Harvested wood products in the context of climate change

Emissions of greenhouse gases is accounted for and reported annually under the UNFCCC and the Kyoto protocol. In the current accounting system, emissions of CO2 from harvested wood products (HWP) are attributed to the year of harvest and the country of harvest. All harvested wood is thus assumed to be oxidised to CO2 in the year of harvesting, and no wood goes into long term storage. This is called the IPCC default approach. Much of the harvested wood will however be stored for a short or long period of time before it oxidises and this will cause a delayed emission of CO2. If more wood is stored than oxidised in a given year, harvested wood products will act as a sink and a removal of CO2 is recorded. However, if the consumption of wood decreases to a level below what is oxidised, harvested wood products will act as a source and emissions of CO2 is recorded. In Norway, as on many other countries, the stock of harvested wood products has been increasing for many years, and is likely to increase further. Including emissions/removals of CO2 from harvested wood products in the post Kyoto 2012 regime is under consideration by the UNFCCC, and in that context it is imperative to evaluate estimation models and approaches for the reporting/accounting (IPCC 2006a).

In this report, different accounting approaches and methods for estimating the annual change of emissions/removals of CO2 due to HWP are analysed. Results showing the emissions/removals of CO2 in Norway reported by the different approaches are also presented. The analyses are constructed for Norwegian conditions and may not be applicable to other countries.

Approaches and estimation methods/models

In this report a distinction is made between an approach and a method/model, and it is important to recognise the difference between them. The approaches describe how emissions are allocated to countries, depending on production, imports and exports of harvested wood products. Put into other words, is it the country where the wood is harvested or the country where the wood is used that should account for the harvested wood products? Estimation methods/models, on the other hand, are how the emissions and HWP stocks are estimated from national data and statistics.

If accounting of HWP is included in the accounting system under the UNFCCC in the next commitment period (after 2012), it will belong in the Agriculture, Forestry and Other Land Use (AFOLU) sector. The choice of approach will therefore have an impact on the emissions/removals accounted for in the AFOLU sector in the National Inventory Report (NIR). Since the approaches treats storage and trade of HWP in different ways, a common approach for accounting should be decided by the Conference of the Parties. If a common approach is not chosen, and all countries can use which approach they choose, this would lead to double counting or no counting of emissions from HWP. The consequence of this would be significant errors in the global emission estimates. Note that the stock change approach for HWP of domestic origin (SCAD) will not give the correct world total (see below). The approaches will give different incentives to national politics with respect to import and export of wood products if HWP are to be included in the accounting system. If emissions from HWP are to be reported only, and not accounted for, no incentives are given by the different approaches.

Approaches and incentives

We have investigated five approaches; the stock change approach, the atmospheric flow approach, the production approach, the simple decay approach and the stock change approach for HWP of domestic origin. The first four are outlined in the 2006 IPCC Guidelines for National Greenhouse Gas Inventories (IPCC 2006a). The approaches differ in how the emissions from HWP are allocated to different countries depending on imports and exports, and will usually give different output with respect to both level and trend. For a country with large net export (or import) of wood products, the different approaches will report extremely different emissions/removals of CO2. A thorough discussion of the policy relevance of the approaches is beyond the scope of this work, we have however included some incentives that they may give.

In the stock change approach (SCA), all HWP residing within the national boundaries are considered, regardless of country of origin. The SCA resembles the estimation methods used for other sources most closely, and it is consistent with how the Land Use, Land Use Change and Forestry (LULUCF) sector is treated in the Kyoto protocol and in the 1996 IPCC Guidelines (IPCC 1996; Kyoto protocol). It is also the simplest of the approaches with regard to data requirements. However, since a country can build up a stock of imported HWP, the SCA may give incentives to import wood from deforestation or other unsustainable sources like illegal loggings.

The atmospheric flow approach (AFA) estimates fluxes of carbon to and from the atmosphere for HWP residing within the national boundaries. All HWP residing within the national boundaries are considered, including imported wood. The AFA is inconsistent with the existing reporting/accounting system of LULUCF which is based on stock-changes. The numerical difference between the SCA and AFA is only net export, data requirements are thus almost as simple as for the SCA. In general, the atmospheric flow approach gives incentives to producing countries to increase their export, and not necessarily to increase the use of wood products. Emissions from imported wood-based biofuels would then be accounted for in the reporting country, which is different from the treatment of other imported biofuels. The AFA will give vast removals of CO2 for a country with large net export of HWP.

In the production approach (PA) all domestically harvested wood is accounted for, including the amount that is exported. The exported HWP will thus remain in the inventory of the reporting country. The reporting country will therefore have a responsibility of exported wood residing in other countries, while imported wood are unaccounted for. As there is no easy way to know the fate of exported HWP, it is assumed in the estimation model that exported HWP is used in the same manner as if it were in domestic use. The complexity and uncertainty of this approach compared to the SCA is therefore high, and it is difficult to use national statistics to estimate the emissions/removals of CO2.

Although the simple decay approach (SDA) estimates fluxes of carbon to and from the atmosphere from domestically harvested woods rather than stock changes, it will give the same results as the production approach. The same arguments apply to the SDA as to the PA.

The stock change approach for HWP of domestic origin (SCAD) only includes domestically harvested wood that stays within the national boundaries. The possible problems with the SCA concerning imported, potentially unsustainable wood are thus avoided, as are the problems with having exported wood in the HWP inventory. The SCAD estimates are however more complex and uncertain than the SCA.

Estimation models and incentives

Two models have been utilised for estimating the emissions/removals of CO2 due to harvested wood products, the IPCC HWP model and the "revised" model. The IPCC HWP model is presented in the 2006 Guidelines (IPCC 2006a) as a default model (Tier 1). We have, wherever possible, estimated national values to be used instead of the default values provided by 2006 Guidelines, thus turning it into a Tier 2 model. The revised model is a combination of a country specific Tier 3 method developed at Statistics Norway (Gjesdal et al. 1996; Flugsrud et al. 2001) and the IPCC HWP model (IPCC 2006a).

The IPCC HWP model (Tier 1) is a flux method with a life-time analysis. Activity data on production, imports and exports of semi-finished wood products are required together with estimates on the lifetimes of the different products. Although the activity data are of good quality and easily accessible (FAO 2008), the flux method is sensitive to the life-time assumptions. The IPCC HWP model is easy to use, the risk of double counting is low and it will not require large resources to perform on a yearly basis. It is also applicable on all the approaches.

In the revised model (Tier 3), a total inventory of the solid wood carbon stock is, among others factors, based on information concerning the Norwegian building stock. Data from the Population and Housing Census is vital to this work, and the total inventory will give the most accurate results if it is performed in the same years as the census (normally every 10 years). The most important modifications of the direct inventories compared to the old method (Gjesdal et al. 1996; Flugsrud et al. 2001) are the inclusion of wood in uninhabited buildings like cabins, outbuildings and garages, the renovation sector and the civil engineering structures. The method has also been improved by assigning different wood contents to dwellings depending on type of building and year of construction. Changes in building tradition are thus incorporated in the model. The solid wood carbon stock in the IPCC HWP model is then fitted to the direct inventories, giving different half-lives for solid wood products for the different decades. The stock and stock changes in the non-inventory years are then estimated with the IPCC HWP model, both for solid wood products, paper products and waste.

The direct inventory in the revised model depends on high quality data regarding the Norwegian building stock. The most accurate information about residential buildings is found in the Population and Housing Census. It is therefore highly recommended that the direct inventories are updated every 10 years, following the cycle of the Population and Housing Census. For the years in between the direct inventories the resource use will be similar for the two models, while the direct inventories require significantly larger resources. As presented here, the revised method only applies to the stock change and atmospheric flow approach.

The two models will respond differently to incentives for increased use of wood in building constructions, panels, window frames etc. In the IPCC HWP model an increased use of wood in constructions may be recognised by a higher production or net import of solid wood products. However, if the products are imported as end-products such as prefabricated houses, they will not appear in the IPCC HWP model at all. In the revised model the estimated value for wood content in buildings and the share of wooden houses should be updated every time the direct inventory is performed, and will therefore reflect increased use of wood in constructions. Annual changes in the non-inventory years will be reflected by a higher production or net import of solid wood products, as in the IPCC HWP model.

An important factor to consider is whether to include HWP in landfills in the estimates or not. Including it may give incentives for storing HWP in landfills. This is in contradiction with the regulative from the Ministry of the Environment which comes into force July 1st 2009 (Ministry of the Environment 2008) concerning a prohibition on landfilling of biodegradable waste. If all wood and paper delivered to landfills are to be burned for bio energy, the annual change in carbon stock will decrease until it reaches zero (or close to zero). If waste is included this will be reflected in decreased removal of CO2 in all approaches.