A bipartisan group of government, business, and NGO leaders—boasting D.C. star power like John Podesta and Lincoln Chafee—is urging Congress to make tropical forest conservation a key facet of its climate and energy legislation.
According to The Commission on Climate and Tropical Forests’ Protecting the Climate Forests, the deforestation and degradation of tropical forests accounts for some 17 percent of annual global greenhouse gas (GHG) emissions. Halting deforestation could be a cost-effective way to quickly slow the growth of emissions rates.
The commission says the United States should lead a global partnership to halve GHG emissions from tropical deforestation by 2020 and reach zero net emissions from deforestation by 2030. The authors suggest investing at least $1 billion in public funding prior to 2012 and mobilizing roughly $9 billion annually by 2020 from the private sector to reduce tropical forest emissions.
REDD
Investment from developed nations for tropical forest conservation in developing countries is the basic framework of a United Nations program known as REDD. REDD is expected to play a key role in upcoming international climate treaty negotiations.
Below, RFF Program Fellow Erin Myers Madeira answers some questions about what REDD is, who could be involved, and how—with the creation of a compliance market—it could work.
What is REDD and how does it work?
REDD stands for Reducing Emissions from Deforestation and Degradation. REDD is a mechanism that uses market/financial incentives to reduce the emission of greenhouse gases from deforestation and forest degradation in a measurable and verifiable way.
REDD credits offer the opportunity to utilize funding from developed countries to reduce deforestation in developing countries. REDD puts a value on forests for the services they provide by keeping carbon out of the atmosphere. At relatively low carbon prices, REDD can make standing forests more valuable than the timber or plantation revenues that would result from clearing forests.
REDD can refer to policies and measures—such as strategic road planning, implementing best practices for timber practices or restricting activities that degrade peatlands—that reduce emissions from deforestation and degradation across a landscape. REDD can also refer to pilot projects or demonstration activities that have a clear objective to directly reduce emissions from deforestation and degradation in a specific geographic area.
You said that there are market incentives for REDD; who are buying and selling REDD?
Land owners, concession holders, traditional forest people, and governments in developing countries can take actions to prevent forest loss or forest degradation. By proving that their actions measurably reduced the rate of deforestation and degradation compared to a reference scenario (where no action would be taken), they can generate REDD credits.
Currently REDD credits can be sold on the voluntary market where individuals, companies, and even towns or counties buy carbon credits to offset their carbon footprint. However, a compliance market for REDD credits could be created by inclusion of REDD in domestic climate change policy or international post-Kyoto climate agreements. In a compliance market, companies and other entities facing an obligation to reduce their emissions could buy REDD credits to offset their emissions and meet their legal emissions requirements.
Who stands to benefit from a compliance market for REDD?
If REDD credits are included in a compliance market, the benefits are widespread. The sellers of REDD credits benefit because they are able to generate value by protecting their forests, making them better off doing that than finding any alternative forest use. The buyers benefit because they are able to reduce the cost of complying to emissions regulations. And greater society benefits from the biodiversity and watershed benefits that forests provide in addition to their carbon storage
What are some of the major concerns in the design and implementation of a compliance market for REDD?
Many of the concerns with REDD have to do with the technical ability to measure and monitor emissions reductions from forests as well as environmental integrity issues about leakage and permanence—meaning that if you sell a credit based on protecting forests in one place at one time, it’s not guaranteed you can be sure that forests are not cut down somewhere else or in the future. The good news is that the technical capabilities for REDD have improved tremendously in recent years, and the attention on environmental integrity has spurred innovative thinking in how to minimize and monitor these risks.
There are also concerns that the developing countries that are expected to generate REDD credits have weak institutional and governance capacities, which would inhibit the success of REDD programs.
It is certainly true that many countries have a poor track record when it comes to governance in the forestry sector. However, REDD has created an incentive to improve governance conditions as they work towards national REDD program. Further, there are a number of activities that can be undertaken in the existing conditions that will result in real, measurable reductions in deforestation and degradation. Find a more in-depth discussion of issues surrounding REDD here.
What is REDD+?
REDD+ expands the scope of REDD beyond avoided deforestation and degradation activities to include forest restoration, rehabilitation, sustainable management and/or af/reforestation. However, it is not yet decided which specific activities will be included in REDD+. Expanding the scope of REDD means that countries that have low rates of deforestation and degradation, or have increasing forests will be able to participate in a REDD+ program where they might not be able to with a narrower definition of REDD.
Erin Myers Madeira is a program fellow at Resources for the Future. She’s written extensively about REDD both in this 2008 RFF report and online at the Katoomba Group’s Ecosystem Marketplace.
