Allowing carbon credits from forests to be traded under the European Union Emissions Trading Scheme (ETS) would create a enormous loophole, allowing EU Member States to buy their way out of emissions reductions.
A coalition of European NGOs is campaigning to keep forests out of the ETS. The December 2008 issue of FERN’s EU Forest Watch provides a succinct summary of the current state of the EU/ETS discussions.
Keep forests out of the ETS
EU Forest Watch, FERN.
Issue 133, December 2008
As negotiations to revise the ETS directive proceed, the EU Council and Parliament still seem to disagree about whether to allow forest credits in the European Emission Trading Scheme (ETS).¹ If included, Member States could offset their emissions by buying forestry credits in developing countries rather than reduce their own emissions. The Council and Parliament are expected to come to an agreement on the revised ETS Directive.
In a separate process, on 4 December 2008 the Council adopted conclusions on the Commission Communication on avoided deforestation.² These are the outcome of a fierce last-minute battle as a coalition of Member States, under pressure from polluting and forestry industries and some conservationists, tried to subvert the precautionary approach proposed by the Commission regarding inclusion of forest credits (see FW 131).
Thanks to Germany’s leadership, the Council did not endorse the ETS inclusion of forests, but it invited the Commission to assess the implications of forest credits for partial fulfillment of commitments and was open to the idea of their recognition for EU ETS compliance. It acknowledged clearly the need for effective forest governance and respect for the rights of forest-dependent communities. How these key requirements fit a market-based mechanism remains unanswered.
FERN, FoE, Global Witness, Greenpeace and the Rainforest Foundation sent a letter³ to the Parliament and the Council expressing their concerns and alerting the EU institutions to the body of research underscoring the negative consequences that the inclusion of forest credits in the ETS would have for the climate, forests and local communities. Their inclusion would also undermine the effectiveness and credibility of the ETS itself.
Emission reductions must take place first and foremost at home, so if the EU is serious about improving its carbon footprint, it must reject forest credits outright. Attempting to tackle deforestation while not sufficiently decreasing greenhouse gas emissions is futile.
1. 2003/87/CE establishing a scheme for greenhouse gas emission allowance trading.
2. “Conclusions on addressing the challenges of deforestation and forest degradation to tackle climate change and biodiversity loss,” available here.
3. See www.fern.org for joint NGO letter asking for exclusion of forest credits in ETS.