ODI’s experts have been thinking about REDD. Leo Peskett seems very happy about it all. Peskett is not worried about financing REDD through the “global carbon markets”. He notes that some estimates state that up to US$13 billion could be available to fund REDD projects through carbon trading.
Peskett doesn’t seem concerned about the fact that carbon trading will not address climate change, since the trade in carbon credits means that the pollution continues somewhere else. Neither does he address the fact that carbon trade through REDD will allow continued emissions from fossil fuels, when the only way of stopping runaway climate change is to reduce emissions from fossil fuels, not to find new ways of allowing them to continue. Even on its own terms, creating a vast number of new carbon credits through REDD would be likely to flood the market, leading to a crash in the price.
“Markets tend to seek out low risk scenarios,” says Peskett. This was in February 2008, when sub-prime loans, the credit crunch and the billions of dollars of bailouts were in full swing. The world’s financial system is melting down precisely because investors put other people’s money in extremely risky derivatives that they didn’t even understand themselves. The carbon market will be worse, because measuring carbon is almost impossible and there is no actual commodity that anyone can point to, at any point in the transaction.
To be fair, he raises some valid critiques of REDD – the risks that money flows will be taken by elites, for example, or that REDD just might help local communities achieve land rights. But if it is funded through the carbon trade, REDD will be a disaster.