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LULUCF as a market mechanisms sector under Article 6

Photo by Jayesh Patil on Unsplash

Background and Objective

In recent years, the land use sector (LULUCF) has gained in importance in international climate change negotiations. With the Paris Agreement and its 1.5 degree goal, land use sector activities are also needed. Article 6 of the Paris Agreement provides for various forms of market-based and non-market-based climate action approaches. In the current negotiations on the design of the new market mechanisms under Article 6, a number of Parties are calling for the LULUCF sector to be made a future focus area for the new market-based approaches. However, the extent to which this sector could actually be an acceptable option for Article 6 requires more detailed analysis and assessment.

Against this backdrop, the Federal Environment Agency (UBA) has commissioned a research project which is currently being conducted by Öko-Institut. As part of the project, the commissioned researchers are investigating how and under what circumstances emission reductions from LULUCF activities can be transferred under Article 6 of the Paris Agreement.


Implementation

To investigate the potential inclusion of LULUCF under Article 6, the project team is analysing various regimes and policy instruments at a range of policy levels. For example, the integration of forests and peatlands into the global climate regime is being examined on the basis of the Kyoto Protocol and the Warsaw Framework on REDD+. Here, selected existing instruments are being looked at in-depth – among them the World Bank’s Forest Carbon Partnership Facility. When analysing national and sub-national policy instruments, the project team looks at how the land use sector is covered in various emissions trading schemes outside the EU as well as in the EU Effort Sharing Regulation. Because the land use sector already plays a key role in voluntary offset markets, this area is subject to separate analysis. The project team is also assessing how LULUCF activities are integrated into nationally determined contributions (NDCs) and is examining a number of selected NDCs for this purpose.


Milestones and Outlook

Initial research results were discussed in October 2020 at a workshop with international experts. The results of the various analyses and the outcome from the workshop will eventually be compiled in a report which will be used to identify concrete criteria and options for market-based forest and peatland conservation activities under Article 6.

 

 

LULUCF as a market mechanisms sector under Article 6 of the Paris Agreement

Role of BMWK: Research funding

Project lifecycle: 2019-2021

Implementation: Öko-Institut

Contact: Hannes Böttcher, h.boettcher@oeko.de

 

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