Assessing Alternative Approaches

1. Issues for Consideration in Decisions on Alternative Approaches to Addressing Non-permanence in LULUCF Activities

2. Risk assessment - are measures needed to guard against non-permanence? Measures Not Needed Provide exception to low risk activities Measures Needed Regulatory, policy, and financial considerations needed to implement Liability:Who takes on the liability ? (Buyer v. Seller) Do credits expire or are they assumed to be permanent? Expire Temporary Credits Permanent Tonne Year Crediting Are full credits awarded, or are they issued incrementally? Incremental Full Mechanisms for Replacement - Buffer - Commercial Insurance - Government Guarantee - Performance Bond Combination of Approaches Assessing Alternative Approaches

3. Issue – Need for Risk Screening • Is the risk screening required? • Should screening be mandatory for assessing types of risks and their potential, if yes, what aspects need to be covered in screening • Whether activities with low risk should be notified as categorical exceptions and exempted from permanence requirements (e.g. buffer, insurance etc.), if yes, which categories of activities • Whether activities with high risk should be excluded from eligible activities (e.g. activities of intentional reversal), if yes, which categories of activities

4. Liability • Who is liable for reversals ? • Seller • Buyer • System • a) During contract period, and • b) Subsequent to contract period

5. Issue – Permanence Period • How long is the permanent period? • Policy and permanence requirements • Permanence period in different standards currently is: 40 & 100 years

6. Issue – Coverage of Reversal Risks • What types of reversal risks need to be covered? • Unintentional • Unintentional and intentional • Exclusion of certain intentional reversals

7. Issue – Scale of Activities • Does the scale of activities influence the choice of approaches? • Project • Program/sub-national • National

8. Issue - Feasibility of Approaches or their Combinations • How feasible are various approaches in real world setting? • Balance of credit accounts • Financial viability • Institutional feasibility • Policy choice and limitations

9. Issue – Adequacy of Approaches • Whether the approaches analyzed are adequate? • Is there a need for additional approaches? • If yes, which are these approaches

10. Issue – Environmental Integrity • Do various approaches ensure environmental integrity?

11. Issue – Choice of Approaches • Should implementing entities be allowed to choose from a menu of approaches?

12. Issue – Consistent Policy Across Land Use Activities • Is there a need for a consistent policy for addressing risk of non-permanence across multiple land use activities?

13. Issue – Risk of Non-permanence in context of LULUCF agenda • How the discussion on non-permanence risk relates to broad LULUCF mitigation agenda?

14. Summary of Issues • Risk Screening • Liability • Permanence period • Coverage of risks • Scale of activities • Feasibility • Adequacy of approaches • Environmental Integrity • Choice among approaches • Consistency across land uses • Relation to broad LULUCF agenda

15. Thank you Rama Chandra Reddy Email: Rreddy1@worldbank.org For more information on the BioCArbon Fund, please contact: EllysarBaroudy Email: Ebaroudy@worldbank.org www.carbonfinance.org