Background
A sink is a natural or manmade system that absorbs greenhouse gases from the atmosphere. To be regarded as a sink, a system must absorb and store more greenhouse gases than it emits. Both articles 3.3 and 3.4 of the Kyoto Protocol deal with sinks, each article is discussed in turn.
Article 3.3 - Forest sinks
Article 3.3 of the Kyoto Protocol refers to a restricted subset of sinks, so called "Kyoto forests."
Kyoto forests are forests established after 1 January 1990 on land that did not contain forest on 31 December 1989.
Carbon stock changes in Kyoto forests must be accounted for over the Kyoto Protocol's first commitment period, the calendar years 2008-2012. Over this period, New Zealand's Kyoto forests will absorb and store significantly more carbon than they emit because of afforestation and reforestation activities undertaken since 1 January 1990. These forests are eligible for 'sink credits.'1
Under the Protocol, permanent removal of forests through 'deforestation2' is treated in the same way as an emission of CO2. New Zealand must account for deforestation emissions from all its forests over the commitment period.
The relationship between forests and emissions under the Kyoto Protocol may have implications for changes to or from certain types of land use. For example, a forest could potentially include stands of manuka/kanuka 'forest'. If manuka/kanuka 'forest' were cleared for non-forest use purposes, then the associated emissions may need to be reported and accounted for. On the other hand, stands of manuka/kanuka that have reverted from pasture land since 1990 could be eligible for sink credits.
Article 3.4 - Additional sink activities
Article 3.4 of the Kyoto Protocol also provides a potential basis for claiming emission units from 'additional' sink activities, where the amount of carbon absorbed and stored as a result of the management of forests, croplands, and grazing lands, and of revegetation activities, has increased since 1990. Additional sink activities include the management of forests established before 1 January 1990 (so called non-Kyoto forests)3. It is not mandatory for countries to account for Article 3.4 activities in the first commitment period 2008-2012. Countries can elect to account for them should they wish.
For forestry the distinction between articles 3.3 and 3.4 is that article 3.3 deals with 'new' forests created since 1990, while article 3.4 deals with management practices for forests established before 1 January 1990.
New Zealand will need to decide whether it will be practical and in our interests to elect to account for sink credits and debits arising from forest management, cropland management, grazing land management and revegetation. In New Zealand's case, preliminary analysis shows high uncertainty and measurement problems with verifying the carbon content of these carbon pools, and points to the difficulties of accounting for these activities in the first commitment period.4 However, the design of systems to be included in legislation for Kyoto forest sinks and deforestation over the first commitment period should be sufficiently flexible to accommodate 'additional' sink activities under Article 3.4. New Zealand has a cap on the credits it could claim for forest management activities over the commitment period of 1 million tonnes of carbon.
Pre and post 1990 established forests distinction
Under the Kyoto Protocol, a clear distinction is made between forests established before 1990 and Kyoto forests (forests established from 1 January 1990). A system to manage Kyoto forest sinks would provide the means for:
- New Zealand to receive additional emission units, based on the carbon stored in 'Kyoto forests' over the first commitment period 2008-2012 (estimated to be about 110 million tonnes of CO2 equivalent or 30 million tonnes of carbon)
- obligations to be placed on 'responsible parties' to hold sufficient emission units to offset CO2 released into the atmosphere through harvesting or deforestation of Kyoto forests
A system to manage non-Kyoto forests (forests already in existence on 1 January 1990) would provide the means for:
- obligations to be placed on responsible parties to hold sufficient emission units to offset emissions of CO2 into the atmosphere over 2008-2012 from deforestation since 1990, where the land is not replanted but converted to some other land-use.
- credits to be gained (potentially) under article 3.4 for management of non-Kyoto forests
Government decisions and international negotiations
No decision has yet been taken on the final design of the system to manage sinks and the role that the Government might take in that system. However in January 2001, the Government agreed that those undertaking sink activities would receive some (undefined) proportion of the benefit from emission units derived from sinks.
The Government also decided that all or most of the emission units derived from sinks should be tradable within an international emissions trading system. This means that domestic emitters would have to purchase emission units at the international market price. In this way, emission unit revenues are maximised and emitters receive the proper price signals to make efficient buy-or-abate decisions.
In July 2001, the Government released a Sinks Information Document to assist the forestry sector to become involved in the development of New Zealand's domestic climate change policy for sinks.
In July 2001, at COP6 in Bonn, the international rules under the Kyoto Protocol for forest sinks were clarified. Agreement was reached on:
- clear and appropriate definitions for sinks activities
- a clear system to account for Kyoto forests with no constraints or discounts on the use of forest sink emission units and inclusion of an accounting framework to deal with harvesting of very fast growing plantation forests during the first commitment period 2008-12 (harvest of Kyoto forests in the commitment period would not accrue any more debits than the credits earned over the same period)
- a clear accounting framework for forest management (of non-Kyoto forests) and agriculture soils management under article 3.4 of the Kyoto Protocol
- protection of the intellectual property rights associated with forestry growth models used for measuring sinks and
- use of sinks in the Clean Development Mechanism (CDM) under article 12 of the Protocol to be constrained by a cap and limited to afforestation and reforestation activities. Further methodological work is required to address specific concerns about sinks in the CDM.
Possible elements of a system to manage forest sinks
The following discussion presents a possible framework for a system to manage forest sinks under the Kyoto Protocol. No decisions have been taken about how a system might operate in New Zealand, so we are seeking comment on the proposals set out below.
1 In this document sink credits are also referred to as 'emission units.' Sink credits can be thought of as emission units derived from sink activities.
2 Deforestation is the conversion of forest land to another land use e.g. dairy farming.
3 'Management' in this context is defined broadly. The current negotiating text defines forest management as "a system of practices for stewardship and use of forest land aimed at fulfilling relevant ecological (including biodiversity), economic and social functions of the forest in a sustainable manner."
4 This analysis is contained in a report commissioned by MAF - "An Assessment of the Significance to New Zealand of Article 3.4 Activities under the Kyoto Protocol", 8 June 2001, Manaaki Whenua Landcare Research, Forest Research, AgResearch, Crop and Food research Ltd, Piers MacLaren and Associates Ltd, National Institute of Water & Atmospheric Research.
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