue to store carbon, trees are often razed and then disposed
of and their carbon released back into the atmosphere and no successor
tree planted. This is particularly the case with tropical forests,
although it is not a phenomenon exclusive to the tropics, nor
within the tropics is it an issue only in countries with high
profile forest loss, such as Brazil and Indonesia.
98. For some, the impermanence of such carbon sinks
is an absolute bar to the acceptability of the offsets which they
provide.[104] Those
opposed in principle to offsets argue that it is unfeasible to
prove, or assure, permanence without which carbon sinks are more
dangerous than useful and their funding a waste of money. While
marginal losses to forests by small-scale illegal logging, natural
disasters, poor growth, and such may be able to be dealt with
by insuring the forest, by planting more trees than needed for
the offsets claimed, or by other means, the issue of assuring
permanence over longer periods of time, especially in developing
countries where the political climate can be volatile, is much
more difficult.
99. Another problematic aspect of forestry or land-use
offsets is connected to future value accounting or future reductions.
In the CDM, offsets can only be sold to be retired when the carbon
savings they represent have already taken place—in other
words when their value is verified and their effect certified.
In the voluntary market, for schemes and offsets that do not
adhere to CDM methodologies or practices, offsets can be sold
for retirement before the savings they represent have actually
occurred. While such offsets may represent a minimum of current
forestry offsets, and are certainly not characteristic of the
way in which VERs are used, it is an important issue. A company
which quantifies the carbon savings, say, over ten years from
a newly planted forest and then retails such credits for retirement,
receives often the full value for something that has not yet happened
and allows present emissions to be "offset" by a future
saving that in fact may not eventuate. Even if all future emissions
thus sold and retired did eventuate, it would still represent
a problem for the way in which such offsetting works—because
the timescale for mitigation is thus stretched out dangerously.
There has to be clarity here. In relation to forestry offset projects,
it is essential that no credits should be retired which do
not represent carbon savings already made. Credits should all
be vintage marked and while future credits may be sold on to others
they should not be retired until that vintage date is reached.
The importance of forestry offset
projects to the climate
100. Without any pressing need urgently to deal with
the imminent risk of major climate change these difficulties with
forestry offsets might be more persuasive, and an effective counsel
for caution. Unfortunately, as two of our witnesses in particular
made clear, so urgent is the need to act in whatever way possible
to preserve forests, soak up more carbon, and fund and invest
in the longevity of new and existing forests, that ensuring support
for planting of sustainable forestry and the preservation of existing
forests is more persuasive. [105]
The Stern Report was very particular about the importance of forestry
and land use to the climate debate and to climate change mitigation.[106]
Forestry schemes must be intended to provide offsets are properly
sustainable, do not over-ride the claims of those local to them,
are properly measured and audited. Beyond that, forestry schemes
may also provide many other benefits to local communities above
and beyond the global carbon benefit they provide. All possible
attempts must be made to ensure the longevity and/or permanence
of forests. Benign, well thought-out and effective forestry schemes
are not an inexpensive source of offsets: the sort of monoculture,
plantation style schemes which often rode roughshod over local
claims to land or ecosystem services, and which often underperformed
significantly or failed to last, are hopefully a thing of the
past.
101. It has to be admitted that the very large-scale
forestry schemes which will make most difference in the fight
to avert climate change require significant amounts of funding
and political support. It has also to be admitted that at the
moment neither of these things appears to be widely available.
However, inside the CDM and outside it there are signs of progress
towards the realisation that a great deal can be done quickly
to ensure that contributions to climate change from changes in
forest cover can be minimised, and that some progress can be made
in reversing the recent trend in deforestation. International
agreements need to be sought quickly, either within the UNFCC
framework or elsewhere, to guarantee countries' co-operation and
progressive activity in this area.
93 For example, the memoranda from Sustainable Forestry
Management (SFM) Ltd., Ev98-107; from Forest Carbon, Ev209-10,
from FERN Ev57-61, and from Carbon Trade Watch, Ev185-9. Back
94
Ev101, para 9 Back
95
Q425 Back
96
Qq437-8 Back
97
Global Canopy Programme, "Forests First in the Fight against
Climate Change", May 2007 Back
98
The McKinsey Quarterly No 1 2007 Back
99
Q161 Back
100
The Carbon Neutral Myth, Carbon Trade Watch, February 2007,
chapter 3 Back
101
Ev188-9, paras 15-19 Back
102
For example, the research recently carried out by Govindasamy
Bala of the Lawrence Livermore National Laboratory, which can
be found in the 9-13 April online edition of the Proceedings of
the National Academy of Sciences. Back
103
Qq144-5 Back
104
Ev18-19, paras 6-15 (evidence from The Corner House) Back
105
Q243-4 (RSPB) and Q146 (SFM Ltd) Back
106
The Stern Review on the Economics of Climate Change, Part VI,
Chapter 25 Back
