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Getting Carbon Value Out Of The Forestry And Wood Sector In Annex I Countries: The French Example

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April 1, 2010
Author/organization: 
Mariana Deheza and Valentin Bellassen

After a description of the forestry sector and its position in existing carbon pricing frameworks, this study focuses on the extent to which "voluntary" carbon markets might make it possible to value the sequestration of CO2 in forestry and timber projects carried out in French territory. With an eye towards practical application, it is based on seven hypothetical projects that could apply for carbon certification in the voluntary markets. The study estimates the sequestration potential of these projects and the number of carbon credits they could generate. A cost benefit analysis is also developed for one of these projects.

This study examines the possibilities to monetize on carbon markets four types of actions through
which the forestry and wood sector can mitigate climate change:

  • Increasing the carbon stock in the forest
  • Increasing the carbon stock in wood products
  • Using wood as a substitute for fossil fuels (wood for energy)
  • Using wood as a substitute for materials more energy intensive (wood as a material)

Actions of the "stock increase" type can theoretically be valued on the voluntary carbon markets.
Developments are nevertheless necessary to make these valuations operational. Mechanisms of
the "substitution" type can be valued only on the compliance market. They are currently valued at
the level of the user (electric power generation, heating etc.); the forestry and timber industry can
only participate in this system via agreements such as "supply contracts".

This report analyses three project types that could be carried out to activate these
mechanisms:

  • Reforestation / Avoided deforestation
  • Improved forest management
  • Optimized utilization of products

On the basis of seven hypothetical projects, this study identifies a strong carbon sink potential in
France (several million metric tons of CO2), including afforestation, the conversion of coppice forest
into high forest and the changes in the uses of harvested wood.

Carbon certification is expensive and makes sense only above a critical size that enables project
developers to recover their expenses. For reforestation projects in metropolitan France, for
example, we estimate this size to be around 100 hectares.

Several certification programs coexist on the voluntary carbon market. Their pertinence to the
seven hypothetical projects is also analyzed, together with the conditions for carbon credits
generated in the French forestry and wood sector to be monetized on carbon markets. To achieve
this, two conditions need to be met: methodologies approved by standards should be developed,
and the forestry and wood sector should implement a proper organization.

 

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