21 Dec 2011

COP17 has left the forest carbon sector, hoping for significant progress towards an operational global REDD+ mechanism in coming years, with mixed results from the climate talks winding up in Durban earlier this month.

The key questions needed for resolution to create a system for reducing deforestation and forest degradation and enhancing forest carbons stocks were how to finance it, what level of social and environmental safeguards are appropriate and how should they be checked, how to set forest emissions reference levels, and how to monitor, report and verify (MRV) the resulting actions to cut emissions.

The consensus from observers is that good progress has been made on the questions of reference levels and MRV standards. However, good work towards appropriate safeguards has been undermined with weak agreement on reporting safeguards performance, whilst the major issue of how to enable the enormous financing requirement to protect forests was squibbed and effectively set back another year.

Meanwhile, the overarching global climate agreement that is needed to create the demand at scale for REDD+ assets is looking healthier now that the principle of a new comprehensive agreement has won the support of the big emitters US, China and India. Ultimately, however, the scope for emissions reduction from preserving and restoring forests within the overall global mitigation effort depends on delivering such a treaty, scheduled to be finalized by 2015 and take effect in 2020. This would deliver firm reduction targets for countries and the role for REDD+ credits in meeting those targets.

Some observers now believe it will be 2020 before REDD+ is fully up and running although, even if this does turn out to be the case, it does not mean there won’t be a scaling up of activity in the meantime. There has been progress in some countries to rein in deforestation, such as Brazil, whilst it’s now hoped for in coming years in Indonesia with its partial moratorium on forest clearing. It is hoped such measures will help but this is only the start in cutting the rate of global native forest loss from 13 million hectares annually over recent years.

On the REDD+ financing question, UNFCCC negotiators baulked at any substantive decisions on how to enable the financial flows needed to provide the $16 to $23 billion that studies say are needed every year to effectively curb deforestation within two decades. It is clear that private capital must be harnessed if these levels are going to be anything close to fulfilled in that time frame. IFCA maintains robust market mechanisms with due regard to social and environmental safeguards are the key to unlocking this financing.

Agreed text in the outcome of the work in the UNFCCC working group (AWG-LCA) on a new treaty spoke only vaguely of financing sources, stating they “may come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources” and that “appropriate market-based approaches could be developed”.

It now appears that much of the progress on financing hoped for in 2011 will only emerge over the course of ongoing UNFCCC talks throughout 2012 with the annual climate conference next year the earliest that agreement is likely be finalised. The AWG-LCA is now to consider financing options and report recommendations next year.

Many of the technical challenges to implementing a robust REDD+ system – the approach to MRV and establishing baseline emissions levels, are steadily being resolved, according to Louis Verchot, principal scientist at the Center for International Forestry Research (CIFOR) based in Bogor, Indonesia.

But the establishment of robust social and environmental safeguards, one of the keys to a credible REDD+ system, was undermined in Durban, with a weakening of the text around how performance on delivering on such safeguards would be reported, Verchot says. This compromises the ability for regulators and independent observers to ensure that robust safeguards are actually being fulfilled.

IFCA believes that neither private nor public investors in REDD+ will feel comfortable to invest under a system that doesn’t provide social and environmental reporting that is solid enough to generate fully credible forest carbon assets.

More:
Durban talks both good and bad for REDD+, says expert CIFOR

What is Up Next for Forest Carbon after Durban? Ecosystem Marketplace

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