Carbon Sequestration as a Land Management Strategy

*Carianne Johnson*

### **Abstract**

Carbon sequestration mechanisms were developed as a land management strategy in the AFOLU sector. The principal land management strategies to obtain payment for ecosystem services include afforestation and restoration, soil carbon sequestration and bioenergy. Improvements in land management can then be traded for payments in two mechanisms—the compliance carbon market and voluntary carbon market. While the compliance market focuses on reducing carbon emissions at the national level in accordance with international agreements the voluntary markets have a multilevel focus working not only with governments but also emphasizes direct engagement with private sector to achieve global emission reduction goals. Each mechanism's structure has benefits and drawbacks with one key shortcoming in both—the access to funding for communities reliant on forest ecosystems which directly impacts the effectiveness of the mechanism to improve land management.

**Keywords:** AFOLU, carbon markets, land management, rural development, carbon rights

### **1. Introduction**

Carbon sequestration is the process of storing carbon. Forests sequester carbon by retaining carbon through the soils, woody debris, litter and biomass [1]. Initially research that determined the carbon sequestration potential of soil, woody debris, litter and biomass was very intensive and time consuming, namely laboratory examinations of soil samples [2–4]. To address this, allometric equations were developed to be less time consuming and included calculations based on the diameter at breast height, crown diameter, tree height, tree species [5]. Obtaining forest inventory data of different tree species became the primary method to determine carbon stocks and once inventory data was collected consistently changes in the carbon stock of the forest were quickly determined [6, 7].

In an effort to reduce the greenhouse gases (GHGs) in the atmosphere several global mechanisms were developed to 'offset' the GHGs emissions by preserving forests [8]. A carbon offset is measured in tons of carbon dioxide (tCO2e) and is defined by [9, 10] as the amount of carbon sequestration or emission reduction of carbon dioxide. Carbon offsets are quantifiable units of GHG reductions [11] 'traded' through a cap-and-trade program where carbon emissions in the developed countries are offset by carbon sequestration efforts in the developing countries. Each cap-and-trade program determines a set amount of emissions allowed which is known as the cap and in order to prevent the emissions from exceeding the prescribed cap, companies offset their emissions by investing in programs that sequester carbon through carbon market trading.

There are two types of carbon markets to date compliance and the voluntary market. These mechanisms were originally envisioned under the Kyoto Protocol which allowed for countries to develop cap-and-trade programs and offset their emissions. Developing countries committed to preserving their ecosystems with carbon sequestration potential while developed countries committed to developing cap-and-trade programs to offset their emissions [12]. Cap-and-trade programs were not developed by all countries, so the Paris agreement extended the requirements of reducing global emissions and requested for all signing parties to outline their emission reduction goals in the National Determined Contributions (NDC). The compliance mechanisms developed were not easily accepted and did not provide the expected impetus for global emission reductions. The effectiveness of the carbon markets continues to be the focus of debate as the cap-and-trade structure allows for buyers to obtain carbon offsets to keep their emissions within allowable limits [12]. The carbon offsets are then seen as licenses to continue business as usual. While some developed countries have national cap-and-trade programs, others only have regional/state-based programs. Existing programs have stark differences allowing for discrepancies in emissions CAPs and acceptable methods for trading on carbon offsets [12, 13]. Additionally, structures for engaging in carbon trading are very cumbersome and require extensive time and technical acumen to receive verifiable credits that would be utilized in trading.

Concurrently, the voluntary mechanisms focused on engaging the private sector to develop emissions reductions commitments and offset their emissions through directly investing in carbon sequestration projects and programs [12]. The voluntary market is seen as the commodification of emissions that favor the companies with the resources to purchase the trades and therefore determine the demand of the credits [14, 15]. Market driven incentives are then unable to produce equitable and ecological results for communities reliant on forest resources [16–20]. However stronger regulation in the voluntary market could alienate small business and forest dependent communities that lack the resources to monitor and report their emission reductions using time consuming methodologies with extensive technical requirements [21–26].

### **2. Carbon sequestration strategies in AFOLU sector**

In the AFOLU sector there are a few principal strategies for reducing emissions and removing emissions. These strategies rely heavily on the science of carbon sequestration. The following is by no means a comprehensive list but provides an overview of the widely recognized strategies that are utilized to improve land management.

#### **2.1 Afforestation or restoration**

Afforestation and restoration (AR) is most widely utilized strategy of the list and is defined as conversion of non-forest land to forest through planting and seeding [27]. According to the Clean Development Mechanism (CDM) afforestation applies when the land was not forested for 50 years whereas reforestation applies to land that did not contain forest before 1990 [27, 28]. Assisted Natural Regeneration (ANR) also applies to this category. It is important to note that afforestation and restoration does not stipulate a time frame for the forest cover to be maintained only that a forest must have a crown cover greater than 105 [27, 28].

However, planting and seeding for mono or multi-species plantations also apply to this category. Plantations that are planted after cutting forests would not be considered in this category unless the plantation was established on grasslands, agricultural croplands or degraded forests with less than 10% crown/canopy cover [27, 29, 30].

Wetland restoration is the most significant aspect of AR due to the enhanced carbon sequestration of mangroves through their extensive root structures and soil composition [8]. This strategy is very variable due to the climate, geomorphology, relative sea level rise, wave energy and anthropogenic factors impacting a wetland system [8]. Wetland restoration requires more extensive assessments of conditions and tends to benefit from ANR activities versus human induced planting and seeding [8, 27]. Primary forests are more effective at sequestering carbon due to the age of the trees and their uninterrupted growth while afforestation and restoration activities require time to allow the forest to regenerate. This strategy is effective at reducing carbon emissions for extended periods and has even prompted countries to grow secondary forests in areas cleared for agricultural production. Agroforestry is also a practice that applies to this category allowing for agricultural production under the forest canopy. As a land management strategy carbon trading for AR projects and programs continues to be a substantial contributor to both the compliance and voluntary markets.

#### **2.2 Soil carbon sequestration**

Given the carbon sequestration potential of soil, cultivation practices can contribute to the release of carbon into the atmosphere and the loss of soil organic carbon [31]. Soil organic carbon is beneficial to promote stability in the soil and suppress the proliferation of diseases [32]. Soil carbon sequestration activities include the reducing tillage, green manuring through the use of tree litter, organic fertilizers as noted in [33–35]. While the strategy is effective at community and regional levels the global potential for sequestration has been subject to scrutiny particularly in agricultural settings [36, 37]. Soil organic carbon stocks are not only vulnerable to agricultural activities, it is also vulnerable to climate change through heterotrophic respiration [38–44] and are dependent on time and scale [38, 45–47].

However, carbon trading for soil carbon sequestration activities is widely utilized by the agricultural sector and benefits individual farm holders with additional financing to support their sustainable agriculture practices.

#### **2.3 Bioenergy and biochar**

Biochar is the conversion of biomass or plant material into charcoal through pyrolysis—the heating of the biomass material until the charcoal is formed [48]. During the process of developing biochar the gases are captured and condensed into liquid fuels namely bio-diesel and ethanol [48]. This process reduces emissions by using agricultural waste to create clean energy resulting in a carbon dense product that can be used with compost as fertilizer [48]. With an increase in demand for biofuels as a form of clean energy, the process of using plant material for energy has increased the use of land for crop plantations namely soy for bio-diesel and corn for ethanol [48–50]. Carbon offsets are traded for the creation of bio-energy and bio-char and the bio-energy created from agricultural waste provides greater opportunities for emission reduction [48, 50, 51].

Utilizing agricultural waste allows for combination of the three aforementioned strategies for overall ecosystem protection. Commercial production of bio-energy is also possible in agroforestry systems. However, land management practices that combine afforestation and reforestation, soil carbon sequestration and bioenergy production are only viable at limited landscape scales. On a commercial scale, there is the challenge of maintaining soil quality versus utilizing agricultural wastes for bio-energy [50, 51]. Emission reduction, land management strategies are feasible for rural, forest dependent communities to develop and maintain. This drives the popularity of these strategies in AFOLU sector for carbon trading and they can be traded in the compliance and voluntary market through different mechanisms.

### **3. Compliance carbon market mechanisms**

Under the compliance market there are multiple mechanisms, however two of them are noteworthy. The Clean Development Mechanism (CDM) whose purpose is to support countries in meeting their sustainable development goals and achieve their reduction commitments [52]. There is continued optimism that the potential investment created from the CDM projects can directly support rural, forest dependent communities once the right structures and incentives are created [52–54]. For example, under the CDM-AR projects support the adoption of agroforestry in small holder farms as a way of engaging small holder farmers [54]. However, in forest dependent communities with unequal or unresolved tenure rights and direct access to the benefits of the projects remains a key concern [52–54]. Additionally, CDM structure and process for project development is managed by a board. The board are elected by parties to the Kyoto Protocol and they oversee the CDM process [55]. The process includes assessing projects, registering projects, issuing credits to registered projects, Additionally the board approves new methodologies, adopt new CDM rules and supervise the accreditation of independent auditing firms. Developing a project under the CDM must provide detailed information on the technologies employed, the expected impacts and calculation of the projected emission reductions using one the 140 methodologies in the CDM library [55]. While new methodologies can be proposed their approval relies on a review process though different groups—the UNFCCC secretariat, independent experts, and CDM methodology panel and the board which extends the process taken to get the project approved [55]. Once a project proposal has been reviewed it then needs to be validated by an independent auditor who then determines if the project follows all the CDM requirements [55]. Once the project is cleared by the auditor it goes into a 30-day public comment period where stakeholders can provide comments on the project. After the public comment period the auditor completes a report with recommendations on how to proceed with the project [55]. In addition to the auditor the CDM Board registration and issuance team reviews the project and provides recommendations. In the event that the two assessment differ the final decision to approve and register or reject the project is in the hands of the full board of the CDM [55]. If the project is approved, they can move forward with implementation.

However, the creation of tradable units or credits for the emissions reductions do not happen right away [55]. A second auditor, different from the one hired previously is required to verify the number of emission reductions which typically happens after 1

#### *Carbon Sequestration as a Land Management Strategy DOI: http://dx.doi.org/10.5772/intechopen.112858*

year of the project being in operation. The reports from the project activity are known as monitoring reports and they are then used to verify the emission reductions [55]. The auditor must verify that the project contributes to emissions reductions. Another board approval is needed to allow for CERs (CDM credits) to be issued to the project. When the CERs are issued then they can be traded. Credits are issued every monitoring period under the CDM system every 7 years [55]. There is the opportunity to apply for two 7-year renewals for credits to be issued or a 10-year non-renewable [55].

The process for CDM credits is long and rigorous requiring multiple approvals from the CDM board committees, auditors and engagement with national agencies and local stakeholders. Projects rejected by CDM struggled to provide a strong case for additionality—the case that the reduction of emissions would not have occurred with the sale of the credits of the proposed carbon project and incorrect use of the methodologies to determine the accurate emissions [56]. CDM has diverse interpretations of sustainable development that results in low standard assessment criteria for monitoring [56, 57]. In this case countries have not comprehensively developed monitoring systems to ensure that projects are achieving sustainable benefits. This impacts the quantity and quality of project benefits to forest dependent communities leaving developers to focus solely on the emission reductions aspects of the projects over the sustainable development benefits to these communities [58]. CDM also does not monetary incentives to benefit these communities and depends on the gaps to be filled by voluntary action on the part of the project developers or national agencies involved in the project [56, 59]. Under CDM projects that generate large volumes of CERs with low implementation costs are favored even as their projects generate no to very low benefits to communities reliant on forest resources [59].

The reducing emissions from deforestation and forest degradation in developing countries (REDD) mechanism sought to improve upon the shortcomings of CDM by emphasizing sustainable forest management of forests as a plus to mechanism [60]. REDD+ outlines how countries must use payments to reduce emissions through sustainable forest management and improved forest protection [60, 61]. A key component of REDD+ projects is the requirement of strategies that support national land-use and forest sector planning, stakeholder negotiations to determine provision of funds and services to local actors, carbon brokering and national level carbon accounting [61–63]. An integrated national approach is a key indication of the success of a REDD+ project giving principal responsibility for forest management to national governments [61–63]. Unlike CDM, not all REDD+ facilities require the generation of tradable units and the corresponding creation of registries, verification requirements and stringent rules for accounting [14, 64–70]. These transactions that do not meet carbon-market standards and would require additional structure to develop tradable offsets. Action for ERR issued under REDD+ to become legally defined certificates will allow for an established registry to track transfers of the offset [71]. The one facility under REDD+ mechanism that requires tradable units is the World Bank's Forest Carbon Partnership Facility (FCPF). This facility precisely outlines the activities that contribute to sustainable forest management namely improving forest law management, strengthening protected areas network, direct payments for environmental services, reduced impact logging, removing subsidies leading to deforestation and degradation [71]. The facility provided funds for countries to set up structures for assessments and monitoring of carbon stocks through a readiness mechanism and then created a verifiable, tracking system for the compensation of reductions [71]. Until the growth of voluntary market REDD+ plus credits under the mechanism are largely sold to offset emission in aviation through the Carbon Offsetting and

Reduction Scheme for International Aviation (CORSIA) [72, 73]. Under its current system the REDD+ experiences the challenges of double counting—which is the country of buyer and the country of the seller claiming the credits as part of their nationally determined contributions [14]. Additionally, double selling which are selling the offsets of the same land area to multiple buyers [14, 74–76].

On the whole the compliance market has drawn strong criticism in several ways. Under the CDM a disproportionately high number of projects are implemented in emerging economies with limited attention to low-income countries [77–81]. With the sole emphasis on forest management, the REDD+ mechanism does not create substantial results for SIDS with limited forested land. This droves the growth of the voluntary carbon market (VCM). As the programs normally referred to as standards under the VCM developed they utilized methodologies developed under the CDM and REDD+ and created premium prices on projects that supported sustainable development goals [81–84].

### **4. Voluntary carbon market**

The voluntary carbon market is structured in a similar way to both the CDM and the REDD+ and differs in that it allows for companies seeking to voluntarily offset their emissions to invest in projects that are reducing emissions at varying scales [85, 86]. VCM was developed in tandem with CDM and REDD+ to provide alternatives to the slow and inconsistent regulatory action [86]. It also sought to address the concerns of developing countries that offsets were utilized to outsource reduction commitments and exploit low-cost mitigation projects and provide limited benefit to communities reliant on forest resources [76, 87, 88]. As a result, VCM standards define requirements to measure reductions, accounting and sustainability. Under the VCM carbon credits can direct private financing to sustainable development activities at the local level [88–92] and require projects to have additional benefits such as job creation, biodiversity protection, public health improvements and scaled up these projects could supply much needed financing to the forest dependent communities of the Global South [92].

The process to develop a project under the VCM differs by the standard utilized but follows the similar process to CDM including developing a proposal, accommodating for a period of public comment, having the proposal audited for accuracy of methodology and technical soundness, approval of the project, preparation of a monitoring report to ensure that the project activities are contributing to a reduction on emissions, having the findings of monitoring report audited, approval and determination of the credits. While the structure of the VCM is similar there is more flexibility in the lengths of the monitoring periods and the frequency of issuing credits over a period of time determined by an individual project or program. As an example, a project under the VCM can have multiple monitoring periods within the 7-year time frame stipulated by the CDM, leading to a higher frequency of trades and corresponding payments. Each monitoring period does require the completion of a monitoring report that is audited and approved before the credits can be traded.

After an initial growth the voluntary carbon market was subject to slow market volumes and market value. Even after the adoption of the Paris Agreement the growth was stymied due to the uncertainty of legitimacy of voluntarily offsetting [93–95]. This lack of growth was due to the demand in the initial stages driven by public institutions while the recent demand is being driven by private institutions [96, 97]. An increased

#### *Carbon Sequestration as a Land Management Strategy DOI: http://dx.doi.org/10.5772/intechopen.112858*

number of private companies have committed to reducing emissions through innovation and investments in the VCM. This drastic increase in interest now drives the demand for the VCM and projects that are developed with sustainable development activities receive a premium due to the emphasis on providing financing directly to forest dependent communities [93, 98]. Companies engaged in the carbon markets cover a wide range of sectors for some phasing out carbon emissions are quickly attainable particularly through utilizing renewable energy sources for electricity and transportation [93, 99]. In this case utilizing offsets are a part of the overall emissions reduction strategies. The VCM also includes companies whose business models feature very high emissions and their path towards full decarbonization is not commercially available or feasible. For companies VCM is the only viable option to achieve carbon neutrality. In a survey conducted with oil and gas companies it was determined that as companies fall short of adjusting their business-as-usual practices of exploration, offsetting would be the only option for them to meet their commitments and will continue to drive the demand for credits on the voluntary carbon market [100, 101].

The major challenge for the VCM is the occurrence of double claiming and double counting particularly in areas where payments are already being received under a compliance market mechanism [102, 103]. Double claiming and double counting will continue to be a challenge as registries under the compliance and voluntary market remain segregated. Article 6 of the Paris Agreement addresses this through corresponding adjustments ensuring that once a mitigation outcome is counted towards one party's mitigation pledge it must be 'un-counted' from the other country's pledge. While guidelines are available to avoid double counting, penalties are not forthcoming [93]. The Taskforce for Scaling the Voluntary Carbon Markets (TSVCM) published report based on consultations which noted that while private and national emissions accounting can exist separately, there may be opportunities for climate neutrality claims under the VCM to 'be made on the back of mitigation outcomes' outlined in the NDCs [104]. The document also notes that double counting at the national level must be avoided. Notwithstanding the strong rhetoric against double counting developing countries continue to face the multi-faceted issues associated with climate change and with limited financial resources to fund mitigation and adaptation measures the potential for funding for project to the most vulnerable and the frequency of payments continue to support a growing interest in the market.

Another key challenge of the VCM is the viability of proposed sustainable development benefits that can also reduce emissions. As case study [105] on the use of cookstoves in rural Kenya illustrates this point. Cookstoves are seen to contribute to improved air quality, fuel reduction, forest conservation and reduction of emissions but there are several issues that can affect the effectiveness of cookstoves including poor design, defects in construction maintenance and the limited firewood requirements [105]. Due to the traditional food preferences and labor requirements for construction and maintenance cookstove use is typically lower than proposed under the project [105]. However, the structure of projects emphasize incentivizes to adopt best practices in place of traditional preferences and tend to alienate beneficiaries leading inconsistent cookstove adoption by forest dependent communities from general abandonment, infrequent and unpredictable use [105]. There are also concerns over commodification of these sustainable benefits especially the 'property' rights over the emission reductions [105]. While these rights are key commodities in the projects there are instances when the rights associated with the activity are not directly owned by the forest dependent communities preventing them from directly benefiting from adoption of new practices [105]. It was discovered that women were required to pay

a portion of the initial costs for the cookstoves whether directly out of pocket or a group lending schemes, repayment occurred over a period of time resulting in the women 'paying' for a cookstove that was not being utilized [105]. Additionally, the rights to the carbon offsets did not belong directly to the women and even as some of the cookstove remain idle the carbon traders continue to reap the benefits of carbon rights for an entire community [105]. As pointed out earlier in the chapter, the key challenge of carbon offsets is the emphasis on an adjustment of the behavior of the most marginalized communities in the developing countries in an effort to offset the continued practices of pollution in the developed countries [105].

The effectiveness of sustainable development projects to alter the behavior of communities reliant on forest resources contributes to the concerns on the integrity of the VCM [105] and the multifaceted nature of credits that provide sustainable development credits leads to errors and fraud [92]. High quality carbon credits projects with sustainable development benefits are seldom well defined leading to discrepancies in accounting and verification [92]. While the market demand increases exponentially the extended time frame between the development of the project proposal and the completed sale of credits detracts buyers from making investments [92]. The varying potential of carbon offsets in the projects drive the market and projects with lower carbon potential are often overlooked based on profitability [92]. While sustainable development benefits and climate neutrality are the ultimate rewards of the projects in the VCM, their development and implementation are driven by market conditions and therefore contingent on profitability [92].

Proponents of reform in the VCM have supported the use of digital tools to provide the much-needed transparency [92]. These digital tools can be utilized for registries providing detailed information on when credits are verified and issued. More importantly they can be utilized to track the impact of projects at regular intervals and not just the end of monitoring periods when payments for credits are issued [92]. This will allow for the traceability of credits and provide greater accuracy in the offset claims used by buyers. Digital tools can also increase the involvement of individuals in the goal towards climate neutrality providing opportunities for customers to better understand the carbon footprint and provide them with opportunities to offset their emissions by contributing to projects [92].

With a growing global climate consciousness many customers are concerned with environmental issues and have expressed willingness to pay for low-carbon products which are seen as having a lower environmental impact [106–109]. This incentivizes companies to provide low-carbon products and services and offset their practices that are not aligned with low carbon strategies [109–113]. Companies are moving towards providing information on the carbon footprint of the products and services as well providing information on the potential carbon footprint of customers utilizing the services [114]. Engaging directly with customers in the carbon markets is growing but managing the scale of investments from individuals versus the scale of investments continues to be a challenge [115]. As outlined in a study conducted by [116] utilizing blockchain technology can support data sharing which supports more efficient carbon trading and transparency in the carbon prices.

## **5. Conclusion**

Carbon offsets provide very distinct opportunities for land management however how a country determines and assign carbon rights to their forest resources will

#### *Carbon Sequestration as a Land Management Strategy DOI: http://dx.doi.org/10.5772/intechopen.112858*

impact the extent that payment in carbon offsets benefit the most marginalized communities [14, 93]. The success of the improved land management and the viability of the carbon offsets for forested areas contingent on the adoption of new practices by these communities. Countries however tend to retain latitude to assign rights to communities as the forest resources are the de facto property of the state [14, 93]. While countries enact certain legislation to afford communities reliant on forest resources land rights over forests most of fall short of explicitly assigning rights to payments from carbon offsets to these communities [14, 93]. As national governments seek to benefit from carbon rights, they are met with legal challenges due to the commodification of environmental services on a given land and the true 'ownership' of those services [14, 93]. While private land ownership as an indication of ownership of carbon rights is more acceptable in certain countries, the determination of rights for forest dependent communities are in flux as they are seen as stewards of the forest resources and not official owners. Countries are now faced with the challenge of differentiating between rights of communities reliant on forest resources to own land therefore benefit from the sale of offsets [14, 93].

Some countries have struck a balance by allowing communities and landowners to benefit from carbon rights subject to taxes or allowing for landowners to claim benefits that are then counted towards the country's contribution to their NDCs [14, 93]. The corresponding adjustments are made to avoid double counting and provide progress for the country meeting their global commitments. Ultimately until there are national laws that connect compliance market or domestic schemes and the voluntary carbon markets, the credits issued under private standards remain independent from resultbased payments [14, 93]. The communities' dependency on forest resources requires keen attention to better improve the socio-economic conditions and equitable land management [117, 118]. While the importance of receiving payments for the improvement of land management is a tool to achieving global climate neutrality goals without due attention to the needs of the communities the incentives for these key actors remain woefully insufficient.
