7
min read

How Land Use Affects your Company’s GHG Inventory: an Introduction

This article will offer an introduction to land use and land-use change, spotlighting how land use can affect your company's GHG inventory, equipping you with the knowledge to get your business ahead of the regulatory curve.

The way in which land is used can have a significant impact on the amount of greenhouse gases (GHGs) that are either emitted or absorbed by that piece of land. It can be difficult to accurately measure these amounts of GHGs for many reasons, including variability in biotic and abiotic conditions, as well as impacts sometimes being experienced in geographically distant areas to where a land use decision is made.

The World Resources Institute (WRI) found that there is huge demand for further guidance and clarity on the topic (GHG Protocol). New draft guidance is being developed and is expected to be available for pilot testing and review by mid-2022. This article will offer an introduction to land use and land use change to allow your business to get ahead of the curve.

In this article, you will learn about:

  1. What land use is, and how it’s related to GHGs
  2. Different kinds of land use change that can be accounted for, namely direct and indirect land use change
  3. How land use can affect your company’s GHG inventory

What is land use?

"Land use" refers to the way that humans use an area of land (the land's "function"). This differs from land cover, which essentially describes the way that the land looks. For example, areas of grassland that are used for agricultural grazing or recreational purposes may look very similar, but they are functionally different.

How is land use related to greenhouse gases?

Humans can choose to use land in many different ways, including commercial, agricultural or conservation purposes, and these decisions have important environmental, social and economic impacts. For example, a piece of arable farming land could have negative environmental impacts through fertiliser use which releases nitrous oxide (N2O) into the atmosphere. This same piece of agricultural land could have positive social impacts through the employment that it creates. Economic impacts of the land would include the finance generated through the sale of the land’s products.

Land use activities can interfere with the role that an area of land has in the cycling of GHGs, such as carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O). The way in which land is managed can affect whether an area of land becomes a GHG sink by net removing GHGs from the atmosphere, or on the other hand, a source of GHG emissions by net releasing GHGs into the atmosphere. GHGs can be stored above ground in vegetation, below ground in the soil (including wetland or peatland), or in coastal or marine ecosystems. Some examples of each include: trees storing carbon above ground in their biomass, plants called legumes storing nitrogen below ground in their root nodules, and seagrass meadows storing carbon below water.

The Agriculture, Forestry and Other Land Use (AFOLU) sector is an important area of global land use GHG emissions, but also offers huge opportunities for mitigation. The AFOLU sector was determined by the IPCC to be responsible for almost 1/4 of annual human-caused GHG emissions. This is mostly due to deforestation and agricultural emissions (from livestock, soil and nutrient management)(UNFCCC).

Figure 1. A diagram showing forests as a carbon sink or a carbon source.

When ecosystems are managed in the right way, land use is an important contributor to the mitigation of climate change. The IPCC 6th Assessment Report recognised land use change to be amongst the top mitigation measures to stop climate breakdown. Similarly, Article 5 of the Paris Agreement emphasises the importance of land use (in particular forests) in acting as GHG sinks and reservoirs. The Paris Agreement encourages incentives for the sustainable management and enhancement of forests for both their carbon and non-carbon benefits. The non-carbon benefits of forests, and other land types, are also particularly important to consider in land management decisions. To name a few, ecosystem services such as provision of fresh water and the regulation of water, air and soil quality (UKNEA) are some of the other benefits that are affected by land management decisions.

Case Study: The Amazon Rainforest

The Amazon Rainforest is one of the most biodiverse habitats in the world, and provides innumerable ecosystem services; within this ecosystem is stored unprecedented levels of natural capital. As trees grow, they pull carbon out of the atmosphere through photosynthesis and store it as biomass. When trees die, they are decomposed by microorganisms, and through respiration the carbon that was stored in the tree is released back into the atmosphere. This is why when deforestation occurs, an area that was once a thriving rainforest becomes a carbon source; not only are the trees no longer absorbing CO2, but their decaying biomass is emitting CO2 back into the atmosphere.

In natural ecosystems, if one tree dies and is decomposed, it would be replaced by another tree which would grow into the space opened up in the canopy. Therefore, the carbon released through the death of the original tree is “offset” by the growth of the new tree. However, if rainforest is cut down and replaced by agricultural land, the carbon that is released by the death of the trees is never “offset” by the growth of other trees. In fact, the area that has been cleared, releasing carbon into the atmosphere, is often then used for other emitting activities such as cattle grazing.

A study of the Brazilian Amazon Rainforest recently found that between 2010 & 2019, 20% more carbon was emitted into the atmosphere than was sequestered, meaning that this ecosystem had become a carbon source. This change in the GHG cycling of the Brazilian Amazon was due to forest degradation and deforestation, and shows how significantly land and the ecosystem services it provides can be both directly and indirectly impacted by human actions.

Sometimes areas which have undergone deforestation are re-forested, in order to re-establish carbon sequestration and turn the area into a carbon sink. Planting monocultures of fast-growing trees can be seen as a way to quickly store a large amount of carbon. However, although this technique may be effective in sequestering carbon quickly, it has been found that planting diverse forests is better for increasing the carbon accumulated in a piece of land. This study on subtropical forests in southeast China found that “for each additional tree species, the total C stock increased by 6.4%”. Planting monocultures is also damaging to the environment in other ways, because it does not support diverse ecosystems and makes populations more susceptible to disease.

Therefore, a change in the way that land is managed can severely impact the capacity of the land to emit or absorb GHGs, as well as having many other wide-ranging environment and social impacts.

What are the different kinds of land use change?

Land use change happens when the function of a land is altered, and this can be in the form of Direct, or Indirect Land Use Change.

Direct Land Use Change can be identified when a new activity happens on an area of land, the result of a direct decision for the land to perform a different function.

Indirect Land Use Change happens as an unintended consequence of land use decisions made elsewhere. Therefore, there has not been a direct decision by the actor for this land use change to happen. A primary example of indirect land use change is biofuel production. The decision to repurpose land to grow biofuels in place of other agricultural products often causes the original agricultural products to be grown elsewhere. The movement of the original agricultural production may cause deforestation or other negative environmental effects, therefore having indirect land use change impacts.

How does land use affect my company's GHG inventory?

Land use and land use change will impact different companies’ baselines to varying extents. For businesses in the AFOLU sector, land use change can be an integral part of their GHG inventory, as well as an important opportunity for mitigation. For other businesses, the impacts of land use change can affect the emissions associated with materials and products that they procure.

Effective reporting of land use change impacts will:

  • Reward AFOLU sector companies who protect and enhance sinks and reduce land use emission sources
  • Reward companies who purchase materials with positive land use impacts

Understanding how land use and land use change are associated with your company’s activities will be an increasingly business critical topic. Currently, few companies account for land sector emissions and removals even when they are relevant (GHG Protocol). In doing so, they are missing out on holistically understanding their impact and identifying opportunities for increasing natural capital.

How can I find out more about land use GHG accounting?

The GHG Protocol is developing new consolidated guidance on accounting for GHGs associated with the Land Sector and Removals, which will build upon and draw together current guidance on land use and land use change accounting (such as is found in their Agricultural Guidance and LULUCF Guidance for Project Accounting, amongst other documents). The new guidance will clarify how companies should account for and report the following activities in their greenhouse gas inventories:

  • Land use. The way in which humans choose to use a piece of land, or its “function”.
  • Land use change. The change in a land’s “function”, for example when forest land is cleared to make way for cropland.
  • Carbon removals and storage. Removing carbon from the atmosphere, through biological (e.g. reforestation) or technological (e.g. direct air capture) methods.
  • Biogenic products. These are products that are produced by living organisms, such as timber produced by trees. Associated emissions or removals with the production and consumption of biogenic products (such as bioenergy) is important to consider.

This guidance is being pilot tested and reviewed in the second half of 2022, with the aim for publishing early 2023.

Conclusion

Land use and land use change are important contributors to GHG emissions globally. These activities interact with the functioning of natural processes in GHG cycles and can be large sources of emissions but also offer huge opportunities for GHG removals. Therefore, understanding these processes and how your company’s activities interact with them is important in being able to identify future opportunities for mitigation.

The guidance on how to account for these impacts is currently being consolidated by GHG Protocol. Altruistiq will be keeping up to date with these guidance updates, so keep an eye on Altruistiq’s blog for future releases on this topic.

Emily Boothroyd

Insights Analyst