November 5, 2019   |   By Will Sheldon, Commercial Director

The fallacy of permanence: what energy projects can learn from natural climate solutions

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November 5, 2019   |   By Will Sheldon, Commercial Director

The fallacy of permanence: what energy projects can learn from natural climate solutions

“The search for something permanent is one of the deepest of the instincts leading men to philosophy.”


Bertrand Russell, A History of Western Philosophy


Deforestation is a major contributor to climate change. Responsible for up to 12% of the world’s global carbon emissions, if deforestation were a country, it would be the third largest emitter in the world behind the United States and China. That’s because wood is about 50% carbon by dry weight so when forests are destroyed, that carbon is returned to the atmosphere. But trees can also mitigate climate change. When new trees grow, they remove carbon from the atmosphere and store it in their plant tissue.

12 million hectares of forests were lost in tropical regions of the world in 2018, which is equivalent to 30 football fields per minute.

Forests’ ability to remove carbon from the air is so important that the UN’s IPCC (Intergovernmental Panel on Climate Change) thinks they represent “one of the most effective and robust options for climate change mitigation” with projects and policies which protect and restore forests able to deliver up to a third of emissions reductions needed to meet the targets set out in the Paris agreement.

But what about the permanence of such investments (i.e. the risk of reversing emission reductions)? How can we be sure that the trees won’t get destroyed (e.g. burnt) releasing all that carbon back into the air?

Because of this fear, natural climate solutions like forestry, while recognized as indispensable, are sometimes presented as an inferior solution when compared to clean energy projects because of their perceived lower risk of reversal. Someone might decide that the climate impact of $100 invested in a renewable energy project is superior to a forest carbon project because it is permanent. The result, as highlighted by environmental leaders Greta Thunberg and George Monbiot is that natural climate solutions receive less than 2.5% of climate funding.

However, in this short essay, I explain how the risk of non-permanence in our climate investments applies to all climate change solutions, including clean energy projects and how these risks can be managed. To avoid ambiguity, I am using the term permanence (and non-permanence as its inverse) to mean the indefinite reduction in greenhouse gas emissions as the result of an investment in a forestry or renewable energy project. This is somewhat different from how the term is sometimes used in carbon accounting[1].

This is not a criticism of clean energy projects. To the contrary, it is intended to increase our understanding of the issue so that we can design more effective policies that promote emission reductions. It is also a much needed defense of natural climate solutions like forestry. While there has been substantial progress in our transition towards renewable energy, the same cannot be said of the world’s forests, which continue to decline at an alarming rate, highlighting the importance of developing solutions.

To meet our climate targets, we need to reduce our dependence on fossil fuels but that won’t be enough. It is essential that we protect and restore the world’s forests. Only then will we be able to create action at the speed and scale demanded by climate change.


Non-permanence and the carbon cycle

To start, let’s go back to the basics. There’s always the same amount of carbon on earth. It’s continuously cycling between the atmosphere, land and sea. Plants remove carbon from the air through the process of photosynthesis and store it in their biomass (e.g. the wood of a tree).

When wood decomposes, microbial respiration releases some of that carbon back into the air. Other parts make it into the soil by interacting with various types of fungus. Over very long time periods, some carbon is fossilized to become things like peat, coal and oil. When biomass or fossilized carbon is burnt, the carbon is released back into the atmosphere and the cycle continues.

To stop climate change, we need to decrease the ratio of the earth’s carbon present in the air by reducing emissions in the first place (e.g. stop burning fossil fuels and stop deforestation) and increasing the amount of carbon stored in other places (e.g by increasing forest cover and restoring peatlands).

What we cannot do is stop the carbon cycle. This means that neither approach is permanent; we will always run the risk of reversal. This risk, however, can be managed. But before it can be managed, it needs to be understood.

Image Renewable energy is a fantastic climate solution, but how do you know solar and wind power will ensure coal, oil or gas stay in the ground?The risk of carbon reversal is well understood with natural climate solutions like forestry. Trees that we plant can die and trees that we protect can die at a later result for Daintree forest
The Daintree Forest in Australia is believed to be between 100 and 180 million years old, while the oldest tree in the world has been registered with only 4,850 years.

The risk of carbon reversal

The risk of carbon reversal is well understood with natural climate solutions like forestry. Trees that we plant can die and trees that we protect can die at a later date. As such, the design of forest carbon projects is not based on the idea that individual trees won’t die. It is based on the idea that the rate of new trees within a forest grow at least as fast as the rate that the old trees die. After all, some forests have been around for hundreds of thousands of years despite the fact that every single tree within them has died. Trees die and trees are born but the forest remains a forest.

Forest carbon models plan for reversals. They plan for partial logging, forest fires, pests and disease. They also account for economic risks. They need to demonstrate that living forests provide value for landowners and communities in the long-run so that the forests aren’t cleared for other uses in the future. They also need to account for leakage, meaning that if you protect forests in one location, forests might be lost in another. But like all models, they aren’t perfect, mistakes are made. This is why the industry uses risk buffers, like an insurance policy, to spread risk across larger areas and multiple countries. The Plan Vivo standard is a particularly good example of how forest projects successfully do this.

This type of planning has made forest carbon projects much better; it has improved the credibility of forestry as an indispensable tool in the fight against climate change.

The risk of non-permanence with energy-based solutions works in similar ways. Yet, for some reason, it has largely been overlooked. Perhaps this is because trees are much more tangible and present in people’s everyday life. We can visualize a tree being cut down, whereas oil, deep in the earth’s crust, is out of sight and therefore out of mind.

This erroneous thinking is so widespread that even champions of the forest carbon industry promote it. Here’s a quote from Forest Carbon’s website, a leading developer of woodland carbon projects in the U.K.:

“If one chilly morning you make a ‘green’ decision to wear more woollies and turn off the heating then the CO2 emissions you’ve just avoided have been avoided forever.”

If that were true, then why would it be any different from the world’s persistent demand for land-use change? If a farmer decides not to clear a forest to grow more food, would these emissions not also be avoided forever? The answer, of course, is no. The farmer could clear the forest the next day. But the same is true if you were heating the house using coal (or any other fuel). You could just burn the same coal the next day!


“Permanence” lies in people’s choices

Let me explain further using coal as an example for fossil fuels in general. Society will continue burning coal until renewable energy becomes a cost competitive alternative. But not all coal is equal. Some coal is a lot cheaper because of how easy it is to access. Maybe it’s right at the earth’s surface near an international port in a country that supports its extraction. The emissions from burning this coal is what we really need to worry about. It’s cheap so people want it the most.

Maybe you believe that we will never run out of coal because at a given date in the future, society will just stop using coal? As such, emissions avoided before that date will be permanent. Again, the same argument could be made for deforestation and land-use change. There could be a moment in time when land-use change simply stops so avoided emissions before that date will be permanent.

More realistically, it’s a question of how long it will take for cheap coal to become more expensive than the next best alternative. This is influenced by the remaining quantity of cheap coal, the price of alternative energy sources and the policies that we create that increase the cost of producing coal. As these advance, the cost of polluting will progressively increase until it no longer makes financial sense to pollute (read more about this in a previous Taking Root blog, Does carbon pricing even work?).

By choosing not to burn coal one day, we run the risk of simply delaying its emissions to a future date. Don’t get me wrong, delaying emissions is indispensable. It just isn’t a permanent thing.

The impermanence of carbon credits

Carbon credits are increasingly used to accelerate the transition towards renewable energy by subsidizing the construction of new renewable energy power plants. The anticipation of carbon credit sales is used to attract investment based on the expectation that every KWH produced displaces one KWH of polluting energy.

Image result for solar panels
A Solar farm in Vietnam

The challenge is that there are two broad categories of permanence risk with such investments. The first is the finite lifespan of renewable energy power plants. Renewable energy power plants like solar and wind farms are expensive to build (i.e. they have high fixed costs) and last for 20 to 30 years. However, once built, these power plants are inexpensive to operate (i.e. they have low variable costs). The wind just blows, and the sun just shines.

The problem is that if renewables become cost competitive without subsidies within the lifetime of the renewable energy power plant, all carbon credits generated thereafter won’t actually have any effect in reducing emissions because it would have happened anyways!

If renewables do not become cost competitive within the lifetime of the project, we go back to burning cheap coal. The emissions were simply delayed for 20 to 30 years, which is well within the timeframes of forestry projects.

The second type of climate permanence risk is what is known as leakage. Leakage is the increase in emissions elsewhere as the result of an emission reductions project. In our example, this can happen because by building a renewable energy power plant, we are delaying the extraction of fossil fuels meaning that there are now more cheap fossil fuels available than there would have been in the absence of the project. And because the price of fossil fuels is influenced by the supply of fossil fuels, we could be encouraging its increased extraction elsewhere.

These illustrative examples aren’t always applicable to all contexts in all situations or that the risk of non-permanence is equivalent across all projects or all project types. The point is simply to demonstrate that investments in forestry projects and renewable energy projects, while essential, do not imply an indefinite reduction of greenhouse gases. Choosing to wear more woollies instead of turning on the heat or putting a solar panel on your roof are essential because they help reduce greenhouse emissions, but they are not permanent solutions. By simply choosing not to burn fossil fuels today, without eliminating the demand for fossil fuels more generally, means that those same fossil fuels are still in the ground and risked being consumed by others either now or later.


The things we can do

To stop climate change, we need people to drastically reduce the demand for fossil fuels while protecting and restoring the world’s forests both today, tomorrow and into the foreseeable future. We need to create solutions that acknowledges both the carbon cycle and human behaviour. That means we need to invest in and support both industrial and natural solutions which discourage polluting activities by making sustainable alternatives competitive in the short run and in the long run.

“No permanence is ours; we are a wave that flows to fit whatever form it finds”
Hermann Hesse, The Glass Bead Game

Author: Kahlil Baker, Executive Director of Taking Root

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[1] The UNFCCC defines permanence as “the risk of release of stored carbon from a project activity back into the atmosphere as CO2 during the permanence period. The risk may be in the form of unintentional caused by natural factors such as fire, wind, other extreme weather events, and pests and disease; and/or intentional caused by purposeful actions such as harvests that are not part of the management plan or conversion or changes to land use prior to the end of a project’s crediting period”. Since renewable energy projects do not store carbon but rather result in avoiding the use of stored carbon, the term permanence using such a definition is not applicable.

Will leads the growth of Taking Root’s impact, working with our buyer, reforestation and funding partners to grow more trees with more farmers. He has a background in scaling technology and environmental solutions. Will led the marketing function at Concentra Analytics, worked as a sustainability consultant with Systemiq and has supported the growth of some the largest smallholder forest carbon projects in the world. He holds a Degree in Social Sciences from Cambridge University and is a member of the On Purpose leadership program.

Will leads the growth of Taking Root’s impact, working with our buyer, reforestation and funding partners to grow more trees with more farmers. He has a background in scaling technology and environmental solutions. Will led the marketing function at Concentra Analytics, worked as a sustainability consultant with Systemiq and has supported the growth of some the largest smallholder forest carbon projects in the world. He holds a Degree in Social Sciences from Cambridge University and is a member of the On Purpose leadership program.