9.6.6.2 Potential non-permanence of carbon storage

The reversibility of carbon removal from the atmosphere creates liability issues whenever integrating land use in any kind of accounting system. There needs to be a liability for the case that carbon is released back into the atmosphere because Parties to the UNFCCC agreed, “…that reversal of any removal due to land use, land-use change and forestry activities be accounted for at the appropriate point in time” (UNFCCC, 2001). In 2000, the Colombian delegation first presented a proposal to create expiring Certified Emission Reductions under CDM (UNFCCC, 2001). Its basic idea is that the validity of Certified Emission Reductions (CERs) from afforestation and reforestation project activities under CDM is linked to the time of existence of the relating stocks. The principle of temporary crediting gained support over the subsequent years. Consequently, the Milan Decision 19/CP.9 (UNFCCC, 2003) created two types of expiring CERs: temporary CERs - tCERs and long-term CERs - lCERs. The validity of both credit types is limited and reflected on the actual certificate. The credit owner is liable to replace them when they expire or when the relating stocks are found to be lost at the end of the commitment period. Afforestation and reforestation projects need to be verified first at a time at the discretion of the project participants, and in intervals of exactly five years thereafter. The value of temporary CERs critically depends on the market participants’ mitigation cost expectations for future commitment periods. Assuming constant carbon prices, the price for a temporary CER during the first commitment period is estimated to range between 14 and 35 % of that of a permanent CER from any other mitigation activity (Dutschke, et al., 2005). This solution is safe from the environmental integrity point of view, yet it has created much uncertainty among project developers (Pedroni, 2005).

9.6.6.3 Additionality and baselines

A project that claims carbon credits for mitigation needs to demonstrate its additionality by proving that the same mitigation effect would not have taken place without the project. For CDM, the Executive Board’s Consolidated Additionality Tool offers a standardized procedure to project developers. Specific for CDM afforestation and reforestation (A/R), there is an area eligibility test along the forest definitions provided under the relevant Decision 11/CP.7 in order to avoid implementation on areas that prior to the project start were forests in 1990 or after. In the modalities and procedures for CDM, there are three different baseline approaches available for A/R. So far, only one has been successfully applied in the four approved methodologies.