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The surprising politics of carbon monitoring?

Authors: J. Van Brusselen and P.J. Verkerk

(This is the second posting in a series of blogs discussing underlying policy frameworks and specific user needs for forest carbon monitoring.)

As pointed out in an earlier blog post (16.12.2021), the market for carbon credits will be given a boost once carbon stocks and changes can be accurately verified at low cost. However, this does not mean that until a forest carbon credit market really takes off, there would not be any need for monitoring carbon in the forests.

In fact, several European Union policy instruments already require to maintain or increase carbon stocks in forest over the long-term and activities should not involve the degradation of land with high carbon stock – let’s call it ‘the carbon requirement’. Let’s have a closer look at two of the policies: one has to do with renewable energy and the other concerns sustainable investments.

Firstly, there is the recast of the EU Renewable Energy Directive (RED II) that includes sustainable harvesting criteria and also LULUCF criteria. Apart from some specific exemptions, biomass originating from a country that has not signed or abides by the Paris Agreement or that doesn’t have legislation in place that comes to the same effect, economic operators have to prove ‘the carbon requirement’ at the level of their forest sourcing area. As EU countries are fully committed to implement the Paris Agreement, the monitoring at forest sourcing area level would most likely concern biomass from outside the EU, implying a need for cost-effective worldwide forest carbon monitoring  capabilities to support economic operators on the EU market.

Secondly, the EU Taxonomy Regulation ’on the establishment of a framework to facilitate sustainable investment’ introduces a common classification system for sustainable economic activities. The list currently includes four forestry activities, to which ‘the carbon requirement’ also applies, in context of climate change mitigation or adaptation:

  • ‘Afforestation’
  • ‘Rehabilitation and restoration of forests, including reforestation and natural forest regeneration after an extreme event’
  • ‘Forest management’
  • ‘Conservation forestry’

For holdings of 13 ha and above, a climate benefit analysis needs to be implemented to ensure that these activities will achieve ‘the carbon requirement’. A forest management plan settles most of the information requirements, but monitoring should ‘ensure the correctness of the information contained in the plan’. So while not all information can or need to be fulfilled with remote sensing, there is a need for a cost-effective monitoring tool. Important to note is that the EU Taxonomy Regulation does equally apply to activities within the EU as anywhere else in the world, insofar as these concern financial products or corporate bonds that are made available on the EU market.

From these examples, it becomes clear that there is already a need for tools that reduce the burden of proof for forest carbon monitoring and that facilitate doing business sustainably. The New EU Forest Strategy is expected to further increase the use of EO based forest monitoring to support the development of a comprehensive EU forest monitoring system, although the exact effects of the strategy on forest monitoring are not clear yet. While the policies discussed above are not about monetization of carbon, the need for forest carbon monitoring tools will further increase once the carbon markets will fully take off. Another point of view is that such tools are a precondition for cost-effectively operating carbon markets.