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Chapter 3: Reducing Emissions From Deforestation & Forest Degradation (REDD)
3.1 Genesis and emergence of REDD
The current international climate change framework is a long way from delivering the emissions reductions required for a global stabilisation target necessary to give the world a realistic chance of limiting global warming to 2ºc equivalent to atmospheric CO2e at 445-490ppm or lower. Further strong and urgent concerted international action will be needed from both developed and developing countries to meet this goal across all sectors:
- Increase energy efficiency
- Reduce demand for emissions intensive goods and services
- Switch to lower carbon technologies for transport and industrial sectors
- Action on non-energy emissions such as deforestation.
Different mitigation measures are required for different sectors as mentioned above with emphasizing more on forests sector which is the main scope of this paper. It is estimated that in the absence of any mitigation efforts, emission from the forest sector alone will increase atmospheric carbon stock to around 30ppm by 2100, at which the current atmospheric CO2e levels stand at 433ppm according to the analysis of Eliasch Review (2008). Thus there is certainly urgency for forests to be a central part of any global climate change deal by placing it in the top priority as it is increasingly accepted that mitigation of climate change will not be achieved without the inclusion of forests fully into the framework in post 2012. Part of the explanation for this is that forests offer the greatest single opportunity in tackling climate change and to reduce carbon emissions immediately and cost-effectively as opposed to developing and inventing expensively new technological infrastructure and when compared with abatement in other sectors. This is confirmed by reports from Stern Review (2007) and IPCC AR4 (2007) in which deforestation accounts for nearly a fifth of global carbon emissions (18-25%), surprisingly a very significant and greater share second only to energy.
Forests including woodlands play many roles in climate change mitigation through carbon sequestration, emission reductions, and carbon substitution. It has been estimated that 80% of the total emissions savings agreed under the current protocol of the convention would be wiped out if the current forest loss in forested developing countries such as Brazil and Indonesia to continue until 2012 (Stern, 2008). Given this significant rate of forest loss worldwide, thus reducing emissions from deforestation and forest degradation (REDD) would undeniably make a major contribution to meeting an emission stabilisation target by complementing measures such as afforestation, reforestation and restoration. These measures would increase global carbon stocks by sequestering and storing atmospheric carbon when new forests are planted and grow. Additionally, natural forests maintain carbon stocks and transfers, and act as a carbon sink besides other co-benefits including biodiversity conservation, ecosystem services, poverty alleviation and livelihoods. The increased use of wood-based biofuels and wood products with bioenergy crops plantation are options for carbon substitution.
Currently developing countries have no obligations under UNFCCC to mitigate GHG emissions although most cases of deforestation are originating from tropical developing countries which accounts for over 1Gt per year of emission resulting from deforestation in the tropics (Stern, 2007). However, developing countries can contribute to global emission reductions by hosting projects under the CDM which include both afforestation and reforestation projects. Measures on REDD were initially excluded from the land use, land use change and forestry sector (LULUCF which is now referred to as agriculture, forestry and other land use (AFOLU) within the IPCC Guidelines for National Greenhouse Gas Inventories as of 2006 for technical consistency) within the UNFCCC’s CDM during CoP7 in Marrakesh. The explanation on REDD exclusion was due of the possibility that if incentives were provided for individual projects, the result would be displacement of deforestation activity elsewhere within a country, with little or no net gain.
Discussions for the inclusion of REDD was initiated at CoP11/MoP1 in Montreal during late 2005, which marked the first step for entry into force of the Kyoto Protocol on 16 February 2005. However, during the CoP13/MoP3 which was convened in Bali in December 2007, agreed to what is known as the Bali Roadmap. The main advances in the roadmap are the commitments to be negotiated including:
- emphasising the development of appropriate policy approaches and positive incentives that would lead to REDD and the role of forest conservation in the carbon trading regime, sustainable forest management and the forest carbon stock enhancement;
- Financing the adaptation needs of developing countries; and
- Funding the transfer of low-carbon technologies to developing nations.
The inclusion of REDD in the roadmap is seen as a way to address environmental destruction by assigning value to intact forest ecosystems including peatlands and swamps. REDD has the potential to shift the balance of underlying economic market forces that currently in favour of deforestation, by allowing incentives and ultimately payments for the ecosystem services provided by forests in the tropical regions. REDD credits offer the opportunity to utilise funding from developed countries to reduce deforestation in developing countries despite question on how to reward forest conservation for the following approaches to pay countries:
- for reducing deforestation relative to a baseline of past deforestation rates, and/or future projections of deforestation;
- according to a fixed formula based on forest area and/or the carbon stock represented.
In general, forest destruction takes place because forest countries can make more money by using the land for intensive agricultural activities, as they capture the value of standing natural timber, then annual harvests of agricultural produce such as beef, palm oil and soya beans (Tickell, 2008). Thus reward payments would therefore have to be sufficient to protect forests from competing land uses and he suggested that countries would be rewarded based on maintaining agreed areas:
- for pure conservation, with no exploitation save that of indigenous or long-established peoples;
- for limited, sustainable exploitation focussed on non-timber products;
- for more intensive exploitation, including for timber but subject to certification for sound management;
- of plantation, but including measures to protect soils, water and biodiversity;
- of degraded and destroyed forest undergoing restoration and rehabilitation to one of the above categories.
The deadline for reaching an agreement on the specifics of an international REDD mechanism, at least as regards to it being implemented in the short and medium term, is the CoP15 which will be held in Copenhagen in December 2009. REDD still faces many challenges especially in implementation as there are particular problems with regards to controlling these emissions owing to:
- their dispersed nature, making them hard to control, and hard or indeed impossible to measure with accuracy.
- The difficulty of distinguishing with certainty between emissions that are of natural origin, and those that are due to deliberate human interventions;
- Issues of national sovereignty in which some forest rich developing countries do not take kindly to other countries telling them what they may and may not do with their forests.
These three factors make it inconceivable that these emissions should be controlled at source in the same way as emissions from other sources. There are also many problems with the approach currently being developed under the framework to protect forests, which is to incorporate REDD within the carbon trading regime.
While much of the deforestation under consideration is the result of legal land-use change and logging, there is also a significant proportion that is illegal. If avoided deforestation is to become a credible element of an international system for controlling greenhouse gas emissions, forest areas will have to be managed over the very long term and be subject to effective legal enforcement.
It is not yet clear whether the necessary investment in standing forests will come from a public fund or private markets, but, if the latter is the case, it is likely that carbon ‘captured’ in countries with effective forest law enforcement will be valued more highly than in those with poor sectoral governance.
3.2 Expectation for global climate deal at CoP15
Talks on commitments for the post 2012 period are on-going since CoP13/MoP3 in Bali in December 2007.
Forest carbon emissions together with emissions from other sources are a global negative externality. The cost of each unit released into the atmosphere is not borne by the emitter. Instead the costs are imposed on the international community as a whole in the form of exposure to the carbon toxification and damaging effects of climate change.
There is currently no comprehensive system that rewards REDD efforts although it brings global benefits. Thus it is reasonable that any international climate change framework should internalise the emissions from forests in order to incentivise forest nations to protect and conserved their natural standing forest from deforestation and degradation.
According to the Eliasch Review (2009), there are likely three criteria that a successful international climate change framework should meet:
- Effectiveness to deliver the emission reductions at required scale by tackling three major challenges, that is, leakage, additional and permanence. Issues range from “permanence” (whether a county can ensure that forest carbon savings are permanent) to “leakage” (what happens when carbon conservation in one area drives deforestation in another?) to baseline data establishment (how does one measure historic deforestation to establish a baseline for calculating reduction?).
- Efficiency to minimise the overall cost of achieving the emissions reductions; and
- Equitable to ensure that the benefits of international action are distributed fairly. questions over land rights (will REDD trigger a land rush by industrial agriculture giants and forestry firms?) as well as how local communities will benefit
There is also ongoing squabbling between a coalition of forest nations and Brazil, which sees REDD as an attempt to limit its economic development of the Amazon rainforest. Some forest-rich countries that have low deforestation rates have expressed concern they will be left out of the process since their forests are not under immediate threat.
3.3 Sources of funding
Despite various concerns mentioned above, it appears likely the REDD initiatives will move forward. According to ITTO ( ), funds are starting to flow to tropical countries via international REDD initiatives and voluntary carbon offset projects. The potential to channel resources to tropical countries under any successor to the UNFCCC’s Kyoto Protocol, which expires in 2012, will have to be improved significantly over present arrangements in order to have any impact. The level of assistance provided to tropical forests through the existing CDM has so far been a bitter disappointment to many. The negative experience of the CDM in the relatively straight forward areas in which it has operated to date inspires little confidence in its ability to encompass the far trickier area of emissions from deforestation.
Last week nine industrialized governments announced plans to put US$165 million (€114 million) toward the World Bank’s newly created Forest Carbon Partnership Facility, a scheme that will offer tropical countries carbon offset credits to preserve forests. The U.S. did not pledge any funds but some 30 tropical countries in Africa, Latin America and the Asia-Pacific stood to benefit from what the World Bank called “the first financial mechanism to pay countries for saving their tropical forests.” In the spirit of the progress on REDD, Governors from the Brazilian state of Amazonas and the Indonesian provinces of Aceh, Papua and West Papua agreed to a moratorium on logging until the carbon values of their forest lands is assessed.
3.4 Linking to carbon markets
Kyoto includes defined “flexible mechanisms” such as Emissions Trading, the Clean Development Mechanism and Joint Implementation to allow annex I economies to meet their GHG emission limitations by purchasing GHG emission reductions credits from elsewhere, through financial exchanges, projects that reduce emissions in non-annex I economies, from other annex I countries, or from annex I countries with excess allowances. In practice this means that non-annex I economies have no GHG emission restrictions, but have financial incentives to develop GHG emission reduction projects to receive “carbon credits” that can then be sold to annex I buyers, encouraging sustainable development. In addition, the flexible mechanisms allow annex I nations with efficient, low GHG-emitting industries, and high prevailing environmental standards to purchase carbon credits on the world market instead of reducing greenhouse gas emissions domestically. Annex I entities typically will want to acquire carbon credits as cheaply as possible, while non-annex I entities want to maximize the value of carbon credits generated from their domestic Greenhouse Gas Projects.
While there is an urgent need to reduce emissions from deforestation, there are considerable dangers in including forests within the carbon trading regimes. This is because GHG emissions need to be cut both from forest destruction and from fossil fuels, that is not to trade the one off against the other. By putting carbon credits from REDD into the Kyoto Protocol’s carbon trading regime, the Annex 1 parties will be able to continue to pollute at will provided they offset their pollution by REDD elsewhere.
Developing countries are not expected to de-carbonize their economy unless developed countries supply enough funding and technology. Setting no immediate restrictions under the UNFCCC serves three purposes:
- it avoids restrictions on their development, because emissions are strongly linked to industrial capacity,
- they can sell emissions credits to nations whose operators have difficulty meeting their emissions targets,
- they get money and technologies for low-carbon investments from the developed countries in Annex II.
Developing countries may volunteer to become Annex I countries when they are sufficiently developed.
Common but differentiated responsibility
The United Nations Framework Convention on Climate Change agreed to a set of a “common but differentiated responsibilities.” The parties agreed that:
- the largest share of historical and current global emissions of greenhouse gases originated in developed countries;
- per capita emissions in developing countries are still relatively low; Brunei do have a high per capita emission
- the share of global emissions originating in developing countries will grow to meet social and development needs.
China, India, and other developing countries were not included in any numerical limitation of the Kyoto Protocol, because they were not main contributors to the greenhouse gas emissions in the pre-treaty industrialization period. China has since become the largest greenhouse gas emitter.However, even without responsibility under the Kyoto target, developing countries were to share the common responsibility of all countries to reduce emissions.
The protocol defines a mechanism of “compliance” as a “monitoring compliance with the commitments and penalties for non-compliance
The five principal concepts of the Kyoto Protocol are:
- commitments to reduce greenhouse gases that are legally binding for annex I countries, as well as general commitments for all member countries;
- implementation to meet the Protocol objectives, to prepare policies and measures which reduce greenhouse gases; increasing absorption of these gases and use all mechanisms available, such as joint implementation, clean development mechanism and emissions trading; being rewarded with credits which allow more greenhouse gas emissions at home;
- minimizing impacts on developing countries by establishing an adaptation fund for climate change;
- accounting, reporting and review to ensure the integrity of the Protocol;
- compliance by establishing a compliance committee to enforce compliance with the commitments under the Protocol.
3.4 Institutional aspect for Designated National Authority (DNA)
Among the annex I signatories, all nations have established Designated National Authorities to manage their greenhouse gas portfolios; countries including Japan, Canada, Italy, the Netherlands, Germany, France, Spain and others are actively promoting government carbon funds, supporting multilateral carbon funds intent on purchasing carbon credits from non-annex I countries, and are working closely with their major utility, energy, oil and gas and chemicals conglomerates to acquire greenhouse gas certificates as cheaply as possible. Virtually all of the non-annex I countries have also established Designated National Authorities to manage the Kyoto process, specifically the “CDM process” that determines which GHG Projects they wish to propose for accreditation by the CDM Executive Board.
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