Accounting for forestry and agriculture

The international LULUCF accounting rules agreed in Durban under the Kyoto Protocol last year fail to account for what the atmosphere sees. The European Commission’s proposal from March 2012 builds on these rules while aiming to slightly improve upon them.

Currently the European Parliament and the Council are debating on a number of important elements of the legislation. So far, the inclusion of agriculture sector and Member States’ action plans have received the most attention. The European Parliament Environmental Committee is set to vote on its proposal on Wednesday 10 October.

Inclusion of agriculture (Article 3, accounting obligations)

A key feature of the Durban agreement is that it allows countries to choose whether or not they account for some emissions and removals from LULUCF.  LULUCF includes several different types of human activity, such as forest-related activities,1 grazing land management and cropland management.

Under the Durban agreement, countries can choose whether or not to account for each of them, except for forest-related activities. As a consequence, countries will tend to choose not to account for activities that result in net emissions (debits), but will account for those which yield net removals (credits). This is clearly not right and would not be allowed in any other emission sector.

The Commission proposal improves considerably upon the Durban agreement by making cropland and grazing land management mandatory (about 17% of the EU LULUCF sector) as well as forest management (about 70%). This proposal should be supported and wetland drainage and rewetting should also be included as mandatory.

Action plans

Currently, LULUCF accounting rules pose a problem for the global climate regime in that they provide a loophole within which countries may hide emissions. There are no obligations for countries to reduce LULUCF emissions or increase  removals. The Commission proposal for EU member states to develop action plans for reducing the impact of LULUCF on the climate is thus very welcome. LULUCF should be part of the solution to climate change rather than part of the problem.

Hiding emissions and misleading accounting

The Durban agreement embodies a number of accounting tricks that would be considered outrageous if included in other emission sectors.

Accounting for forest management is especially bad because the Durban rules allow countries to account however they like. Countries have therefore chosen ways of accounting that best suit them in terms of gaining credits and obscuring debits. The EU countries have chosen to account relative to reference levels – business as usual projections that allow them to hide emissions as long as they say what they are going to emit in advance. If applied to electricity generation, this rule would allow countries to avoid counting emissions from new power stations as long as they said that they were going to build them beforehand.

In a fair world with environmental integrity, these rules would simply be scrapped but the Commission proposal must try to build on the Durban agreement. CAN Europe is calling for the EU’s LULUCF regulation to make clear that in the next accounting period, the EU will employ more comprehensive accounting relative to a historical base year or period (so-called “net-net accounting”).