Once applicable activities and an accounting framework have been selected,
it is necessary to determine which carbon related to these activities will be
counted in determining Parties' compliance with their Kyoto commitments. This
section introduces the concept of baselines-which can be used, if desired, to
adjust carbon stock accounts to discriminate between the effects of LULUCF activities
and other factors as well as to factor out the effects of business-as-usual
and activity undertaken prior to 1990.
Baselines are the reference scenario against which a change in GHG emissions
or removals is measured. There are many options for baselines, including the
stock change that would have resulted from "business-as-usual" activities; the
stock change that would have resulted from the continuation of current or 1990
activity levels; the stock change that would result in the absence of active
management; performance benchmarks or standard management practices; or the
rate of change of stocks in 1990.
Baselines could be set at a national, regional, or project level. National
baselines presumably would be developed from analysis of regional trends and
practices and could be based on a combination of measurements on control plots
and models. Regional baselines could also be used as a constraint on the baselines
for projects within the region. If national baselines were developed using a
standardized methodology and agreed upon at the international level (e.g., by
the COP), the design of incentives for individual landowners to enhance carbon
sequestration could be purely a matter of domestic policy in each country.
Baselines need not necessarily be derived solely from observed trends and practices
in a given country or region. Internationally agreed performance benchmarks
have also been suggested as a means for establishing objective baselines (Lazarus
et al., 1999). For example, certain practices could be considered "standard
management practice," and baselines might be set to reflect the level of carbon
sequestration that would occur if these practices were universally applied.
Credit would then be available only to the extent that there was an improvement
compared to the results of applying these standard practices. The applicability
of this approach to the LULUCF sector is unclear, however, because there is
no set of internationally agreed "standard management practices," and such practices
may be difficult to define for the wide variety of situations that will be encountered
in the field.
Baselines can be reflected in the adjustment terms of the accounting equations
presented in Table 2-3, if the Parties so decide.
In the land-based rule, the baseline stock change may be subtracted from the
gross change in carbon stocks during the commitment period on land included
in the system. Similarly, in the activity-based rule a baseline area subject
to the activity under business-as-usual might be subtracted from the total area
where the activity takes place during a commitment period. In addition, the
impact of the activity per unit area may implicitly be calculated relative to
a baseline representing the absence of that activity.
Key policy questions that could be addressed through the use of appropriate
baselines are as follows:
- Will the accounting system include adjustments for the effect of non-human-induced
- Will the accounting system include adjustments for the effect of business-as-usual
- Will the accounting system be adjusted for the effect of activities undertaken
prior to 1990?
These questions may be addressed differently for ARD activities, Article 3.4
activities, and projects. Decision 9/CP.4 requires accounting for ARD activities
as changes in stock during the commitment period without making reference to
a baseline stock change (suggesting that the baseline adjustment term may be
zero for Article 3.3 accounting). Articles 6 and 12, on the other hand, require
that credit be based on benefits that are "additional" to what otherwise would
have occurred, implying the use of a "business-as-usual" baseline. Project developers
therefore have had to develop methods to define "business-as-usual" baselines.
A more detailed discussion of these methods appears in Chapter
5. Article 3.4 requires the COP to "decide upon modalities, rules, and guidelines
as to how" additional activities will be included. Thus, the Parties must decide
whether to require a baseline and, if one is required, how it should be calculated.
If the Parties determine that such a baseline requirement is not relevant to
Article 3.4, the baseline adjustment term can be set to zero in the accounting
The following three sections provide additional information to guide decisions
regarding each of the policy questions relevant to the use of baselines. Distinctions
are made between ARD activities, Article 3.4 activities, and projects where
appropriate. More details related to each of these types of activity appear
in subsequent chapters.