This Week in Forest Carbon: Breaking Records

The big day is finally here. After months of investigation and analysis the State of the Forest Carbon Markets 2011: From Canopy to Currency has been released.  Find the details inside this week’s Forest Carbon News along with the latest headlines from around the world.

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.

30 September 2011 | The big day is finally here. After months of investigation and analysis the State of the Forest Carbon Markets 2011: From Canopy to Currency has been released.   This is Ecosystem Marketplace’s second annual report giving readers an in-depth look at what’s happening in today’s market, and what might be happening down the road.

The take aways from this year’s report are sure to generate some discussion, and here are some of the findings to whet your appetite: First, 2010 marked a dramatic increase in the volume and value of credits, dramatically outpacing the market activity we observed in our last State of the Forest Carbon Markets report that covered transactions up to mid-2009. The 2010 surge in credit generation has been fueled to a great extent by large Reduced Emissions from Deforestation and Forest Degradation (REDD) projects.

The increasing entry of the private sector as project developers, investors, and buyers is also bringing new blood into the market and may hold a host of new implications for the future of the forest carbon markets as well as their perception in the broader climate policy discourse.   From a rising secondary market to a strong boost in volumes due to forward contracting brought about in no small part by newly minted forest carbon methodologies, this report uncovers a host of interesting developments.

Project developers and market players looking into the future were optimistic about market growth, but few predicted the market would reach its current size and even fewer seemed to sense the scale of credits now being developed by hundreds of projects in the pipeline.  

The State of the Forest Carbon Markets 2011 is public and freely available thanks to support from the report’s Premium Sponsors – Wildlife   Works Carbon, ERA Ecosystem Restoration Associates Inc., and the World Bank BioCarbon Fund – and Sponsors – Ecotrust, Face the Future, Forest Carbon Group, Det Norske Veritas, and Baker & McKenzie.
For the full story, get a copy of the State of the Forest Carbon Markets 2011 report here.

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International Policy

All the President’s Emissions

Indonesia’s President has been busy reaffirming his commitment to curbing rates of deforestation, using a recent Center for International Forestry Research (CIFOR) conference to dedicate the rest of his presidency to saving forests (read more from CIFOR here). The president formally signed a decree to implement a plan to reduce greenhouse gas emissions by 26 percent from projected levels by 2020, saying that if additional support from international donors is secured they would curb emissions by up to 41 percent. The plan has been repeatedly referred to since it was announced in 2009, but has only now been the subject of a formal decree.

While the high level commitment to reducing greenhouse gas emissions seems positive, Indonesia’s real commitments to REDD+ are once again being questioned under the new decree which defines palm oil plantations as “industrial forest”. This definition means that converting natural forests to palm oil does not constitute deforestation and could actually be seen as a way to increase Indonesian forest cover. Widespread concerns about the new regulation may jeopardize the the Norway-Indonesia Partnership with the Norwegian Environment Minister Erik Solheim telling the Norwegian Broadcasting Corporation, NRK that “The money will be performance-based, meaning that Indonesia will receive the money when it protects the rainforests. They will simply not be given Norwegian funds if they turn rainforests into palm oil plantations.”   This message seems to have hit home already as Indonesia has announced that it will delay the controversial regulation to allow time to make improvements and ensure consistency with previous decrees.   Read more at The Foreigner here and Reuters here.

Governing the direction of REDD

The Governor’s Climate and Forest Taskforce (GCF), a collaboration of 15 states and provinces from 5 countries, held their fifth meeting in Indonesia to discuss the progress of sub-national and provincial efforts in developing REDD+ programs and reducing deforestation.   Over 200 representatives and experts attended the three-day meeting in Kalimantan, discussing how to attract funding at the state or provincial level, as well as strategy for upcoming COP17 talks in Durban. Read more from the CIFOR blog here.

REDDying biodiversity for Durban

The Convention on Biological Diversity (CBD) has organized a workshop in Durban to discuss biodiversity safeguards and REDD+. The CBD are trying to ensure that biodiversity is taken into account amid all the enthusiasm for REDD+, which has the potential to reshape the management of forest biodiversity. The meeting was attended by experts and negotiators from over 60 African countries and was intended to inform negotiators attending other climate change talks, particularly the UNFCCC COP17 in Durban, which will take place in December. Read more from Engineering News here.


Partnering developments on REDD+

The latest REDD+ Partnership meeting is currently underway in Panama City and is focusing on developing the Voluntary REDD+ Database and assessing the effectiveness of multilateral initiatives. The Voluntary REDD+ Database was launched in July and aims to improve effectiveness, transparency and efficiency of REDD+ initiatives while also offering an assessment of the gaps and overlaps in REDD+ financing. Early reports from the meeting are that discussions have focused around improving access to the information and ensuring consistency of data. On multilateral initiatives, participants noted improving effectiveness and a better understanding of the roles of UN-REDD and the Forest Carbon Partnership Facility (FCPF) as well as the REDD+ standards. Read more from Forest Carbon Asia here.

Project Development

Forests Keeping Panama Canal Clear

The Agua Salud project has been set up in Panama to “understand and quantify” the various services provided by forests. Forests play a vital role in helping the Panama Canal function, and erosion in deforested areas has led to significant costs for the Panama Canal Authority. This has prompted a widespread ban on forest clearing in the canal watershed but prompted questions about the most effective species for reducing erosion and increasing water retention. Early results from this research suggest that native species can have a number of economic benefits while the prior land use can substantially impact carbon storage. As Panama starts to develop REDD+ projects, this research is expected to inform planting decision as well as improve assessments of likely carbon storage. Read more from Mongabay here.

Facing a VCS future in Uganda

In our last newsletter, we relayed news of the first tropical Improved Forest Management project in Borneo.   Project developers Face the Future have now announced their first Verified Carbon Standard-approved project in Uganda’s Kibale National Park. This project is set   to work with local people to restore around 10,000 hectares of forest, while also conserving national park biodiversity in a region home to one of the largest chimpanzee populations in the world. Read more from the Face the Future press release here.

Gold on the Bayou

The 2,600 acre Upper Ouachita National Wildlife Reserve forest carbon project in Louisiana has received gold level validation under the Climate Community Biodiversity (CCB) standard. This is the fifth gold level project for The Conservation Fund’s Go Zero program that is managing this project with the US Fish and Wildlife Service and TerraCarbon and is expected to have a number of additional benefits, including preventing downstream flooding and assisting the recovery of forest birds. Read more from The Conservation Fund here.

And the winners are…

The UN has announced gold and silver awards for sustainable forest management. Rwanda won the gold Future Policy Award for its native species reforestation program, agroforestry incentives and environmental education initiatives which have increased national forest cover by 37% since 1990. The US and Gambia both won silver awards for the 2008 amendment to the US Lacey Act, which prohibits the trade of products sourced illegally in the country of origin. Gambia’s Community Forestry Policy was recognized for being the first in Africa to secure permanent forest ownership rights for local people. Read more from Mongabay here.

National Strategy & Capacity

How do you say Photo Copy in Bahasa?

The United Nations Development Programme is set to open a special office in Jakarta after signing an agreement to partner with the country in advancing its goal to curb deforestation, protect biodiversity, and reduce emissions. The opening of a UNDP office is another clear signal of support from the international community, who despite several disappointments, have continued to push for the development of a national REDD program in Indonesia. Read more about the new UNDP office here.

Jakarta Hands over Checkbook to Provinces

Indonesia’s government has announced that local administrations will oversee and manage REDD funds, while providing some central government oversight through the yet-to-be-established REDD oversight agency. Donor parties and funds would also be held accountable to the Ministry of Forestry. According to the Ministry’s Secretary-General, “This is intended to avoid accusations that the Indonesian government might embezzle funds.” The threat of corruption is one of the stumbling blocks that has donors and potential investors in Indonesian REDD projects worried. Read more about the plan here

Finance & Economics

Wall Street meets the Amazon

The Climate Bonds Initiative, the Global Canopy Programme, and the World Wildlife Fund have released a workshop report, Unlocking Forest Bonds, synthesizing and identifying the issues and next steps to advance forest bonds. These bonds would mobilize capital to finance forest conservation to cover the short-term financing gap that many forest carbon projects face, using carbon markets and income from other payment for ecosystem services to diversify income streams. However, there are a number of obstacles, including generating adequate public policy support, attracting initial investment, and developing a financial product that will appeal to socially responsible investors as well as deeper-pocketed institutional investors. Read about the report from Environmental Finance here and Mongabay here.   Download the report directly here.

Human Dimension

The Race for Land in Mozambique?

Following recent concessions covering 7.6% of the country’s land to Brazilian soy producers, the increasing interest surrounding REDD+ is now adding to higher demand for securing private land-use rights across the country.   This, according to a native Mozambican who wrote the story, is fueling a rush to acquire land for REDD projects and other competing uses despite admirable progress in the country’s national consultations surrounding the development of a national REDD+ program.   Read more from Reuters here.

Grabbing forest in Uganda

Oxfam is reporting that over 20,000 people have been forcibly evicted from   the Kiboga and Mubende districts in Uganda since 2006 to make way for a tree planting project. The Ugandan National Forestry Authority denies the extent of the evictions, arguing Oxfam has exaggerated figures. The government claims that encroachment is one of the biggest problems impacting the country’s forests and that forestry projects will provide jobs and infrastructure which will ultimately benefit local communities. Read more from Oxfam here.

Science & Technology Review

The cutting edge of forest carbon storage

A new study by Tropical Conservation Science finds that fragmented forests store significantly less carbon than expected. Looking at three habitats in Brazil’s Atlantic Forest which is one of the most damaged and fragmented forests in the world, researchers found that 92% of the forest sequestered just half of the expected carbon. This is largely believed to reflect the level of damage and the extent of edge-forest in fragmented landscapes. Carbon retention is widely thought to decrease towards the edge of forests with a reduction in large trees and canopy species. Read more at Mongabay here.

All Biodiversity is not Created Equal

Biodiversity safeguards in REDD+ have been a perennial topic of conversation. Now an article in the open access journal Tropical Conservation Science argues that the discussion would benefit from acknowledging biodiversity is not homogeneous. The authors assess species pleiotropy, or the dependence of a species’ conservation status on habitat loss (think eucalyptus-loving koalas), and charisma, or the degree to which species may be able to generate premiums (think pandas and polar bears), concluding that a more nuanced discussion of biodiversity among researchers and other REDD+ stakeholders could improve the biodiversity conservation outcomes of REDD+ projects. Read about biodiversity and REDD+ here.

Publications & Tools

State of the Forest Carbon Markets 2011: From Canopy to Currency

That’s right!   The latest in-depth look into the global marketplace for forest carbon offsets is now freely available.   Get your copy here!


If you’re going to be in San Francisco October 4 or London on October 11, come by and see the report authors and a panel of experts launch Ecosystem Marketplace’s State of the Forest Carbon Markets 2011 report.   Find out more about these events and RSVP here.  


Can you see yourself at Fauna and Flora International working as a Tropical Forestry Specialist? Check out this or other job opportunities on the Forest Carbon Portal’s Jobs page, where you can also post your own job listings.



The Forest Carbon Portal provides relevant daily news, a bi-weekly news brief, feature articles, a calendar of events, a searchable member directory, a jobs board, a library of tools and resources. The Portal also includes the Forest Carbon Project Inventory, an international database of projects including those in the pipeline. Projects are described with consistent ‘nutrition labels’ and allow viewers to contact project developers.



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