Reducing emissions from deforestation
This is in light of the IPCC’s 4th assessment report, which estimates that around 5.8 Gt CO2 is released annually into the atmosphere from global deforestation and degradation and also estimated that this sector in the developing countries may be contributing roughly 20 per cent of the world’s GHG emissions.
Currently, the Clean Development Mechanism does not include standing forests (forests, which need to protected so as to avoid deforestation and its related emissions). Furthermore, the agreed methodologies for CDM projects in forestry sector are so cumbersome, that very few projects have qualified.
Quick summary
There are number of issues to be resolved. The most intricate ones include the financing for REDD, the methodology to calculate emissions reductions and the methodology to price forests. Belize, Boliva, Cameron and others have also raised the issue of the ownership of the forest.They want the rights of rural communities to be recognised and want REED to support their social, environmental and economic development. They also want REDD to be voluntary and complementary and additional to CDM.
A combination of markets and fund-based mechanism has been proposed by Norway to finance REDD. New Zealand wants the mechanism to provide adequate financial resources to compensate countries for the economic benefits they lose by reducing deforestation.
There are concerns that if REDD is used to offset emissions in the developed world, then it would flood the carbon market; depress carbon price and slow the transition to clean energy.
The mechanism must recognise their traditional knowledge, their intrinsic relationship with tropical forests and should support their social, environmental and economic development.
At present, most countries struggle to address the drivers of deforestation because of insufficient domestic resources and overly cumbersome requirements from international agencies and donors.
Each party should take leadership over their own REDD process, to prepare for expanded implementation. The participation in this “readiness activity” is voluntary.
It could involve parties inviting interested multilateral and other agencies to use existing platforms, like the World Bank Forest Carbon Partnership Facility and the UN-REDD initiative (UNDP-UNEP-FAO) to coordinate and manage an institutional REDD platform. Each REDD country would have the flexibility to select a lead agency to sub-coordinate national readiness activities.
There are two options for its implementation:
- Through non-compliance and voluntary market instruments;
- Through measurable, reportable and verifiable (MRV) emission reductions through compliance based market mechanisms. In other words, developed country parties can use the REDD mechanism to meet their emission reduction targets.
In addition, specific options are suggested to give developed country parties incentives to use the REDD mechanism to take credits for emission reductions.
- Credit for early action -- MVR emission reductions obtained during the period from the year 2005 up to the beginning of a future international agreement on climate change can be used to assist in achieving compliance under the terms and conditions of that agreement. This will follow the precedent granted to CDM in the Kyoto Protocol.
- Fungibility – MRV emission reduction units earned under an agreed reference emissions level should guarantee market access, be fully fungible with AAUs and transacted at a price equal to that applied to credits earned by Annex-1 parties.
- Ex-Ante crediting – a party could issue allowance credits ‘ex-ante’ agreed an agreed ‘reference level’ subject to the end of term responsibility, considering that a REDD mechanism constitutes a sectoral approach for policy approaches and positive incentives.
The REDD mechanism must be complementary and additional to CDM. It cannot compete with, and lower market prices for, actions taken under CDM.
As REDD will introduce a new supply of carbon credits, Annex-1 parties should agree to deeper emission reductions, as would otherwise have been agreed. The deeper targets that are truly additional, must precede the introduction of this mechanism.
Methodology issues
- Forest degradation – the methodology developed by IPCC and approved by the parties (IPCC LULUCF good practice guidance) should to used.
- Enhancement of forest carbon stocks and sustainable management of forest carbon – there is a need to strengthen and expand forest carbon stocks to have a meaningful impact on climate objectives so as to be considered as a mitigation activity. However, the standards imposed by the international community for sustainable forest management (SFM) are very high and require a significant increase in forest resources.
- The role of forest conservation – in order to recognise the efforts of countries that have maintained or reached stable level of forest cover the following approaches should be considered:
- Low rates of deforestation – where parties can intentionally increase their reference emissions level in order to generate the revenues necessary to continue maintaining carbon stocks, while overcoming risks of alternative opportunity costs;
- Permanent forest conservation areas – seek to increase or consolidate permanent forest conservation area by identifying conservation areas. In such cases, non-market instruments, such as auctioning AAUs with parties listed in Annex-1 could be used to support efforts to increase carbon reservoirs.
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