Project-based activities

Projects that are based on land use, land-use change, and forestry are important means of mitigating greenhouse gas (GHG) emissions. These projects are the required approach for putting some parts of the Kyoto Protocol into practice. In this context, they have special features and raise issues that differ sharply from those relating to GHG accounting at the national level (see Chapters 2, 3, and 4). Although experience has shown that many types of LULUCF projects can mitigate GHG emissions in a cost-effective, measurable, and verifiable manner, there have been questions about the practicality of including LULUCF projects generally within the Kyoto Protocol. These concerns center on the permanence, additionality, leakage, measuring and monitoring, and risks of project-based changes in carbon stocks or GHG emissions. There are also questions about the degree to which LULUCF projects can meet tests for sustainable development and compatibility with national development priorities. This chapter reviews these project-related issues with two aims in mind. The first goal is to provided policymakers and others with broad guidance about the nature of LULUCF projects. What is their potential for meeting national emission reductions commitments, and with what costs? Are some types of projects more or less efficient in producing GHG and other socioeconomic and environmental benefits? How accurately can carbon be measured and monitored, and with what tradeoffs between accuracy and cost? Will the compliance costs of LULUCF projects deter potential investors or create biases for large projects at the expense of small ones? How do LULUCF projects differ from projects in other sectors, such as energy, with respect to key issues such as additionality, leakage, duration, and risks? The GHG mitigation effect of LULUCF projects results from "changes in carbon stocks or GHG emissions;" in this chapter, the terms GHG benefits or carbon benefits are used as shorthand for this phrase. Answers to many of the foregoing questions depend on rules and guidelines that remain to be agreed. The second aim of this chapter, therefore, is to provide information to help policymakers develop internationally agreed rules or guidelines concerning a variety of challenging project-specific issues. The chapter presents and discusses these issues together with relevant scientific information, alternative options, and the implications of these options.