A pragmatic method for estimating greenhouse gas emissions from leakage for Improved Forest Management projects under the Verified Carbon Standard

Abstract

Under the Verified Carbon Standard (VCS), adjustments must be made for leakage when calculating the net greenhouse gas (GHG) emission reductions for an Improved Forest Management (IFM) project. Leakage can be distinguished as either activity shifting leakage or market leakage, based on the agent doing the shifting, and the forest location where the timber harvesting occurs. The current VCS method of applying default market leakage discount factors to determine market leakage can significantly affect the feasibility of IFM projects. In addition, the VCS requirement to demonstrate ‘no leakage’ for activity shifting leakage may also jeopardize a project's viability. An empirical ex post method for accounting for leakage of an IFM project has been proposed in this article. Annual timber harvesting data gathered during the historical reference period and the monitoring period of an IFM project is applied and tested in case studies under various timber harvesting scenarios. The recommended method for activity shifting requires regular monitoring of all potential leakage areas comprising forestlands existing or newly acquired by the IFM Project Proponent. Quantification of market leakage using directly measured data from a national database reduces both the risk and the uncertainty of market leakage attributed to an IFM project.