A delicate negotiation about how to account for forestry and land use emissions looms large over this year’s UN climate conference in Paris. The issue is potentially divisive within the EU, and threatens to unravel the bloc’s proclaimed leadership on climate change.
On 25 March, the European Commission launched a public consultation on the integration of agriculture, forestry and land use into the EU’s climate and energy policy for 2030.
The consultation, which largely went unnoticed, is more important than one would think, with implications stretching far beyond the anxieties of tree-huggers. European forests currently absorb and store around 10% of EU carbon emissions and their contribution is seen as crucial for the next round of emissions cuts expected in Europe, and globally.
EU leaders set the stage for a showdown on forestry last October by signing off on a pledge to cut the bloc’s carbon emissions by at least 40% compared to 1990 levels, by 2030.
For the first time, the EU objective will also incorporate emissions from land use, land use change and forestry, also known under its acronym, LULUCF.
The European pledge, presented as the most ambitious in the world, will be taken to the UN climate conference taking place in Paris next December (COP21).
Winners and losers
But as the December conference approaches, the LULUCF sector is fast emerging as an elephant in the room for European negotiators.
The way forests and land use are addressed in Paris will be critical because the sector does not only remove carbon dioxide from the atmosphere – acting as a “sink” – it also contributes to emissions via deforestation, livestock production, and fertiliser use.
And the way those processes are accounted for will inevitably create winners and losers, according to Carbon Market Watch, an environmental pressure group advocating for fair and effective climate protection.
“If LULUCF is incorporated into the INDCs [Intended Nationally Determined Contributions] without increasing the overall target, forest offset credits would allow polluting in other industries and effectively reduce the total amount of reductions by 5%,” said Eva Filzmoser, Director at Carbon Market Watch.
As a consequence, “the real impact of the EU’s efforts would be no more than 35%”, she said, well below the headline 40% objective touted as the most ambitious in the world.
Such a large difference in accounting would no doubt be used by developing countries in Paris to push Europeans into making further reduction pledges.
The EU already reports its carbon emissions and removals from the LULUCF sector when it adopted its own carbon accounting rules in 2013. However, revising those rules to take account of the global dimension would carry potentially huge implications for countries with big forestry or agricultural sectors, such as Russia or Brazil.
Euopean Union decision postponed until 2016
At EU level, the European Commission has preferred playing it safe by adopting a wait-and-see approach. Anna-Kaisa Itkonen, the Commission spokesperson on climate change and energy, said a decision on LULUCF would have to wait until after the Paris conference.
“The Commission is planning to table a proposal in the first half of 2016,” she told EURACTIV in e-mailed comments, saying this should allow “sufficient time to consult stakeholders on this important initiative”.
But according to Filzmoser, Europeans may only be delaying a potentially divisive discussion that will eventually have to take place.
“In the EU, there is no agreement on how to reduce emissions in these sectors and there are still risky options on the table,” Filzmoser told EURACTIV. “For example, the agricultural industry could plant a tree, which might get burned down or harvested at a later date, and keep polluting instead of improving fertilizer use or making their production chain more efficient.”
In its public consultation document, the Commission acknowledges shortcomings, and points to a lack of common rules at global level on how to collect carbon data from forests and soils.
“Before assigning a goal, you need to be able to count,” explained a European diplomat who has intimate knowledge of both the EU and UN processes. “For the moment, at the UNFCCC we are only trying to refine the recognition of the sector’s emissions before even asking ourselves the question of how to assign a possible reduction goal for this sector.”
As the diplomat put it, the complexity resides in finding a carbon accounting methodology that reflects situations as diverse as forests in Brazil, France or Finland.
But in his view, there is no urgency to revise the EU’s own carbon accounting rules right now. “The reality is that there is no need to go into the detail on this subject today because the [LULUCF] sector is included in the European Union’s 40% emissions reduction target,” the diplomat said. It therefore makes more sense to revisit the debate after the Paris conference, he argues.
For environmentalists, the issue is not so much about the timing of the proposal than avoiding to “dilute” the EU’s carbon reduction pledge by introducing accounting loopholes into the system.
As Filzmoser explained, it is “currently being debated whether land-use sectors sinks would be used to replace emissions reductions in other sectors” not covered by the ETS, such as transport or buildings.
Doing so could be tempting for Europeans, as it would allow them to continue polluting in other sectors of the economy – such as chemicals, steelmaking or coal-burning for energy – and compensate those emissions with forest management efforts which are difficult to measure. This would have perverse effects, as EU countries would be tempted to overestimate their projections for future forestry activity in order to “hide” emissions elsewhere, Filzmoser said.
“If forestry projections are overestimated, then countries will surpass their targets without any additional mitigation efforts,” Filzmoser warned, calling on the Commission to clarify the linkages between the LULUCF sector and the EU’s wider climate policies.
Norway, for example, has a huge forestry sector and has already linked up to the EU’s emissions trading scheme (ETS) for greenhouse gases. But it refuses to let its forest sinks compensate for industrial emissions cuts at home, an option which is still on the table at European level, Filzmoser told EURACTIV.
In this area, she said the Commission could act early to close what could turn out to be a gigantic loophole. “On how to use forest sinks, the Commission could be showing a lot more leadership and try to facilitate discussions between member states – but they’re not.”
The European paper industry, which is heavily reliant on the forest sector, also sees a missing link between LULUCF and the EU’s wider climate policies.
“What is considered missing is the link between the LULUCF emissions and/or removals and the overall EU commitment to reduce CO2 emissions, in other words how to factor the LULUCF positive or negative impact into the overall EU climate effort,” said Bernard de Galembert, of the Confederation of European Paper Industries (CEPI).
In that context, he says discussions at European level might consider linking the LULUCF sector with the ETS or with the effort sharing decision, which sets emissions targets for member states in sectors not covered by the ETS, such as transport, buildings, agriculture and waste.
“But this is not a COP-relevant issue,” Galembert stresses. “It is an internal EU and member states issue.”
Indirectly, the Commission appears to recognise that LULUCF could destabilise Europe’s global stance on climate change and divide nations within the 28 EU member bloc.
“For instance, in Sweden and Finland net removals in LULUCF are more than half the total emissions in other sectors and in Latvia the double,” the Commission stated in the impact assessment accompanying the EU’s own carbon accounting rules, adopted in 2013.
The difference essentially depends on the size of national forestry sector and the overall “vegetation cover” in the country, the document stated, highlighting “the importance of considering national circumstances when assessing the role of the sector in the climate change commitments”.
“Lots of member states put [LULUCF] on the table, but for different reasons,” the EU diplomat explains. “There is the Irish who tell you – because they are great friends of the CAP – that agriculture, forestry and land use have a limited mitigation potential [against climate change]. And at the other end of the spectrum are the British who say LULUCF should be used to enhance the EU’s climate ambition, with a more important goal.”
Green campaigners, for their part, emphasise that the carbon accounting puzzle is not as big a headache as it may seem.
“I think a common accounting method could be found from a scientific perspective,” said Hannah Mowat a forests and climate campaigner at Fern, an environmental group that coordinates NGO activities on forests at European level.
She points out to precedents at the UN whereby developing countries can report with less accuracy. “But whether this is politically possible, I’m not sure,” she told EURACTIV, “because depending on the accounting rules you use, you favour certain things rather than others, which can have an impact on the effort a country needs to make to reach its targets.”
At the end of the day, “it is not a scientific hurdle, but a political one”, she stresses.
Essentially, because forestry and land use is the only sector counting for both carbon emissions and removals, she says LULUCF should be ringfenced and treated separately, with a specific target that would incentivise removals without undermining ambition in other sectors.
“All of this is demonstrative of how LULUCF is used, as a negotiating chip, and indicates that we need to take precaution when dealing with this sector,” Mowat said.