IUOS Carbon in Drylands: Desertification, Climate Change and Carbon Finance A UNEP-UNDP-UNCCD Technical Note for Discussions at CRIC 7, Istanbul, Turkey - 03-14 November, 2008 Prepared on behalfofUNEP by UNEP-WCMC Authors: Kate Trumper, Corinna Ravilious and Barney Dickson 31s1 October 2008 Disclaimer: The contents ofthis report do not necessarily reflect the views orpolicies UNEP-WCMC of or contributory organisations. The designations employed and the presentations do not implythe expressions ofanyopinion whatsoeveron thepart of UNEP-WCMC or contributory organisations concerning the legal status of any country, territory, city or area or its authority, or concerning the delimitation ofits frontiers orboundaries. Technical Note: Carbon in drylands - Desertification, climate change and carbon finance Introduction Drylands cover about 40% of the Earth's land surface, excluding Antarctica and Greenland, and are home to more than two billion people (WRI 2002). They are susceptible to desertification, land degradation and drought (DLDD) and their populations, agriculture and ecosystems are vulnerable to climate change and variability. The United Nations Convention to Combat Desertification (UNCCD), one ofthe three 'Rio' conventions born out of the 1992 United Nations Conference on Environment and Development (UNCED). aims to address these issues and emphasises action to promote sustainable development at the community level. The other Rio conventions are the United Nations Framework Convention on Climate Change (UNFCCC) and the Convention on Biological Diversity (CBD). The areas of interest ofthe three Conventions are closely linked and each has accepted the need to work in concert. One area ofjoint interest is that ofthe uptake ofcarbon dioxide from the atmosphere by plants and its storage in ecosystems. It is perhaps the only practicable way ofremoving carbon dioxide from the atmosphere in the short term and therefore one ofthe few options for addressing its existing carbon load, as distinct to slowing future loading by reducing current and future emissions. Most attention so far has focussed on carbon sequestration by tropical forests. More recently, some have argued for a more holistic approach to terrestrial carbon (The Terrestrial Carbon Group, 2008). This paper reviews the potential for carbon sequestration in dryland ecosystems, which includes forests, but also covers other habitats, such as grasslands, and, importantly, soils. It also considers ways in which carbon storage in drylands affects land degradation issues. Carbon storage in drylands Plants take up carbon dioxide from the atmosphere and incorporate it into plant biomass through photosynth—esis. Some of this carbon is emitted back to the atmosphe—re but what is left the live and the dead plant parts, above and below ground make up an organic carbon reservoir. Some of the dead plant matter is incorporated into the soil in humus, thereby enhancing the soil organic carbon pool. Plant biomass per unit area ofdrylands is low (about 6 kilograms per square meter) compared with many terrestrial ecosystems (about 10-18 kilograms). But the large surface area ofdrylands gives dryland carbon sequestration a global significance. In particular, total dryland soil organic carbon reserves comprise 27% ofthe global soil organic carbon reserves (MA 2005). The soil properties, such as the chemical composition ofsoil organic matter and the matrix in which it is held, determine the different capacities ofthe land to act as a store for carbon that has direct implications for capturing greenhouse gases (FAO 2004). The fact that many ofthe dryland soils have been degraded means that they are currently far from saturated with carbon and their potential to sequestercarbon may be very high (Farage et al. 2003). 3 Is al \t E_- <§ll || &v fs fl lei, -D is 1| 5?ua ISII | Qo f£ Sis.! * 5£ If "'Hi Pi! « °S •» if ii ai fisl i^yi fl s|| si sltS Hi M if *S1 , "! |#" yl i-soi-ia lis- 5 11 Sill If •ill iS5 £ 2J,<mu>rifot<LXrUct2c^fl o,nua=. :*COOL«Uo«<JQ«.<C a |s 5-a E| z^cM(&!)IucTots-,mme^IzrOJ<N! ; The map above shows how the density ofcarbon stored, that is, the mass ofcarbon per hectare, varies throughout drylands. The carbon densities are derived from two global datasets: the carbon stock in biomass is from a map based on IPCC Tier-1 Methodology using global land cover data. (Ruesch & Gibbs, in review); soil carbon is from Global Soil Data Products CD-ROM. (IGBP-DIS 2000). The delineation of drylands is from UNEP-WCMC's map ofareas ofrelevance to the CBD's programme of work on dry and sub-humid lands (UNEP-WCMC 2007). The UNCCD defines drylands according to an aridity index: the ratio ofmean annual precipitation to mean annual potential evapotranspiration. The CBD definition of 'drylands' used within its Programme ofWork on Dry and Subhumid Lands (UNEP/CBD/SBSTTA/5/9) differs from the UNCCD definition described above in two ways: i. It includes hyperarid zones (CCD does not) (UNEP/CBD/SBSTTA/5/9), which represent approximately 6.6 percent ofthe Earth's land surface. ii. Major vegetation types are used to define dryland areas in addition to those defined according to the aridity index (UNEP/CBD/SBSTTA/5/9). Table 1 gives a breakdown ofthe carbon stored in eachregion in drylands. Figures for the total carbon stock in each region are from Campbell et al. (2008) and are derived from the same data as the dryland figures. Estimates ofcarbon stored in each region are sensitive to changes in land cover type. Therefore for detailed regional or national purposes, it will be necessaryto refine global land cover data with more detailed local data. Nevertheless, this global overview shows that dryland carbon storage accounts for more than one third ofthe global stock. In some regions, such as the Middle East and Africa, a very high proportion of carbon is in drylands, so any sequestration measures there would need to address dryland ecosystems. Even in regions such as Africa and South Asia, where moist forests contain a lot ofcarbon, dryland carbon storage is still significant. Table 1. Comparison oftotalanddrylands carbon stocks in regions ofthe world Map Total carbon Share of number stock per regional region (Gt) Carbon carbon stock stock in held in Region drylands(Gt) drylands (%) 1 North America 388 121 31 2 Greenland 5 3 Central America & Caribbean 16 1 7 4 SouthAmerica 341 115 34 5 Europe 100 18 18 6 North Eurasia 404 96 24 7 Africa 356 211 59 8 Middle East 44 41 94 9 SouthAsia 54 26 49 10 EastAsia 124 41 33 11 South EastAsia 132 3 2 12 Australia/NewZealand 85 68 80 13 Pacific 3 Total 2053 743 36 Land degradation and carbon emissions According to the Millennium Ecosystem Assessment, "some 10-20% ofthe world's drylands suffer from one or more forms of land degradation. Despite the global concern aroused by desertification, the available data on the extent of land degradation in drylands (also called desertification) are extremely limited. In the early 1990s, the Global Assessment ofSoil Degradation, based on expert opinion, estimated that 20% ofdrylands (excluding hyper-arid areas) were affected by soil degradation. A study based on regional data sets (including hyper-arid drylands) derived from literature reviews, erosion models, field assessments and remote sensing found much lower levels of land degradation in drylands. Coverage was not complete, but the main areas ofdegradation were estimated to cover 10% ofglobal drylands." The MA estimated that the true level ofdegradation lay somewhere between the 10% and 20% figures. (MA 2005). The Land Degradation Assessment in Drylands (LADA) project, funded by the Global Environmental Facility (GEF) and carried out by the Food and Agriculture Organization of the United Nations (FAO) is drawing together information about degradation and developing ways of assessing the extent of land degradationand its impacts. Land use change and degradation are important sources ofgreenhouse gases globally, responsible for about 20% of emissions (IPCC, 2007). Land degradation leads to increased carbon emissions both through loss of biomass when vegetation is destroyed and through increased soil erosion. Erosion leads to emissions in two ways: by reducing primary productivity, thereby reducing soils1 potential to store carbon and through direct losses ofstored organic matter. Although not all carbon in eroded soil is returned to the atmosphere immediately, the net effect of erosion is likely to be increased carbon emissions (MA, 2005). There have been a number ofestimates ofthe rate ofcarbon emissions due to land degradation in drylands at different scales. At the global scale, Lai (2001) estimated that dryland ecosystems contribute 0.23 - 0.29 Gt ofcarbon a yearto the atmosphere, which is about 4% of global emissions from all sources combined (MA 2005). In China, degradation ofgrassland, particularly on the Qinghai-Tibetan Plateau, has led to the loss of3.56 Gt soil organic carbon over the last 20 years. It is estimated that the soils ofChina overall nowact as a net carbon source, with a loss of2.86 Gt in the same period (Xie et al., 2007). It is therefore vital from a climate perspective that this region is managed to enhance carbon sequestration (Xu et al., 2004) and further study is clearly required in this area (ESPA China 2008). Grace et al. (2006) reviewed carbon fluxes in tropical savannas. They found that carbon sequestration rates in these ecosystems may average 0.14 tonnes carbon per hectare per year or 0.39 tonnes carbon per hectare per year. They concluded that "if savannas were to be protected from fire and grazing, most ofthem would accumulate substantial carbon and the sink would be larger. Savannas are under anthropogenic pressure, but this has been much less publicized than deforestation in the rain forest biome. The rate of loss is not well established, but may exceed 1% per year, approximately twice as fast as that ofrain forests. Globally, this is likely to constitute a flux to the atmosphere that is at least as large as that arising from deforestation of the rain forest." As well as contributing to greenhouse gas emissions, drylands are themselves vulnerable to the effects ofclimate change and the impacts ofclimate change in these areas may lead in turnto further carbon emissions. Any further failure ofplant growth due to increased temperatures would further reduce carbon inputs to the soil, accelerating its degradation. Smith et al point out that "even partial loss ofvegetation integrity could make soils more vulnerable to degradation through other agents such as grazing and cultivation.' (Smith et al 2008) Climate change mitigation through addressing DLDD Addressing land degradation in dryland ecosystems presents two complementary ways of mitigating climate change. First, by slowing or halting degradation, associated emissions can be similarly reduced. Second, and arguably of greater significance, changes in land management practices can lead to greater carbon sequestration, that is, to removing carbon from the atmosphere. In general, the carbon storage potential ofdryland ecosystems is lower than for moist tropical systems, but the large area of drylands means that overall they have significant scope for sequestration. Managing drylands for carbon sequestration Since carbon losses from drylands are associated with loss of vegetation cover and soil erosion, management interventions that slow or reverse these processes can simultaneously achieve carbon sequestration. There is a wide range of strategies to increase the stock of carbon in the soil. Examples include enhancing soil quality, erosion control, afforestation and woodland regeneration, no-till farming, cover crops, nutrient management, manuring and sludge application, optimal livestock densities, water conservation and harvesting, efficient irrigation, land-use change (crops to grass/trees), set-aside, agroforestry, and the use of legumes (FAO 2004, Lai 2004, Smith 2008). There is a growing interest in assessing the carbon sequestration potential of such strategies quantitatively. Using a modelling approach, Farage et al (2007) found the most effective practices for increasing soil carbon storage were those that maximised the input oforganic matter, particularly farmyard manure (up to 0.09 tonnes C per hectare per year), maintaining trees (up to 0.15 tonnes C per hectare per year) and adopting zero tillage (up to 0.04 tonnes C per hectare per year (Farage et al 2007). Tiessen et al. (1998) reviewed data on carbon and biomass budgets under different land use in tropical savannas and some dry forests in West Africa and North-Eastern Brazil. They found that improvements in the carbon sequestration in these semi arid regions depended on an increase incrop production under suitable rotations, improved fallow and animal husbandry, and a limitation on biomass burning. Use of fertilizer was required for improved productivities but socioeconomic constraints largely prevented such improvements, resulting in a very limited scope for changes in soil carbon management. Increasing carbon stocks in the soil increases soil fertility, workability, water holding capacity, and reduces erosion risk and can thus reduce the vulnerability ofmanaged soils to future global warming (Smith. 2008). However, hidden costs also need to be considered, such as the addition ofmineral or organic fertilizer (especially nitrogen and phosphorus) and water, which would need significant capital investment (MA 2005). Estimates ofdryland carbon sequestration potential Several studies have attempted to assess the potential for carbon sequestration in drylands. Considering all drylands ecosystems, Lai (2001) estimated that they had the potential to sequester up to 0.4-0.6 Gt of carbon a year if eroded and degraded dryland soils were restored and their further degradation were stopped. In addition, he suggested that various active ecosystem management techniques, such as reclamation of saline soils, could increase carbon sequestration by 0.5-1.3 Gt of carbon a year. Squires et al (1995) estimated similar figures. Keller and Goldstein (1998) reached the slightly higher figure of 0.8 Gt of carbon per year using estimates ofareas of land suitable for restoration in woodlands, grasslands, and deserts, combined with estimates ofthe rate at which restoration can proceed. Other studies have examined specific ecosystems in particular locations. For example, Glenday (2008) measured forest carbon densities of58 to 94 tonnes C/ha in the dry Arabuko-Sokoke Forest in Kenya and concluded that improved management ofwood harvesting and rehabilitation forest could substantially increase terrestrial carbon sequestration. Farage et al. (2007) used soil organic matter models to explore the effects of modifying agricultural practices to increase soil carbon stocks in dryland farming systems in Nigeria, Sudan and Argentina. Modelling showed that it would be possible to change current farming systems to convert these soils from carbon sources to net sinks without increasing farmers' energy demand. The models indicated that annual rates ofcarbon sequestration of0.08-0.17 tonnes per ha per year averaged over the next 50 years could be obtained. Despite these studies, significant gaps in knowledge remain. Better information is needed on the impact ofland use changes and desertification on carbon sequestration and the cost-benefit ratio ofsoil improvement and carbon sequestration practices for small landholders and subsistence farmers in dryland ecosystems (MA 2005). Linking drylands development and carbon markets There are two markets for carbon sequestration: a) the compliance market governed by the United Nations Framework Convention on Climate Change (UNFCCC) through its Kyoto Protocol and b) the voluntary market. The role of the natural biosphere in climate change mitigation is recognised in the UNFCCC through Land Use Land Use Change and Forestry (LULUCF). Annex I Parties, under Article 3.3 of the Kyoto Protocol, can use "direct human- inducedland-use change andforestry activities, limitedto afforestation, reforestation and deforestation since 1990, measured as verifiable changes in carbon stocks, " to meet emissions reductions targets. In addition, they can elect Forest Management, Grassland Management, Cropland Management, and Revegetation for inclusion in the accounting process. There are calls by some to include all lands and associated processes inthe LULUCF, rather than the narrowactivities specified above. The rules for LULUCF were only set after emission reduction targets had been agreed. This has been viewed as a limitation, as in effect land use activities 'offset' emissions in other sectors, rather than acting as an integral part of the mitigation portfolio. Issues still remain over the permanence of sequestration activities as management changes or natural disturbances can quickly release any carbon accumulated. The opportunities for Non Annex 1 countries to participate in such activities is also limited, and restricted to the Clean Development Mechanism (CDM); where Annex I CDM countries can gain carbon credits through activities in developing countries. activities are restricted to Afforestation, Reforestation and Deforestation activities, and can make up only 1% ofthe emissions reduction portfolio for Annex I countries. As yet few forestry-based carbon sequestration activities have been funded through the CDM, partly because of concerns about additionality, permanence and leakage. Voluntary markets have developed their own regulations and protocols, and are the only outlet for reduced deforestation programmes at the moment. However, the UNFCCC is considering introducing a financial mechanism to reduce emissions from deforestation and forest degradation (REDD) in developing countries. There is still a great deal ofuncertainty about the form ofthe mechanism, not least how it will be funded. One option is to do so though a specific fund, another is a market-based mechanism that would allow developing countries to sell carbon credits on the basis of successful reductions in emissions from deforestation and forest degradation. A market-based mechanism is expected to generate a much greater supply offunds; one estimate, based on a relatively low carbon price ofU.S. $10 per ton and an estimate of individual countries' ability to slow deforestation, suggests a potential market ofU.S. $1.2 billion a year (Niles et al, 2002). The United Nations Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (UN-REDD Programme) is a collaboration between FAO, UNDP and UNEP. It is aimed at "tipping the economic balance in favour ofsustainable management offorests so that their formidable economic, environmental and social goods and services benefit countries, communities and forest users while also contributing to important reductions in greenhouse gas emissions". Its immediate goal is to assess whether carefully structured payment structures and capacity support can create the incentives to ensure actual, lasting, achievable, reliable and measurable emission reductions while maintaining and improving the other ecosystem services forests provide. The UN-REDD programme has nine initial pilots, two ofwhich- Tanzania and Zambia - are dryland woodland countries. The potential scale of funding available through a market-based REDD has drawn attention to both its potential for achieving other benefits simultaneously and the risk ofdisplacing degradation into areas that may have low carbon storage potential, but that are valuable in other ways (Miles and Kapos 2008). There are technical and statistical challenges ofmeasuring changes in above and belowground carbon stocks over large areas in drylands with the required accuracy, and further research is required to demonstrate the feasibility oflarge area measurement schemes. The pros and cons ofcarbon accounting at different scales (e.g. individual land user, watershed, national level) and the associated transaction costs in administering such schemes also still need to be evaluated. REDD is applicable to forested ecosystems only, but other carbon markets may include projects based in other ecosystems, depending on their carbon sequestration potential. Regardless ofthe market, the price ofcarbon strongly influences whether interventions to manage land degradation and carbon sequestration simultaneously are cost effective. At present, the price of soil organic carbon, for example, is low, at about $1 per tonne, so only low-cost interventions are likely to be cost effective for land managers. For example. Smith (2008) concluded that there was technically the potential to increase soil organic carbon stocks by about 1-1.3 Gt per year. However, he found that if carbon prices were less than US$20 per tonne it would only be economically feasible to increase soil carbon stocks by up to 0.4 Gt carbon per year. At higher carbon prices, costlier interventions may generate sufficient revenue through carbon credits to be worth undertaking. The important questions for drylands, then, are first to identify areas, forest or otherwise, where the carbon storage potential is great enoughto attract carbon finance based on that alone and second to consider whether REDD and other mechanisms could prioritise schemes that also delivered co-benefits such as watershed or erosion protection. The studies referred to in this technical note indicate that, although carbon density (tonnes ofcarbon stored per hectare) ofdrylands is low, the total amount stored can be large as the areas involved are large. As such, interventions that increase the amount ofcarbon stored in drylands, particularly those that are relatively low cost, may be attractive to carbon markets. Tropical dry forests can store significant amounts ofcarbon (ECCM 2007) so REDD may be a suitable finance mechanism for anti-degradation measures in these ecosystems, particularly in dryland nations that do not have carbon-rich moist forest. However, it would be helpful to have more information on the characteristics ofdryland forest and their carbon storage potential, as well as greater clarity ofthe form that REDD mechanism will take, to estimate the likely scale finance available for UNCCD-relevant forests. It is clear that dryland carbon sequestration, particularly in soils, can provide other ecosystem and social benefits such as as the rebuilding ofthe biophysical foundations of a sustainable natural environment - biodiversity, forests, livestock, soils, water, natural ecosystems - thus increasing productivity, improving water quality, and restoring degraded soils and ecosystems. In its 2004 report on carbon sequestration in dryland soils, the FAO concluded that "actions for soil improvement through carbon sequestration are a win - win situation where increases in agronomic productivity may help mitigate global warming, at least in the coming decades, until other alternative energy sources are developed" (FAO 2004). Conclusions Sustainable land management practices that address desertification, land degradation and drought (DLDD) in drylands can also have significant carbon sequestration potential, particularly where they increase the organic carbon content ofsoils. As Lai (2004) pointed out, the carbon sink capacity oftropical dryland soils is high in part because they have already lost a lot ofcarbon. Restoring that carbon offers long-term sequestration and can improve crop yields and increase ecosystems' resilience to future climate variability. Indeed, the UNCCD's 10 year strategic plan (10YSP) recognises the links between DLDD and climate change. One indicator ofthe plan's strategic objective 3 "to generate global benefits through effective implementation of the UNCCD" is to achieve an "increase in carbon stocks (soil and plant biomass) in affected areas" (indicator S-6). However, weak institutions, limited infrastructure and resource-poor agricultural systems often limit the capacity to address soil carbon and DLDD. Carbon markets offer a possible way of financing measures to do so in some areas. However, for significant carbon finance to be channelled to dryland ecosystems, it may be necessary that market mechanisms allow prioritisation or a premium for schemes that offer other benefits. Both forest and non-forest ecosystems have carbon sequestration potential, but the price ofcarbon traded in the voluntary market is often too low to influence land management practices at present. The 10YSP has already set a strategic objective (Strategic objective 4) ofmobilising resources to support implementation of the Convention through building effective partnerships between national and international actors. Work that encourages national and international carbon markets to consider co-benefits in terms ofecosystem serves as well as carbon is in line with this objective. Giventhat soil carbon sequestration has muchto offer climate change mitigation, land and livelihood protection and resilience to climate change, but that actions to enhance it may be hampered by lack of finance, lack of data and perhaps capacity to implement changes, it is all the more important that policies and institutions addressing these issues should work co-operatively, as setout in 10YSP. References Campbell. A., Miles. L., Lysenko, I., Hughes, A., Gibbs, H. 2008. Carbon storage in protected areas: Technical report. UNEP World Conservation Monitoring Centre ECCM 2007. The Edinburgh Centre for Carbon Management. Establishing Mechanisms for Payments for CarbonEnvironmental Services inthe Eastern Arc Mountains, Tanzania. ESPA China 2008. China Ecosystem Services and Poverty Alleviation Situation Analysis and Research Strategy - Final Report to the ESPA Programme. ESPA China Consortium, CAAS, Beijing, China. Farage P., PrettyJ., and Ball, A.. 2003. Biophysical Aspects ofCarbon Sequestration in Drylands. UniversityofEssex. Farage P., Ardo J., Olsson L., Rienzi E., Ball A. and Pretty J. 2007. The potential for soil carbon sequestration in three tropical dryland farming systems ofAfrica and Latin America: A modelling approach. Soil & tillage research, vol. 94, no2, pp. 457-472. 10