This Week in Forest Carbon: Bring on the Confidence

This week, we again took a look at the status of REDD+ in Indonesia in the light of recent troubles for the country’s leading REDD project.  However, in other parts of the world, there are abundant signs of market progress and developer confidence elsewhere.  In addition, top private sector investors are calling on negotiators in Durban to clarify their role in REDD projects.

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.

16 September 2011 | This week, we followed up with further analysis on the outlook for Indonesian REDD+ in the light of recent troubles for the country’s leading REDD project (Rimba Raya Debacle Casts Pall Over Indonesian REDD).   While some industry players have clearly questioned Indonesia’s true commitment to REDD+ in the wake of Rimba Raya exposés, many of those involved actually predict long term successes, with mounting pressure encouraging greater cross government commitment in Indonesia. The day after publishing our article, we received an Indonesian press release announcing the expansion of the federal REDD task force to include a number of additional key officials from across government. Everyone involved no doubt hopes this signals a new, and more coordinated, commitment to REDD+ from the Indonesian government.

Despite the project development jitters some may have for Indonesia, there are abundant signs of market progress and developer confidence elsewhere. Colombia is developing a system of Verified Emissions Reductions (VERs) and looking to establish a voluntary carbon trading platform. Over in Malaysia, project developers Face the Future have successfully been issued credits from the first tropical Improved Forest Management project under the VCS. And in Tanzania, REDD pilot projects are being developed with seven local villages.

Calls for clarity and consistency in forest carbon policy continue – this time with top private sector investors calling on negotiators in Durban to clarify their role in REDD projects. This is likely to be a challenging ask, but with forecasters predicting the market to generate $10B in investments by 2020, the financial sector’s comments will be difficult for those at Durban to ignore.

As always, read on for all the headlines and more in this, the latest edition of Ecosystem Marketplace’s Forest Carbon News Brief. What’s more, stay tuned for an invitation to attend one of three launch events we are planning for the release of our State of the Forest Carbon Markets 2011 report.   We’ll be swinging through Washington DC (Sept 29), San Francisco (Oct 4), and London (Oct 11).  

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International Policy

Coming soon to a degraded landscape near you

A recent ministerial conference in Bonn announced a global commitment to restore 150 million hectares of forest by 2020 after new analysis showed that 2 billion hectares of the world’s deforested and degraded landscapes would benefit from restoration. An IUCN report estimates that such work could add new value of $85B each year to the restored landscapes. This will directly contribute to international climate change and biodiversity goals which call for the restoration of 15% of degraded ecosystems by 2020 and increasing commitments to REDD. For more information see the IUCN story here

EU and Australia trade carbon dreams

The EU’s President Manuel Barroso has praised Australia’s planned carbon scheme and announced that the EU and Australia will ‘discuss how (to) gradually link emissions trading systems in the future.’ This would allow the world’s newest carbon market (the bill has yet to pass through the lower house in Australia’s parliament) to become linked to the its largest carbon market. While there has been significant support from the EU to develop a global climate regime, there is also some concern that monetary exchange rates may prevent credits in different schemes being truly interchangeable. See more in the Guardian here.

A PECk on the cheek: China pledges forestry assistance

China used the first Asia Pacific Economic Cooperation (APEC) meeting for forestry ministers held in Beijing to announce plans to increase national forest area by 40 million hectares in the next decade. China also pledged continued assistance to APEC countries as they seek to raise standards of living and improve forest management practices across the region. Read more from Global Asia here.

Finance and Economics

VERy promising commitments in Columbia

The Inter-American Development Bank has announced it will support a $10.5M project to establish a system of Verified Emissions Reductions (VERs) in Columbia. This project will focus on creating a voluntary market for Colombian verified VERs and expects to issue over 370,000 while also focusing on validating and registering credits generated under REDD and agricultural projects. The funding will be partially used to support five REDD projects across two different regions in Columbia, with the aim of cutting carbon emissions by half a million tons over the next four years. Read more from the IDB press release here.  

The true cost of deforestation

The United Nations Environment Programme (UNEP) released the “Forests in a Green Economy” report in June, arguing that investing an average of $40B a year, or 0.034% of global GDP, could halve the pace of global deforestation by 2050. The report claims that such investment could lead to 28% more carbon being stored in forests and 140% increase in the number of new trees. This comes in the wake of recent successes in the Republic of Congo which announced plans to plant one million hectares of trees by 2020, but the report ultimately argues that more still needs to be done globally to curb deforestation rates. Read more from The Citizen here.

Banking on Durban

Big hitters in the financial sector, such as Bank of America, Barclays and Deutsche Bank, are calling on policy makers to ensure the success of REDD, and cement their role in REDD investment, in the upcoming Durban climate negotiations. More than 200 banks and investors pointed to a recent report released by the UNEP (and backed by players in the financial sector) that says that a post-Kyoto climate convention needs to clarify the role of private investment in REDD if the program is to succeed. A forest carbon market has been forecast to generate $10B in investments by 2020 – a sum that negotiators at Durban should have trouble ignoring. Read more from BusinessGreen here and download the UNEP report here.


US Policy

ARB offers double-verification incentive

California’s Air Resources Board has made some changes to their rules on liability, shortening the amount of time that ARB can invalidate carbon credits. While ARB maintains the power to invalidate credits within 8 years of issuance, the proposed new rules would limit this window down to three years if forest projects undergo a duplicate verification audit within one year of the original credit issuance.   Reactions have been mixed, with some saying the fear of invalidation is overblown in the first place, while others see the shortened time-span incentive as insufficient. Download the latest from ARB here.

Project Development

Borneo leads with IFM credits

Malaysia is now home to the world’s first tropical Improved Forest Management (IFM) project to be successfully registered under VCS.   25,000 hectares of forest have been restored through enrichment planting, cutting climbers and vines, and other techniques in Face the Future’s INFAPRO project.   After three years of project activity, the project can now boast issuance of more than 500,000 credits and expects to generate more than 4 MtCO2e over the project’s 30 year crediting period. Read more from Face the Future here, and visit the project’s listing in the VCS Project Database here.

Belarus wets appetite for carbon credits

Near the infamous Chernobyl site, across the Ukraine border in Belarus, a new conservation project hopes to finance part of its operations by generating carbon credits through the re-wetting of 14,000 acres of peatland. Belarus is unable to sell credits on the Kyoto market, so the project is seeking foreign investments and validation under VCS.   The Centre for Sustainable Peatland Management, a company based in Minsk, plans to secure ownership of the carbon credits and management rights on the re-wetted areas, which are predicted to generate more than 1 MtCO2e.   Read more from Environmental Finance here, and see a press release from BirdLife Belarus, one of the new project’s implementers here.

Parents, make sure you’ve signed those permission slips

Students (and professors) from Colgate University will have a 430 acre site in Chile’s Aysén Region of Patagonia available as a research site under a deal with project developer, Patagonia Sur. The project will plant native species, generating carbon offsets that Colgate University has committed to purchasing. The forest is expected to generate 5,000 tCO2e each year and is part of a larger project verified by VCS to restore 700 acres. Read more at Utica Observer Dispatch here and from Colgate University here.

h4 style=”font: bold 11px Arial; margin: 0pt; padding: 8px 0px; text-transform: uppercase;”>No monkeying around with Tanzania’s new REDD projects

The Jane Goodall Institute is administering REDD pilot projects in seven villages of the Kigoma Rural district in Tanzania with local people expected to start seeing the benefits from next year including carbon credit payments. The projects will receive $400,000 annually and are being funded through the Norwegian Embassy in Dar es Salaam. Norway has committed over $500M to help REDD projects in Tanzania develop over the next five years. The JGI has already conducted surveys to determine how locals can best benefit from and manage REDD projects. Read more from AllAfrica here.

National Strategy and Capacity

Untangling Ghana’s roots of REDD+ confusion

Farmers in Ghana have been struggling to establish ownership over trees on their land due to confusing and conflicting customary and formal tenure systems.   A new IUCN report further argues that a lack of clarity around forest ownership is also limiting uptake of REDD+ in Ghana. For example, if a tree grows naturally on a farmer’s land, the government owns it and is able to cut it down. Even if a farmer did plant the tree, he has to register it, a complicated process. The national   Forestry Commission has therefore simplified legal frameworks believed to be adding to the confusion and have made concerted efforts to help local farmers understand the potential of REDD+ and afforestation. Read more from the World Agroforestry Centre here and Reuters here.

Indonesia enlarges federal REDD+ task force

Following recent concerns about Indonesia’s commitment to REDD+ after the Rimba Raya project in Central Kalimantan was pushed to the brink of collapse (see Ecosystem Marketplace’s article here), the Indonesian government announced that it is bolstering its REDD+ Task Force. This announcement by President Susilo Bambang Yudhoyono comes in advance of a visit from Norway’s Environment Minister this month. Indonesia did not meet the June deadline to set up a framework for implementing REDD+ as part of the $1 billion climate deal and there have been growing concerns about conflicting actions from different government Ministries. Indonesia’s announcement is perhaps evidence of a desire to seem more committed to REDD. Kuntoro Mangkusubroto, Chairman of the Task Force was quoted as saying that “the new Task Force for REDD+ Agency will continue to ensure the coordination   of all activities related to REDD+ and will report directly to the President” in a press release. See what led to this point from Ecosystem Marketplace here.   Read a brief update about the enlarged agency from Reuters here.

Methodology & Standards Watch

Revising the REDD modules

The Verified Carbon Standard has signed off on a revision to the methodological module for its REDD modules (VMD0007, its name is too long to print here) that were developed earlier by Avoided Deforestation Partners.   The revision, developed by The Field Musuem, adds in an approach to calculating the baseline for unplanned deforestation by using population growth as a proxy indicator. The original module completed the VCS methodology approval purpose late last year, and the revision received final approval this month. Read more from VCS here.

Making grass greener

A new VCS methodology for measuring emission reductions and carbon sequestration in grasslands under sustainable grassland management practices has been proposed by the UN’s Food and Agriculture Organization. Based on a project in Qinghai Province, China, if approved, this would be the first methodology since the CCX to credit soil carbon sequestration by using biogeochemical models without requiring field measurement of soil carbon storage.   The methodology is seeking validation and is open for public comment until October 6. Download the methodology and submit your comments here.

Human Dimension

Cutting Communities Out

The Congolese Human Rights Observatory (OCDH) has questioned a proposal to sell carbon from the Republic of Congo’s Odzala-Kokoua National Park. While the Park’s authority promised benefits to the local community when the [ark management plan was signed in 2010, the Partnership Agreement signed between the federal government and the African Parks Network allegedly precludes any revenue from being shared with locals. The OCDH has called on the Congolese government to clarify local participation and benefits in the absence of legal and official guidelines from the country’s as-yet unapproved REDD+ readiness proposal submitted earlier to the World Bank’s Forest Carbon Partnership Facility.   Read more at REDD-Monitor here.

Nothing sweet about deforestation

IRIN Africa has reported   growing concerns surrounding unrest in Uganda over plans to convert a quarter of the protected Mariba Forest to sugarcane. Politicians and activists in the region have already pledged that they will fight the proposals evoking memories of similar protests over concessions in 2007 which resulted in three deaths. Further violence was also reported in the region in April and May of this year. Read more from IRIN here.

Science & Technology Review    

Carbon Calculus

MIT researchers have developed a tool for calculating the value of ecosystem services and carbon storage which its creators hope will help indicate how demand for ecosystem services may impact land use. For example, demand for biofuels was found to increase when a CO2 tax was put in place. However, if the tax included emissions from land use change then this was seen to encourage avoided deforestation. With a tradeable credit program, reforestation was seen to be more likely. The researchers argue that encouraging carbon storage would also mean significant tradeoffs including less agricultural production. Read more from MIT here.

Researchers Bolster Australian Forest Policy

A study published in July by an international team of researchers in the journal Science contends that deforestation emits 2.9 BtCO2 annually and that the best response is a combined approach of reforestation, sustainable forest management practices, substituting forest biomass for fossil fuels, and preserving old growth forestry. Australian forest policy wonks see the research supporting the policies of the Australian government, which will attempt to incentivize farmers and land owners to conserve native forest, as well as reforest land, with the Carbon Farming Initiative. Read more from Science Network Western Australia here.

Publications and Tools

Getting over the confusion

An article analyzing forest carbon standards in the voluntary over-the-counter (OTC) market has found that although standards act as ‘market-making’ intermediaries and contribute to the quality and transparency of the OTC market, they also create confusion among buyers. “Effectiveness and Legitimacy of forest carbon standards in the OTC voluntary carbon market”, published in the journal Carbon Balance and Management, also states that standards in a voluntary mechanism are better able to innovate and respond to different stakeholders and adopters of the standards, and conclude that international climate policy and governmental institutions might be able to learn a thing or two from standards created under OTC regimes.   Read more at Carbon Balance and Management here.  

Documenting REDD, Agriculture and Energy

REDDNet has released three publications describing a cross sectoral approach for harmonizing REDD+, agriculture, and energy sectors. “REDD+ and Agriculture: A cross-sectoral approach to REDD+ and implications for the poor” stresses the importance of local level food security in ensuring the long-term political and social sustainability of REDD+. “REDD+ and Energy: a cross-sectoral approach to REDD+ and implications for the poor” details the close links between forestry and energy at both the local and global levels. At the global level, biofuels are competing with forestry, while at the local scale, wood fuel continues to be a popular energy source for rural areas of Africa and Asia.   Download the reports here, here and here.


Keep your eyes peeled for forthcoming invitations to the State of the Forest Carbon Markets 2010 report launches, happening in Washington DC (Sept 29), San Francisco (Oct 4) and in London (Oct 11). We hope to see you all soon at these upcoming events.


Can you see yourself at the World Bank working as a Carbon Finance 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.



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