News
International Roundtable on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries
Brussels, Belgium
October 24-25, 2007
SUMMARY
As Bali is fast approaching, there remains a growing anticipation for what tangible outcomes can be expected from the meetings, in particular regarding reducing emissions from deforestation (“RED” or “avoided deforestation”). On 24 – 25 October, a diverse group of leading private sector companies, environmental NGOs, scholars, lawyers and representatives from key tropical forest governments, the EU and the U.S. gathered in Brussels to discuss RED policy in an effort to illicit common views and refine the policy challenges. The meetings included engaged and open discussion from all participants on various policy approaches and testimonials on the urgency of the deforestation crisis. The 24 October was filled with presentations and discussion. The presentations can be downloaded from www.adpartners.org and www.climatefocus.com. The session on 25 October was conducted as a round table discussion which focused on key issues for Bali.
The meeting participants acknowledged that whatever policy measures are adopted, to be successful, they must attract private sector investment in preserving standing forests. While there is little expectation that the details of a comprehensive RED policy will be achieved in Bali, the RED meeting participants overwhelmingly agreed that Bali must result in a strong political statement that sends a signal to the market that RED will be included in the post 2012 regime. The RED meeting participants identified and discussed the following key issues that may form part of a blueprint for such a political statement. The participants voted on the importance of each general issue which is set out below in order of the identified priority.
PROMPT START
The participants attached highest priority to receiving a mandate from the Bali negotiations that would authorize a RED prompt start or pilot activities. They also agreed that early actions taken prior to 2012 should be recognized in the post 2012 regime. In particular, the group cautioned against repeating how the Activities Implemented Jointly (“AIJ”) program for early carbon reduction pilot projects was promoted prior to Kyoto but was then largely left out of the prompt start of the CDM. One way to avoid repeating the AIJ lesson was to expressly encourage early activity and expressly provide that such activities, if properly conducted, could be recognized in the future regime. Some participants urged for clear modalities for pilot activities to be adopted in Bali others suggested that a prompt start approach could be catalyzed by developing a prompt start fund to assist pilot projects as a means of developing best practices.
MARKETS
RED policy should leverage the carbon markets to drive private and government investment in forest protection. Most meeting participants where united on the need to bring RED into the global carbon market, but there were a number of different suggestions on how best to achieve this goal. Most participants favored the creation of RED carbon credits that would be fully fungible with other carbon credits in the market, provided that concerns over market flooding were addressed. While fungibility was considered generally positive, RED fungibility should not discourage emission reductions in developed countries or provide an excuse for those countries to continue to invest in long-term fossil fuel based infrastructure (i.e., coal-fired power plants without carbon capture and storage). A number of participants supported a “dual markets” concept, which would isolate a RED market from the broader global carbon market, but facilitate demand by having separate, specific obligations on Annex I countries to source a percentage of their commitments from RED offsets.
NATIONAL AND PROJECT ACCOUNTING
A number of participants cautioned that the private sector is unlikely to make any significant investments in RED unless direct investments in projects without significant exposure to risks associated with the host country would be possible. Most attendees thought there could be some combination of established national monitoring and accounting against a reference scenario while allowing individual projects to be recognized within a national approach. Others supported a centralized government driven national approach. The discussion on this topic foreshadowed the challenges facing the COP/MOP. A key point of agreement among the meeting participants was that a mere expansion of the CDM to include RED would not catalyze private sector investment in any meaningful way, given how the combination of CDM and EU ETS have approached LULUCF credits to date – the former creating temporary and devalued credits and the latter expressly precluding them. In the context of national reference scenarios, the participants did not agree on the nature of any national targets that would accompany the reference scenario. One suggestion was to have national monitoring, but allow a way for private sector investments in specific projects to avoid any risk that the projects’ “credits” would be impacted in the event that a particular country did not achieve its national targets.
CAPACITY BUILDING FUND
There is a need for funding directed specifically towards capacity building related to the technical and legal aspects of RED. The RED meeting participants offered a number of suggestions on the appropriate use of a RED capacity building fund, but no consensus emerged on the details of such a fund. Some of the notable recommendations included applying the proceeds from the fund to (i) develop pilot projects and share global best practices, (ii) develop a more robust land rights database, and (iii) provide local communities economic and skills assistance to encourage local participation and facilitate a shift away from existing local economic dependence on destruction of the forests.
EMISSION REDUCTION VS. CARBON STOCK ACCOUNTING
The participants briefly discussed crediting carbon stock vs. emission reductions. The UNFCCC and Kyoto Protocol have focused on emissions and reducing emissions, so the obvious trend in RED is to focus on establishing investment incentives based on a demonstrated reduction in that rate of emissions. The benefits to this conventional approach are (i) it keeps the UNFCCC and Kyoto Protocol focus on emission reductions as opposed to other related forestry concepts, such as carbon stocks; (ii) more perceived certainty of achieving an actual reduction in emissions; and (iii) focusing the investment in the areas that have the most urgent need based on empirical evidence. Some of the RED meeting participants noted the potential detriments to this conventional approach as (i) depending on how the reference level is set, it can preclude from the market those countries that have had historically low rates of deforestation, or create a perverse incentive for such countries to increase their deforestation rates to enable participation in the markets; (ii) it does not allow for up front return on investment, requiring instead a typical five year waiting period for verified reductions to be recorded; and (iii) it relies on a questionable assumption that historic rates of emissions from deforestation can be accurately assessed and agreed among sovereigns.
It was made clear by some of the meeting participants that introducing carbon stock accounting would likely only distract the COP/MOP from reaching the needed political commitment to address RED in the post 2012 regime. Any such approach is therefore only likely to be pursued in the voluntary market.
CONCLUSION
The two day meeting in Brussels brought together key stakeholders from government, the private sector, and academia to exchange ideas on what outcomes are needed in Bali to address the deforestation crisis. The meeting participants agreed that while a lot is riding on the Bali meetings, achieving a detailed RED policy should not be expected. Rather, a successful outcome of Bali would be to achieve a strong political declaration of support (much like in the COP 6.5) for the inclusion of RED in the post 2012 regime, with the details of such a plan to be worked out over the next two years. The issues discussed at the Brussels meetings and summarized above hopefully could inform the architects of the RED policy to come.
CONFERENCE ATTENDEES
Name / Organization
Adriana Mejia - Federación Nacional de Cafeteros de Colombia
Aimée Christensen - Christensen Global Strategies, LLC, US
Andrea Garcia-Guerrero - Ministerio de Medio Ambiente,, Colombia,
Andrew Mitchell - Global Canopy Programme - UK
Anne Vehviläinen - Senior Advisor - Finland
Angel Parra - SEAM, Paraguay
Anna Lehmann - 3C Group - Regional Manager, Germany
Aquiles Neuenschwander - Fundación para la Innovación Agraria, Chile
Bas Clabbers - Ministry of Agriculture, Nature and Food Quality, The Netherlands
Bert De - Somviele Directeur VBV
Charlotte Streck Director - Climate Focus, The Netherlands
Christine Dawn Fletcher - Forest Research Institue, Malaysia
Cristophe Van Orshoven - Biodiversity & Forestry Expert, Belgium
Cristoph Thies - Greenpeace
Claudia Liebers - Embassy of Bolivia
Coos Battjes - Credit Suisse
Dan Millstein - Avoided Deforestation Partners, US
Diana Movius - Center for Clean Air Policy - US
Dieter Cuypers - Coordinator - Groenhart.be
Donna Lee - U.S. Department of State - Office of Global Change, US
Eduardo Sanhueza - CEPAL
Elliot Conway - Managing Director, Citigroup Global Markets, US
Erik van Zadelhoff - IUCN Regional Office for Europe - Brussels
Eugen Diemel-Rellecke - GOPA
Felix Magallon Gonzalez - Panama / ANAM
Flip Van Helden – The Netherlands
Fred Boltz - Conservation International, Vice President for Regional Programs Division
Ghazal Badiozamani - UNFF
Greg Janetos Sustainable Forestry Management - Director of Carbon Programmes, UK
Ines Manzano Torres - Ecuador
Jan Fehse - Principal Consultant, EcoSecurities
Javier Ortiz - Fundación GAIA Amazonas, Colombia
Jeff Horowitz - Avoided Deforestation Partners, Berkeley CA, US
Jennifer Ann Farmer - Carbon Bureau, Uganda
Jenny Henman - Sustainable Forestry Management, UK
Jessica Ellis - Embajada de Bolivia
Jim Penman - Department for Environment, Food and Rural Affairs- UK
Joachim Sell - Factor Consulting + Management AG
Johnathan Ekstrom - The Biodiversity Consultancy, London
Jon Grayson - Enviromarket
Joost Pellens - Essent
Jose Luis Samaniego - CEPAL
Juan Pablo Castro - Climate Focus
Julia Justo - Soto FONAM Peru
Justin Mundy - Climate Change Capital, UK
Klas Osterberg - Environment Protection Agency, Sweden
Lucio Pedroni – CATIE, Costa Rica
Manuel Estrada - Mexico
Mandar Trivedi - Global Canopy Programme, UK
Maria Antonia - Abad P. ENDESA
Marlene Grundström - Office of Anders Wijkman, MEP
Michael Dutschke – BioCarbon, Germany
Nick Roberts Researcher - Imperial College, London
Nicolas Grondard – ONF, France
Paulo Canaveira - Portugal
Peter Aarup Iversen - Special Adviser, Forest and Climate, Denmark
Ralph Ashton - Wentworth Group
Ricardo E. Giesecke - Jefe de la Unidad de Cambio Climatico- CONAM, Peru
Ricardo Ulate Ministerio de Ambiente y Energia, Costa Rica
Richard M. Saines – Attorney, Baker & McKenzie, Chicago, Illinois
Robert Kofi Bamfo - Ghana
Robert O'Sullivan - Climate Focus, Washington DC
Rosemary Benndorf - Federal Environmental Agency, Gemany
Sarene Marshall TNC - Director of Forest Carbon Partnership, Washington DC
Simon Counsell - The Rainforest Foundation, UK
Sjef Gussenhoven - Fondo Ambiental Nacional, Ecuador
Sonia Carpio - Embassy of Honduras
Steve Schwartzman - Environmental Defense, Washington DC
Tanja Havemann - Climate Change Capital, UK
Tracy Johns - The Woods Hole Research Center, US
Valerie Merckx - EU Comission
V.R.S. Rawat - India
Walter Oyhantcabal - Min. Ganaderia Agric y Pesca, Uruguay
Wim Luyckx - Statkraft Markets B.V.
Yanne Goossens - European Parliament
BRUSSELS WORKSHOPS PRESENTATIONS:
International Roundtable on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries
Session 1: Views of PartiesViews of Latin American Countries - Manuel Estrada, Mexico
(Reducing Emissions from Deforestation: Views from Latin America 69k PDF)
Views of the EU - Bas Clabbers, Ministry of Nature and Food Quality, The Netherlands
(Reducing emissions from deforestation: Views of the EU 140k PDF)
Compensated Reduction - Stephan Schwartzman, Director, international Program, Environmental Defense
(Compensated reduction compensated reduction of deforestation 834k PDF)
Nested Approach - Lucio Pedroni, Head of Global Climate Change Group, CATIE
(The “Nested Approach”: A flexible mechanism to reduce emissions from deforestation 591k PDF)
Other Approaches - Tracy Johns, The Woods Hole Research Center
(Policy Mechanisms to address RED(D): Overview of current policy proposals 96k PDF)
Other Approaches - Diana Movius, Center for Clean Air Policy (CCAP)
(A New Framework for Reducing Deforestation in Developing Countries: The Dual Markets Approach 79k PDF)
Avoided Deforestation Partners - Jeff Horowitz, Founding Partner
(Climate Change Solutions Avoided Deforestation: Between Policy and Practice 2,048k PDF)
Sustainable Forest Management - Greg Janetos, Director of Carbon Programmes
(International Roundtable on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries 6,532k PDF)
Climate Change Capital - Tanja Havemann, Associate, Carbon Markets
(Roundtable on Reducing Emissions from Deforestation 282k PDF)
EcoSecurities - Jan Fehse, Principal Consultant
(The importance of the private sector in a REDD scheme 1,752k PDF)
Global Canopy Program - Andrew Mitchell, Executive Director
(Climate change, sustainable development and environmental ecosystem services in Amazonas, Brazil 19,427k PDF)
GAIA Amazonas - Javier Ortiz, Consultant, Fundación GAIA
(MISSION: ECOSYSTEM CONSERVATION 8,750k PDF)
Presentation 13: 3C Group - Anna Lehmann, Regional Manager Asia, CDM/JI/VER Origination Unit
(A buyer‘s perspective on markets for REDD credits 2,287k PDF)
The event was organized by Climate Focus, CATIE and Avoided Deforestation Partners and co-sponsored by the governments of Colombia, Costa Rica, Ecuador, Panama, Paraguay, and Peru, the UN Economic Commission for Latin America and the Caribbean (CEPAL), and GTZ. Additional sponsorship and support was provided by Climate Focus, CATIE, Avoided Deforestation Partners, FORMA, TrofCCA, Energeia, 3C Group, Equator Environmental, and the Center for International Policy. A copy of the agenda and a list of attendees is available at www.ADPartners.org and www.climatefocus.org.
One participant noted that the concerns over market flooding might be academic, given the relative difficulty in successfully completing any forestry related projects to date.