Is A Tonne Of Co2e A Tonne Of Co2e

Emission allowances to countries, and to emitters within countries, are in terms of carbon dioxide (CO2) equivalent. The major greenhouse gases are rated for their global warming potential and converted to CO2e, which is the commodity traded in the world's carbon markets. The workings of the markets for emission allowances and the role and potential for forestry in those markets are analyzed in Chapter 1. In assessing the potential role and importance of forestry the chapter finds that there is great range in forecasts in the literature, prompting attempts at clarification in later chapters.

The question that heads this section needs to be asked because the potential market is for billions of tonnes CO2e, withdrawn or withheld from the atmosphere and stored as carbon in forests' biomass. Markets can work well if the commodity being traded is divisible, uniform and capable of accurate description. However, every forest differs and every tree in it, and so does the amount of atmospheric CO2e a tree extracts, and is expected to extract, over time. Another complicating factor when we come to estimating the carbon in forests, and hence how much CO2e has been removed, is the amount of carbon in soils and how this changes when we establish plantations. Chapter 5 discusses the sophisticated measurement techniques that need to be deployed in estimating the carbon in tracts of native forests, something that is crucial if payments are to be made for the conservation of forest carbon in the tropical zone. The chapter also emphasizes the importance of ground-truthing these estimates; a case study shows how the amount of carbon in forests can be confirmed by physical measurement.

It is known with accuracy how much CO2e is released by burning a gallon of gasoline. However, buyers may not have such confidence in the amount of CO2e removed by a forest in a reforestation or a tropical forest, even after the carbon in the trees is measured. Buyers' confidence may be eroded by the knowledge that there is a risk that a proportion of the forest's carbon may be released any time back into the atmosphere as CO2e, as a result of fire, disease, accidental clearing or climate change. In these circumstances, potential investors in forest carbon have every right to discount its value. A recurrent theme in the book is how markets cope, or fail to cope, with the idiosyncratic nature of forest carbon sinks.

Chapter 2 focuses on the role of forestry in international markets created under the Kyoto Protocol, including those that give flexibility to the developed nations by allowing then to mount forestry projects in other developed and in developing countries. Questions are raised about the architecture of the existing schemes and whether the market is able to deliver the volume of projects that will allow forestry to make a telling contribution to tackling climate change. A conclusion is that the rules governing forestry in the Kyoto Protocol should be changed only at the margin to eliminate inconsistencies. If the global price of carbon rises, for example as a result of deeper global cuts in global emissions agreed at the Copenhagen conference in December 2009, the interest in afforestation and reforestation will increase from its present low level. However, it is argued that the inherent nature of forestry (as reflected in unfavorable prices, costs and risks) means that afforestation and reforestation under the Protocol is likely to remain less attractive to private investors than other types of offsets.

The informal markets are developing quite outside the formal architecture of the Kyoto Protocol and official domestic climate change policies of countries. These so-called 'voluntary' markets allow investors anywhere, large and small, to buy into projects that are conserving carbon in new forests or that are protecting forests. By doing so they offset a quantity of their own emissions. These types of investors can be distinguished from the corporates responding to taxes or caps on emissions in that their motivation for investing is pure altruism, desire to create a favorable image, reduce guilt, or a combination of all three. Chapter 3 reports on research that delves into the rather chaotic voluntary market and finds that most voluntary forestry offsets are sold before they have been verified as existing, that is before the trees have had a chance to grow; that is they are offsets not only in space but also in time. In fact these offsets are commonly sold on the basis that they will be still sequestering carbon in 100 years' time, so that the question 'Is a tonne of CO2e sequestered in a forestry offset a tonne of CO2e?' is a very relevant one. While progress is being made in the forestry offset market in defining its product, there are still improvements to be made in the verification that carbon has actually been sequestered. This would increase the confidence of buyers of forestry offsets.

The protection of the world's remaining biodiversity in the face of the rapid clearing of forests could be said to be one of the greatest challenges of our time. Yet there is no integrated international effort backed by finance to curb it. Chapter 4 asks the question whether the markets for forestry offsets and the accompanying rapid increase in afforestation and reforestation will benefit biodiversity, given that the market rewards carbon sequestered but not biodiversity conserved. It does this through case studies of projects in both developed and developing countries.

Liquid biofuels will increasingly replace fossil fuels in transport. The use of biofuels derived from cellulose, including from wood, is a technique that delivers impressive greenhouse gas savings per gallon compared to the level of emission savings from crops, as detailed in Chapter 6. The commercialization of such 'second generation' processes will take time, however, and the price of carbon, or subsidies, will need to be high for them to fulfill their promise.

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