This Week in Forest Carbon: The Good and the Bad

While the Central Kalimantan Governor gained some valuable credibility among environmentalists this month, the bigger story you’ll want to keep you eye on in Indonesia revolves around the inability for the Ministry of Forestry to contribute to the country’s national REDD+ aspirations.  But the news on the project front is not all doom and gloom in other parts of 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.

22 August 2011 | While the Central Kalimantan Governor gained some valuable credibility among environmentalists this month after rejecting an offer from a Russian rail investor that would have contributed to forest destruction across the province, the bigger story you’ll want to keep you eye on in Indonesia revolves around the inability for the Ministry of Forestry to contribute to the country’s national REDD+ aspirations.  

A new news report shows the Ministry of Forestry is still bristling against a move to conservation and REDD+,   favoring the concession model instead, which has been a long-time cash cow and source of corruption.   After leading a project developer and a host of investors through bureaucratic hoops for years, with the flick of a pen the Ministry has now hobbled the pioneering Rimba Raya project, handing much of the project area over to a palm oil developer and leaving the project developers sitting with little hope to keep the project alive.   Despite the national-level commitments to forest conservation and REDD+ over recent years, this move targeting the country’s first project making clear progress toward third-party certification in the voluntary market sends a clear and unfortunate signal to potential investors in REDD+ that Indonesia remains a very risky place to do business.
Things are not all doom and gloom on the project front, however.   The Democratic Republic of the Congo signed it’s first ever contract for a forest conservation concession, paving the way for ERA Ecosystem Restoration Associates to develop a REDD project on 300,000 hectares in the country’s forest.
Back in the US, California’s cap-and-trade regulation looks set to be finalized by its October 28 deadline. The Air Resources Board has just closed it’s last commenting period on the draft cap-and-trade regulation, eliciting comments from many of the big names in the carbon markets and several companies with a lot at stake.
And as we reported in the last newsletter, we’re happy to say the State of the Forest Carbon Markets 2011 report is still on track for a release in late September, so stay tuned!   In the meantime, read on below for all the headlines and more in this, 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].


US Policy

Comments capped on California’s draft regulation

The fifteen day window for stakeholder comments on the California cap-and-trade draft regulation closed on last week, leaving the Air Resources Board (ARB) to mull them over and finalize the regulation by October 28. Some of comments have been published and highlight a number of concerns. The Climate Action Reserve praised ARB’s reliance on existing registry infrastructure, but emphasized the importance of setting high standards and stressed the need for ensuring credit liability is placed on the projects rather than the buyer, share concerned in comments submitted by the International Emissions Trading Association (IETA). Many stakeholders also raised concerns over the harvesting practices allowed under the forest protocols. The finalized regulation is expected to be enforced from January 2012 with emissions obligations implemented in 2013. See the Reserve’s response here (PDF), IETA’s here (PDF). Access the more than 800 comments submitted to ARB here.


Project Development

Palming off REDD

After more than three years of development and millions in investments from private foundations and for-profit backers, the fate of the Rimba Raya project in Indonesia has been thrown into a fog. Despite successfully delivering the first double-validated REDD methodology under the VCS, a maze of bureaucratic delays and double-dealing have since led the Rimba Raya project to the verge of collapse. The project developers, Hong Kong-based Infinite Earth, say they were provisionally granted 90,000 hectares for the project in Dec 2009, including carbon-rich peatlands that would provide a significant share of the project’s credits. On the eve of the nationwide moratorium on forest clearing a year later, the Ministry of Forestry slashed that down to just 46,000 hectares with the remainder handed off to a palm oil company including 6,500 hectares set for conversion to a palm oil plantation. Indonesia’s Corruption Eradication Commission is now on the scene and the head of the Indonesian REDD+ task force is openly admitting these bureaucratic hurdles must be sorted out. The Indonesian Ministry of Forestry’s actions not only contradict the spirit of the country’s alleged national stance toward REDD+, but also speak volumes to private REDD+ investors: your money will be at serious risk here. See more on the story from Reuters here.

DRC enters a new ERA

Canada’s leading forest carbon project developer, ERA Ecosystem Restoration Associates, and the Democratic Republic of Congo (DRC) government have signed a contract for the country’s first concession for a REDD project. This contract follows recent commitments from the DRC government to curb deforestation and the signing of a Carbon Rights Agreement with ERA in March. ERA have already announced that the project will be developed in line with the VCS and CCBA standards with early predictions suggesting carbon emissions reductions in the realm of between 1.5 to 3 million tons in the future. Read more about the concession agreement from the ERA website here.

National Strategy & Capacity

REDD+ Gains Momentum in Chiapas

A formal Technical Advisory Committee has been set up in the state of Chiapas to integrate a statewide REDD+ plan with Mexico’s national REDD+ strategy and promote local stakeholder engagement. Chiapas has also announced it will be the next partner to host the Governor’s Climate and Forests Task Force (GCF), a collaboration of fifteen states and provinces, including states in the US, Brazil, Indonesia, Nigeria and Mexico. Officials have said one meeting will specifically explore the commitments under the California-Acre-Chiapas MoU, signed to begin the process of forging a jurisdictional-level accounting program for generating REDD+ credits and still in early stages of development. See the original story from Chipas Hoy (in Spanish) here. Read an English translation here.

Nigeria REDDies for governance pilots

As national REDD+ programs continue to move forward, observers and donors are looking for signals that adequate social and environmental safeguards will be put into place. In line with this, Nigeria recently announced that it will pilot REDD projects aimed at assessing governance while looking for ways to promote a more participatory process. These pilot programs will therefore involve Social and Environmental Safeguards (SESs) as well as the Participatory Governance Assessments (PGAs) aimed at preventing harm to the local environment and communities at the earliest possible stage in project decision making and development. The pilots will run until December 2011, with an update likely in October when Nigeria is due to re-present it’s National REDD+ report at the next UN-REDD Policy Board meeting in Germany. Read more from Nigeria’s Daily Independent here.


Australia logs more forestry debate

A report by Andrew Macintosh, a climate law expert at the Australian National University suggests that Australia could meet 45% of its emissions reductions targets under the Kyoto Protocol by curbing logging of native forest. This has, however, opened up debate about the most cost effective ways for Australia to meet it’s carbon reduction commitments. This report follows recent controversy over a $276 million Tasmanian forestry deal to protect 430,000 hectares of native forest and the developing Carbon Farming Initiative which aims to open a voluntary window for agriculture and forestry sectors to supply offset credits into the national emissions reduction program. This legislation, currently before the Australian Senate will likely include methodologies to prevent logging of native forests. Read more from the Canberra Times here.

Don’t railroad Indonesia’s forests

While Russian investors have offered $2.5 million to construct a 135 kilometer railway between Central and East Kalimantan, the Central Kalimantan Governor has rejected the plans citing reluctance to destroy protected forest and open the northern region of Murung Raya to widespread flooding. This rejection has won widespread support from environmentalists who commend his commitment to sustaining the natural forest. Central Kalimantan is known as one of Indonesia’s top carbon emitters but has shown commitment to avoided deforestation after being chosen as Indonesia’s first REDD pilot project under the Norway-Indonesia REDD Partnership signed in 2010. Read more from the Jakarta Globe here.

Ghana to develop legal framework for carbon rights

The Ghanaian government has announced a new commitment to sustainable forest management that will be set out in a law aimed at securing resource tenure. Land tenure has been a core discussion point within the REDD+ space as it becomes increasingly clear that projects and carbon rights can only be developed if relevant tenure disputes have been resolved. There is still a ways to go on securing tenure rights, but a bill before Parliament is a first step in addressing some long standing forest management obstacles in Ghana. Read more from the Ghana News Agency here.

Congo refuels plantation debate

The Republic of Congo has announced an afforestation/reforestation project of degraded forest land which will increase the national forest cover up from 65 to 70%. The government is currently shopping for investors, hoping to get around $2.6 billion from international donors for the project. Yet questions remain about how environmentally friendly this initiative actually is, especially as the 5% increase in forest cover will come from plantation crops of native and exotic species. Environmentalists have been quick to highlight that plantations do not conserve biodiversity and will actually reduce carbon storage even compared to an area of degraded forest. Read more from Mongabay here and Reuters here.

Finance & Economics

Industry Group Targets Munden Report REDD+ Outlook

The Carbon Markets and Investors Association (CMIA) has responded directly to a report published earlier this summer which gave dim hopes for a global REDD+ market. CMIA argues three “flaws” in the Munden Project’s “REDD and Forest Carbon: Market-based Critique and Recommendations.” Beginning with the accusation that the report inadequately addresses any existing carbon markets, the CMIA argues the value of the assessment for any REDD+ mechanism in the future is fundamentally undermined. They also contend the report fails to consider how primary and secondary markets co-exist and the pace at which the carbon market has developed and evolved. Read more of the CMIA response here, and read the original Munden report here.

Alerting the market

July saw an increasing number of complaints to the UK’s Financial Services Authority (FSA) surrounding the validity of carbon credit trading schemes and the hard tactics used to try and sell credits to consumers. The rise in complaints has led to the FSA issuing its first ever consumer alert for carbon credits, advising that potential consumers should seek advice from a certified financial advisor before investing in carbon credits. There have been increasing concern about the credibility of a number of carbon investment companies and the wider effects that such industry reputations might have on future REDD+ projects. Read more from the Guardian here.

Human Dimension

Locals critical for REDD success

Experts have long suggested that the long term success of REDD+ projects hinges on the continued involvement of indigenous people throughout the decision making process. At the International Day of the World’s Indigenous Peoples, which took place August 9, local indigenous representatives acknowledged the consultation work that has taken place under the UN-REDD Programme but call for greater commitment to the principles of free, prior and informed consent (FPIC). FPIC, which frequently refers to the recognition of rights of indigenous groups and tribal peoples to make decisions regarding their lands and natural resources, is increasingly recognized as a critical step to justly involve local peoples in forest conservation and management programs. Read more from the CIFOR blog here.


Where are the women in REDD+?

A recent study conducted by Women Organizing for Change in Agriculture and Natural Resource Management argues the UN and others are failing to consider critical gender issues when making decisions on REDD+. The report suggests this restricts women from accessing forests and could actually lead to increased use of illegal non-timber forest products instead. Women’s involvement in REDD+ is noted as a critical way in which local communities can manage REDD+ policies while ensuring local people can also sustain their livelihoods. Read more from the CIFOR blog here, and a guest post from the Rights and Resources Initiative on REDD-Monitor here.

Science & Technology Review

Midwest US Producing “new generation” of carbon storage

A recent study from scientists at Ohio State University suggests the newly growing forests in the upper Midwest may actually outpace the productivity of earlier forests in the region. The researchers liken the new forest growth to a new “generation” of native trees that will aid carbon storage across the region as the older “baby boomer” generation of forest ages and is gradually succeeded. Read a quick review of the study on the Ohio State website here.

Soils Priming the Pump

Research out of Cambridge University is reviving a long-standing debate in the world of soil science. While many climate scientists have assumed the soil in tropical rainforests would serve as a long term store for carbon, a new study based on experimental research in Panama suggests that the increasing forest growth which could produce more litterfall may then in turn “prime” the release of carbon already stored in soils. The specific mechanisms (largely believed to be due to altered microbial metabolism) are still poorly understood. Nevertheless, the “priming” of forest soils with climate change holds the scary potential that forest soils may begin increased pumping of CO2 into the atmosphere, acting against the increased sequestration achieved above ground by the trees. Read more from the Cambridge University website here, and see the research article published in Nature Climate Change here. See a companion piece in Nature Climate Change by Yakov Kuzyakov, one of the leading experts on soil priming here.

Publications and Tools

Mid-Course Adjustment for Norway’s $1B

A review of the Indonesia-Norway REDD+ partnership was released in May, highlighting the complexity of developing capacity and a national strategy for REDD+. Overall, the report produced by Gaia Consulting highlights that the partnership is making progress and concludes that the financial support from Norway should continue over the next year. It calls for further defining REDD+ functions and greater transparency and access to information held by the Ministry of Forestry. While Indonesia has been working on implementing key milestones of the Partnership deal, there has been some concern that the deadline to put in place a national REDD+ strategy has not been met. The report also recommends greater political engagement, particularly with Indonesia’s House of Representatives and ensuring that land tenure of degraded lands are effectively clarified. Read a brief review and access the full report from the Norwegian Ministry of Environment website here.


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