Harvested material from forests and farms end up in a variety of product streams. Some are relatively short-lived such as food or pulp and paper. Others may remain 'stored' for decades or centuries such as lumber used in buildings or furniture. Schlamadinger and Marland (1999) provide some estimates and discuss issues related to carbon in the product stream. This raises the question that in harvesting a forest, should harvested product be tracked until it actually decomposes, and only then be counted as an emission of carbon requiring an allowance? In principle, the answer is 'yes' because this would provide an incentive to not finally dispose of these products if they can be salvaged or reused, and would accurately account for the time between harvest and decomposition when the carbon remained out of the atmosphere. In practice, this would require a complex tracking system both of the product and of the owners of the product to ensure that they were liable for emissions if and when they dispose of the product in such a way that the carbon was released to the atmosphere.
Simpler approaches would be to ignore this storage and assume the carbon will return to the atmosphere sooner or later. Another approach is to try to apply an average discounted tonne factor as an offset to the total harvest. Neither approach creates an incentive to prolong the life of carbon stored by not destroying structures or by recycling used lumber, assuming there is value to temporary storage. Crediting via a discounted tonne approach gets us back to the problem of estimating this discount factor, which we rejected earlier.
Bioenergy is a carbon-containing product of vegetation, and it has the potential to become more important as a 'carbonfree' energy source in a carbon-constrained world. It can be carbon-free if the biomass used is from areas where the crops are continually regrown, the carbon in the soil is not being depleted and fossil energy is not used in its production. Given the potential importance of bioenergy as a solution to climate change, getting the incentives on bio-energy right is particularly important. If one simply exempted biomass energy producers from the cap, ignoring emissions that occur in processing and combustion on the basis that these are being taken up by next year's biomass crop, it would provide no incentive to regrow the biomass.3 Schlamadinger and Marland (1999) find that in cases of clear-cutting forest stands with large amounts of biomass the loss of carbon may never return to the predisturbance level even when accounting for energy and long-lived stocks. Similarly, disturbed cropland, as shown in Section 8.3, often has significantly less carbon than in its predisturbed state. To correctly account for such land conversion losses of carbon or non-sustainable management of land, land used to produce biomass would need to come under a cap to provide correct incentives to maintain carbon stocks in soils or in standing vegetation or detritus. Because the bioenergy would be combusted relatively quickly (weeks, months, a few years at most) after production, one could exempt emissions from combustion of the fuel (e.g. at power plant or by vehicles using a liquid fuel) completely. This approach could be applied to other product streams that are short-lived, reducing the monitoring problem to the land parcel without the need to follow the product stream.
The long-lived product streams create a more severe problem of tracking and monitoring. More investigation is needed to determine the importance of long-lived product streams. An important question is whether this carbon pool would be substantially affected by creating proper incentives to manage it. Any gain should then be balanced against the cost of establishing the necessary monitoring and tracking system for the carbon.
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