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II THE FEASIBILITY OF PAYMENTS FOR ECOSYSTEM SERVICES

One of the greatest challenges facing the forest sector today is to reconcile the conflicting demands of different stakeholders for the many goods and services, forests provide. Besides being a valuable source of timber and non-timber products, forests offer important environmental services such as watershed protection, biodiversity conservation and carbon sequestration that help sustain life on Earth. Hardly ever do beneficiaries pay for the services they receive, resulting in low incentives to conserve forests. The implementation of payments systems for ecosystem services supports the recognition of the true economic value of forests. Globalisation provides opportunities for such market-based incentives for forest conservation and income generation for the communities that manage the forests. The following contributions provide some examples - with the lessons learnt, the pitfalls and dead ends.

DEVELOPING SYNERGIES BETWEEN CARBON SINKS AND SUSTAINABLE DEVELOPMENT THROUGH FOREST CERTIFICATION

By Catrinus Jepma

The Kyoto Protocol contains a greenhouse gas emission limitation and a reduction commitment for industrialised countries (Annex 1 parties) which can be achieved through measures that reduce greenhouse gas emissions and through activities enhancing sinks. Forestry projects in the form of reforestation and afforestation are now included in the project cooperation between industrialised and developing countries under the Clean Development Mechanism (CDM).

During the past decade, and quite unrelated to the Kyoto Protocol, certification systems for forest management and a chain-of-custody for certified forest and timber products have been introduced based on a set of forest management principles, guidelines, criteria and standards. The question is: is there scope for synergies between enhancing carbon sinks and sustainable forest management through forest certification?

With respect to these synergies the following points are to be considered:

1. The degree to which synergy can be achieved between forest management certification and sinks certification depends on a number of factors such as the accounting framework under which the activity will be reported (as specified in various articles of the Kyoto Protocol), the type of forestry activity, the level of measurement, the scope and time horizon implicit in the implementation of the instruments (a short-term vs. a long-term or infinite time horizon) and the cost of implementation at the management unit level.
2. Trade-offs between the main criteria relevant for forest management certification and the criteria used only for the assessment of sink activities can emerge under many circumstances. Such trade-offs can only be dealt with if the responsibilities for the implementation are defined clearly and if clear rules are established on how to resolve any conflict between the forest management certification and sink targets without compromising the aims of both schemes.
3. Both practices could conceivably be developed in more detail on the basis of private initiatives in accordance, or otherwise, with a formal framework such as the UN Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol. The ratification of the Protocol may lead to the issue of forest management certification being relevant to various of its sink aspects .
4. As far as the role of sinks under the Joint Implementation (JI) is concerned, it is yet to be understood if and how sinks-related Emission Reduction Units (ERUs) would make use of forest management certification and what the decision-making structures on that issue would be. Both UNFCCC and the Kyoto Protocol refer to sustainable development. This would suggest that sustainability criteria might be necessary when considering sinks activities under the JI. We should keep in mind that neither sinks nor forest management certification automatically contribute to sustainable forest management.
5. Processes which try to enhance the compatibility between, and integrated implementation of, forest management certification and sinks certification may be complicated by the fact that the first is essentially is a voluntary, market-driven instrument, whereas the second is ultimately an official government instrument, albeit complemented with private sector exercises outside the Kyoto Protocol.
6. At the implementation level, the accumulated experience from forest management accreditation and certification and verification programmes may provide useful lessons for developing and implementing sink accounting procedures. Conversely, work on sink-related issues such as permanence and uncertainty, project boundaries and leakage, as well as baselines, may provide useful insights into the further development and cost-effectiveness of forest management certification.
7. Finding synergies between forest inventory and management planning, forest management accreditation, certification and verification procedures on the one hand and comparable sinks procedures on the other may be useful especially in case of forest areas which are considered for both processes. Such synergies may help to overcome a lack of economies of scale in small parcels of land.
8. The voluntary implementation of forest management certification may enhance sinks by setting up technical capacities for measurement, management plans consistent with the goal of sustainable development, familiarity with relevant concepts and definitions, as well as independent verification variables. All these factors may make it easier and less costly for the forest owner to be rewarded for carbon sequestration as well.
9. Areas of potential synergies between certification of forest management and carbon sequestration that need to be explored, may include:
   • Whether common methodologies, definitions and concepts can be developed.
   • The building of capacity which is required for both instruments.
   • Whether forest management certification and other management tools could contribute towards the preparation of accurate inventories through the provision of data relating to land-use changes and changes in the growing stock.
   • Whether forest management certification, if further developed, may verify the implementation of measures or a lack of those, both positive and negative, that affect sinks.
   • Whether auditing procedures could be complementary to forest management and sinks certification even if both instruments require separate protocols and accreditation.
   • Whether general procedures of existing accreditation bodies (e.g. for ISO 9000 and 14000 series standards) could be applicable to sinks validation, verification and certification systems after having been augmented to deal specifically with sink projects.
   • How group certification may reduce barriers (e.g. costs) for individual (small) forest owners to implement forest management certification schemes and facilitate the implementation of (bundled) sinks activities.
   • Whether and to what extent any sinks credit return may provide additional financial support to the private sector for also implementing forest management schemes (e.g. cap management), or the reverse, where forest management certification may give added value and marketing advantages to carbon sequestration.

There is certainly some scope for synergy between forest management and carbon sequestration certification. Many questions at both the conceptual and implementation level need to be addressed however. One such question is whether alternative, simpler and more effective procedures can be developed to meet the goals of the Kyoto Protocol, for instance by not seeking to combine forest and carbon certification.

Further information:
Prof. Dr Catrinus Jepma
International Economics & Business Department, University of Groningen and Faculty of Economics and Econometrics, University of Amsterdam
P.O. Box 800, 9700 AV, Groningen
The Netherlands
E-mail: c.j.jepma@eco.rug.nl

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