INDC ratings and LULUCF

Why the CAT INDC ratings don't include LULUCF

The Climate Action Tracker (CAT) is an independent science-based assessment, which tracks Government emission commitments and actions. In preparation for the adoption of the Paris Agreement in December, the CAT analysed governments’ Intended Nationally Determined Contributions (INDCs) and assessed whether they are consistent with a fair share effort to holding warming to below 2°C.

The CAT methodology for assessing and rating INDCs focuses on CO2 and other GHG emissions from fossil fuel combustion, industry, agriculture and waste sources[1], which account for 93% of global GHG emissions in 2010. CO2 and other GHG emissions from land-use, land use change and forestry (LULUCF), which account for around 7% of global GHG emissions, are not included in the effort sharing ranking system.

In analysing INDCs, the CAT estimates and reports both historical and likely future emissions from both broad sources of GHG emissions and, where significant, elaborates on LULUCF issues in the overall assessment of government action. This note serves to shed light on the reasoning behind this approach and why it matters when being concerned with holding warming to below 2 and 1.5°C.

There are several inter-related factors that lead to the approach in which CAT rates all governments’ INDCs against their fair share contribution towards reducing emissions from fossil fuel combustion, industry, agriculture and waste sources—in effect on their contribution towards long-term decarbonisation—excluding LULUCF. In summary, the CAT assesses INDCs without emissions from LULUCF because of:

 In order to meet the 2 and 1.5°C limits the world’s energy system needs to decarbonise

Results from the IPCC’s most recent Fifth Assessment Report (AR5) show that long-term transformation of the global economy needed to achieve 1.5 or 2°C requires emission cuts in the energy sector for 2025, or 2030, and these cannot be replaced by reductions in emissions from the land-use sector. Limiting warming below 2°C and 1.5°C requires deep and long-lasting changes in energy and industrial greenhouse gas emissions.

The major focus of mitigation activities needs to be on greenhouse gas (GHG) emissions from the energy sector, industrial processes, solvent and other product use, agriculture and waste sectors, because of the very long legacy of installed infrastructure. Knowing, for example, that a power plant fired by fossil fuels commits to 40-60 years of CO2 emissions, the phase-out of this technology needs to start decades in advance and already in the time frame of the 2020’s and 2030’s.

While reducing deforestation is important, as is maintaining the sink, or carbon storage capacity of forests, soils and other ecosystems, enhancing emissions reductions only from LULUCF will not replace the required reductions in emissions within energy and industry sectors, given the long legacy of committed emissions after installation of new high-emission infrastructure.

Emission reductions of 2025 and 2030 benchmarks for 1.5°C pathways actually assume large reductions in emissions from all sectors including the LULUCF sector. Further enhancing these, as discussed above, will not replace the required reductions in emissions within energy and industry sectors. The emissions scenarios in IPCC AR5 that have a likely chance of holding warming below 2°C show that global fossil-fuel CO2 emissions must reach zero by 2060-2075, and total global GHG emissions need to reach zero before the end of the century. For 1.5°C this must occur several decades earlier for both fossil fuel CO2 and for total global GHG emissions.

Inclusion of LULUCF in targets has the potential to disguise increasing trends of energy and industrial emissions.

When assessing progress towards decarbonisation, the inclusion of LULUCF into a emissions reduction target has the potential to disguise increasing trends of energy and industrial emissions in the country concerned. For example, if LULUCF emissions have a strong decrease over a period of time, as illustrated, for example, by looking at historical emissions from Brazil (see figure below), the country’s total net emissions may show decreasing trends even if its energy and industrial emissions are still increasing. In order to actually assess decarbonisation trends, it is crucial to disentangle emissions from LULUCF from emissions from the energy and industrial sectors.

LULUCF data uncertainties and fluctuations far exceed those of other sources of CO2 and GHG emissions.

The large data uncertainty - and possible fluctuation - of emissions from LULUCF really put these emissions in a different category. Combining both in one aggregate target would also impose these uncertainties on the other sectors. If unexpected developments in the LULUCF sector occur, emissions in the other sectors can be significantly higher or lower. The estimation of uncertainties in the LUUCF sector gives governments freedom on the calculation approaches, which then also has an effect on whether emission targets of the other sectors are met.

This can only be solved by separating the targets for the LULUCF sector from targets for all other emissions.

Disentanglement of the effects of LULUCF accounting rules and approaches essential for comparability of INDCs

The CAT attempts to compare “like with like,” ensuring comparability among and between assessment of INDCs so that the implications of INDCs for decarbonisation are clear. Governments can – and do - account for emissions from LULUCF in very different ways and, depending on the method or approach taken, quite different pictures of a government’s level of action or ambition can be formed. 

At its simplest, governments can opt for “gross” or “net” accounting. Gross emissions include emissions from sectors excluding the LULUCF sector. In comparison, net emissions comprise gross emissions minus removals[2] or plus emissions from LULUCF activities. Thus, comparing two countries, one using a gross approach, the other a net approach, would be similar to comparing apples and pears.

If LULUCF emissions are a sink, which is often the case, the emissions from that country would appear smaller compared to a country using a gross approach, as the removals de facto reduce the resulting net emissions levels, and vice versa:  if LULUCF emissions are added to gross emissions, emissions appear larger in comparison to the country that excludes LULUCF.

The complexity and scope of the issues that arise as a consequence of different approaches to LULUCF accounting can be seen from the experience with the Kyoto Protocol and the development of its accounting rules. 

In extremis, the Kyoto LULUCF accounting rules can allow a country to continue to increase its fossil fuel emissions through the way in which it is allowed to credit LULUCF activities, as illustrated by the case of Australia below. These approaches are also appearing in INDCs, and hence could be of more general concern for the post 2020 period.

Effort sharing assessments generally based on GHG emissions from fossil fuels, industry, agriculture and waste.

The CAT methodology for rating governments’ efforts uses the scientific literature on the subject, and is predominantly based on GHG emissions not including LULUCF.  The LULUCF sector has very different economics, drivers and longer-term dynamics than those that, by and large, govern the development of energy and industrial systems enjoining emissions from this sector. 

[1] Removals refer to the storage of carbon through photosynthetic activity in forests, soils and other vegetation, as well as removal of methane through interactions with soil and other vegetation.

[2] Those are the so- called Annex A emissions of the Kyoto Protocol which cover GHG emissions from the energy, industrial processes, solvent and other product use, agriculture and waste sectors