Can money grow on trees? New report from the Australian Council for International Development

A recent report published by the Australian Council for International Development (ACFID) looks at REDD, “from a sustainable development standpoint”. While the report acknowledges the potential opportunities, it highlights the risks, including: “the potential exacerbation of poverty through loss of access to land, dislocation of forest communities, deprivation of property rights, and corruption.”

The report is titled “Can money grow and trees? Reducing emissions from deforestation and degradation (REDD) in developing countries” and can be downloaded here (pdf file 2.1 MB)

The report starts by pointing out that “Changes in land use are currently responsible for approximately 12 per cent of annual global carbon dioxide (CO2) emissions.” And the author, Andrew Macintosh, the Associate Director at the Centre for Climate Law and Policy at the Australian National University, give four references for this statement:

1. R Houghton, Carbon Flux to the Atmosphere from Land-Use Changes: 1850–2005. Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory, Oak Ridge, Tennessee, US, 2008.
2. T Boden, G Marland and R Andres, Global CO2 Emissions from Fossil-Fuel Burning, Cement Manufacture, and Gas Flaring: 1751-2006. Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory, Oak Ridge, Tennessee, US, 2009. Doi 10.3334/CDIAC/00001.
3. G van der Werf, D Morton, R DeFries, J Olivier, P Kasibhatla, R Jackson, G Collatz and J Randerson, ‘CO2 emissions from forest loss’, Nature Geoscience 2, 2009, pp. 737–738.
4. C Le Quéré, M Raupach, J Canadell, G, Marland, L Bopp, P Ciais, T Conway, S Doney, R Feely, P Foster, P Friedlingstein, K Gurney, R Houghton. J House, C Huntingford, P Levy, M Lomas, J Majkut, N Metzl, J Ometto, G Peters, I Prentice, J Randerson, S Running, J Sarmiento, U Schuster, S Sitch, T Takahashi, N Viovy, G van der Werf and I Woodward, ‘Trends in the sources and sinks of carbon dioxide’. Nature Geoscience 2, 2009, pp. 831–836.

The report includes an interesting graph, illustrating that while emissions from land us change are significant, the rapid increase in CO2 emissions since the end of the 19th century is overwhelmingly due to emissions from fossil fuels. (The black area is CO2 emissions from fossil fuels, the grey is land-use change.)

This may seem like stating the obvious, but the negotiating text for AWG-LCA in Cancun shows a bias towards REDD-type solutions, rather than reducing fossil fuel emissions – as Jago Wadley points out in a recent comment on REDD-Monitor:

The word “forest” occurs 80 times
The acronym REDD occurs 12 times
The word “deforestation” occurs 17 times
The word “degradation” occurs 18 times, always following “forest”

The words “fossil fuel/s” occurs 3 times
The word “Bunker fuels” occurs 3 times
The word “gas” occurs 32 times, but always as “greenhouse gas” (many linked to forests, terrestrial sinks and emissions from Land Use)
The word “energy” occurs 7 times

The word “oil” does no occur
The word “coal” does not occur
The word “petrol” does not occur
The word “petrochemicals” does not occur
The word “pollution” does not occur

Nevertheless, the ACFID report acknowledges the importance of addressing emissions from deforestation and degradation:

Reductions in REDD emissions alone will not avoid dangerous climate change; however, REDD abatement is an important component of a cost-effective strategy to address climate change and failure on REDD could have a material impact on climate outcomes in the latter half of the century.

The report explains what REDD is and how it might be funded, from market-based to fund-based schemes with various hybrid possibilities in between. Australia is proposing a hybrid scheme, and the government has argued that:

“While public financing from developed countries will play a role, ultimately carbon markets are the only mechanism capable of mobilising investment on the scale needed to support and provide incentives for these emission reductions.”

The report outlines the opportunities and risks associated with with market-based REDD schemes. Included in the risks are the climate risks that have dogged REDD from the outset: additionality, measurement, leakage and permanence. The report also looks at economic, governance and other risks.

In an interview with The Australian, Mark Purcell, the executive director of ACFID, focussed on the governance issues:

“The Australian government has so far been pretty vague on the
governance side of things. The issue is governance at a provincial level where there are significant risks of illegal logging and questions over the capacity to measure the carbon reserves and the impact on local communities. There are real risks for a carbon market in Australia if we don’t get the governance issues right. A worst-case scenario is that schemes become unaccountable and bring no financial benefits to poor communities, with revenues going into the pockets of dodgy companies or dubious officials.”

The report includes a list of key findings. REDD-Monitor disagrees with point 8, about introducing market-based REDD schemes. Any “cautious approach” to market-based REDD schemes, as recommended by ACFID, would in any case mean excluding trade in forest carbon. But the list could provide a useful checklist to hold the Australian government to account in its financing of REDD projects:

1. REDD schemes should not exacerbate poverty and should equitably distribute benefits to vulnerable communities.
   Australia should support participating developing countries to ensure that the poorest communities in these countries are not negatively affected by any REDD scheme. This could include by requiring appropriate consultation with affected communities, appropriate devolution of revenues, access to resulting employment opportunities and fair compensation for any foregone benefits at the local level.
2. The rights of local communities must be supported by social safeguards.
   Australia should ensure that a REDD scheme does not threaten the rights and interests of Indigenous peoples and local communities in developing countries. Furthermore, appropriate social safeguards need to be put in place to ensure local rights and interests are given appropriate consideration and protection in international and domestic decision-making processes.
3. REDD must be supported by capacity-building activities financed by developed countries.
   Any REDD scheme must be supported by a continuing Australian commitment to long-term capacity building for REDD in participating developing countries and to greater adaptation financing made over and above current aid projections. Such funding should not result in the reduction or redistribution of funds from existing poverty reduction programs.
4. Weak governance arrangements present a significant barrier to a successful international REDD system.
   Australia should address the significant governance risks associated with any international REDD scheme, including corruption and the misappropriation of REDD revenues. This is particularly pertinent considering the difficulties associated with monitoring land use and the lack of capacity to enforce property and land-use laws and support landholders and others to address REDD in those countries.
5. An effective international REDD scheme requires participating developing countries to have the systems in place to ensure real emission reductions.
   Australia should ensure that the basic operational requirements for an effective REDD system are established in participating developing countries to ensure legitimacy and environmental integrity, particularly given the barriers to real emission reductions including the lack of reliable, accurate and transparent forest monitoring systems.
6. A REDD system must rely on an accurate and transparent system for setting emissions baselines and measuring forest carbon emissions.
   Australia’s support for an international market-based REDD scheme should be conditional on the establishment of an accurate and transparent mechanism for setting emissions baselines and measuring forest carbon emissions.
7. The establishment of an international REDD scheme will take time and require continued investment in the conception phase to ensure effectiveness.
   Australia should continue to invest in base-level capacity building and trial and demonstration of REDD projects to ensure any scheme it supports is well designed and administrated to mitigate potential adverse impacts. Political and economic imperatives for rapid progress should not undermine the scheme design process.
8. A staged and cautious approach should be adopted for the introduction of any market-based scheme.
   Although a market-based approach to REDD has the potential to bring significant benefits, we must remain wary of the associated risks. If a market system is not designed and administered appropriately, it could have significant adverse climate, environment, social and economic impacts.

   A staged and cautious approach should be taken to the introduction of a market-based scheme. This should start with capacity building and demonstration projects, coupled with an interim fund-based scheme to support early action. Graduation to a full market-based scheme must be contingent on the production of evidence that the risks can be appropriately managed and that the national and international frameworks are sufficiently robust and transparent to support an environmentally and socially credible scheme.