In planning for arrangements post-Kyoto Protocol, that is after 2012, it is instructive to bear in mind how the CDM came to be adopted. When the inclusion of LULUCF in the Kyoto Protocol was agreed, there were no specific rules as to how removals and emissions by land use, land-use change and forestry (LULUCF) would be accounted for. The Protocol needed to be operationalized, and this was done through a series of conferences of the parties, or COPs. Hohne et al. (2007) provide a history of the negotiations that led to the adoption of rules for LUCF.
Perhaps the most contentious single issue in negotiations of the Kyoto Protocol was the inclusion of forestry sinks. The earliest formal proposals to count forestry proposals towards emission limits were from the US and New Zealand. However, the ability to use sinks was seen by some countries as a potential loophole by which industrialized countries could postpone the implementation of domestic policies to reduce their greenhouse gas emissions; it would also result in the delay of the development of new technology. Issues of leakage, where emissions are reduced in one place but lead to an increase elsewhere, and of permanence, given the carbon sequestered in forests can easily be released back to the atmosphere, also loomed large.
In contrast, the US and Latin American countries maintained that investment in the forest sector was important to halt deforestation and to diversify the income opportunities of local communities through reforestation (Boyd et al., 2008). Moreover, many forestry projects under Activities Implemented Jointly had already been tested (UNFCCC, 2002). It has been suggested that without the inclusion of sinks, the Kyoto Protocol would not have been successfully negotiated (Boyd et al., 2008).
A special report by the International Panel on Climate Change (IPCC, 2000) provided definitions of terms and accounting rules for LULUCF activities. In 2001 the Marrakesh Accords finally decided on the inclusion of A/R in the CDM and in the commitment period 2008-2012, but avoided deforestation was excluded. Included in the agreements negotiated was that losses from LULUCF from several land-use types must be included in the commitments of Annex B countries, that is those subject to caps. Under Article 3.4 of the Kyoto Protocol and the Marrakesh Accords of COP 7, countries may choose to account for carbon stock changes due to forest management (FM), cropland management, grazing land management (GM) or revegetation (RV).
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