Are forest management reference levels incompatible with robust climate outcomes? A case study on Australia

The Kyoto Protocol's forest management (FM) accounting framework contains a number of deficiencies that increase the risk of parties recording credits and debits that do not reflect the additional direct anthropogenic influence on net forest emissions. To rectify these flaws, it has been proposed that the current 'gross-net' approach be replaced with a baseline-and-credit system (FM reference levels), under which credits and debits would be determined on the basis of deviation of net FM emissions from a preset reference level. This article reviews the proposed FM reference level system and uses a case study on Australia to highlight its pros and cons. It is concluded that, while the system has the potential to lead to improved outcomes, these benefits are threatened by the refusal of several parties to adopt a principled approach to setting reference levels. Even if these fundamental issues are overcome, the success of the system will rely on improved transparency and a willingness of parties to make ex post adjustments to exclude non-anthropogenic and non-additional changes in net forest emissions from their accounts.