Choice of method

This section provides:

1. Guidance on when it is consistent with good practice to report a HWP Contribution value of zero; 6

2. Guidance on when it is consistent with good practice to assume that the annual change in HWP carbon in SWDS is zero (i.e., assume annual carbon release from SWDS is the same as HWP additions to SWDS); and

3. Three tiers of methods to estimate the five HWP variables which may be used to compute HWP Contribution. Figure 12.1 presents a decision tree as a guide in making these choices.

The HWP Contribution can be reported as zero if the inventory compiler judges that the annual change in carbon in HWP stocks is insignificant. Either the stocks in the country (Variable 1A + Variable 1B), or the annual change in carbon in HWP stocks originating from wood harvested in the country (including exported HWP) (variable 2A + variable 2B) may be considered. The term 'insignificant' in this context means that the annual change in carbon in HWP stocks, using one of the measures of carbon change above, is of a comparable size to a key category. Countries are encouraged to use the Tier 1 methods to estimate HWP variables to aid in judging if the annual change is insignificant. Parties that wish to report HWP contribution to AFOLU where the focus is on carbon fluxes to and from the atmosphere may want to report HWP even where there is no significant stock change.

If an inventory compiler judges that the annual change in carbon in total HWP stocks is significant, they may still separately judge if the annual change of HWP carbon in SWDS is significant. If it is not significantly increasing or decreasing it may be assumed to be zero (Variables 1B and 2B are zero). It is suggested that an estimate be made if annual change in carbon in TOTAL HWP stocks is likely to be of a comparable size to other

6 This guidance replaces the guidance in the 1996IPCC Guidelines on when to report HWP contribution of zero.

key categories. Countries are encouraged to use the Tier 1 methods to estimate HWP variables to aid in judging if the annual change in SWDS is insignificant.

If the annual change in HWP carbon stocks are judged to be significant, or a country chooses to make estimates, then one of three tiers may be selected to make estimates of the five HWP variables to make an estimate of HWP Contribution. Tier 1 uses forest products data from FAO (the default activity data) which are freely and easily available to most countries. The Tier 1 method specifies that changes in carbon held in SWDS (Variables 1B) is to be calculated using the Waste Sector Tier 1 methods, default data, and worksheets. A Tier 1 method is provided to estimated Variable 2B from Variable 1B.

The decision tree in Figure 12.1 indicates how to choose a Tier to estimate HWP Variables on the basis of data availability. Default data are provided for Tier 1. Tiers 2 and 3 aim to improve the accuracy of the estimates by using more accurate country-specific data and methods.

Until the Parties to the UNFCCC decide on the approach to be used, it will not be possible to identify definitively whether or not HWP is a key category, since the magnitude of the HWP Contribution depends on the approach chosen. Thus, whether or not the sector is a key category cannot be used to guide the choice of tier. In order to facilitate current reporting and allow for future decisions, there are two options. First, they could elect to use a particular approach and determine if this is a key category in the normal way, according to guidance provided in Volume 1, Chapter 4. Alternatively, they could use their judgment to determine if the source is likely to have a significant (equal or greater than other key categories) impact on the national greenhouse gas emission estimates. If the source is judged to be significant, then a Tier 2 or 3 method should be used.

HWP Variables 1A, 2A, 1B and 2B are estimates of annual changes in stock of HWP carbon which are each estimated using a flux-data method with lifetime-analysis. The decay of HWP is assumed to be of first-order 7. This means the annual loss from the stock of products is estimated as a constant fraction of the amount of the stock. Estimates of change of carbon held in "products in use" (Variables 1A and 2A in Table 12.1), are made by tracking inputs to and outputs from the "products in use" carbon pool. The carbon inflow to the pool is estimated from historical production or consumption rates of HWP. Waste Sector Tier 1 methods are used to estimate change in HWP carbon stock in SWDS (Variable 1B) (see Volume 5, Chapter 3). A Tier 1 method is provided to estimated Variable 2B from Variable 1B.

In the case of the "products in use" pool, the outflow from the pool is calculated based on estimated half-life and associated decay rates of HWP from use assuming first-order decay rates.

The intent is to provide valid estimates of the total release of carbon from HWP for any UNFCCC reporting year. This requires knowledge of change to the total existing HWP pool. In the absence of surveys or census data of HWP in use, it is recommended that inputs to and outputs from HWP stocks since 1900 are used in order to make valid estimates for recent years. Excluding current year carbon release or stock change associated with HWP placed in use in years prior to the reporting period would overestimate current year net additions to HWP carbon stocks (underestimate current year carbon release), and would therefore not be consistent with the Good Practice Guidance objective to neither over- nor under-estimate as far as can be judged. 8

Data beginning in 1900 are used to estimate additions to HWP in use while the discard from use of this HWP is estimated assuming a first order decay. This procedure is needed to produce an estimate of the existing HWP stock accumulated from historical wood use, and hence the current year carbon release from the total stock as it goes out of use (also termed "inherited emissions").

HWP Variables 3, 4 and 5 (i .e., Pim, Pex, and H, respectively) are estimates of carbon in annual product imports and exports, as well as carbon in annual harvest for products and fuelwood. They are estimated by adding together - aggregating - various forest products variables from the FAO database.

7 Other decay profiles have been suggested (Ford-Robertson, 2003) and these could be used in place of the FOD assumption. In this case the estimation procedure would differ from Equation 12.1 and the decay of each year's Inflow would be tracked individually up to the current year. The remaining discussion about default data would still apply.

8 The year 1900 was chosen based on the judgement that contributions to the current year HWP Contribution due to products entering the product pool prior to 1900 would be insignificant, therefore to exclude years prior to 1900 would not violate good practice neither over- nor under-estimate as far as can be judged.

Figure 12.1 Decision tree for reporting an HWP Contribution of zero or selecting a tier.

Figure 12.1 Decision tree for reporting an HWP Contribution of zero or selecting a tier.

Policy Factors
Box 1: Tier 1

GENERAL METHOD TO ESTIMATE VARIABLES 1A AND 2A -- ANNUAL CHANGE IN CARBON STOCK IN "PRODUCTS IN USE"

Estimation of changes in carbon stock in "products in use" may be obtained by using Equation 12.1:

Equation 12.1

Estimation of carbon stock and its annual change in HWP pools of the reporting

COUNTRY

Starting with i = 1900 and continuing to present year, compute

(A) C(i +1) = e~k • C(i) +

k

• Inflow(i) with C(1900) = 0.0

( B) AC (i) = C (i +1) - C (i)

Note: For an explanation of technique used in Equations 12.1A to estimate first-order decay see

Pingoud and Wagner (2006).

C(i) = the carbon stock of the HWP pool in the beginning of year i, Gg C

k = decay constant of first-order decay given in units, yr-1 ( k = ln(2) / HL, where HL is half-life of the HWP pool in years. A half-life is the number of years it takes to lose one-half of the material currently in the pool.)

Inflow(i) = the inflow to the HWP pool during year i, Gg C yr-1

AC(i) = carbon stock change of the HWP pool during year i, Gg C yr-1

Estimating Variable 1a - Annual change in carbon stock in "product in use" in the reporting country

Equation 12.1 is used to estimate carbon change in each of two pools in the Tier 1 spreadsheets (discussed below). The two pools are:

1. Solidwood products in use; and

2. Paper products in use.

Where products in use are held in the reporting country, more than one pool is used because it is believed there is a significant difference in half-life of products in use between the two pools. Annual change in these two carbon pools, when added together, gives Variable 1A. The carbon Inflow variable to these pools is from annual consumption in the reporting country of semi-finished wood products, including sawnwood, wood panels and other solidwood products or paper and paperboard. Consumption equals domestic production plus imports minus exports as shown in Equation 12.2. The rate at which solidwood or paper is lost from the pools in a given year is specified by a constant loss rate (k) and for convenience is also specified by half-life in years. A half-life is the number of years it takes to lose one-half of the material currently in the pool. Production, imports and exports of solidwood or paper are converted from cubic meters or air dry Gg to tonnes of carbon (see Table 12.4).

Equation 12.2

Estimation of HWP products produced annually from domestic consumption

Where:

InflowDC = carbon in annual consumption of solidwood or paper products that came from wood harvested in the reporting country (that is, from domestic harvest), Gg C yr-1

P = carbon in annual production of solidwood or paper products in the reporting country, Gg C yr-1

SFPim and SFPEX = imports and exports of semi-finished wood and paper products. For solidwood this includes sawnwood, panels, and other industrial roundwood. For paper products this includes paper and paperboard, Gg C yr-1

In order to make estimates of change in these pools for the reporting year, the method uses data on Inflow (Product Consumption = Production + Imports - Exports) back to 1961 from the FAO database 9 For the period prior to 1961 back to 1900, it is assumed that change in consumption prior to 1961 was the same as change in industrial roundwood production for the region the country is in. Data and parameters used are as follows:

• FAO variables used to estimate product consumption are shown in Table 12.5.

• Default factors to convert solidwood and paper from volume units to carbon units is shown in Table 12.4. Countries are encouraged to estimate factors using wood densities in Tables 4.13 and 4.14 in Chapter 4 (Forest Land).

• Regional rates of change in industrial roundwood production prior to 1961 are show in Table 12.3.

• Half-lives for products in use are shown in Table 12. 2

The rest of harvested wood material transported from the harvest site - any material except the semi-finished products noted above - is assumed to be oxidized in the year of harvest, and it is thus not transferred to the HWP pools.

Estimating Variable 2a - Annual change in carbon stock in "products in use" where wood came from harvest in the reporting country (includes exports)

General Equation 12.1 is used again to estimate carbon change in each of two pools (as for Variable 1A) in the Tier 1 spreadsheets to estimate the annual change of carbon in solidwood and paper products in use separately where wood to make the products came from wood harvested in the reporting country (domestic harvest). This includes products exported and held in use in other countries. Annual change in carbon stock in solidwood products in use and paper products in use reservoirs when added together give Variable 2A. The Inflow variable to these pools is the production of all products from wood harvested in the reporting country.

This annual carbon inflow variable is estimated using Equation 12.3. If the ratio in parenthesis is <1 then the country is a net importer of industrial roundwood (IRW), wood chips and wood residues that are used to make products and less than the full amount of HWP produced (P) would have used domestically harvested IRW. If the ratio in parenthesis is >1, then this means there is a net export of IRW, chips, and residues by the country. The HWP production inflow calculated by the equation needs to be greater than HWP production (P) in this case because exported wood is used to make products in other countries. The implicit assumption being used is that the importers of the exported IRW, chips and residues will use them to produce solidwood or paper products in the same proportion as in the reporting country.

Equation 12.3

Estimation of HWP products produced annually from domestic harvest

InflowDH = P •

" irwh '

IRW h + irwM - irwEX + WCHIM - wchEX + wrM - wrEX _

InflowDH = carbon in annual production of solidwood or paper products that came from wood harvested in the reporting country (that is, from domestic harvest), Gg C yr-1

P = carbon in annual production of solidwood or paper products in the reporting country, Gg C yr-1. Note that paper product production includes wood fibre and excludes non-wood fibre. An equation to estimate the wood fibre in paper products production is shown in Note 1 of Table 12.5.

IRWH = industrial roundwood harvest in the reporting country. This is the harvest of wood to make solidwood and paper products including IRW for export. [The FAO variable is called Industrial RW Production], Gg C yr-1

IRWim , IRWex = industrial roundwood imports and exports, respectively, Gg C yr-1

WCHim, WCHex = wood chip imports and exports, respectively, Gg C yr-1

WRim, WRex = wood residues from wood products mills imports and exports, respectively Gg C yr-1

Just as for Variable 1A, estimates of annual change in the two product-in-use pools require data on total product production, and industrial roundwood production, imports and exports from the current year back to 1900. As for

9 See http://faostat.fao.org/

Variable 1A, FAO data are used back to 1961 and data back to 1900 is estimated by assuming the annual rate of change from 1900 to 1961 is the same as the annual rate of change in industrial roundwood production between 1900 and 1961.

The half-life values for product-in-use pools are assumed to be the same as for variable 1A and the carbon conversion factors are assumed to be the same. Data and parameters used are as follows:

• FAO variables used to estimate total product production and industrial roundwood production, imports and exports are shown in Table 12.5.

• Default factors to convert solidwood and paper from volume units to carbon units are shown in Table 12.4. Countries are encouraged to estimate factors using wood densities in Tables 4.13 and 4.14.

• Regional rates of change in industrial roundwood consumption prior to 1961 are shown in Table 12.3.

• Half-lives for products in use are shown in Table 12. 2

Estimating Variables 1B and 2B - Annual change in carbon stock in SWDS in the reporting country; and Annual change in carbon stock in SWDS where wood came from harvest in the reporting country

Tier 1 methods are provided to estimate accumulation of HWP carbon in SWDS because a number of studies have indicated very long storage times for HWP carbon in SWDS in some cases (NCASI, 2004; Gardner et al., 2002; Micales and Skog, 1997).

Variable 1B, ACHWP SWDS i.e., the carbon stock change of HWP from domestic consumption discarded to SWDS of the reporting country is estimated directly by the Waste Sector Tier 1 methods and spreadsheets (Volume 5, Chapter 3, Section 3.2.1.1 "Spreadsheet model" and Section 3.4). The Waste Sector guidelines explain how to use Waste Sector default data and parameters to estimate the amount of solidwood and paper carbon that accumulates in SWDS in the reporting country. A key point about the Waste Sector Tier 1 estimate is that it estimates carbon change in SWDS by identifying the portion of carbon discarded to SWDS in the current year which is judged to have originated as HWP. It is assumed that HWP carbon equates to the "garden", "wood" and "paper" waste categories. The spreadsheet gives the amount of "long-term" stored carbon from HWP in the "HWP" sheet. The individual waste type sheets give the amount of decomposable, degradable organic carbon stored. Together these give the change in the amount of stored HWP carbon. No carbon release to the atmosphere is reported from this long-life pool in the SWDS Chapter.

To estimate Variable 2B, ACHWP SWDSdh, it is necessary to estimate the portion of Variable 1B that is from domestic harvest. The Tier 1 estimate of Variable 2B is limited to estimating the carbon change in domestic SWDS only. It is judged that potential Tier 1 methods to estimate carbon change in SWDS in other countries could lead to substantial over- or under-estimates so it is best to not include an estimate of carbon change in SWDS in other countries.

The portion of Variable 1B that is from domestic harvest is approximated by multiplying by the fraction of wood carbon consumed in the country in the current year that came from domestic harvest (Equation 12.4). This ratio will be a reasonable approximation of the fraction of HWP carbon discarded to SWDS that came from domestic harvest if imported wood material has been a relatively stable fraction of all wood consumed over a period of years.

Equation 12.4

Estimation of annual change in carbon in HWP in domestic SWDS where HWP came

FROM DOMESTIC HARVEST

ACHWP swdsdh — ACHWP swdsdc •

1 i Imported wood material | ^ Produced wood material + Imported wood material J

Imported wood material —

~IRWm + WCHm + WRim + SawnWIM + WPanIM +~ P&PBIM + WPulp&RecPapIM

Produced wood material = IRWH

ACHWp swdsdh = Variable 2B = annual change in carbon in HWP in domestic SWDS where HWP came from domestic wood harvest, Gg C yr-1 ACHWp swds dc = Variable 1B = annual change in carbon in HWP in SWDS in the reporting country, Gg C

yr-1

IRWH and IRWIM = industrial roundwood harvest in the reporting country and industrial roundwood imports, respectively, Gg C yr-1

WCHIM = wood chip imports, Gg C yr-1

WRIM = wood residues from wood products mills imports, Gg C yr-1 SawnWIM = sawn wood imports and, Gg C yr-1 WPanIM = wood panel imports, Gg C yr-1 P&PBim = paper and paperboard imports, Gg C yr-1 WPulp&RecPapIM = wood pulp and recovered paper imports, Gg C yr-1

Data to be used for Equation 12.4 are FAO variables shown in Table 12.5.

Estimating Variables 3, 4, and 5 - Annual imports and exports of HWP to and from the reporting country, and annual HWP harvest

Estimates of annual imports, exports and harvest for Variables PIM, PEX, and H are needed for the most recent years only (see Annex Equations 12A.3 and 12A.4). No data are needed for years before the reporting period. Default import, export and harvest data may be obtained from the FAOSTAT database. The specific FAO variables that are needed are shown in Table 12.5. Factors to convert from cubic meters or air dry tonne of product are shown in Table 12.4.

H (Variable 5), total annual HWP harvest, is defined here as all wood and bark that leaves harvest sites including fuelwood. It is intended to include the total of the Lwood-removals and Lfuelwood values as defined in Volume 4, Chapter 2, Equations 2.12 and 2.13. Guidelines for estimation of Lwood-removais and Lfueiwood for Forest Land is in Volume 4, Chapter 4, Section 4.2.1. Default estimate for this variable is the FAO database value for industrial roundwood times a bark expansion factor plus the FAO database value for fuelwood. A default bark expansion factor is shown in Table 12.5, Note 4.

Spreadsheet MODELS: step by step guidance

The IPCC Harvested Wood Product Model: Estimating Variables 1A, 2A, 2B, 3, 4, and 5

The model may be used to estimate the HWP variables and produce Table 12.7 which may be used to fill in AFOLU Sectoral Background Table 3.10. Default parameters are already included to make Tier 1 estimates or may be changed to make Tier 2 estimates. Variable 2B may be estimated if Variable 1B has been estimated using the Waste Sector Tier 1 spreadsheets.

Here are general instructions on how to use the model spreadsheet to estimate the HWP variables and generate Table 12.7 and AFOLU Sectoral Background Table 3.10. Please see detailed instructions under the "Instructions" tab of the model spreadsheet.

1. Download country activity data (wood and paper products production, imports and exports) from the FAOSTAT web site and place in columns of one of the "Data" sheets (years 1961 to reporting year).

2. Transfer estimates of carbon stored in SWDS from the Waste Sector Tier 1 Model spreadsheet to the last two columns of the same "Data" sheet (years 1990 to reporting year as needed).

3. Type the country name in cell A1 of the Data sheet.

4. Check / change default parameters as needed that are shown in yellow in the "Parameters" sheet.

5. See results in a completed Table 12.7 on the sheet named "Result". Results from this table may be transferred to the AFOLU Sectoral Background for Harvested Wood Products in Table 3.10.

6. See detailed results in tables, graphs, and diagrams in "Parameters" and "Result" sheets.

Waste Sector Tier 1 Model: Estimating Variable 1B

To prepare the estimate of carbon stored in HWP in the reporting country that can be inserted in the model spreadsheet, see Volume 5, Chapter 3, Section 3.2.1.1 "Spreadsheet model" and Section 3.4. In Section 3.2.1.1 there is a link to the spreadsheet model. Details on how to use the model can be found in the "Instructions" spreadsheet.

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