This Week in Forest Carbon: A Flurry of Developments

Is cap-and-trade a rose which by any other name would smell as sweet?  Australia will be finding out shortly as a carbon tax is in the process of being unveiled for the country’s top 500 emitters. Australia’s new regulations, California’s cap-and-trade delay and Indonesia’s moratorium on clearing primary forests are just some of the stories from the incredibly busy world of forest carbon.

NOTE: This article has been reprinted from Ecosystem Marketplace’s Forest Carbon newsletter. You can receive this summary of global news and views from the world of forest carbon automatically in your inbox by clicking here.

14 July 2011 | Is cap-and-trade a rose which by any other name would smell as sweet?   Australia will be finding out shortly.   A carbon tax is in the process of being unveiled down under against the country’s top 500 emitters, with an initial fixed price of A$23 per tonne that by 2015 ceases being a tax when the price will be allowed to float and voila, there’s your emissions trading scheme.

In California, state regulators released a new plan this week starting to spell out how the recently announced delay of compliance obligations until 2013 will be carried out.   The state plans to breathe life into the market machinery in 2012, but many of the details still remain to be penciled in.  

Indonesia’s moratorium on clearing primary forests in concession areas drew more fire last week as the area of forests protected by the regulation appears to be shrinking even as the forest boundaries already mapped for protection continue to show indications of moratorium violations from inspection of satellite data.

On the financing front, news of major new funding commitments from the International Finance Corporation and World Bank’s Climate Investment Fund come at the same time as a brief assessment of fund-based financing for REDD shows the model is slower to deliver cash to the ground than many may have thought.   Many countries are not deterred, however, as the UN-REDD Programme announces six new observers have joined the multilateral forum.

And finally, as UN-REDD and FCPF publish joint papers outlining, among other things, lessons from various safeguard approaches, two indigenous coalitions in Peru call for a halt to the signing of any REDD+ contracts in their region until more of the details about the sub-national projects and broader national and international REDD+ programs are settled and shown to respect indigenous and community rights.

It’s been an incredibly busy couple weeks in all aspects of the forest carbon world, so read on below for all these and more stories in the latest edition of Ecosystem Marketplace’s Forest Carbon News Brief.
—The Ecosystem Marketplace Team

If you have comments or would like to submit news stories, write to us at [email protected].


International Policy

Pay me to Preserve my Preserve

The 10 country members of the Association of South East Asian Nations (ASEAN) are planning to play a role in pushing for further elaboration of a REDD mechanism at the climate talks set for South Africa this December. At a recent meeting in Bangkok of the ASEAN Senior Officials on Forestry, representatives articulated a desire to ensure REDD covers conservation in nature reserves and national parks. Whether the ASEAN bloc will take a united stance on some of the more contentious issues surrounding REDD+ such as market-based financing, the creation of offsets, and the scope of oversight and reporting regarding community and indigenous rights remains to be seen. Read more about ASEAN and REDD from the Bangkok Post here.

Operationalizing Cancun and the $100B Question

Last week 35 ministers and other high-ranking representatives convened in Berlin to try and light the way forward in UN climate change negotiations. At the top of the agenda was putting more elbow grease towards turning the Cancun Agreements into functioning climate policy and financing tools. High on this to-do list was addressing the financing gap likely to emerge after 2012, when the “fast-start” climate finance period (which has largely focused on capacity-building aid) ends. Clarifying the roadmap to the 2020 $100 billion annual financing goal also lined up with the discussion of launching a functional Green Climate Fund as a key goal of the Durban climate talks. The ministers believe progress toward the $100B goalpost should follow a transitional phase with a middle-ground “Plan B” option should the upcoming December negotiations fail to deliver an operational Fund. Read more about the Petersburg Climate Dialogue II from and see the co-chairs summary from the German Ministry of Environment website here.

US Policy

California Tunes Up Cap-and-Trade Program Rules

The California Air Resources Board has now released a revised discussion draft of the state’s cap-and-trade program rules. Much of the revisions address the recently announced delay until 2013 of compliance obligations. And although compliance is set to start in 2013, the draft syncs with recent announcements that market activities such as allocation of allowances, auctions, and trading will still begin in 2012. For forest projects, an earlier requirement of annual site visits by a third-party verifier has been replaced with a once-per-six-years site visit requirement. Additionally, an earlier permission for the use of “qualified positive offset verification statements” for offset projects was specifically removed for forest projects, meaning that forest projects will not be allowed to have one or more points of non-conformance with their offset protocols. This change was explicitly attributed to ensuring all sustainable harvest requirements are met. Other project types will still be allowed to have one or more points of non-conformance (if not prohibited in their individual protocols) so long as they do not represent material misstatements of project character or performance. A public workshop will take place this Friday (July 15) to discuss the revisions, with regulators particularly seeking feedback on which activities should begin in 2012 or 2013. A public comment period will follow later this summer. Read a summary of the draft revisions, or see the discussion draft featuring full mark-up on the ARB website, where you can also find out more about this Friday’s workshop, here.

National Strategy & Capacity

That’s not a Carbon Tax, THAT’s a Carbon Tax

Australia officially announced its carbon tax policy Sunday, confirming an initial price of A$23 per tonne increasing 2.5% each year until 2015, when the price will float in a transition to an emissions trading scheme (ETS) linked to international carbon markets. When the ETS comes online, 5% of emissions may be offset by a wide range of eligible carbon instruments, including homegrown credits generated by the Carbon Farming Initiative that encourages emissions reducing projects in agriculture and forestry. The tax will only apply to the 500 top Aussie emitters, mainly in the mining, power generation, and resource processing industries. Read about the new tax program here and here. Read about the program’s boost to land use offsets here and how the Carbon Farming Initiative and new tax will work together here.

Growing Signs of Moratorium Violations

More news following allegations we relayed in our last newsletter from an investigation into Malaysia-based palm oil and pulp conglomerate KLK for alleged violation of Indonesia’s newly authorized forest moratorium on a concession area on Indonesian Borneo. Using recent satellite data, the Environmental Investigation Agency (EIA), an international environmental watchdog group working in collaboration with local NGO association Telapak, are now reporting a large fire in the same concession area belonging to the KLK’s subsidiary, PT Menteng Jaya Sawit Perdana, which was handed the ignominous allegation of first moratorium violator last month. This is in direct contradiction to the purported KLK policy, articulated by Roy Lim, the Director of Plantations who stated “KLK has long abandoned using fire to clear land for new planting or replanting. Our policy and practice is zero burning for such activities.” Open burning is also illegal under Indonesian law. As EIA and Telapak begin pulling on this thread however, it looks like more bad news may start to emerge regarding Indonesia’s moratorium in the coming months as the groups detected “numerous” fires in forest areas in Kalimantan that are supposed to be covered by the national moratorium. Read more about KLK’s growing moratorium troubles from Mongabay here, and see the direct criticism leveled by EIA/Telapak here.

The Incredible Shrinking Moratorium

Indonesia’s Ministry of Forestry has released a revised Moratorium Indicative Map (MIM), the first revision since the signing of the moratorium in May – and it appears to reduce the area protected from an earlier map. The revised map, which shows concession areas where forest clearing is prohibited outlines 55 million hectares of primary forest and 17 million hectares of peat land under the moratorium for a total of 72 million hectares, just a bit less than the 96 million hectares the government had previously stated would be conserved. Read more about the map on the CIFOR blog here, view the map here and read about the shrinking moratorium from the Jakarta Post here and Mongabay here.

In Brazil, You say Tomato, I say…

Mongabay has published interviews covering the opposing sides of the debate on proposed changes to Brazil’s Forest Code and what they could mean for the Amazon. A May vote in the country’s House of Representatives showed overwhelming government support for reform, but positions remain hotly debated on issues such as decreasing set-aside conservation requirements and offering amnesty to earlier violators of the Code. Senator Katia Abreu, a member of opposition Democrat Party who heads the Brazilian Agricultural Confederation, argues that reform of the 35 year old law is crucial to not only ensure Brazil’s agricultural sector stays competitive, but that the Amazon and Cerrado’s environmental services are adequately protected. Although Senator Abreu contends a reformed Forest Code would promote sustainable growth, Roberto Smeraldi, founder and director of Brazil-based Amigos da Terra – Amazí´nia Brasileira argues the proposed reforms would undermine sustainability. Alongside a call to eliminate the amnesty provision, Smeraldi also argues for “a market of environmental assets and liabilities to allow for progressive regularization of farms, intelligent economic instruments, payment for environmental services,” to ensure the protection of Brazil’s forests. Read Mongabay’s interviews with Senator Abreu and Roberto Smeraldi here and here.

Project Development

Surprise of the Year: Bureaucratic Approval is Slow

In September of last year, Nigeria’s Federal Environment Ministry signed an MOU with the Global Oxygen Development Corporation (GODC) and UNISPACE Nigeria Limited to begin developing several Nigerian REDD projects. GODC and UNISPACE are now reporting limited progress has been made due to bureaucratic gridlock, particularly stemming from the slow pace of work by the Environment Ministry. Although the groups formed a contract with Taraba State government to initiate REDD+ projects, and are in similar discussions with Ekiti State government, securing formal official recognition and approval for the projects has reportedly presented an unanticipated critical bottleneck. Read more about the mired projects in Nigeria’s Daily Independent here.

Still Waiting for the African CDM Goldrush

The African Carbon Forum, held in Marrakesh this year, concluded last week with participants again greeted with the refrain of slow growth but huge potential for CDM and other carbon projects on the continent. Although Africa currently only accounts for around 2 percent of the more than 3,000 CDM projects registered globally, the last three years have seen an increased entry of African projects into the CDM pipeline, always underlying a large untapped project potential. Sessions on REDD received strong attendance, with two sessions discussing project development and financing sub-national REDD+ initiatives. Read more about the Forum from UNEP here, read a brief on-site recap from Ecosystem Marketplace’s latest V-Carbon news brief here and check out the conference website where the agenda, program, and presentations should be available here


Project Database Roundup

This week we visited the registries of the major public standards, and here is what we found.

* ACR is sitting pretty with 3 A/R projects listed, one which has been issued credits giving a total of 1,119 issued forest credits to date. ACR is still waiting for the first projects to be listed applying its approved IFM and REDD methdologies.
* CAR’s project registry shows 65 listed and 5 registered projects which have been issued a total of 2.56 million CRTs. The project listings breakdown: 14 Avoided Conversion, 11 A/R, and 45 IFM.
* CCB’s project list shows 14 projects undergoing validation, 40 projects completed with validation, 1 undergoing verification, and still just 2 to receive verification under the standard. Congratulations to Sierra Gorda and Green Resources for successfully completing validation in late June for their Mexican and Ugandan projects, respectively.
* CarbonFix’s website lists 9 projects, 4 of which have been registered on the Markit Environmental Registry. The CarbonFix project listings indicate over 650,000 ex-ante credits have been issued, though Markit now lists just over 250,000.
* VCS’s recently remodeled project database features 12 forest projects, with total issuances to 6 projects of 3.2 million VCUs.
* Plan Vivo’s project register shows 5 projects registered, with another 9 still seeking validation. A total of 1,011,773 Plan Vivo certificates have now been issued across these five projects.
* The Risoe CDM pipeline shows 61 active AR projects, with 33 at validation, 2 undergoing a review request, 5 requesting registration, and 22 registered. And still no tCERs or lCERs issued.

Methodology & Standards Watch

TNC Tweaks REDD Module

The Nature Conservancy has proposed revisions to the Monitoring Module included as part of the VCS REDD Methodology developed by Avoided Deforestation Partners. The revisions expand the scope of monitoring to specify methods for quantifying natural disturbance losses and degradation due to FSC-certified selective logging. The revised version, which would replace the existing module if approved, was released July 1 and is open for public comment until July 30. View the revised methodology here, and submit your comments here.

In the End, There Can Be Only One

This morning VCS announced the merger and successful validation of what until recently were two separate REDD Methodologies. The World Bank’s BioCarbon Fund and the Brazilian NGO Fundaçí£o Amazonas Sustentí¡vel have merged their two methodologies, covering mosaic and frontier deforestation, respectively. Those familiar with the methodologies are already aware that language in both was virtually identical, and the merger seems to be a common sense move to streamline the use of the methodologies. Read more on the VCS website here.

Finance and Economics

IFC Jumps Into the REDD Fray

The International Finance Corporation has joined with Australian financial service provider the Macquarie Group and Global Forest Partners to raise $25 million for investment in forest carbon projects in developing nations. Macquarie’s BioCarbon Group is already developing 3 projects in Indonesia with Flora and Fauna International, and sees this funding going toward a 100,000-acre project in West Kalimantan, Indonesia. The project is expected to generate REDD+ credits for sale in the international carbon market. Read more about the investment deal in Reuters here and The Financial here.

Happy Birthday NZ ETS, What’s Next?

New Zealand is looking to establish itself as a regional trading hub for carbon markets in the Pacific. The government recently held a meeting including officials from Japan, China, the US, and South Korea with emerging carbon trading schemes. After just completing its first year (as of July 1, 2011) operating a compliance carbon market, New Zealand now hopes to share its experiences as a leader to other countries looking to follow its example. With Australia planning to convert its “carbon tax” into an ETS in 2015, New Zealand Prime Minister John Key is already looking to link-up the Australian and New Zealand markets. Read more about New Zealand’s quest to be a carbon market hub here.

Just another Underfunded Development Program?

A new brief from IdeaCarbon shows just how slow public funding has been to get to the ground through a couple major multilateral REDD+ funds. Recognizing that public sector funding is unlikely to be sustainable of sufficient into the future, the authors suggest the remedy should be an active international carbon market to provide the necessary capital for a functioning REDD program. Read about the bearish take on the present and future of REDD funding from the Guardian here and check out the 7-page brief here.

More Funds Approved for Climate Projects

The World Bank’s Climate Investment Funds (CIF) have announced $444 million in grants and near-zero-interest loans to support projects in Asia, Africa, and the Caribbean. Included in the grants is $30 million in funding for Burkina Faso to decentralize sustainable forest management and encourage participatory protection of state forest reserves, and $60 million for the Democratic Republic of Congo to fund small-scale REDD+ initiatives and engage the private sector in REDD+. Read more about the CIF’s activities here. And no, the irony of having this story right next to the report about the slowness of funds for climate projects is not lost on us.

And the List Goes On

The UN-REDD Programme has announced six new countries have joined its illustrious ranks. Ivory Coast, Ethiopia, Honduras, Mongolia, Pakistan and Peru will now have the ability to engage in Policy Board meetings and may at some point in the future become eligible to apply for UN-REDD financial assistance to develop national REDD+ programs. Until then, they’ll have to be satisfied as observers and gleaning the lessons learned from their colleagues. Read the announcement from the UN-REDD website here.

This is Why we Can’t Have Nice Things

The UN is apparently planning on establishing an anti-corruption initiative to track some of its REDD investments. Recent concerns have been raised in Zambia that corruption may be sapping some of the $4.5 million meant to fund (in part) the countries REDD+ readiness preparations, says Josep Gari, the UNDP environment finance advisor for Africa. Read more from the Zambia’s The Post here.

Human Dimension

Tenure Time

The Rights and Resources Initiative (RRI) has released a report assessing how countries in south and southeast Asia moved from being net deforesters to net forest growers. “The Greener Side of REDD+: Lessons for REDD+ from Countries where Forest Area is Increasing” finds forest governance and tenure reforms that increased the rights of forest communities led to increased forest cover. The report was presented alongside several others at a conference convened in Indonesia by the Ministry of Forestry, the International Tropical Timber Organization (ITTO) and RRI. Read more about the conference here, the release of the report here and download the report here.

Indigenous Groups Call for REDD+ Contracting Freeze

CODEPISAM and FENAMAD, two organizations representing indigenous peoples of the San Martin and Madre de Dios states in Peru voiced concerns at meetings in May and June over sub-national REDD+ projects potentially impinging on their ancestral lands and rights. The groups called for all parties to hold off on signing any REDD+ contracts until all disputed territorial delineation is completed and indigenous peoples’ and local communities’ rights are guaranteed. What’s more, the groups want local stakeholders to keep out of contracts until the nature of REDD+ projects and programs have been clearly defined at national and international levels. Judging by the pace of international REDD+ negotiations, they may be waiting for quite some time. The groups also formed a REDD+ committee to monitor regional developments, as well as to create a platform to lobby for the securing of indigenous rights. Read more from the Forest Peoples Programme here.

Science & Technology Review

Scientists Eager to Inform Forest Code Debate

The Association for Tropical Biology and Conservation (ATBC), an international consortium of conservation scientists, released a resolution this week warning that proposed reforms to Brazil’s Forest Code could reverse progress in reducing deforestation in the Amazon. The group is promoting productivity gains on existing agricultural lands (especially grazing) as a solution to boosting production without clearing additional forest. The group called upon the government to delay approving any amendments to the Forest Code until a science-based assessment of the ecological impacts could take place. Read more about the ATBC’s concerns, and read their resolution here.

Publications & Tools

There’s an App for That, Too

A new tool from researchers at ETH Zurich, the University of Wisconsin-Madison, and South Dakota State University will provide the ability to estimate the potential benefits and opportunity costs of REDD throughout a country. The “REDD Calculator” gives emissions reductions estimates along with opportunity costs for different REDD+ scenarios, like the current two-year moratorium in Indonesia. Read more about the calculator here.

New Joint FCPF and UN-REDD White Papers

Three jointly commissioned papers from the UN-REDD Programme and the Forest Carbon Partnership Facility (FCPF) covering stakeholder participation, benefit-sharing and safeguards initiatives for REDD+ were published last week. “Draft Framework for Sharing Approaches for Better Multi-stakeholder Participation Practices,” presents lessons learned from ongoing stakeholder processes. “REDD+ Benefit Sharing: A Comparative Assessment of Three National Policy Approaches,” reviews payments for ecosystem services, participatory forest management (PFM), and forest concession revenue-sharing arrangements, concluding that a mix of all three is necessary for effective and sustainable financing of conservation efforts. “A Review of Three REDD+ Safeguard Initiatives,” outlines current approaches to applying social and environmental standards and principles, and highlights current REDD+ safeguard initiatives from the FCPF, UN-REDD and REDD+ Social and Environmental Standards. Read more about the papers and download them here.


California’s Air Resources Board is holding a workshop on July 15 to discuss changes to a discussion draft of the Greenhouse Gas Cap-and-Trade and Mandatory Greenhouse Gas Reporting Regulations, with a public commenting period to follow. See the announcement here and access documents for the workshop here



If you think working for WWF on climate change and energy in New Delhi sounds like your cup of tea, check out this or other job opportunities on the Forest Carbon Portal’s Jobs page, where you can also post your own job listings.

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