Wrong premises mislead the conclusions by Kallio et al. on forest reference levels in the EU

A recent paper by Kallio et al. (2018) attempts to assess economic impacts that could result from the implementation of the Forest Reference Level (FRL) approach included in the recently approved EU LULUCF Regulation. FRLs are country-projected baselines of net emissions of greenhouse gases (GHG) from forests, against which the future net emissions will be compared for accounting purposes (i.e. to assess credits or debits towards complying with a climate target). Kallio et al. argue that the harvest limits that they assume to be a consequence of the FRLs would decrease the employment opportunities and jeopardize climate mitigation benefits of EU policies. In our comment, we respond that while the paper of Kallio et al. may be of general interest in analysing the impact of setting binding limits on harvest, it should not be considered as an assessment of the economic impacts of implementing FRLs. Their conclusions are largely invalidated by some misunderstandings on the FRL approach. We first clarify that FRLs are not binding limits on harvest volumes, but rather accounting baselines that ensures that the GHG consequences of changes in forest management (relative to a historical period) are accounted for in a framework comparable to that of other sectors. Second, we explain that FRLs are not based on frozen historical harvest rates, as assumed in the main analysis of Kallio et al., but rather are determined by the interaction between the projected continuation of historical forest management practices, the age-related forest dynamics and the available growing stock volume. The approach actually allows for increasing harvest in the FRL as forests age, without incurring an accounting debit. We hope that these clarifications contribute to a correct understanding of the FRL approach and encourage a constructive dialogue between research communities reflecting different perspectives.