The Rimba Raya Biodiversity Reserve REDD Project

CL2. Offsite Climate Impacts (‘Leakage’)Leakage is the unanticipated decrease or increase in GHGbenefits outside of a project’s accounting boundary resultingfrom the project’s activities. A number of theoretical andmethodological issues complicate leakage accounting and haveyet to be resolved.First among them is the question of scale. In theory, leakagemust be accounted for at the local, regional, and national levels.Realistically, national leakage accounting is beyond the purviewof any individual project developer, depending instead ongovernment land use priorities and incentives, and bestaddressed through a national leakage buffer or some similarmechanism. Accounting for leakage at the local scale willnecessarily be the focus of project proponents, with an emphasison regional concerns where data is available and mitigationefforts supported by the government.Second is a question of the agent responsible for driving leakage.Primary leakage focuses on the displacement of activity by theoriginal ‘baseline agents’ targeted by the project. Three forms ofprimary leakage have been identified in the theoretical literature(Aukland et al. 2003):Activity Shifting: the activities that cause emissions arenot permanently avoided, but simply displaced to anotherlocation outside the Project Area.Outsourcing: the purchase or contracting out of theservices or commodities, by the baseline agent, that werepreviously produced on-­‐site.Ecological: indirect positive impacts on adjacent forestsresulting from project activities aimed at protecting theProject Area.Secondary leakage occurs when a project’s outputs createincentives to increase GHG emissions elsewhere. Unlike primaryleakage, secondary leakage activities are not directly linked to,nor carried out by, the original baseline agents. Three forms ofsecondary leakage have also been identified in the theoreticalliterature:Market effects: when emissions reductions are offset bynew emissions created from shifts in supply and demandof the products and services affected by the project. Thistype of leakage is likely to occur with projects that affectmarket-­‐based activities, such as commercial agriculture,timber harvesting, and reforestation and afforestation.Super-­‐acceptance of alternative livelihood options: thealternative activities provided by a project may result inan influx of people attracted into the area from regionsoutside of the original project boundaries or target group,who may adopt the activities promoted by the project.This may result in either positive or negative leakage.Life-­‐cycle emissions shifting: mitigation activities increaseemissions in upstream or downstream activities (e.g.,conservation leads to eco-­‐tourism and more traffic).A pragmatic approach to leakage accounting will focus onprimary leakage, incorporating secondary leakage concernswhere they are both significant and measurable.The third and final issue complicating leakage accounting is thetheoretical distinction between positive and negative leakage.211