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2014: The Year in Forest Carbon

Allie Goldstein

How to measure a year? You’ll have to wait for our data collection to conclude in the New Year to find out how many tonnes of forest-based emissions reductions were financed in 2014, but for now we’ll take stock of the year’s major developments, which ranged from the triumphant to the tragic.

26 December 2014 |If you had told the Earthlings of 10 years ago that we would soon be watching deforestation occur in almost real-time on our smartphone screens, most would not have believed you. But here we are in 2014 with Global Forest Watch at our fingertips an exciting tool that also highlights the complex, global nature of the fight to keep forests intact in a climate-changing world.

This past year was also one of new pledges to end deforestation, many of them by unusual suspects and many of them including encouraging financial commitments.

But the murder of four Ashaninka leaders Edwin Chota Valera, Leoncio Quincima Mel©ndez, Jorge Rios Perez and Francisco Pinedo in Peru in September followed by the killing of Shuar leader Jos© Isidro Tendetza Antºn in Ecuador weeks before the United Nations climate negotiations in Lima puts a tragic spotlight on the fact that protecting the world’s tropical forests is often life-threatening work. And indigenous peoples are the ones on the front lines.

Big promises

After 400,000 demonstrators took to the streets during the People’s Climate March in New York City in September, governments, multinational corporations, civil society and indigenous peoples issued the New York Declaration on Forests, committing to cut forest loss in half by 2020 and completely end it by 2030. The pledge, if successfully implemented, would reduce global emissions by between 4.5 billion and 8.8 billion tonnes of carbon dioxide each year, and it came with a promise of $1 billion in funding.

Many of the corporate signatories of the New York Declaration are members of the Consumer Goods Forum companies such as Unilever, Nestl©, and Walmart that source much of the palm oil, soy, and other agricultural commodities that drive a $1.4-trillion annual business and deforestation. In fact, a report released by Forest Trends this year found that almost three-quarters of deforestation between 2000 and 2012 was caused by commercial agriculture, a significant shift from the timber industry that drove the majority of deforestation in the 20th century.

Facing global pressure, these consumer goods companies made a flurry of “zero deforestation commitments in 2014, to the point that 60% of the global palm oil trade is now controlled by companies that have committed to eliminating deforestation and human rights violations from their supply chains.

REDD scaling up

Buyer interest in avoided deforestation (REDD) offsets tripled to total 24.7 million tonnes in 2013, according to Ecosystem Marketplace’s State of the Forest Carbon Markets 2014 report. About a third of that volume came from a $40 million agreement between the state of Acre in the Brazilian Amazon and German development bank KfW as part of the REDD+ Early Movers Program.

After spending three years developing its payments for ecosystem services framework, Acre is beginning to see the first payments about $2.9 million  flow to the local agroforestry association in the region that is managing its REDD activities. The money comes from KfW as payments for emissions reductions, and 70% of it is earmarked specifically for the providers of ecosystem services, including rubber-tappers and indigenous peoples.

Though the remaining two-thirds of REDD offset demand came mainly from companies pursuing corporate social responsibility targets, the government-to-government deal marked the type of “jurisdictional or state-scale initiative that is likely to become more common in the future. Indeed, during the UN Conference of Parties (COP) in Lima in December, the REDD Early Movers expanded to Colombia and Ecuador, with Norway joining in on the funding side. Colombia and Ecuador each has the opportunity to earn about $65 million if they successfully reduce emissions from deforestation over the next three years.

Though Indonesia surpassed Brazil to earn the infamous spot as the world’s top deforester, the country also achieved some important capacity-building last year, creating the world’s first REDD+ agency and naming Heru Pratseyo as its head in January. Pratseyo is now attempting to save the country’s peat forests which contain eight times the carbon content of other rainforests by engineering a massive land-swap, essentially by convincing palm oil producers to move their operations to degraded land.

Show them the money

Rainforest nations say they are poised to do much more if financing materializes. Governors from 13 states that are members of the Governors’ Climate and Forests Task Force, a group committed to scale up jurisdictional REDD, signed the Rio Branco Declaration in August, committing to cut deforestation 80% in their territories by 2020 if they are compensated for the emissions reductions.

With the Green Climate Fund surpassing the critical $10 billion threshold this month, REDD proponents are jostling to see if they might be able to carve out a space for avoided deforestation. The Fund’s Director indicated that forestry projects are attractive, but given the pressure to get some projects off the ground before the Paris COP negotiations next December, REDD proposals must be simple enough to be fast-tracked.

The World Bank’s Forest Carbon Partnership (FCPF) also had a busy 2014, selecting 11 new countries Belize, Bhutan, Burkina Faso, Cote deIvoire, the Dominican Republic, Fiji, Nigeria, Pakistan, Sudan, Togo and Uruguay and allocating $191 million in REDD+ readiness grants. FCPF’s Carbon Fund, which will offer payments for achieved emissions reductions, now amounts to $470 million. Eleven countries have submitted ideas for Emissions Reductions Programs, and three Costa Rica, the Democratic Republic of Congo, and the Republic of Congo have so far signed letters of intent.

On the private sector side, the Althelia Climate Fund made its first direct investment in 2014, pledging $10 million to the Taita Hills REDD project in Kenya developed by Wildlife Works. In May, The United States Agency for International Development guaranteed Althelia for up to $133.8 million in commercial finance for forest conservation and sustainable land use though a new mechanism that seeks to de-risk these types of investments.

California dreamin’

The Yurok tribe in northern California became the first organization to get compliance forestry offsets more than 800,000 of them approved by California’s cap-and-trade program in April. The same month, the state’s Air Resources Board (ARB) decided to shift the risk of invalidated offsets to buyers (rather than sellers) of compliance forestry offsets, putting it in line with other offset protocols.

And, with support from the Walt Disney Company, the community of San Juan Lachao in Oaxaca, Mexico developed the first pilot carbon offset project under the Climate Action Reserve’s Mexico Forest Protocol. The protocol was developed to be adaptable into a national Mexican REDD+ program in the future, with the potential of linking with California.

Chiapas, Mexico and Acre, Brazil signed a memorandum of understanding with California to coordinate around REDD back in 2012 and ARB officials have said they would consider accepting international offsets into the program, although they have not yet set a date for doing so. If California moves forward, it could become the first compliance market for REDD offsets.

The people’s forest

A study released this year by the World Resources Institute and the Rights and Resources Initiative found that rates of deforestation are, on average, 11 times lower in community forests with strong legal recognition, and indigenous people have official rights to about an eighth of the world’s forest area.

Buyers of forest carbon offsets have sent a strong signal that, in addition to verified emissions reductions, they are interested in the community and biodiversity benefits of forest protection indeed, these “beyond carbon benefits are sometimes what interests them about offsetting in the first place. Starting in November, the Verified Carbon Standard assumed the day-to-day management of the Climate, Community, and Biodiversity Standards to ease the pathway for the many projects that are already using both carbon and co-benefits certifications.

These verification standards, alongside remote sensing tools like Global Forest Watch, are evidence that we are now living in the Anthropocene a new geological epoch in which humans have so fundamentally changed Earth’s systems that their management rests in our hands.

Allie Goldstein is an Associate in Ecosystem Marketplace’s Carbon Program. She can be reached at agoldstein@ecosystemmarketplace.com.

 

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