COP21 Paris: REDD and carbon markets

By Chris Lang

“Governments have signalled an end to the fossil fuel era,” reported the Guardian on Saturday. “Nearly 200 countries signed on to a legal agreement on Saturday evening that set ambitious goals to limit temperature rises and to hold governments to account for reaching those targets.”

Good news? Er, no, not really. As George Monbiot writes, also in the Guardian on Saturday, “By comparison to what it could have been, it’s a miracle. By comparison to what it should have been, it’s a disaster.”

The Paris deal includes a target of “Holding the increase in the global average temperature to well below 2°C above pre-industrial levels”. And it even mentions “pursuing efforts” to keep warming below 1.5°C. But it notes that even if countries meet the targets in their (voluntary) intended nationally determined contributions, we don’t stand a snowball in hell’s chance of keeping warming below 2°C.

Climate scientist James Hansen calls the Paris talks a fraud:

“It’s a fraud really, a fake. It’s just bullshit for them to say: ‘We’ll have a 2C warming target and then try to do a little better every five years.’ It’s just worthless words. There is no action, just promises. As long as fossil fuels appear to be the cheapest fuels out there, they will be continued to be burned.”

Leaving fossil fuels in the ground was not on the agenda in Paris, and the words “fossil fuels” do not appear in the Paris Agreement.

So Paris will not address climate change. But will it at least save the forests?

REDD in the Paris Agreement

REDD is dealt with in the two paragraphs of Article 5 of the Paris agreement. Here’s the first:

1. Parties should take action to conserve and enhance, as appropriate, sinks and reservoirs of greenhouse gases as referred to in Article 4, paragraph 1(d), of the Convention, including forests.

This paragraph does nothing other than refer to the 1992 UN Framework Convention on Climate Change. Article 4 of the 1992 UNFCCC text is the “commitments” paragraph. It starts as follows:

“All Parties, taking into account their common but differentiated responsibilities and their specific national and regional development priorities, objectives and circumstances, shall:

And paragraph 1(d) reads as follows:

(d) Promote sustainable management, and promote and cooperate in the conservation and enhancement, as appropriate, of sinks and reservoirs of all greenhouse gases not controlled by the Montreal Protocol, including biomass, forests and oceans as well as other terrestrial, coastal and marine ecosystems;

Article 5, paragraph 1 of the Paris Agreement uses the word “should”, whereas the 1992 UNFCCC text used “shall”. (In UN-speak, shall means must and should means encouraged to.) Under the Paris Agreement, “Parties should take action to conserve and enhance” sinks and reservoirs of greenhouse gases, whereas in the 1992 UNFCCC text they only had to “promote and cooperate in the conservation and enhancement” of sinks and reservoirs.

Paragraph 2 of the Paris Agreement on REDD is a bit more chewy:

2. Parties are encouraged to take action to implement and support, including through results-based payments, the existing framework as set out in related guidance and decisions already agreed under the Convention for: policy approaches and positive incentives for activities relating to reducing emissions from deforestation and forest degradation, and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries; and alternative policy approaches, such as joint mitigation and adaptation approaches for the integral and sustainable management of forests, while reaffirming the importance of incentivizing, as appropriate, non-carbon benefits associated with such approaches.

Countries are only “encouraged to take action”, so none of this is legally binding. “Results-based payments” refers to payments from one country to another for having achieved reductions in emissions from deforestation and forest degradation.

The text spells out REDD and the “plus” part of REDD: “the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries”.

REDD payments may be through carbon markets, or not. We’ll come back to carbon markets shortly. “Joint mitigation and adaptation” refers to Bolivia’s 2012 proposal for financing REDD. The proposal exists in a zombie-like state in the UNFCCC text, and as far as I’m aware, nowhere else.

Tacked on at the end of the second REDD paragraph is a note about the importance of “non-carbon benefits”. That’s things like biodiversity, indigenous peoples’ rights, human rights, land rights, livelihoods, transparency and accountability. These are (sort of) covered in the REDD safeguards, which are staggeringly weak.

Financing REDD?

The COP21 Paris text is in two parts: the Decision; and the Agreement.

Finance gets 13 paragraphs (53-65) in the Decision part of the text. Paragraph 55 is about financing REDD:

55. Recognizes the importance of adequate and predictable financial resources, including for results-based payments, as appropriate, for the implementation of policy approaches and positive incentives for reducing emissions from deforestation and forest degradation, and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks; as well as alternative policy approaches, such as joint mitigation and adaptation approaches for the integral and sustainable management of forests; while reaffirming the importance of non-carbon benefits associated with such approaches; encouraging the coordination of support from, inter alia, public and private, bilateral and multilateral sources, such as the Green Climate Fund, and alternative sources in accordance with relevant decisions by the Conference of the Parties;

So, countries “recognize the importance of adequate and predictable financial resources” for REDD. Finance may come from public, private, bilateral, or multilateral sources. But none of this text involves anyone making any commitments to finance REDD.

REDD and carbon markets

Article 6 of the Paris Agreement creates a new carbon trading mechanism. It manages to do so with mentioning the words “carbon” or “trading” or “markets”.

Instead these words are replaced by the term “voluntary cooperation”. Carbon offsets are “internationally transferred mitigation outcomes”. And the new carbon trading mechanism is a “mechanism to contribute to the mitigation of greenhouse gas emissions and support sustainable development” (with the catchy abbreviation MCMGGESSD, as Oscar Reyes points out).

Shortly before COP21 started Brazil issued Decree 8576/2015, establishing a REDD+ National Commission. The Decree confirmed Brazil’s position, that was outlined in its INDC, that Brazil will not sell its REDD credits internationally.

But this isn’t because Brazil is opposed to carbon trading. Brazil wants to keep its REDD credits to offset its own emissions from the its expanding oil industry. On 8 December 2015, Brazil and the EU put forward a proposal on carbon markets. In a press release, the EU announced that,

The EU and Brazil have agreed and submitted a ground breaking proposal on rules to govern use of the international carbon market at the UN climate talks in Paris. The joint proposal demonstrates a willingness to engage in common and robust rules on accounting for all parties.

The final rules of the new carbon trading mechanism have not yet been agreed. It will only start in 2020 at the earliest. That means another five years of negotiating a new carbon market mechanism at the UNFCCC.

Once the carbon trading mechanism kicks off, countries generating REDD credits will have two options:

1. Keep the REDD credits to offset their own emissions from fossil fuels.
2. Sell the REDD credits to countries that will use them to offset their emissions from fossil fuels.

Neither of these options reduces global greenhouse gas emissions, because in both cases the reduction in emissions from forests would be offset against continued emissions from fossil fuels. Rich countries may finance REDD if it creates a loophole allowing them to continue burning fossil fuels. But it is difficult to see why they would want to finance REDD if it creates a loophole allowing forested countries to continue burning fossil fuels.

At the start of COP21, Norway’s Prime Minister, Erna Solberg, announced that Norway wants to include REDD in carbon markets, so that in future Norway can claim to be “carbon neutral”.

Emissions from fossil fuels are not the same as emissions from forests

It gets worse. The Paris Agreement assumes that emissions from fossil fuels are equivalent to emissions from forests. While the carbon emitted in both cases is the same, from the climate perspective emissions from fossil fuels and from forests are very different.

The carbon in fossil fuels is permanently stored under ground, unless it is dug out and burned. The carbon in forests is far less stable, particularly in a changing climate. We saw this to devastating effect this year with the forest and peatland fires in Indonesia. Indonesia’s emissions this year were way more that Japan’s as massive amounts of smoke and carbon were released to the atmosphere.

We need to dramatically reduce emissions from burning fossil fuels and from deforestation. We cannot afford to trade off one against the other. Unfortunately, the Paris Agreement sets the stage for precisely that.