This Week in Forest Carbon: The Movers and Shakers

From US point of view, climate policy is certainly in the doldrums.  UN talks shifted back into neutral, and US policymakers seem keen to go nowhere fast.  The movers and the shakers all seem to be outside these political bodies with continued developments in the voluntary market and the willingness for Guyana and Norway to stick their necks out on a bold template for financing REDD+.

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15 April 2011 | From the view here in the US, climate policy is certainly in the doldrums.   UN talks shift back into neutral, and US policymakers seem keen to go nowhere fast.   The movers and the shakers all seem to be outside these political bodies with continued developments in the voluntary market and the willingness for Guyana and Norway to stick their necks out on a bold template for financing REDD+.
In Bangkok, the latest round of UN climate talks last week failed to produce any substantial progress on sticking points left from Cancun.   The Kyoto Protocol appears more precarious than ever, and consensus on numerous technical issues including financing and market mechanisms even beyond the role of REDD+ seems a tall order by the next Conference of the Parties in Durban, South Africa.
Just before the UN waiting game recommenced, Norway’s Minister of Environment returned to Guyana to release $40 million into the country’s REDD+ Investment Fund. Undaunted by sustained criticism, Minister Solheim and Guyana’s President Jagdeo are pitching the Norway-Guyana model as a critical first step in the move towards a global REDD+ mechanism that must support countries like Guyana with historically low deforestation rates.
Two breakthrough projects in Democratic Republic of Congo and Tasmania signal the growing reach of the voluntary market and Verified Carbon Standard while the American Carbon Registry also announced its first fully operational REDD methodology for avoiding planned deforestation.
The circus surrounding the US budget provided an illuminating side show on Congressional distaste for the Environmental Protection Agency’s growing regulation of greenhouse gases under the Clean Air Act.   Clear majorities in both houses of Congress now appear to favor restricting EPA’s mandate, but it remains to be seen whether Republicans and Democrats in the Senate will cooperate to tie EPA’s hands since a complete removal of EPA GHG authority doesn’t have sufficient support to clear the Senate.
In California, we’re still waiting for new developments in the ongoing legal challenge to the state’s cap-and-trade scheme, but on a positive note, European Union Climate Commissioner Connie Hedegaard paid Governor Jerry Brown a visit to invite a future linkage between California’s expected carbon market with that of the EU.
As always, read on below for all this and more in Ecosystem Marketplace’s latest edition of the Forest Carbon News Brief.
—The Ecosystem Marketplace Team

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International Policy

The Guyana Template for REDD+ Accounting

A fresh $40 million deposit from Norway to Guyana’s REDD+ Investment Fund was announced March 31, bringing the total to date up to $70 million. A revised Joint Concept Note describes new terms for future payments, including a new “reference level” of annual deforestation. Although this benchmark was revised downward substantially, it still sits at nearly ten times the 2000-2009 historical deforestation rate. But in an interesting shift, the new Concept Note also introduces a system for proportionally reducing Guyana’s gross compensation when deforestation exceeds the 2009-2010 deforestation rate (0.056%), progressing to a cancellation of all payments in a given year if deforestation reaches 0.1%. Read the press release and supporting documentation from the Norwegian Ministry of Environment website here. Read local views on the announcement from Kaieteur News here.


Climate Talks… yawn… Close in Bangkok

Despite optimism from tangible progress at Cancun, negotiators convened in Bangkok made no substantial progress after an entire week of “negotiations.” In the Kyoto Protocol Working Group (AWG-KP), talks stalled as delegates confronted Kyoto’s existential crisis: the unwillingness of several developed countries to commit to a Kyoto framework after it expires in 2012. Speaking at a conference in New York last week, lead U.S. Climate Envoy Todd Stern reaffirmed this crisis, stating the US would not join any treaty that preserved the Kyoto Protocol’s ‘firewall’ where only developed countries assume emissions obligations. In the Working Group on Long-Term Cooperative Action (AWG-LCA), talks completely ground to a halt as the negotiators bickered until the final day before agreeing to an agenda. Read a recap of the (non)events from the International Centre for Trade and Sustainable Development here.


Measured Progress in REDD+ Partnership

With a day off from the UN negotiations, delegates filtered in to the Sunday meeting of the REDD+ Partnership. Beginning with an extended detour to discuss administrative blockbusters (per diem payments for delegates were apparently a hot topic), presentations in the first day rolled through the emerging database the Partnership has commissioned to track REDD+ financing, with the Forest Carbon Portal’s Project Inventory receiving an honorable mention (thanks Norway!). Up next, Partners revisited the gap analysis on REDD+ funding prepared back in December. The second and final day of the meeting involved a workshop to discuss demonstration projects in DRC, Indonesia, Japan, and Costa Rica. Compared to the UN talks, the Partners set a blistering pace. See the presentations and supporting documentation from the meeting at the REDD+ Partnership’s website here.


US Policy

Congressional Majorities Oppose EPA GHG Authority

Two days before the midnight deal to avert a government shutdown, the Senate voted on four different budget amendments to limit EPA authority to regulate GHGs under the Clean Air Act. The most restrictive amendment from Minority Leader McConnell to completely strip EPA authority received 50 votes, with 4 Democrat cross-overs. Two remaining amendments proposing 2-year delays to EPA authority and one exempting agriculture and small business from regulation also fell with lackluster support. The fact that the Republican-controlled House of Representatives passed a bill the next day to strip EPA GHG authority comes as no big surprise, and the bill later died when passed to the Senate. Nevertheless, the total of 60 Senators who voted to delay or remove EPA authority for GHG regulation signals troubling days are likely still ahead. Read more about the Senate vote in the New York Times here and the House vote at Bloomberg here.


EU Extends Open Hand to California Carbon Market

EU Commissioner for Climate Action Connie Hedegaard was in California last week and met with Governor Jerry Brown and Air Resources Board Chair Mary Nicholls to discuss the possibility of linking the current EU and future California emissions trading systems. While the short-lived hope for a U.S. federal cap and trade scheme has been extinguished, the California scheme set for launch in 2012 (pending a court review) is expected to become the second largest carbon market in the world when it opens. Read more about the Commissioner’s visit at BusinessGreen here and the Guardian here.


Project Development

Playing Devil’s Advocate

Tasmania’s first forest carbon project was successfully validated under the Verified Carbon Standard (VCS) last week. Redd Forests, a New South Wales-based project developer is celebrating the project, which arranges for 7,666 ha of land owned by Paul and Anne Downie to be reserved from their historical pattern of selective logging. Back in July 2009 the project received certification under the Climate, Community, & Biodiversity Standard, and yes, it does include conservation of 4 endangered species, including the Tasmanian devil. Check out the press release from Redd Forests here, and an article by Redd Forests’ Founder and Director here.


Ribbon Cutting in the DRC

ERA Offsets Ltd. has inked a deal with the Democratic Republic of Congo to develop a large-scale forest carbon project. The project covers 300,000 hectares and is predicted to build up to generating as much as a million credits per year for the next 25 years. This is the first voluntary forest market project we’ve tracked in DRC (3 CDM-oriented forest projects exist). ERA Offsets plans to certify offsets using the Verified Carbon Standard, beginning with improved forest management and later building a separate REDD component. Read the press release from ERA here.


Capturing Carbon in Colombia’s Conservation Corridor

Revisiting his 2005 PhD work, anthropologist Brodie Ferguson is leading the charge for a community-based carbon project inside Colombia’s 5-million-hectare Choco-Darien Conservation Corridor. Starting with more than 1,000 families in the Acandi municipality, the project is seeking CCB and VCS verification, aiming to produce 50,000 tonnes of carbon reductions per year. The local families currently “own” half the project and plan for a gradual transition to community-based control as administrative and financial capacity is built. Read more about the project from AlertNet here.


National Strategy & Capacity


A small group including leaders from the Guyanese opposition party raised concerns to Norwegian Environment Minister Erik Solheim during his recent visit that contributions to the Guyana REDD+ Investment Fund (GRIF) could be misdirected to directly bolster the ruling party during the election year. The group cited a lack of watchdog NGOs to monitor funds and implementation of projects as a reason for their concern. President Jagdeo defended the government’s ability to handle the funds responsibly, and Minister Solheim tried to reassure observers by stating that if the ruling party does not share details about the use of the funds, Norway will. Read more at Kaieteur News here.


Carbon Markets Taking Off in China

While the U.S. debates EPA authority to regulate greenhouse gases and UN talks stagnate, China is stepping up plans to implement market-based mechanisms to meet their 2020 emissions-intensity targets. Plans for a scheme in six cities and provinces by 2013 would then expand to national coverage by 2015. According to China’s National Development and Reform Commission, previous efforts from Beijing to reduce emissions using a command-and-control approach had been a “mistake” and the country will increasingly use market mechanisms for carbon reductions in the future. Read more from Reuters here.


Finance & Economics

Squaring Investments in REDD and Palm Oil

The World Bank has decided to remove its own ban on palm oil investment, touting a new lending framework that prioritizes investment in local businesses and communities and focuses on improving the productivity of existing plantations. Critics, however, remain concerned that the new policies do not go far enough to protect indigenous people’s rights. Meanwhile, Norway has continued to increase investment in Southeast Asian palm oil through its own sovereign wealth fund. While several palm oil and logging companies have been blacklisted by an ethics committee setup by the government, critics see the investment as directly at odds with the Norway’s REDD+ aid. Read more about the World Bank’s investment conundrums at Mongabay here and Norway’s own at Reuters here.


Methodology & Standards Watch

ACR Mints First REDD Methodology

American Carbon Registry (ACR) has approved its first REDD methodology for avoiding planned deforestation after completing an unexpectedly smooth peer review process. Projects tackling other deforestation drivers will have to wait for further methodologies to emerge, but the wait may not be too long, as the Avoided Deforestation Partners’ REDD Modules (already approved for use under VCS) have recently completed a public comment period to be followed by a scientific peer review before ACR grants its own seal of approval. Find out more about ACR’s newly-approved methodology here.


Science & Technology Review

Rainforests, Eat Your Heart Out

The carbon cost of global mangrove destruction is coming into focus, with a new study in Nature Geoscience. Mangroves store two to four times more carbon than rainforests do because of their complex root structures that trap large amounts of organic sediments underwater, slowing the process of decay and building a huge store of soil carbon. The authors estimate that despite accounting for only 0.7% of the forest area destroyed, mangrove destruction contributes 10% of the global emissions from deforestation each year. Read more about the study from AlertNet here. Check out the abstract here. For the policy context, see the call to action from Forest Trends’ Marine Ecosystem Services Program for integrating mangrove conservation into the ongoing international REDD+ dialogue here.


Publications & Tools

Survey on REDD Communications Barriers and Needs

The Forum on Readiness for REDD has released a white paper detailing findings from a recent survey of REDD stakeholders on their preferred resources for REDD+ information. 70 individuals involved with REDD policy or implementation activities were surveyed, with the majority from developing countries. Of the major findings, perhaps the most striking is that respondents reported being overwhelmed with the volume of information on REDD, but find navigating the array of resources a huge undertaking to gain meaningful insights. Read the white paper here.


Tell Me How You Really Feel

Leading up to the UNFCCC meetings in Bangkok earlier this month, parties were asked to submit their views regarding potential market and non-market mechanisms for financing climate mitigation and adaptation. The Institute for Global Environmental Strategies has conveniently summarized the submissions and packaged them all together for you reading pleasure, which you can find here. For those looking for a longer read, you can still check out the full submissions from all parties on the UNFCCC website here.


Greenpeace Throws McKinsey a Curveball

Greenpeace has unleashed a new report targeting McKinsey’s role in developing national REDD+ plans. According to the report, McKinsey’s advice to the Democratic Republic of the Congo and Guyana led them to assume inflated projections of deforestation and logging rates to allow the countries to claim aid despite increases in deforestation. The company’s cost curves are at the heart of the controversy, which estimate price tags and emissions reductions potentials on varying approaches to greenhouse gas reductions. Read coverage on the Greenpeace-McKinsey skirmish from Business Green here and Bloomberg here. Read McKinsey’s response here, and check out the report for yourself at Greenpeace’s website here.



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