5.2.2. Experience in LULUCF Project-Based Activities: Estimates of Sequestration, Emissions Avoidance, Substitution, and Land Areas Involved

Table 5-2 summarizes a representative set of LULUCF projects currently underway that have been reported to provide carbon sequestration or emissions reduction benefits. The projects are divided into six subcategories: (i) reforestation, afforestation, and restoration; (ii) soil carbon management; (iii) forest conservation; (iv) forest management and alternative harvest practices; (v) agroforestry; and (vi) multi-component or community forestry projects that combine several of these activities. The projects listed in Table 5-2 are predominately forestry projects because experience to date has been most influenced by electric utility companies and conservation NGOs seeking projects likely to produce credible GHG benefits at costs that are lower than their emissions reduction options in their home territories, as well as conservation, biodiversity, and community development benefits. Many soil management, bioenergy, and other LULUCF management projects exist, but few have estimated and reported changes in carbon stocks or greenhouse gas emissions, so they are underrepresented in Table 5-2.

The 3.5 Mha of projects currently being implemented could eventually total 6.4 Mha if the projects are fully funded. Most of these 3.5 Mha (2.9 Mha, or 83 percent) are in forest land protection or conservation, potentially avoiding emissions or sequestering about 41-48 Mt C if the projects are fully financed and implemented (Table 5-2). Another 92,000 ha (3 percent) are in projects primarily undertaking afforestation, reforestation, or forest restoration, potentially generating an estimated 10 Mt C. Projects involving forest management and alternative silvicultural or harvesting practices occupy about 60,000 ha (less than 2 percent) and may generate about 5.3 Mt C. Multi-component community forestry or agroforestry system projects cover at least 530,000 ha (15 percent) and may provide about 20 Mt C in benefits. Only a few very small projects currently exist for soil carbon management (see Chapter 4).

Carbon sequestration or emissions avoidance per unit area over the reported lifetime of the projects varies by project type from an average of about 110 t C ha^-1 for afforestation and reforestation projects, to 88 t C ha^-1 for forest management projects, to 40 t C ha^-1 for community forestry and agroforestry projects, to a low of 16 t C ha^-1 for forest protection projects (mainly from avoided logging), with very large ranges within and across project types (Table 5-2). These averages reflect project designs to date and vary across design, site condition, and implementation conditions.

Emissions avoidance per hectare of forest protection projects, in particular, is highly sensitive to the total project area involved and the activity avoided (e.g., avoided deforestation or avoided logging). These projects generally conserve a large area of forest considered under threat of deforestation at rates of about 1-5 percent of total forest area per year. In the Noel Kempff Climate Action Project (NKCAP), for example, areas where deforestation is expected to be avoided are estimated to generate about 143 t C ha^-1 over the life of the project and areas where logging is avoided about 12 t C ha^-1; the project overall is estimated to generate about 7 t C ha^-1 (because the total project area is large) (Brown et al., 2000). For project components designed solely to avoid deforestation, typical emissions avoidance values are likely to range from 28-80 t C ha^-1 for boreal forest to about 30-140 t C ha^-1 for temperate and 100-175 t C ha^-1 for tropical forests (Brown et al., 1996).

Several models for the design and funding of projects are already being used in many of the projects reviewed in Box 5-1 and Table 5-2:

• Project funding is provided by investors who are committed to offset their carbon emissions, irrespective of the status of the international climate change negotiations. Monies are provided to a central office which seeks out, designs, and implements projects meeting investor criteria.
• Entities (e.g., electric utilities) that consider themselves likely to face emissions reduction mandates in the future are implementing their own projects.
• Project proponents identify and design projects on the basis of expected GHG and non-GHG benefits, then seek funding from donor sources. These projects are developed primarily to mobilize resources for non-climate services (e.g., biodiversity protection by a land management NGO) and to gain experience in project implementation (often reporting under the AIJ pilot program).

Other models are likely to develop as entities seeking certified emissions reductions organize their investments to spread liabilities and risks. One potential trend may be the emergence of flexible derivatives involving brokers, traders, and insurers who trade various attributes of the potential emissions reductions of bundles of projects. Experience using the aforementioned models in the early stages of pilot project implementation has helped produce several advances, including quantifying and monitoring the GHG benefits of a range of project types using the Winrock estimation and monitoring methodology (MacDicken, 1997a); reviewing and refining without-project baseline assumptions in an independent review of the Protected Areas Project (PAP) in Costa Rica (Busch et al., 1999); and addressing ways to minimize leakage in the design and implementation of the NKCAP (Brown et al., 2000).
Several portfolios of projects have been assembled by national, NGO, or private JI or AIJ pilot programs. For example, the FACE Foundation-founded in 1990 by the Dutch Electricity Generating Board-has targeted 150,000 ha of new forest planting in five projects in six countries, to absorb the lifetime CO2 emissions of a coal-fired 600 MW power station. About 40,000 ha had been planted by 1999. The projected carbon benefits are 75 Mt C over the lifetime of the projects. Total estimated, undiscounted costs are $100 million, of which $30 million has been committed, with an estimated unit cost of $8 per t C (FACE Foundation, 1998; Verweij and Emmer, 1998).

The USIJI began in 1993. It has accepted 14 forestry projects and one soil carbon management project as of February 2000. Estimated total carbon benefits over the lifetimes of eight projects in at least initial implementation stages are about 13 Mt C-rising to 25.5 Mt C if the projects are fully funded and implemented-on 1.27 Mha. Total funding committed to date is about $17 million, at an estimated carbon cost of $3.90 per t C (EPA/USIJI, 1998; Table 5-2).

Some projects have been designed that could expand across whole regions. The Scolel Te project in southern Mexico has initiated agroforestry activities on about 150 small farms. If an incentive rate of $15 per t C were available, it could supply 150-200 Mt C over 40 years (de Jong et al, 1997; Tipper et al., 1998).

Projects offer varying rates of carbon benefits over time. Projects summarized in Table 5-2 have reported project lifetimes ranging from 16 to 99 years, averaging 41 years. Forest conservation projects designed to slow deforestation are highly sensitive to estimated baseline assumptions about non-project forest loss rates (see Section 5.3; Busch et al., 1999). These projects appear to deliver carbon benefits quickly relative to other project types, however, by annually avoiding high losses of carbon stocks per hectare of mature forest. Conversely, soil carbon management and afforestation or reforestation projects in boreal forest deliver carbon benefits slowly because carbon sequestration rates in both systems are generally less than 1 t C ha^-1 yr^-1.

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