Tuesday, July 28, 2009

Saving a Rainforest

Lowland rainforest in Costa Rica (March 2009). Photo by Rhett Butler.

By 2007 advancements in science had shown that not only were verification and monitoring of forest carbon possible, but that emissions from deforestation and degradation were so significant that they couldn't be excluded and keep atmospheric carbon dioxide levels under 450 parts-per-million, a level seen by many scientists as a critical climate tipping point. The Rainforest Coalition had a strong case that actions on forests by tropical countries could make a substantial contribution to the battle against climate change. But the Coalition still had to go up against the United States In Bali, where the U.S. delegation was attempting to block progress towards a post-Kyoto agreement. Conrad issued a direct challenge:

"We ask for your leadership, but if for some reason you're not willing to lead, leave it to the rest of us. Please get out of the way."

Minutes later the U.S. delegation capitulated, paving the way for the Bali Action Plan, which recognized the critical role tropical forests play in regulating climate.

Bali proved to be a watershed moment for REDD. During the meeting, Norway unveiled its International Climate and Forests Initiative, a plan to commit some 3 billion krone ($500 million at the time) per year to rainforest conservation, a sum still unmatched by any other donor. The World Bank announced a $300-million fund, the Forest Carbon Partnership Facility (FCPF), to jumpstart REDD projects in developing countries, and several other countries voiced support for the concept of REDD. Since Bali, momentum has only grown. In 2008, Britain and Norway put $200 million towards the Congo Basin Forest Fund to fund forest conservation activities in Central Africa; the U.N. has launched it own REDD fund; and Prince Charles made saving rainforests his signature cause, developing the Prince's Rainforest Project to bring business and political leaders around to supporting conservation. His efforts culminated in a historic meeting between heads of state to discuss rainforest conservation ahead of the G20 summit in April 2009.

Oil palm plantation and logged-over forest in Borneo (April 2008).

Mining road in Suriname (June 2008). Photos by Rhett Butler.

Developing countries have also become involved. Ecuador offered up a large tract of rainforest in the eastern Amazon as a giant forest carbon offset, while a group of 26 African countries in East, Central and Southern Africa announced the African Climate Solution, a plan to seek carbon financing for forest conservation, rural development, and poverty alleviation. Meanwhile, dozens of other countries have applied to the U.N. REDD program and the FCPF to begin receiving funds for REDD readiness activities. But the biggest news came from Brazil, which announced the formation of a $21 billion fund to reduce deforestation in the Amazon by 70 percent within 10 years, preventing an estimated 4.8 billion tons of carbon that would have been emitted under a business-as-usual scenario.

Owning to its lack of a climate policy, the United States has been slow to move on the concept of avoided deforestation, but a broad base of interests, including conservationists, development experts, scientists, and industry groups, has helped pushed it to the front of the climate agenda. Groups like Forest Carbon Dialog and Avoided Deforestation Partners, have played a critical role in working through difficult policy questions, fostering partnerships and strategic alliances between sometimes adversarial parties, helping draft legislative language, and informing policymakers of the multiple benefits of REDD.

Emissions from fossil fuels for the U.S. and China, 1900-2007.

"Having a dialog among companies, NGOs, and other stakeholders about how to get forest carbon on the table in a U.S. policy context have been very important," said Petsonk of EDF.

The efforts have paid off, with REDD figuring into last year's failed Lieberman‐Warner Senate Bill and the American Climate and Energy Security Act (ACES) narrowly passed by the House of Representatives in June. The current version of ACES, which is now in the Senate, seeks to achieve supplemental emissions reductions of at least 720 million tons of carbon dioxide in 2020 and a cumulative amount of at least 6 billion tons carbon dioxide by the end of 2025 through avoided deforestation. The proposal is equivalent to the United States conserving 34,000 square miles of rainforests in developing countries and would boost U.S. emissions reductions targets from 17 percent below 2005 levels by 2020 to 27 percent if fully exploited.

U.S. climate legislation is particularly important for progress on REDD. Without it, the U.S. delegation to the December 2009 Conference of Parties (COP15) in Copenhagen will not be able to bring much to the negotiating table, Eizenstat said.

"It is impossible for the U.S. delegation to go beyond the emissions targets that Congress will set in legislation," he said. "The administration cannot go further than Congress will allow. Congressional legislation will thus be a very important step."

National GHG emissions from industrial sources (electricity generation, transportation, buildings, etc) and LULUCF, 2000. Note that some countries have negative emissions from LULUCF meaning they these sources are a net carbon sink. Also note that the E.U. is listed in addition to its individual member countries.

Supporters say that beyond the environmental benefits of REDD, there are good reasons for the U.S. Congress to include REDD provisions in climate legislation, including reducing compliance costs for American business under a cap-and-trade system, engaging developing countries in a climate framework, and bolstering security in potentially worrisome areas through sustainable development and climate change mitigation.

"Climate change impacts could include crop failures and drought, creating instability and the potential mass movement of ‘eco-migrants,'" Eizenstat said. "But strong forest provisions would offer multiple co-benefits."

Tracy Johns, a forest policy expert who is co-leader of the Woods Hole Research Center's REDD Initiative, agrees.

"From a domestic standpoint one of the things that makes REDD a really attractive policy option is that it is a mechanism to encourage developing countries to take on emissions reductions goals," she explained. "At the same time it offers to these developing countries a potential pathway to use forests in a sustainable matter for development. Finally REDD offers a very interesting and potentially very effective cost containment measure U.S. businesses under cap-and-trade program. REDD will make it easier for the U.S. to reduce emissions further at a lower cost."

While still evolving, the U.S. position appears to be leaning towards a financing mechanism for REDD that includes both fund-based and market-based financing mechanism for REDD, a position shared by the Coalition for Rainforest Nations and by Australia. Financing remains one of the most contentious issues for REDD, with Brazil calling for an aid-based fund and Europe hesitant to allow forest carbon into its compliance market for fear it could cause the price of carbon to fall. Market advocates say that fund-based approaches will be subject to political whims and won't generate the kind of money needed to reduce deforestation at the scale and pace necessary to meet emission reduction targets.

But the critical issue in the market debate really is the fungibility of credits—whether countries can count carbon credits against their emissions. ("Fungibility" means that economic assets are exchangeable in the satisfaction of obligations.) Some Europeans countries are worried that the REDD credits will undermine low-carbon technologies without meaningfully reducing emissions, while Brazil doesn't like the idea of letting industrialized countries off the hook for their emissions. Environmental groups are split. Some call any sort off offsetting a "false solution" to climate changes; others say strong caps will greatly reduce the risk of the market for carbon credits being flooded.

"The central issue that is a critical impediment to progress on REDD and really to anything dealing with global warming is that the United States is not in the international game," Stephan Schwartzman, co-author of the seminal paper on compensated reduction of emissions from deforestation, said. "The U.S. has not actually begun to reduce its emissions nor created a cap-and-trade system. As long as that's the case, European policymakers are justifiably concerned about guarding the integrity of their carbon market."

Clearcutting in the Peruvian Amazon (October 2005). Photo by Rhett Butler.

"In the international discussion, among some NGOs there's still a sense that we can somehow avoid the risks of the market funding all of this with one version or another of public funding. But government priorities change and public funds are limited," Schwartzman said.

"A robust market mechanism is going to be critical to having this work. If there are too many good, real reductions from avoided deforestation out there, then tighten the cap. How hard is that?"

William Boyd, a professor at the University of Colorado Law School who has worked closely on REDD policy issues, agrees that a capped system can help avoid market flooding. A Greenpeace study, released at Bonn, has warned that in an unlimited market, carbon prices could drop by up to 75 percent.

"This isn't an extension of pure project-based offsets," Boyd said "The system is moving towards a national accounting framework where a country only get credits if it reduces emissions below a baseline that could progressively ratchet down over time—it might go to zero deforestation at some point. At that point you're trading between two capped sectors or two capped systems. Very different than the idea of offsets."

Continued next blog!!

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