A primer on forest carbon policy and economics under the Paris Agreement: Part I

Highlights

• An innovation of the Paris Agreement is the nationally determined contributions (NDCs).

• Inventories for GHG emissions and removals are needed for NDC accounting.

• Actions taken by subnational and other entities should be nested within the NDC.

• Results-based payments for REDD+ will take time to be carried out at scale.

• Improving forest conditions is key to shoring up forestry's significance.

Abstract

This article deliberates the processes, principles, and rules relevant to forest-sector climate change mitigation and adaptation in light of the nationally determined contributions (NDCs) of the Paris Agreement (PA). We tackle such issues as targets and indicators, scope and information needs of forest-sector actions, progress tracking, stock taking, anthropogenic testing, carbon (C) accounting, and jurisdictional governance. Along the way, we also offer our perspectives of and solutions to some of the problems likely to be encountered in implementing the PA. We note that a Party must possess consecutive inventories for greenhouse gas (GHG) emissions and removals to determine, communicate, and update its NDC. While there is little concern over the availability of GHG emission inventories, there remain gaps between the available information and what is needed for accounting forest-based actions. Improved measurement and monitoring is needed if the Party desires to include the C pools as part of the offsetting credits in its NDC accounting. Also, the jurisdictional governance means that actions taken by subnational and other entities should be nested within the NDC. As to the results-based payments scheme for REDD+, it will take time to be carried out at scale, because of the challenge of determining the baseline of an action and the failure to deliver the promised finance. Finally, Parties must do more to maintain and improve their forest conditions to shore up the significance and sustainability of forest-sector actions.

Introduction

Adopting the Paris Agreement (PA) brought all Parties to the United Nations Framework Convention on Climate Change (UNFCCC) together for the first time in a common purpose—“Holding the increase in the global average temperature to well below 2°C…and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels (Article 2a).” As such, it has ushered in a new global regime for addressing climate change (UNFCCC, 2020). A fundamental innovation under the PA is the nationally determined contributions (NDCs) by Parties, which has resulted and will continue to result in diverse actions of climate change mitigation and adaptation (M&A) (UNFCCC, 2015; FAO, 2016).

As Parties gear up to implement the PA, it is essential for policy makers, practitioners, and scholars to establish a coherent knowledge base of the NDC-centered processes, principles, and rules regarding emission reduction by sources and removal enhancement by sinks of greenhouse gases (GHGs). In this context, we are keenly interested in a clear and coherent understanding of the processes, principles, and rules pertinent to forest-based M&A in order to more effectively tackle issues concerning carbon (C) accounting, climate governance, target realization, international cooperation, and many others. Notably, some of them have been deliberated and even debated over the past. To name a few, Sedjo and Sohngen (2012), Gren and Zeleke (2016), and Thamo and Pannell (2016) examined challenges of forest C accounting with respect to additionality, permanence, and/or leakage; Fischer et al. (2016) reviewed the studies of REDD+ projects,¹ while Chagas et al. (2020) and Galik et al. (2016) elucidated their governance; Boyd et al. (2018) analyzed the jurisdictional approach to land-based M&A actions; and Juutinen et al. (2018) and van der Gaast et al. (2018) assessed the feasibility and potentials of forest-based C sequestration and payment schemes.

Nonetheless, our knowledge has so far been confined mostly within the domain of forest C projects, and adopting the NDC structure has made what we learned under the Kyoto Protocol no longer adequate or even relevant. Indeed, confusions and controversies exist in the discussion of C offsetting, credit taking, results-based payments, and other matters. This state of affairs is in contrast with the fact that over 70% of the Parties have included forest-sector actions in their NDCs (FAO, 2016) and the imminent starting of the PA implementation. Therefore, it has become requisite to harmonize our past experiences and lessons with the NDC structure. Further, it is urgently needed to explore practical solutions to the problems facing the international community in executing forest-based M&A actions. In this paper, we will pursue these objectives by highlighting the core elements of the PA and deliberating their implications for forest-based actions. Our exploration will consider the unique characteristics of forest ecosystems (FESs) that make it challenging for us to handle these actions properly; whenever necessary, also, we will use China as a case to illustrate our viewpoint, which has to do with the usefulness of such a case coupled with our familiarity with the country's situation.

Specifically, we will focus on the following interrelated issues: NDC makeup and information needs, processes of stock taking and progress tracking, determination of anthropogenic GHG removals, accounting principles and rules, jurisdictional governance, and availability of and gaps in forest-sector data. We will close with a few remarks concerning how to capture various C pools of forest ecosystems (FESs) adequately and how to take advantage of the FES role in combating climate change by strengthening conservation and accelerating growth. It should be noted at the onset that in preparing this article, we have drawn information from the key documents of the leading international organizations, including: Reference Manual for the Enhanced Transparency Framework under the Paris Agreement (UNFCCC, 2020), Forestry for a Low-Carbon Future: Integrating Forests and Wood Products in Climate Change Strategies (FAO, 2016), and 2006 Guidelines for National Greenhouse Gas Inventories (IPCC, 2006).