unep-iucn-fao „cdm and forestry“ addis, oct 2003
DESCRIPTION
UNEP-IUCN-FAO „CDM and Forestry“ Addis, Oct 2003. Accounting for non-permanence of carbon sequestration – options as contained in FCCC/SBSTA/2003/10/Add.3. Jens Mackensen. (following presentation by Martina Jung, HWWA, Manila). UNEP-IUCN-FAO „CDM and Forestry“ Addis, Oct 2003. - PowerPoint PPT PresentationTRANSCRIPT
UN
EP-I
UC
N-F
AO
„C
DM
an
d F
ore
stry
“ A
dd
is,
Oct
2
00
3
Accounting for non-permanence of carbon sequestration – options as contained in FCCC/SBSTA/2003/10/Add.3
Jens Mackensen(following presentation by Martina Jung, HWWA, Manila)
UN
EP-I
UC
N-F
AO
„C
DM
an
d F
ore
stry
“ A
dd
is,
Oct
2
00
3The negotiaton text offers three options for accounting of non-
permanence:
1) rCERs (removal Certified Emission
Reductions)
2) tRMUs (temporary Removal Units)
3) iCERs (insured Certified Emission
Reductions)
UN
EP-I
UC
N-F
AO
„C
DM
an
d F
ore
stry
“ A
dd
is,
Oct
2
00
3rCERs
• „Temporary“ credit
• Validity?
- (Only valid for CP in which it was issued) or- Expiry 5 (20) years after issuance
• Not bankable
• If carbon is lost upon expiry of rCER, it has to be replaced by other (temporal or permanent) credits
UN
EP-I
UC
N-F
AO
„C
DM
an
d F
ore
stry
“ A
dd
is,
Oct
2
00
3tRMUs
• „Temporary“ credit converted CER from forest CDM project (after 2% for adaptation fund subtracted)
• Validity?- Valid for actual Commitment Period, in which it was
issued
- End of subsequent CP to which it was issued
• Not bankable
• An expired tRMU can be replaced by a valid tRMU up to 7 (x?) times / CP (total of 35 years)
• Afterwards, tRMU has to be replaced by a permanent credit
UN
EP-I
UC
N-F
AO
„C
DM
an
d F
ore
stry
“ A
dd
is,
Oct
2
00
3iCERs
• (Permanent) CER, insured up to at least [Y] years after end of crediting period
• In case of GHG release (during verification period), insurance has to replace the respective amount of iCERs with other credits
• If insurance provider unable, Annex 1 country in possession of iCER is liable
• No liability after end of insurance coverage
UN
EP-I
UC
N-F
AO
„C
DM
an
d F
ore
stry
“ A
dd
is,
Oct
2
00
3Crediting Approaches
Advantages Disadvantages
rCER -accounts for non-permanence-Relatively easy to understand
tRMU -accounts for non-permanence
-rather complicated-renewal limited
iCERIf insurance coverage far beyond crediting period
-Non-permanence (partially) accounted for
-Insurance not available for such long-term
iCERIf insurance coverage NOT far beyond crediting period
-not accounted for non-permanence-insurance not available to developing countries
UN
EP-I
UC
N-F
AO
„C
DM
an
d F
ore
stry
“ A
dd
is,
Oct
2
00
3Carbon accounting
1. Total stock change
2. Average stock change
3. Delayed total stock
J.44. The certification report shall constitute a request to the Executive Board for issuance of [CERs] [rCERs] [or ICERs] equal to the verified amount of net anthroponic greenhouse gas removals by sinks achieved by the afforestation and reforestation project activity under the CDM [during the [verification] period] [since the start of the project].
UN
EP-I
UC
N-F
AO
„C
DM
an
d F
ore
stry
“ A
dd
is,
Oct
2
00
3Carbon stock accounting:Total stock change, advanced crediting
t0 t1
Certification and issuance
time
carb
on
rCER
- t1: here end of 1st Commitment Period (could be earlier)
- rCERs valid for CP in which certification has taken place
- Problem: risk of carbon release afetr t1 (full amount has not neen stored for t1-t0)
rCER
UN
EP-I
UC
N-F
AO
„C
DM
an
d F
ore
stry
“ A
dd
is,
Oct
2
00
3
t0 t1
Certification and issuance
time
carb
on
- t1: here end of 1st Commitment Period (could be earlier)
- rCERs valid for CP in which certification has taken place
- If release after t1, but amount of rCERs represent sequestration in t1-t0
- Economically unattractive
Carbon stock accounting:Average stock change, advanced crediting
UN
EP-I
UC
N-F
AO
„C
DM
an
d F
ore
stry
“ A
dd
is,
Oct
2
00
3
time
-If total stock change of t1
maintained , full issuance of rCERs at t2
-Amount of rCERs represents real storage (risk of early release avoided)
-Economically unattractive, because income flow very late
Carbon stock accounting:Total stock change, delayed crediting
t0 t1
Initial certification
carb
on
t2
rCER
Certification and issuance
UN
EP-I
UC
N-F
AO
„C
DM
an
d F
ore
stry
“ A
dd
is,
Oct
2
00
3Crediting periodThree options
1) Maximum of [Y] years, renewal of at most [X] times
If original baseline still valid, starts with project activity
Not beyond 31st December 2003
2) See above OR [A maximum of] [5] [X] years
3) A maximum of [5] [X] years
In forestry environmental and socio-economic benefits are expected to be larger for longer crediting periods
Investor interests/investor security ?
UN
EP-I
UC
N-F
AO
„C
DM
an
d F
ore
stry
“ A
dd
is,
Oct
2
00
3Definitions – Threshold date
Keep 1990
-consistency, firmness
-don‘t reward deforestation
- natural regeneration needs time
- documentation possible
- historic emissions
Change to 2000
- more suitable land available
- more soc.-env. benefits
- documentation easier
- more geographic equityShifting date (10 years)