Protecting terrestrial ecosystems and the climate through a global carbon market

Abstract

Protecting terrestrial ecosystems through international environmental laws requires the development of economic mechanisms that value the Earth's natural systems. The major international treaties to address ecosystem protection lack meaningful binding obligations and the requisite financial instruments to affect large-scale conservation. The Kyoto Protocol's emissions-trading framework creates economic incentives for nations to reduce greenhouse-gas (GHG) emissions cost effectively. Incorporating GHG impacts from land-use activities into this system would create a market for an important ecosystem service provided by forests and agricultural lands: sequestration of atmospheric carbon. This would spur conservation efforts while reducing the 20% of anthropogenic CO(2) emissions produced by land-use change, particularly tropical deforestation. The Kyoto negotiations surrounding land-use activities have been hampered by a lack of robust carbon inventory data. Moreover, the Protocol's provisions agreed to in Kyoto made it difficult to incorporate carbon-sequestering land-use activities into the emissions-trading framework without undermining the atmospheric GHG reductions contemplated in the treaty. Subsequent negotiations since 1997 failed to produce a crediting system that provides meaningful incentives for enhanced carbon sequestration. Notably, credit for reducing rates of tropical deforestation was explicitly excluded from the Protocol. Ultimately, an effective GHG emissions-trading framework will require full carbon accounting for all emissions and sequestration from terrestrial ecosystems. Improved inventory systems and capacity building for developing nations will, therefore, be necessary.

Accounting for carbon sequestration and its implications for land-use change and forestry projects.

“…Two types of systems for carbon transactions exist: a capand-trade system, which distributes allowances that must be used by entities under the cap to cover their emissions; and a credit system, where credits are earned by reducing emissions below a baseline [59]. If a participant in the market can reduce emissions below its cap, it can bank (carry forward) or sell its allowances [77]. By permitting trade, the system encourages the most efficient operators to reduce emissions and results in a lower-cost abatement strategy than would occur under fixed individual targets.…”

“…In forest projects, measuring costs can be as low as $0.28/Mg C, but achieving this requires a nationwide system of permanent sampling plots [77], and this sort of system does not exist in many countries.…”

“…The challenges of baseline calculation and leakage do not pertain solely to carbon-sequestration projects [77], and the uncertainty associated with carbon measurement in LUCF projects does not need to eliminate them from the market. A trading system can operate as long as the measurement process is accepted by the market [59].…”

“…Bonnie et al (p. 1863) state: 'For a market to operate effectively, carbon-sequestration credits must not only be measurable, they must also be fungible with credits produced in other sectors of the economy' [77]. A full carbon-accounting system that monitors all carbon stocks permanently is the preferred option [77,81], particularly if avoided deforestation is to be eligible [11].…”

Biodiversity, climate, and the Kyoto Protocol: risks and opportunities

“…2002; Figure 6) Capturing some of the lowest‐cost carbon mitigation opportunities available Spurring sustainable economic activity in the underdeveloped regions where biodiversity‐rich habitats exist, by generating project‐associated employment opportunities and a revenue stream from trading the “carbon services” derived from these protected habitats (Petsonk 1999; Tietenberg et al . 1999; Bonnie et al . 2002) Maintaining resilient ecosystems (Folke .…”