As the European Commission enters the final stages of deciding how to integrate Land Use, Land Use Change and Forestry (LULUCF) in the EU Climate and Energy package for 2021-2030, Fern has released a report showing that this can be accomplished without diluting the overall target but still incentivising good climate performance in the forest and land sectors.
The report, written for Fern by the Institute for European Environmental Policy (IEEP), recommends structuring a LULUCF pillar that would set targets for Member States with a large LULUCF sector, yet be voluntary for those with a smaller LULUCF sector.
It modulates targets based on GDP per capita in order to achieve a similar cost per tonne of carbon as will apply in the Emissions Trading System (ETS) and Effort Sharing Decision (ESD) sectors. Since these targets would singularly apply to LULUCF, this would avoid any bridging between the new LULUCF pillar and existing climate instruments, such as the ESD.
Fern’s report responds to concerns that including LULUCF, a net sink of emissions in the EU, into the climate and energy package could weaken the EU emission reduction target by at least three per cent, to less than 37 per cent (down from 40 per cent in relation to 1990) if all credits produced could be used by other sectors to meet their targets. This, even after internationally approved accounting rules have been applied.
Fern’s report comes at the same time as a report by the European Forestry Institute (EFI), which suggests that the EU mitigation target could increase from 40 to 50 per cent if climate mitigation were incentivised in the forest sector. Its bottom line, as with the Fern report, is that LULUCF must not serve to dilute ambition in other sectors.