ROLE OF TERRESTRIAL SEQUESTRATION
IN MEETING KYOTO TARGETS

• Extracts from Article 3, Kyoto Protocol
• Carbon Cycle Diagram (GRID/UNEP)
• Global Carbon Cycle Diagram
• Greenhouse Effect Diagram

SUMMARY

There is strong scientific consensus that the concentration of greenhouse gases in the atmosphere is increasing due to human activities and that this is leading to changes in the Earth's climate. Fluxes between terrestrial ecosystems and the atmosphere are a significant component of the global carbon cycle and actions to increase net storage in terrestrial ecosystems (often called 'sinks') will delay the build up of greenhouse gases in the atmosphere.

There is still political debate as to which sinks may be accounted in compliance with the Kyoto Protocol. The decisions made will affect the total costs of compliance with the Kyoto Protocol by a factor or two to four. Geological sequestration may also reduce emissions by an amount of the same order as sequestration in terrestrial sinks.Biological and geological sequestration offer a significant opportunity to buy several decades of time to make an efficient transition to technologies and economies that release less greenhouse gases to the atmosphere from energy production and industrial processes.

INTRODUCTION

It is well established that the concentrations of greenhouse gases in the atmosphere are increasing significantly faster than they have in any recorded period in the past (Bolin and Sukumar 2000).

Human activities, primarily the combustion of fossil fuels (coal, oil and gas), de-forestation and agricultural practices since the beginning of the pre-industrial era around 1750 are the primary drivers of these increases. Atmospheric carbon dioxide has increased in concentration by nearly 30%, methane by more than a factor of two, and nitrous oxide by about 15%. Their concentrations are higher now than at any time during the last 420,000 years, the period for which there are reliable ice-core data.

Scientific principles suggest that such increases in greenhouse gases are likely to contribute to climate change. Observations show that the climate is changing. The recent decade is not only the warmest recorded by meteorological instruments, but also the warmest, as assessed by proxy methods, in the past millennium.The weight of scientific evidence suggests that the observed changes in the Earth's climate are, at least in part, due to human activities.

Climate models that take into account only the natural changes in volcanic activity, orbital geometry and in solar activity do a reasonable job of simulating observed temperature changes up to about 1970. After this date, only models that include the observed increases in the atmospheric concentrations of greenhouse gases, sulphate aerosols and the observed decrease in ozone in the lower stratosphere effectively simulate the observed changes in annual mean global surface temperature (Mitchell and Karoly 2001). This, and our basic scientific understanding of the greenhouse effect, suggests that human activities are implicated in the observed changes in the Earth's climate.

THE CARBON CYCLE

These observed changes are primarily due to human intervention in the global carbon cycle, so it is necessary to look at this cycle in some detail. The main carbon pool is in the rocks with transfers to and from the atmosphere via processes such as CO2 and CO vented from volcanoes and CO2 laid down in limestone etc, varying only on geological time scales. Fossil fuel deposits are another major carbon pool of about 16,000 Gt (Gigatonnes, i.e. 109 tonnes). These have been built up over millions of years and are currently being released through human actions at the rate of about 6 Gt C/yr.

The main pool of non-geological carbon is in the ocean (39,000 Gt C), which is about 50 times more than the 750 Gt C in the atmosphere (Fig. 1). Most of the oceanic pool is in the deep ocean and has very slow turnover rates. Another large pool is in soil organic matter (2,000 Gt C) with another 500 Gt C in terrestrial biota.

Fig 1. A schematic representation of the main elements of the global carbon cycle during the 1990s. The areas of the blocks are proportional to the size of each of the carbon pools (the fossil and ocean blocks are truncated from their full square size). The numbers show the sizes of the pools (italics) and fluxes in Gt (1,000 million) tonnes of carbon. The small square within the atmosphere pool shows the current increase of carbon in the atmosphere of 3.3 Gt C/yr.

Fluxes between the atmosphere and terrestrial ecosystems and the ocean are substantial-about 60 Gt C per year for the land biota and 90 Gt C per year for the ocean. In pre-industrial times the balance between uptake by terrestrial biota and emissions back to the atmosphere through respiration, decay and burning were approximately in balance. The ocean fluxes were similarly in balance. However, since about 1,750 small additional fluxes from the use of fossil fuels and from large-scale land clearance have added extra carbon to the atmosphere and have disrupted that balance. Some of the carbon has remained in the atmosphere while some has been taken up by terrestrial biota and the oceans. Each year approximately a third of the excess carbon from fossil use and land-clearing remains in the atmosphere; a third is taken up by the oceans and a third is retained in terrestrial ecosystems.

The current best estimates from IPCC are shown below in Table 1.

Table 1. The global carbon budget in the 1990s (IPCC)

It is critically important that terrestrial fluxes are included in monitoring the carbon cycle. They contribute 25% of the input of carbon to the atmosphere and 30% of eventual removals of carbon and, thus, play a major role in the carbon cycle. They represent opportunities for reducing greenhouse gas emissions by modifying land use activities and for enhancing uptake of carbon from the atmosphere. Even if we were to decide not to allow them a role in compliance with the Kyoto Protocol, failure to monitor these fluxes would leave significant unknowns in our efforts to reduce greenhouse gases in the atmosphere. These unmeasured fluxes are far larger than the targets in greenhouse gas reduction set out in the Kyoto Protocol and variations in them may exceed our efforts towards compliance through other means.

SINKS IN THE KYOTO PROTOCOL

The Kyoto Protocol was negotiated by a Conference of the Parties (CoP3) to the UN Framework Convention on Climate Change in late 1997. The question of whether to include or exclude terrestrial emissions and sequestration in the Kyoto Protocol was a major issue in the negotiations leading up to the Kyoto Conference. Various Parties and vested interests floated a wide range of schemes. Attention was focussed on forested ecosystems, but there was no consensus on whether soil carbon should be included in any accounting and whether other ecosystems should be incorporated. Some thought that it would be too difficult to measure sinks, as they became known, and that this might compromise the compliance system. Others feared that allowing credit for sinks would distract from the main goal, i.e. reducing greenhouse gas emissions from the fossil and industry sectors. Within the Parties interested in including sinks, some had forests that were increasing in their uptake of carbon and favoured one model, while others had forests where uptake rates were decreasing and, therefore, favoured another model. Eventually, sinks were incorporated in the Kyoto Protocol but in a limited way. New (post-1990) activity in establishing forests (afforestation and re-forestation) would be credited and land clearing (de-forestation) would be penalized under Article 3.3 (see Appendix 1). Other activities were not accepted at CoP3 but a process was put in place to introduce them at a later Conference of the Parties (Article 3.4).

Australia is in a unique position with respect to sinks. It is the only Annex 1 (developed) country where emissions and sinks from terrestrial ecosystems make up a significant portion of the carbon account; thus, sinks matter to Australia. Also, in Australia emissions from land clearing are greater than the net uptake from activities included under Article 3.3. Thus, rather than being a sink, terrestrial ecosystems constitute a source of emissions for Australia.

There was a long and complex debate about the precise rules for accounting of carbon in assessing compliance with the Kyoto Protocol. Eventually a gross-net model was agreed to (see Noble and Scholes 2000) for a more detailed discussion of these models). This means that only emission from fossil fuels and industrial processes are counted in setting the baseline emissions in 1990 (i.e. gross emissions). Each Annex 1 country was allocated an assigned amount, based on this 1990 baseline, below which it must reduce its emissions by the first commitment period (2008-2012). However, in calculating emissions during the compliance period, a partial net accounting will be used in that a limited set of sinks as defined in Articles 3.3 and 3.4 are to be incorporated.

This leads to some arithmetical problems for Parties, such as Australia, that have net emissions from land-use practices. Australia succeeded in getting a correction for this in the Protocol in Article 3.7. This clause, often known as the Australia clause, along with our very tough stance in seeking to be allowed to increase our emissions by 8%, has led to Australia being regarded in many quarters as a pariah state. As a consequence, Australian activities in the follow-up negotiations relating to the Kyoto Protocol have come under intense scrutiny by many other Parties and NGOs.

The main issues in the continuing negotiations that might affect Australia's position have related to the landuse sector. The Intergovernmental Panel on Climate Change (IPCC) was requested to prepare a Special Report on Land Use, Land-use Change and Forestry (LULUCF) that was approved in May 2000. It dealt with options that would affect the amount of forested land to be included under Article 3.3 and the options for including additional activities under Article 3.4. This is a scientific report and is not allowed to be policy prescriptive in any way. The report formed the basis for discussions leading up to CoP6 in November 2000.

THE UNCERTAINTIES

CoP6 decisions

There appears to be good agreement on Article 3.3. It is likely that the definition of a forest will be close to that of Food and Agriculture Organisation (FAO), the most commonly internationally accepted definition. This is a very inclusive definition, including lands on which the cover of tree canopies is only 20% (or possibly less); i.e. what many of us would know as open woodlands. This means that over 30% of Australia's land surface will need to be monitored for acts of clearing and reforestation. There had been considerable debate since CoP3 about possible loopholes and scams that might arise from Article 3.3. It appears that there is a strong international consensus to close as many of these as possible. Some NGOs will be disappointed with the outcome. For example, although loopholes that may have encouraged the continued felling of old growth forests are likely to be closed, many conservation groups will argue that there is little in the Protocol that discourages their continued felling. There is still a huge amount of detail to be agreed upon and this will be spelled out in a best practices manual to be prepared by the IPCC starting late in 2001.

The big surprise of CoP6 was associated with Article 3.4. In most of the post CoP3 negotiations, Article 3.4 was the poor relation receiving little attention. However, as the IPCC Special Report was prepared, many Parties became increasingly aware that they would have to depend significantly on sinks to help them achieve compliance in the first commitment period. They also realised that the sequestration countable under Article 3.3 would be very limited; essentially carbon stored by forests established on land that was not forested in 1990 and then only the carbon stored during the 2008-2012 period. This would amount to only a few million tonnes of carbon towards a required reduction of about 750 Mt C.

In the negotiations leading up to CoP6, the USA gradually outlined a proposal to take a very inclusive approach to Article 3.4. Up until mid-2000, most discussion of the additional activities under Article 3.4 were based on relatively narrowly defined activities; for example, improved tillage methods in agriculture, fertilising plantation forests and so on. The USA took a decidedly broad approach to the definition of additional activities by proposing only three, namely forest management, the management of agricultural lands, and the management of grazing lands. This includes the vast majority of the lands of the Annex 1 countries and changes enormously the contribution by sinks to compliance. The USA proposal met strong opposition from many Parties and in particular from the European Union.

The USA assessed that their suggested approach to Article 3.4 would account for over 300 Mt C of sequestration per year within the United States alone. Many Parties and NGOs criticised their approach. Firstly, many were concerned that, by accounting for changes in carbon stocks over such extensive areas, significant amounts

of carbon taken up as a result of increasing CO2 concentrations, global warming and the deposition of nitrogen would be included. Essentially, the USA suggestion brings into the accounting system a significant portion of the 2.3 Gt C per year that appears to be accumulating in terrestrial ecosystems (Fig. 1). The USA argues that within its territory most of the sequestration results from the regrowth and expansion of forested ecosystems on land that was cleared for agriculture in the 19th and early 20th centuries. This is not acceptable to many Parties as the entire tone of the Kyoto Protocol is that only activities after 1990 should contribute to credits.

The USA recognised these concerns to some degree by accepting that some form of discounting, cap or threshold rules would need to be applied to limit the benefits claimed under Article 3.4. Each of these mechanisms would have significant impacts on the application of sinks in complying with the Kyoto Protocol. For example, if all uptakes by sinks were discounted (e.g. credit was given for only 30% of the carbon estimated to be taken up by an ecosystem) then the incentive to carry out activities would also be discounted similarly. Another suggestion is that only storage greater than a threshold rate of sequestration should be counted (e.g. only storage above a threshold rate of 0.5 tC/ha/y). This would leave incentives to sequester carbon in high productivity areas (e.g. moist forests) but would give no benefit for many sequestration schemes, such as the regeneration of large areas of degraded lands, which have the potential to provide substantial sequestration. Setting a cap on claims under Article 3.4 is seen as a purely political device, but it would probably best represent the reality of the state of the negotiations.

Debate over these issues was largely the reason for the negotiations breaking down at CoP6 in November 2000. However, there are major differences over other issues relating to sinks. The most important is whether sinks should be included in the Clean Development Mechanism (CDM). Some Parties believe that projects that increase sequestration through reforestation or other forms of revegetation would have multiple benefits for both the host nation and the Annex 1 partner. However, there is considerable concern whether such projects could be reliably maintained into the future (permanence), whether they might be ineffective as they simply divert sequestration that would have happened in forestry activity elsewhere (leakage) and sovereignty issues in that large areas of developing countries would come under a perpetual lien to a developed country (sovereignty). The biggest debate is about projects that seek to avoid deforestation. Such projects suffer from all of the concerns listed above and have the problem that the amount involved has the potential to be enormous (i.e. much of the 1.6 Gt C emitted each year from deforestation, Fig.l).

Australia faces several particular issues in completing the CoP6 negotiations. One relates to what has been called in Australia vegetation thickening. This describes the increase in density of trees and woody shrubs in grazing lands. The bulk of scientific opinion attributes this to the reduction in grass density under grazing and the subsequent reduction in competition for tree and shrub seedlings. These seedlings are further advantaged by the reduction in fire frequency under current management systems. This gives these woody weeds an advantage over the grasses and leads to vegetation thickening. Some have disputed this mechanism so a debate continues about whether areas subject to this process should be included in accounting for the Kyoto Protocol. The USA proposal under Article 3.4 is likely to focus more attention on this issue as similar processes contribute to their claimed sequestration. The impact on Australia's situation is hard to assess because the extent of the areas affected and amount of carbon involved are poorly known for Australia. The quantitative outcome can have a significant impact on Australia's situation because of the arithmetic associated with Article 3.7 (Noble and Scholes 2000).

Australia has also sought to have revegetation projects with plants other than trees recognised as sequestration activities under the Protocol. This would provide an incentive for projects with multiple benefits such as salinity control with scattered tree plantings or salttolerant woody species, and grazing land rehabilitation with shrubs such as saltbush. There seems to be support for this proposal, which would be picked up in any case if the USA proposal were implemented without significant discounts or thresholds. However, if Australia claims significant sequestration for rehabilitating degraded lands, questions might be raised about whether we are reporting carbon lost in those areas that are still degrading. The actual carbon losses from continuing degradation may well be small, but the costs of implementing an acceptable monitoring program to demonstrate this may be significant.

WHERE ARE WE HEADING?

Sinks in emissions trading

There is already a massive literature on emissions trading (Australian Greenhouse Office, 1999; Sonneborn, 1999). To some, trading is one of the major financial opportunities of the next decade; to others it is the ultimate environmental sell out. There is little question that an international emissions trading system will greatly reduce the cost of meeting Kyoto targets. This reduction arises largely from one-off advantages. The former Soviet Union will hold significant credits during the first commitment period arising mainly from the collapse of high emission and economically inefficient industries. Their sale will reduce the need to make immediate changes in other sectors in industry; hence the strong opposition from many green NGOs and sympathetic Parties. Another major reduction in the cost of compliance will result from the inclusion of sink activities in an international trading mechanism. Many studies have been done and the projected prices for carbon in the first commitment period from different studies of similar scenarios vary by more than an order of magnitude (from a few US dollars to over $US100; Missfeltd and Haites unpublished). Nevertheless, all show that the costs of compliance will be lower as increasingly comprehensive inclusion of sinks occurs (Table 2).

In Australia, the most critical issue is whether we can claim a credit for reducing land clearing. Current estimates of emissions in 1990 from land clearing are about 80 Mt CO2 per year.

Table 2. The effect of different options for including terrestrial sinks in emissions trading systems on the estimated cost of compliance with the Kyoto Protocol in the first commitment period (from Missfeldt and Haites unpublished). The base case (1) assumes that no terrestrial sinks are included in compliance with the Kyoto Protocol, while case 6 assumes that a wide range of sinks art allowed under both Articles 3.3 and 3.4, sinks are included in the CDM and full trading is allowed.

If this is reduced to only about 25 Mt CO, per year, which is a feasible, although politically difficult goal, and some simple additional sink activities continue, then emissions from Australian industry can rise from 320 Mt CO, per year in 1990 to about 435 Mt CO2 per year in the first commitment period. However, in the second commitment period, these reductions from reducing land clearing will no longer be available and it is also likely that Australia's target will be more severe than +8%. This will mean that industry emissions will have to stabilise or fall by the end of the second commitment period in 2017. Thus, it is imperative that Australian industry seeks greater carbon efficiency very soon so that the time bought by any use of sinks mechanisms is not squandered.

All sinks have a limited capacity. Land clearing can only be reduced to zero and there is a limit to how much carbon can be stored in terrestrial ecosystems. Ocean storage remains problematic with great scientific uncertainties and major legal issues. The total capacity to store carbon in terrestrial ecosystems is estimated to be about 250 Gt C and this is likely to be reduced significantly through competition for other land uses. At current rates of increase in the use of fossil fuels, this means that sinks can make a significant contribution to curbing the increase in atmospheric CO2 concentrations for 20 years or so. Geological sequestration has the capacity to store another several hundred Mt C, which will extend the effectiveness of sinks in general for another decade or so. However, it is essential that we move to more carbon efficient energy systems before then. Scenarios that lead to stabilisation of atmospheric greenhouse gases at levels that contain projected climate change within safe bounds require much tougher targets to be implemented before the middle of this century.

There is also another sleeper that has yet had little impact on policy negotiations. There is accumulating scientific evidence that by the second half of this century the uptake of carbon by terrestrial ecosystems in response to CO2 fertilisation, warming, nitrogen deposition and changes in forest age structures will slow and start to decline. This will mean that we will have to run harder merely to keep up. Sinks, both biological and geological, can buy us several decades of time for the necessary technological and commercial changes, but they cannot forestall the inevitable need to reduce the emission of greenhouse gases to the atmosphere to rates that are significantly lower than those today.

APPENDIX 1

Extracts from Article 3 of the Kyoto Protocol : From http://www.unfccc.de/resource/convkp.html

3) The net changes in greenhouse gas emissions by sources and removals by sinks resulting from direct human-induced land-use change and forestry activities, limited to afforestation, reforestation and deforestation since 1990, measured as verifiable changes in carbon stocks in each commitment period, shall be used to meet the commitments under this Article of each Party included in Annex I. The greenhouse gas emissions by sources and removals by sinks associated with those activities shall be reported in a transparent and verifiable manner and reviewed in accordance with Articles 7 and 8.

Prior to the first session of the Conference of the Parties serving as the meeting of the Parties to this Protocol, each Party included in Annex I shall provide, for consideration by the Subsidiary Body for Scientific and Technological Advice, data to establish its level of carbon stocks in 1990 and to enable an estimate to be made of its changes in carbon stocks in subsequent years. The Conference of the Parties serving as the meeting of the Parties to this Protocol shall, at its first session or as soon as practicable thereafter, decide upon modalities, rules and guidelines as to how, and which, additional human-induced activities related to changes in greenhouse gas emissions by sources and removals by sinks in the agricultural soils and the land-use change and forestry categories shall be added to, or subtracted from, the assigned amounts for Parties included in Annex I, taking into account uncertainties, transparency in reporting, verifiability, the methodological work of the Intergovernmental Panel on Climate Change, the advice provided by the Subsidiary Body for Scientific and Technological Advice in accordance with Article 5 and the decisions of the Conference of the Parties. Such a decision shall apply in the second and subsequent commitment periods. A Party may choose to apply such a decision on these additional human-induced activities for its first commitment period, provided that these activities have taken place since 1990.

7) In the first quantified emission limitation and reduction commitment period, from 2008-2012, the assigned amount for each Party included in Annex I 'shall be equal to the percentage inscribed for it in Annex B of its aggregate anthropogenic carbon dioxide equivalent emissions of the greenhouse gases listed in Annex A in 1990, or the base year or period determined in accordance with paragraph 5 above, multiplied by five. Those Parties included in Annex I for whom land-use change and forestry constituted a net source of greenhouse gas emissions in 1990 shall include in their 1990 emissions base year or period the aggregate anthropogenic carbon dioxide equivalent emissions by sources minus removals by sinks in 1990 from land-use change for the purposes of calculating their assigned amount.

REFERENCES

AUSTRALIAN GREENHOUSE OFFICE (1999)-National emissions trading: establishing the boundaries. Discussion paper No. 1, Commonwealth of Australia, Canberra.

BOLIN B. AND SUKUMAR, R. 2000-Global perspective, In Land use, Land-use Change, and Forestry: An IPCC Special Report. In Watson, R.T. et al (eds), Cambridge University Press, Cambridge, pp XX.

MITCHELL, J.F.B AND KAROLY, D.J. 2001-Detection of climate change and attribution of causes. In Intergovernmental Panel on Climate Change Third Assessment Report, Working Group I, in press.

NOBLE, I.R. AND SCHOLES, R. J. 2000-Sinks and the Kyoto Protocol. Climate Policy 1,1-23

SONNEBORN, C.L. 1999-An overview of greenhouse gas emissions trading pilot schemes and activities. (Article) Ecological Economics. 31,1-10.

WATSON, R.T., NOBLE ,I.R., BOLIN, B., RAVINDRANATH, N.H., VERARDO, D.J. AND DOKKEN, D.J. (2000)-Land use, land-use change, and forestry: An IPCC Special Report. Cambridge University Press, Cambridge, 377. http:// www.ipcc.ch