Land Use, Land Use Change and Forestry (Land Use Accounting)

LULUCF refers to the way land management activities, such as deforestation, reforestation, afforestation, and changes in soil or agricultural practices, impact greenhouse gas (GHG) emissions and removals. Often called land use accounting, LULUCF can act as both a carbon source (when forests are cleared or soils degraded) and a carbon sink (when vegetation regrows or sustainable land practices increase carbon storage). In climate finance, LULUCF plays a critical role in national emissions inventories, target-setting, and transition-risk assessment, as reliance on land-sector credits can mask the slower pace of decarbonisation in energy, industry, and transport. For investors, understanding LULUCF is vital for evaluating the credibility of climate targets and the resilience of financed emissions pathways.