Forestry carbon credit loophole could be used to game climate commitments

EXCLUSIVE / Weaknesses in the oversight of the European Union’s forestry sector has exposed it to the risk of being used to game government climate commitments and scoop up millions of euros worth of carbon credits.

Leaving the loophole open in forthcoming EU climate legislation could mean that the bloc only reduces greenhouse gases by 33% compared to 1990 levels, rather than the “at least 40%” promised by EU leaders, according to campaigners.

Current rules give or deduct carbon credits, using a “business as usual” baseline submitted by member states to the European Commission.

By overstating their “business as usual” logging, governments can scoop up millions of euros worth of carbon credits by simply not hitting their timber-felling targets.

Better management could increase the climate benefits of European forests

Europe’s forest coverage has increased by 10% since 1750, but forest management methods have changed dramatically. According to a study published in the journal Science, this has led to a slight increase in global temperatures. EURACTIV’s partner Journal de l’Environnement reports.

The European Commission told euractiv.com that it was “aware of the potential risk” and that accounting rules and their interaction with climate laws were being taken into account in ongoing work on legislation due before the summer.

In 2013-2014, after at least seven EU countries – the UK, Germany, Denmark, Finland, Lithuania, Portugal and Slovakia – submitted high baselines, there was a windfall of 100 million tonnes of carbon credits.

130 million tonnes would have been credited, but the windfall triggered the 3.5% of 1990 emissions failsafe in the rules for the second commitment period of the Kyoto Protocol (2012-2020).

Data from 2013 and 2014, the two most recent years available, exposed the loophole in the UN reporting system.

According to environmental NGO Fern, the 100 million tonnes is equivalent to;

• Not insulating 50 million homes;
• Staying with current Co2 limits for cars;
• A €500 million bailout for farmers.

No other sector has a business as usual reference level regarding greenhouse gas emissions.  Most use levels from a given year, usually 2005 or 1990.

Campaigners argue that as Europe’s forest sizes have remained consistent for many years, that would be a more accurate way of measuring the real contribution of the sector.

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Carbon windfalls can be used by governments to offset other carbon costs in polluting sectors, which would be “a disaster”, according to Hannah Mowat, forest and climate campaigner at Fern

“If it’s a decision between difficult choices in the transport or agriculture sector, or doing relatively little in the forestry sector and getting rewarded for it – what are governments going to do? Countries are fighting hard for as many credits as possible.”

“If this is to be a serious sector, it needs to grow up and have serious rules, not these Neanderthal rules,” Mowat added

Any untouched trees would likely still be logged in the future after they had secured the credit windfall, which meant the system would not even prevent global warming, she said.

Forthcoming bill

The Commission could include land use and forestry in the Effort-Sharing Decision, which is the one of two EU instruments to hit the bloc’s 2030 climate and energy target of an emission reduction of at least 40%. It is expected to be put forward as a bill on 10 July.

The term Land use, Land Use Change and Forestry (LULUCF) is used to describe the impact of land use and forestry on greenhouse gas emissions.

Fern said if LULUCF credits were calculated using current rules and were made available in the Effort-Sharing Decision, it would it would reduce the 40% greenhouse gas target by 3-7%.

The new legislation is driven by the landmark deal to cap global warming struck in Paris last December at the UN Climate Change Conference.

Europe quietly shelves forestry debate ahead of Paris climate talks

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.

Governments worldwide agreed to limit warming to two degrees above pre-industrial levels, and to report on their progress every five years. An ‘aspirational’ target of 1.5 degrees was also set.

The UN link is particularly relevant, as LULUCF reporting is used in carbon account for the 2nd commitment period of the Kyoto Protocol – the predecessor to the Paris Agreement.

While it was not part of the EU’s 2020 climate and energy target, campaigners are concerned LULUCF will be part of the framework for the 2030 targets.

“Before summer the Commission will present proposals on the Effort-Sharing Decision including, LULUCF, which feed into the implementation of the 2030 Climate and Energy Framework,”  a spokesperson for the executive told EURACTIV.

“Accounting rules for LULUCF and their interaction with the Effort-Sharing-Decision are important elements which are indeed taken into account in the currently on-going preparatory work,” the spokesperson added.

Any legislation needed to have “a real firewall” between sectors, Mowat said, “to prevent unjustified flexibility” that would game the system.

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