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Addressing uncertainty upstream or downstream of accounting for emissions reductions from deforestation and forest degradation

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  • Johanne Pelletier
  • Jonah Busch
  • Catherine Potvin

Abstract

Uncertainty in emissions and emission changes estimates constitutes an unresolved issue for a future international climate agreement. Uncertainty can be addressed ‘upstream’ through improvements in the technologies or techniques used to measure, report, and verify (MRV) emission reductions, or ‘downstream’ through the application of discount factors to more uncertain reductions. In the context of Reducing Emissions from Deforestation and forest Degradation (REDD+), we look at the effects of upstream interventions on reductions in uncertainty, using data from Panama. We also test five downstream proposals for discounting uncertainty of the potential credits received for reducing emissions. We compare the potential compensation received for these emission reductions to the cost of alternative upstream investments in forest monitoring capabilities. First, we find that upstream improvements can noticeably reduce the overall uncertainty in emission reductions. Furthermore, the costs of upstream investments in improved forest monitoring are relatively low compared to the potential benefits from carbon payments; they would allow the country to receive higher financial compensation from more certain emission reductions. When uncertainty is discounted downstream, we find that the degree of conservativeness applied downstream has a major influence on both overall creditable emission reductions and on incentives for upstream forest monitoring improvements. Of the five downstream approaches that we analyze, only the Conservativeness Approach and the Risk Charge Approach provided consistent financial incentives to reduce uncertainty upstream. We recommend specifying the use of one of these two approaches if REDD+ emission reductions are to be traded for emission reductions from other sectors. Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Johanne Pelletier & Jonah Busch & Catherine Potvin, 2015. "Addressing uncertainty upstream or downstream of accounting for emissions reductions from deforestation and forest degradation," Climatic Change, Springer, vol. 130(4), pages 635-648, June.
    • Handle: RePEc:spr:climat:v:130:y:2015:i:4:p:635-648
    DOI: 10.1007/s10584-015-1352-z
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    References listed on IDEAS

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    1. Gregg Marland & Khrystyna Hamal & Matthias Jonas, 2009. "How Uncertain Are Estimates of CO2 Emissions?," Journal of Industrial Ecology, Yale University, vol. 13(1), pages 4-7, February.
    2. Thomas Knoke, 2013. "Uncertainties and REDD+: Implications of applying the conservativeness principle to carbon stock estimates," Climatic Change, Springer, vol. 119(2), pages 261-267, July.
    3. Jean Ometto & Ana Aguiar & Talita Assis & Luciana Soler & Pedro Valle & Graciela Tejada & David Lapola & Patrick Meir, 2014. "Amazon forest biomass density maps: tackling the uncertainty in carbon emission estimates," Climatic Change, Springer, vol. 124(3), pages 545-560, June.
    4. Daniel Plugge & Thomas Baldauf & Michael Köhl, 2013. "The global climate change mitigation strategy REDD: monitoring costs and uncertainties jeopardize economic benefits," Climatic Change, Springer, vol. 119(2), pages 247-259, July.
    5. Giacomo Grassi & Sandro Federici & Frédéric Achard, 2013. "Implementing conservativeness in REDD+ is realistic and useful to address the most uncertain estimates," Climatic Change, Springer, vol. 119(2), pages 269-275, July.
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    Cited by:

    1. Till Neeff, 2021. "What is the risk of overestimating emission reductions from forests – and what can be done about it?," Climatic Change, Springer, vol. 166(1), pages 1-19, May.
    2. Jichuan Sheng & Weihai Zhou & Alex De Sherbinin, 2018. "Uncertainty in Estimates, Incentives, and Emission Reductions in REDD+ Projects," IJERPH, MDPI, vol. 15(7), pages 1-21, July.
    3. Jichuan Sheng, 2017. "Effect of Uncertainties in Estimated Carbon Reduction from Deforestation and Forest Degradation on Required Incentive Payments in Developing Countries," Sustainability, MDPI, vol. 9(9), pages 1-14, September.

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