Getting carbon value out of the forestry and wood sector in Annex I Countries: The French Example

This study examines the possibilities to monetize on carbon markets four types of actions throughwhich the forestry and wood sector can mitigate climate change:- Increasing the carbon stock in the forest- Increasing the carbon stock in wood products- Using wood as a substitute for fossil fuels (wood for energy)- Using wood as a substitute for materials more energy intensive (wood as a material)Actions of the "stock increase" type can theoretically be valued on the voluntary carbon markets.Developments are nevertheless necessary to make these valuations operational. Mechanisms ofthe "substitution" type can be valued only on the compliance market. They are currently valued atthe level of the user (electric power generation, heating etc.); the forestry and timber industry canonly participate in this system via agreements such as "supply contracts".- This report analyses three project types that could be carried out to activate thesemechanisms:- Reforestation / Avoided deforestation- Improved forest management- Optimized utilization of productsOn the basis of seven hypothetical projects, this study identifies a strong carbon sink potential inFrance (several million metric tons of CO2), including afforestation, the conversion of coppice forestinto high forest and the changes in the uses of harvested wood.Carbon certification is expensive and makes sense only above a critical size that enables projectdevelopers to recover their expenses. For reforestation projects in metropolitan France, forexample, we estimate this size to be around 100 hectares.Several certification programs coexist on the voluntary carbon market. Their pertinence to theseven hypothetical projects is also analyzed, together with the conditions for carbon creditsgenerated in the French forestry and wood sector to be monetized on carbon markets. To achievethis, two conditions need to be met: methodologies approved by standards should be developed,and the forestry and wood sector should implement a proper organization.