ncx-gitbot
commented
1 year ago NCX response: Projects are additional when the carbon stocks in the project scenario are greater than the carbon stocks expected under the baseline scenario–this is the basis for any carbon project verified against any standard. Because additionality, and therefore, creditable carbon is dependent on an accurate baseline, eligibility is limited to forests that are truly at risk of being harvested in the next year. Deferring that harvest results in additional carbon in the landscape.
Commenter Organization: Forest Carbon Alliance Inc.
Commenter: Etienne Green
2021 Deferred Harvest Methodology Section: No Section Indicated
Comment: As I read this methodology, I cannot help but ponder how the one-year term and tonne-year accounting creates an opportunity for some savvy landowners to exploit carbon finance, without really making any changes to their practices. This methodology could simply become integrated as harvest schedule optimisation process with the constraint of meeting the earliest eligibility criteria for a deferral/harvest risk defined in this methodology and also harvest revenues that would maximize the financial return over the rotations.
Deferring harvest for 1 year is not an activity only motivated by the presence of carbon markets. There are plenty of situations where this could happen anyway; high fuel prices, labour shortage, market fluctuations, inventory surplus, greater volume potential, to name a few.
Land landowners will always be incentivised to maximise the returns generated on their properties. In this case, the only cost to the landowner is the temporary opportunity loss of harvesting in that year. The value of the wood is still accruing and the oppertounity to harvest is regained. The landowner doesn’t have to invest capital in new silviculture, produce new technology, incur additional cost in order to produce a benefit. The project activity is fundamentally just a business decision to receive an immediate payment while still retaining all the assets... Most of the upside is on the landowner’s side. Making decisions that maximises returns will always be the business as usual, and in the best interest of the landowner.
Perhaps I have not fully understood the details on the methodology or am unnecessarily overly pessimistic. I also assume this methodology works best when it is paired with the NCX auction, which determines the price paid to all landowners. This would create some level abatement to the items described above, but this context is not relevant in all jurisdictions or required by the methodology, not does the methodology address this.
In my opinion, projects that employ this type of methodology in its current format, come really close to the line when it comes to additionality and are vulnerable to criticism of being fabricated circumstances that does not produce real GHG benefits.
Proposed Change: Consider a requirement that the issuance of VCU be delayed for first time project enrollers. Perhaps this can be disincentivized landowners, looking to take advantage of nuances in the methodology