Forestry in the climate change policies of selected developed countries

This chapter reviews the national policies that have been adopted by developed countries for the mitigation of greenhouse gases (GHGs) and the role of forestry within those policies. Climate change policy is dynamic, and discussions are well underway on the international framework that will replace the Kyoto Protocol, post-2012. While land-use change and forestry (LUCF) are mechanisms for flexibility that are likely to be built into a new protocol, their effectiveness is also dependent on the policies adopted by those countries agreeing to GHG emission cuts.

Cap and trade schemes, rather than tax policies, have emerged as the preferred vehicle for curbing emissions in the US, Europe, Australia and New Zealand. The restriction on allowances to emit GHGs under cap and trade schemes puts a price on the allowances.22 The deeper the cuts required by the caps, the higher the prices of allowances and the greater the demand for offsets from forestry projects that sequester carbon.

Very few countries have announced medium-term targets for emissions or detailed schemes for achieving them. This chapter examines climate change policies in selected developed countries and regions where caps on emissions have been adopted or policies are at a sufficient stage of development to enable the potential role of forestry to be reviewed; these are the Kyoto Protocol's Annex I countries, the US, Australia, New Zealand and the EU. The chapter then examines policies that are in place that cover the execution of forestry projects by developed countries in developing countries. Finally the chapter develops some policy guideposts for forestry in the new international regime that will replace the Kyoto Protocol. The discussion and recommendations are informed by the analysis in previous chapters on the role of forestry in mitigating climate change.

Annex B countries that have ratified the Kyoto Protocol (at the time of writing, all major industrialized countries except the US) have agreed to reduce their emissions by an average of 5.2 percent by 2012, compared with 1990 levels.23 The ability of Annex B countries to trade their allowances, or assigned amount units (AAUs) (each equal to one tonne of carbon dioxide equivalent, CO2e), allows them to lower national costs of compliance with their caps, as explained in Chapter 1. Similarly, where domestic policy allows, the forest sector can generate allowances for sale, while industries subject to caps can offset their emissions by buying into forestry projects at a lower cost than by abating their own emissions. The Kyoto Protocol already allows developed countries to offset their emissions in other developed countries and in developing countries. Forestry is one option amongst an array of possible offsets that include fuel switching and the adoption of renewable energy technologies.

The US was until recently, when it was overtaken by China, the country with the greatest greenhouse gas emissions, so its policies will be crucial in meeting global targets for GHG emissions. Twenty-eight US states and Canadian provinces have already developed cap and trade policies but, while President Obama is intent on cutting US greenhouse gas emissions, a cap and trade bill needs to pass Congress. The European Union is a large economic bloc containing 27 countries which already operates within the world's first scheme and presently by far the largest: the EU emission trading scheme (EU ETS).

Australia has the distinction of being the highest emitter of greenhouse gases per person. It also has vast forests and lands capable of supporting plantations. Its imminent introduction of a carbon pollution reduction scheme provides insights into the role of forestry and the mechanics of its incorporation into domestic climate change policy. New Zealand has also framed a cap and trade scheme that includes forestry.

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