INCLUSION OF HARVESTED WOOD PRODUCTS IN AN EMISSIONS TRADING SCHEME
AN AUSTRALIAN PLANTATION PRODUCTS AND PAPER INDUSTRY PERSPECTIVE
SEPTEMBER 2008
Miles Prosser
miles.prosser@a3p.asn.au
&
Marion Niederkofler
marion.niederkofler@a3p.asn.au
Australian Plantation Products & Paper Industry Council
29 Torrens Street, Braddon ACT, 2612, Australia
Ph: +61 2 6273 8111
W: www.a3p.asn.au
SUMMARY
Current international and national emissions trading schemes do not recognise carbon
storage in wood products, largely because there has been no agreement on how this could be
done at an international level. This paper proposes an approach for recognising the storage of
carbon in wood products, for application in a domestic emissions trading scheme. The
proposed approach would allow a conservative but positive acknowledgement of the carbon
stored in wood products. Further, it would create incentives for:
 Use of timber in preference to more greenhouse-intensive alternative building
products
 Use of existing forests for production of long-lived timber products, and expansion of
forestry to meet the increased demand
 Re-use and recycling of wood products
 Reduced emissions from landfill
This paper presents three conceptual approaches to the inclusion of harvested wood products
in an emissions trading scheme:
1. A liability would be incurred at the grower-processor interface for emissions from the
decay of harvested wood products using a simple decay model.
2. There would no liability, to any party in the supply-use-disposal chain, for the quantity
of carbon that is conservatively thought to be stored for more than 100 years.
3. The grower would bear the liability for emissions at the time of harvest or soon after
and the remaining liability would be incurred by the waste sector.
Using the third conceptual approach an example treatment is presented:
the quantity of carbon estimated to be stored in wood products for a significant period
(twenty years) would be recognised as a ‘credit’ (avoided liability) at the point at
which logs are traded to the processor from the forest owner. The waste sector (or
some other party) would face the liability for emissions from the eventual decay after
the service life of the product.
The proportion of carbon in the log that is deemed to be stored for a significant period would
be calculated by applying factors specific to the type of log and the processing facility
The credit would initially be available only for wood products produced and consumed
domestically.
The credit could be available either as an avoided liability for the grower or as a credit to the
processor. It would be available to wood products derived from all forests that are exposed to
a carbon cost or where the long term carbon stocks are neutral or better.
This approach would effectively see part of the current liability faced by the forest grower
transferred to the waste sector where there is greater control over the emissions (and
avoidance or use thereof) and closer proximity to the timing of emission.
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BACKGROUND
INTRODUCTION
Much discussion has focussed on the approach and methods for inclusion of the
carbon stored in harvested wood products in inventory reporting and accounting
under the international policy framework on climate change. This paper, however,
considers a method by which harvested wood products can be included within a
domestic emissions trading scheme. It has been developed in the context of
Australia’s proposed Carbon Pollution Reduction Scheme but the principles could be
applied to other emissions trading schemes and may also help to inform
consideration of harvested wood products within future international accounting
frameworks.
CARBON FLOWS IN THE FOREST PRODUCT SUPPLY CHAIN
Developing an approach to account for the carbon stored in wood products first
requires an appreciation of the carbon flows in the wood product supply chain. Tree
growth withdraws carbon dioxide from the atmosphere and fixes the carbon within
the cellular structure of the tree. Harvesting leads to the emission of a proportion of
that carbon, from harvesting residues decaying on site. Further carbon will be
released relatively soon after harvest as biomass is used for the production of energy.
(Additionally, there will be fossil fuel and energy related emissions associated with
forest management, harvesting, wood processing and transport, but these are
accounted separately, by the energy sector.)
However a proportion of the carbon originally stored through tree growth is retained
in any product made from wood fibre. The carbon remains stored for as long as the
product retains its physical integrity - during use, re-use and after disposal.
The growth of trees stores carbon. Wood products extend the duration of that carbon
store. Wood products should be thought of as a delayed or avoided emission rather
than a new carbon store.
CURRENT INTERNATIONAL TREATMENT
The current international default approach to wood products assumes that the pool of
wood products is static, and that emissions due to decay of wood products are
therefore equal to the flow from harvested products into the wood products pool. This
leads to the (unfortunately) simplified expression of the default approach as “all
carbon removed in wood and other biomass from forests is oxidised in the year of
removal” (IPCC, 1997). The IPCC recognises this to be “not strictly accurate,… but
…a legitimate conservative assumption”, in the case where the national wood
products pool is not increasing, and therefore new wood products simply displace
existing wood products.
Countries are able to include increases in the total carbon stored within their wood
products pool in UNFCCC reporting. Reporting under the Kyoto protocol does not
currently incorporate harvested wood products, though discussions are ongoing. It is
has yet to be demonstrated how national accounting could be translated into an
emissions trading scheme at a national, or other, level.
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WHAT ARE WE TRYING TO ACHIEVE?
We are seeking a method of accounting for carbon flows that accurately reflects the
true extent and the actual timing of carbon emissions. This simple statement of the
objective has important ramifications:
o It could form the basis of a comprehensive and crisp carbon price signal that
encourages abatement in the wood product supply chain and in the markets in
which it trades.
o It could provide a more accurate measure of greenhouse gas emissions in this
sector.
Further we are seeking a method that can be applied at an entity, project or product
level within the scope of an emissions trading scheme that is consistent, or could be
reconciled, with national level reporting in an international context.
A last subscript to the objective is that the proposed method(s) must be simple and
implementable. However, this should be viewed as a constraint to the objective
rather than the major priority.
KNOWLEDGE BASE
All elements of climate change policy are being developed under less than prefect
knowledge. However the need for action and the magnitude of the task require
immediate policies, based on best available knowledge, and sufficiently flexible to
adjust to improved scientific understanding without compromising investment
certainty.
The treatment of the carbon stored in wood products must reflect what we currently
know and ensure that policy can be stable while incorporating expected
improvements in knowledge.
We currently know that a proportion of the carbon stored during tree growth is not
emitted at the time of harvest but is maintained for as long as the physical structure
of the wood fibre is maintained. Carbon is stored in wood, reconstituted timber
products and paper. Furthermore, the carbon is not released immediately when the
product is deposited in landfill.
The length of time from harvesting of the tree to eventual release of carbon from the
wood product after disposal is significant in the context of climate change. The
targets for emissions reductions are expressed in terms of decades. The drive for
new technologies is expected to drastically alter the emissions profile of energy
production and economic activity over the next few decades. And the global warming
potential of greenhouse gases is estimated over lifetimes of 100 years.
A significant proportion of carbon remains stored in wood products for periods in
excess of these timeframes.
While we can be certain that a proportion of carbon remains stored in timber for a
significant time, we are less certain on the precise proportion, the variability, or the
factors that may lead to variation.
Under these circumstances the optimal approach is to construct an accounting
method that:
o is as close as feasible to the true carbon flows;
o applies appropriately conservative factors in the face of current uncertainty; and
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o can be smoothly updated as more accurate information becomes available.
The current approach to wood products accounting does not meet the criteria listed
above. An alternative approach is required.
CHALLENGES TO INCLUDING HWP IN EMISSIONS TRADING
When and where do emissions occur?
The magnitude of carbon emissions from harvesting is not a simple number but is
actually a ‘decay curve’ that represents the rate at which carbon is released through
various processes including decay of forest residues, use of residues for energy,
lifespan of products in use, and rate of decay after disposal.
Developing a rigorous accounting method for carbon stored in wood products
requires knowledge of:
How much carbon is emitted?
When is it emitted?
Where is it emitted?
Who has greatest control over the emission?
The accounting method will be more rigorous and any carbon price signal most
effective if the accounting method matches liability for emissions closely to the
answers to these questions. In reality the answers will demonstrate that emissions
are the responsibility of a range of parties – forest growers, processors, product
users, landfill operators – in a range of locations, and that emissions occur over long
timeframes.
Carbon emissions following harvesting occur in discrete time periods – though not
necessarily at single points in time – or associated with specific identifiable decisions.
The first emissions are those that occur as a result of the harvest operation – logging
debris that remains on the forest floor and root mass will decompose and release
carbon over a finite time period. Further emissions occur soon after harvest when
parts of the tree that are transported to a processing facility are used to generate
energy, as well as emissions that might occur if processing residues are disposed of
in landfill.
The remaining carbon is retained in the product (timber, boards, paper, etc) and will
remain stored at least while the product is in use. When the product is no longer in
use, carbon may be released at that point if the finished product is used to generate
energy or incinerated. If the product is delivered to landfill any emissions would
occur over a much longer timeframe. There is growing evidence that a high
proportion of the carbon in timber products placed in engineered landfills remains
stored for the many decades for which we have evidence; and could reasonably be
thought of as a near-permanent carbon store. In this context the service life of the
product may be immaterial to the carbon store.
Some carbon is clearly withheld from the atmosphere for over 100 years. 100 years
is also the timeframe over which atmospheric lifetimes of greenhouse gases are
measured. Therefore, some of the carbon contained in the tree at the time of
harvesting is effectively withheld from the atmosphere for a sufficient period to
materially alter the global warming impact.
Who is responsible for the emissions?
Emissions can therefore be ascribed to four features of the life cycle:
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1. Emissions associated with harvesting or immediately after (debris decay, use of
biomass for energy).
2. Length of time of wood product in service.
3. Decay of wood products while in service.
4. Decay of wood products (or use as an energy source) after use.
Features 1 and 4 are the major sources of emissions. Feature 3 is thought to be
negligible for most products and Feature 2 determines the length of time from harvest
until the emissions from Feature 4 occur.
Some events, such as harvesting or disposal, lead to emissions that occur over long
time-frames and the timing of emissions after use will depend on the length of time
that the product was in service.
While the emissions can be linked to the features listed above, it will not be feasible
to implement a system that tracks individual forest products through use and disposal
and transfers liability for emissions to users of those products. The number of users,
the low level of individual usage, the length of usage (e.g., furniture) and the transfer
of ownership (e.g., house framing) all complicate the ability to impose liability on
product users.
If liability cannot be imposed on users then the alternatives are to impose it upstream
(processors or growers) or downstream (e.g., landfill operators), or some
combination of the two, or not at all if the carbon is thought to be permanently stored.
The current convention of accounting for all forest carbon stock decline as an
emission in the year of harvest is the extreme example of shifting all liability upstream
to the forest grower.
The accounting treatment must effectively track all the carbon by either
demonstrating that it is not emitted or by ascribing a liability for its emission to an
identifiable party in the life cycle.
Current timber use and the existing wood products pool
The approach outlined in this paper is proposed to apply only to the carbon flows
associated with harvesting, utilisation and disposal of forest products from the date of
implementation onward. However, the accounting method must also explicitly deal
with the current rate of consumption of wood products and emissions from the
existing wood products carbon pool and the wood-in-landfill carbon pool.
While the future use of harvested wood products can be seen as a continuation of
the carbon store commenced by the tree, there may be an associated emission if the
use of that wood product displaces some of the existing wood products pool and
leads to the release of carbon. These emissions must be essentially ‘sealed’ within
the accounting treatment to avoid carbon leakage.
The accounting method must also effectively deal with the transport of wood products
(pre- and post- use) across national boundaries. This must be done effectively for
national accounting but will also be relevant for emissions trading schemes,
particularly where the wood products are imported and exported between regions
with inconsistent emissions trading schemes.
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APPROACHES TO CREDITING CARBON STORED IN HARVESTED WOOD PRODUCTS
Assuming that an international mechanism is in place that allows countries to monitor
and report carbon stored in wood products, the challenge becomes translating that
into inclusion in an emissions trading scheme to create the market signals that will
change behaviour and induce abatement.
There is clearly an interaction between the treatment of wood products within
national inventories and the treatment of wood products within a domestic emissions
trading scheme. The intention here is to explore how wood products could be
included in a domestic emissions trading scheme so that this can be considered
during the resolution of international regimes.
Which forests?
Wood products considered for inclusion in emissions trading should be restricted to
those obtained from forests for which carbon has been appropriately accounted. This
may include:
o Forests covered by an emissions trading scheme and/or included in national
accounts.
o Forests not covered by an emissions trading scheme or included in national
accounts but which can reasonably be assumed to have stable or increasing
carbon stock in the long term.
Forests outside these categories include forests where carbon stocks are being lost
or depleted (deforestation and degradation) and which are not exposed to a carbon
cost. It could be argued that if deforestation is exposed to a carbon cost then it is
legitimate to include the carbon stored in wood products.
How much carbon?
A significant issue to be resolved is the quantity of carbon that will be credited (or,
more correctly, the quantity of carbon for which the grower will avoid a liability). An
obvious option is that the grower would only face liability for the emissions under their
control – that is, the decay of residues and debris left in the forest. The liability for
release of all other carbon would transfer, along with the wood fibre, to the processor
and user of that fibre.
A variant on this first option is that the grower would face the liability for emissions
under their control and those that follow soon after harvest (to simplify accounting).
And that another party (such as the waste sector) would face the liability for later
emissions.
A second option is that no liability would be imposed for the minimum amount of
carbon that will remain stored in wood products (in use and in landfill) for 100 years
as this is the measure of warming impact of greenhouse gases in the atmosphere
and sufficiently long to be considered permanent and allow the development of new
technologies. The grower would effectively face the liability for all emissions that
might occur within 100 years.
A third option, using similar reasoning would be to use the average amount of carbon
stored for 100 years.
A fourth option is that a liability would be avoided only for the real increase in the
amount of carbon stored in the wood-product-in-use carbon pool. That is, an
allowance would be made (a liability imposed) for the carbon in existing wood
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products displaced from the wood-products-in-use carbon pool by the use of new
wood products.
Which wood products?
Avoided liability (‘credits’) for storage of carbon could be applied equally to all wood
products or restricted only to some.
Only forests included in an emissions trading scheme would be able to generate
credits for in-forest carbon sequestration, hence it could be proposed that the
avoided liability for wood products be restricted only to wood fibre that has generated
credits. However there may be other forests for which it is legitimate to recognise
carbon in wood products – such as forests that are eligible, but have not been
included in a voluntary scheme.
Another approach would be to only ‘credit’ usage of wood products that was deemed
to be additional to business as usual, though this would be difficult to define.
The import and export of wood products between nations will be an important issue
in resolving international treatment of wood products. It is unclear whether an
avoided liability should belong to the country that grows the trees or the country that
utilises the wood product. In the face of this uncertainty an option within a domestic
emissions trading scheme is to only ‘credit’ timber produced and consumed
domestically. Alternately timber derived from a country with a similar approach to
accounting for harvested wood products could be also be ‘credited’.
Who gets the ‘credit’?
A further issue to be resolved is which party gets the ‘credit’ for the carbon stored.
Given that the carbon is stored through the growth of the tree and that portion of it
that is incorporated into products is not emitted by the harvest, then an argument can
be put that the grower should get the ‘credit’ or avoided liability.
However the processor of the log harvested from the forest, the user of the product
and the disposer of the product can all claim a significant impact on the length of time
that the carbon remains stored. They could further claim that the carbon price signal
will have significant impact on behaviour if applied at these stages of the supply
chain.
An attempt to reflect the true fate of carbon would suggest that the carbon in wood
products is most accurately accounted for as an avoided liability on the grower at the
time of harvest. That is, the grower is only faced with the liability for the carbon that
is released through decay of material on the forest site.
It should be noted that wherever in the supply chain the value is generated, the
benefit will spread across the players involved through changes in transfer prices and
increased competitiveness of wood products in comparison to alternatives.
PROPOSED TREATMENT OF CARBON IN WOOD PRODUCTS
Based on the discussion above the proposal is built on two fundamental premises:
o There should not be an immediate emission liability for carbon that is stored in
wood products for a significant period and/or where the liability can be allocated to
a party with control at a later stage of the life cycle.
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o ‘Credit’ for the carbon stored in wood products should be available where the
forest management is exposed to a carbon cost or where the carbon stocks in the
forest are neutral or better in the long term.
CONCEPTUAL APPROACHES TO INCLUSION OF HARVESTED WOOD PRODUCTS
Three conceptual approaches to the inclusion of harvested wood products in an
emissions trading scheme are proposed:
1. A liability would be incurred at the grower-processor interface for emissions from
the decay of harvested wood products at the estimated time that they occur.
That is, a simple decay model would be developed for the product that defined
liabilities in the future based on the expected service life of the products and their
fate after disposal.
2. There would no liability, to any party in the supply-use-disposal chain, for the
quantity of carbon that is conservatively thought to be stored for more than 100
years. This storage will depend primarily on the retention of carbon in wood
products in engineered landfills.
3. The grower would bear the liability for emissions at the time of harvest or soon
after (processing residues used for energy, short-lived products, etc) and the
remaining liability would be incurred by the waste sector at the time of disposal.
The first conceptual approach most closely mimics the actual flow of carbon.
However it is likely to create challenges in the monitoring and enforcement of
liabilities over long time periods. The second conceptual approach is reliant on the
fate of carbon in engineered landfills and is the most simple and easy to implement.
The third conceptual approach reduces the emphasis on the fate of carbon in landfill
but attempts to retain some of the simplicity of the second conceptual approach.
EXAMPLE TREATMENT FOR INCLUSION IN NATIONAL EMISSIONS TRADING
Using the third conceptual approach as the basis, an example treatment is further
developed as follows (potential questions arising from the example treatment are
answered in the Attachment):
the quantity of carbon estimated to be stored in wood products (in service) for
a significant period (twenty years) should be available as a ‘credit’ (avoided
liability) at the point at which logs are traded to the processor from the forest
owner. The waste sector (or some other party) would face the liability for
emissions from the eventual decay after the service life of the product.
The measurement would be based on the already available measurements of log
volume or weight at the point of log sale with simple conversions to the quantity of
carbon dioxide equivalent. The proportion of carbon in the log that is deemed to be
stored for a significant period would be calculated by applying factors specific to the
type of log, the processing facility and national circumstances.
The factors would be set initially at a conservative level to ensure that carbon storage
was not overestimated and to provide incentives for data collection and development
of more robust factors. Conservative factors would be available at a national level
with the potential for individual grower-processor combinations to collect and verify
data that would demonstrate higher levels of carbon storage. If implemented these
would require regular (5 yearly?) audit.
The ‘credit’ would be available for all timber. The service life combined with the longterm storage of carbon in wood products in landfill, plus the inclusion of emissions
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from landfill within the emissions trading scheme, ensures that virtually all carbon is
accounted for. The grower still bears the liability for all emissions that are estimated
to occur immediately after harvest including: decay of logging debris and residues;
and use of forest and processing residues for energy.
The credit would initially be available only for wood products produced and
consumed domestically. However this could be expanded in future as part of linking
of compatible emissions trading schemes.
The credit could be available either as an avoided liability for the grower (if they face
one) or as a credit to the processor. It would be available to wood products derived
from all forests that are exposed to a carbon cost or where the long term carbon
stocks are stable or increasing. If the forest management is not exposed to a carbon
cost (but is regrown to previous carbon stocks) it is most appropriately available as a
credit to the processor. It may also be possible for some form of sharing the credit
between the grower/processor and the landfill operator.
Within the domestic emissions trading scheme the conversion of a national target
into a cap for the scheme should consider the business as usual levels of wood
product storage. For example, if the current consumption of timber products
represents 3 million tonnes of carbon dioxide equivalent then the Government could
quarantine 3 million tonnes from the national target when determining the cap and
then allow credit for the use of all timber products.
The application of the accounting method above would allow a conservative but
positive acknowledgement of the carbon stored in wood products. Further, it would
create incentives for:
o Use of timber compared to more greenhouse-intense alternatives in proportion to
the carbon stored and therefore the growing of trees to meet this demand.
o Greater use of wood fibre in long-term applications.
o Re-use and recycling of wood products.
o Minimising emissions from landfill and encouraging use of methane as an energy
source.
o Collection of data on the use of wood fibre, service life of wood products and fate
of wood products in landfill.
ACKNOWLEDGEMENTS
The authors would like to acknowledge the contributions of Dr Annette Cowie and Fabiano
Ximenes (NSW Department of Primary Industries) and Peter Weir (New Zealand) who
provided helpful comments on an earlier draft of this paper.
The proposal contained in this paper has evolved from wide ranging discussions within the
membership of A3P and the contributions from staff of many of those companies have been
invaluable.
Ultimately though, any errors, omissions, or misinterpretations in the document are the fault of
the author’s alone.
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ATTACHMENT - POTENTIAL QUESTIONS ARISING FROM EXAMPLE TREATMENT
Who incurs the liability (and when) for the carbon released by the ultimate decay of
wood products including methane emissions?
The carbon stored in wood products may ultimately be released gradually after
disposal in landfill. As waste will be covered by the emissions trading scheme,
landfill operators will be liable for emissions - as they will be for emissions from other
components of the waste stream. However, it should be noted that timber has been
found to decompose extremely slowly in properly engineered landfills and there may
be little release of carbon over a 100 year timeframe.
Part of the carbon stored in wood products may be released as methane upon
decomposition. Methane has a greater global warming impact than carbon dioxide
and hence release in this form is an important factor. As landfill operators will be
covered by the emissions trading scheme, this will be their liability and it will create
an incentive for capturing methane.
Is credit being paid for business-as-usual storage of carbon in timber?
Normally inclusion of a sector within a cap-and-trade emissions trading scheme
removes any difficulties of establishing business as usual baselines. However, as
wood products represent a store of carbon, the increasing levels of carbon stored in
harvested wood products represent abatement that can be included in national
accounts without any necessity to include it in the domestic scheme. Accordingly the
Government may seek to avoid paying for business-as-usual levels of wood product
usage.
However it is likely that a significant quantity of permits will be freely allocated to
timber’s main competitors in the building products market (steel and concrete) to
ensure that domestic production is not disadvantaged compared to product imported
from countries with no carbon cost. While this measure addresses a real policy
distortion in international trade in those products, it creates an unwanted distortion in
domestic building product markets that operates against the objective of reducing
emissions.
In this context it would be a minor adjustment to quarantine a quantity of permits from
the national target equivalent to the level of business-as-usual timber use when
determining the scheme cap.
Who will incur the liability for existing wood products in landfill and wood products
displaced from the current wood-in-service carbon pool?
The proposed methodology deals only with wood products derived from harvesting
operations from the current day on. The liability for emissions from the current wood
products in landfill pool will remain unchanged by the proposed treatment of future
production of wood products and will be resolved by the Government as it determines
the methods for covering the waste sector. The displacement of wood products out
of the wood-in-service pool may increase if a credit can be earned for new wood
products. However, inclusion of the waste sector in the emissions trading scheme
will create a price signal at the disposal point for re-use, recycle or utilisation as
energy. Ultimately the emissions from displaced wood products will be covered in
the scheme.
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How is the proposal different to “Kyoto accounting” and how could it be reconciled to
national level reporting?
Crediting the carbon stored in harvested wood products while in use and beyond is
different to Kyoto accounting where the carbon liability is brought to account at the
time and place of forest harvesting. Therefore any credit generated for the carbon in
wood products will create an inconsistency with national accounts under the Kyoto
protocol. The magnitude of this discrepancy will not be great in the context of other
fluctuations in annual emissions or sectors excluded from a domestic scheme.
However it would require separate tracking and reconciliation (through translation of
the national target into the scheme cap) of this element of emissions trading against
the national accounts. This increases the urgency of the call for a change in the
international framework.
How would the methodology apply to wood products sourced from domestic forests
not covered by the emissions trading scheme?
Wood products can, and will, be sourced from forests not covered by the emissions
trading scheme including post-1989 plantations that do not opt in and pre-1990
plantations and native forests. However in each of these situations the forests could
be deemed to be neutral in the long term (pre-1990 plantations and native forests) or
neutral at worst (post-1989 plantations) even when only the in-forest carbon stocks
are considered. Therefore it is consistent to credit the carbon stored in wood
products (and removed from the site) from these forests.
It is also theoretically possible to source wood products from deforestation
domestically - though this is not thought to occur at significant scale currently. The
treatment of deforestation within the scheme will address this, either by preventing it,
exposing it to a cost, or by the liability being borne by the Government.
How would the methodology apply to imported wood products including those not
covered by an emissions trading scheme?
Similarly wood products could be imported from forests not covered by an emissions
trading scheme – from sustainably managed forests but also potentially from
deforestation and degradation. The latter possibility is a strong reason for restricting
the generation of credits to wood products produced and consumed domestically in
the initial phases until there is a stronger international framework.
Could this methodology be applied within an emissions trading scheme prior to any
change in the international framework?
This methodology for crediting the carbon stored in harvested wood products can be
implemented immediately within an emissions trading scheme. As noted above, the
differences to “Kyoto” accounting will create discrepancies between the generation of
credits and national reporting. This discrepancy can be dealt with at the time of
converting national obligations into a scheme cap. This stage of the process will
involve ‘setting aside’ a quantity of emissions for uncovered sectors. The additional
quantity of emissions to reconcile the inclusion of harvested wood products will be
insignificant compared to the adjustment for uncovered sectors and the quantity of
scheme permits allocated for free to impacted industries.
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Does the methodology lead to potential leakage of carbon or double-counting of
carbon storage?
All carbon stored in the tree is accounted for either as an emission attributed to the
grower at the time of harvest (for emissions that occur within twenty years) or to the
landfill operator, as applies to other parts of the waste stream. Emissions from
current wood products in-service and in landfill are not altered by the proposed
treatment of new wood products but , in any event, will be captured by the
Government’s proposed coverage of the waste sector.
Crediting wood products harvested from forests not covered by the scheme is
compatible with the neutral-at-worst or neutral-in-the-long-term nature of these
forests.
Existing usage of wood products and inconsistencies with Kyoto accounting can be
easily addressed through relatively minor adjustments to scheme caps and permit
allocation.
What further work is required?
The key areas of work required to take this proposal forward are to:
o Incorporate this approach within the coverage and rules for Australia’s Carbon
Pollution Reduction Scheme.
o Develop the conservative national standardised factors for application at the
grower-processor interface for a range of species and log types.
o Progress the international framework for accounting for harvested wood products
at a national level so that will be compatible with incorporation into domestic
emissions trading schemes.
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