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Beyond carbon financing: Briefing sheet from World Resources Institute

Beyond carbon financing: Briefing sheet from World Resources Institute

“For many the term ‘REDD’ has become synonymous with a carbon financing approach where reducing emissions from forests by developign country actors is supported by developed country actors buying carbon credits, potentially to meet their own emissions reduction obligations.”

This quotation comes from a World Resources Institute (WRI) briefing sheet titled, “Beyond Carbon Financing: The Role of Sustainable Development Policies and Measures in REDD”. The briefing sheet notes that under the Bali Action Plan, agreed in Bali in December 2007, REDD “is defined more broadly to include a range of actions by both developing and developed countries to address the drivers of deforestation”.

WRI notes that carbon financing is “not a panacea”:

For carbon financing to work, developing countries need to demonstrate that they can quantify market-quality emission reductions at the sub-national or national level. This includes setting credible baselines (known as reference scenarios), showing that deforestation has not simply shifted from one place to another (known as leakage), and that the emission reductions will be permanent.

These requirements will likely present significant barriers for many developing countries wishing to take actions under NAMAs to reduce forest loss and degradation. These barriers include:

    1. In countries with historically low rates of deforestation, it is difficult to reliably predict future rates and the related emissions for the reference scenario. Attempts to project rates of deforestation may decrease the credibility of the carbon financing mechanism.
    2. In countries where deforestation and forest degradation is caused by highly unpredictable drivers (such as fires, droughts, insects, and external demand for products) setting reliable reference scenarios may be difficult.
    3. In countries where the institutions that govern forests are especially weak, the ability to implement policies that result in credible and permanent emission reductions will be limited.

In addition, where a major driver of deforestation or forest degradation is to meet global demand for timber, food or fuel, effective action to address this driver requires actions by consumer countries to reduce their demand and promote procurement of sustainably produced products.

WRI is not opposed to all carbon trading. The briefing suggests that “revenues generated from selling allowances in developed country national cap and trade programs” could be used to provide financial, technical and capacity building support in the South. This could support actions aimed at “seeking to clarify land tenure, building fire fighting capacities or tracking the legality of wood products for REDD,” for example, says WRI.

WRI suggests actions aimed at reducing deforestation for countries in both the North and the South. “Developed and developing countries should adopt policies to address consumption of products that drive deforestation as NAMAs (nationally appropriate mitigation actions), and should start by addressing the illegal timber trade.”

WRI’s two-pager can be downloaded here. WRI is working on a longer policy paper on REDD, which will be available in 2009.

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