REDD Hot in Bali – and Very Confusing

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By Steve Zwick & Katherin Hamilton

"I believe that deforestation will have to be an important component of a future climate change regime beyond 2012, in both adaptation and mitigation strategies," stated Yvo de Boer, Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), after a week of apparently difficult but very opaque negotiations at the 13th Conference of the Parties (COP 13) in Bali, Indonesia.

The statement came on Saturday, two days after he announced the formation of the Working Group on Reduction of Emissions by Deforestation and Degradation (REDD) in Developing Countries, designed to come up with a mechanism for recognizing carbon offsets from avoided deforestation.
It was the kind of statement that would have been unthinkable five years ago, before a number of groups –including one called the Coalition of Rainforest nations, which is made up of several countries (the leaders being Papua New Guinea and Costa Rica) with support from NGOs—came together to put forestry on the agenda in a big way at the 11th COP in Montreal in 2005. The battle to bring deforestation back into the climate negotiations may have been won, but it comes as many NGOs are just beginning to realize how complicated the REDD procedures are, and how various are the ideas regarding how to fit it into current Kyoto carbon markets.

All of which has led to disappointment among many in the scientific community, who say negotiations are taking far too long and becoming far too complex to provide the necessary immediate action.

"I had the impression before I came here (to Bali) that the big debate was more or less over, and that all we'd be talking about was how to proceed," said Annette Freibauer, who has studied the biochemical impact of biodiversity on the Amazon rainforest for Germany's Max Planck institute. "But then the negotiations started with a very bad temper and this indigenous group said that REDD is the worst thing you can do to indigenous people."

The indigenous group in question is the International Forum of Indigenous Peoples on Climate Change (IFIPCC), which demanded that the COP "refrain from adaptation and mitigation schemes and projects promoted as solutions to climate change that devastate Indigenous Peoples' lands and territories and cause more human rights violations, like market based mechanisms, carbon trading, agrofuels and avoided deforestation (REDD)."

"That's really a question of implementation rather than the mechanism itself," says Freibauer, "and it's a surprise to me that we started with an issue that seemed to be positively seen by everybody, and suddenly there's a lot of pressure to slow down the process."
Perhaps, but the more you talk to participants, the more you see their concerns aren't that far apart.

"Some very vocal groups have concerns, and they're often the same groups that came up before, and their concerns have to do with ensuring that you get benefits to local communities," said Andrew Mitchel of the Global Canopy Program. "It's critical that whatever mechanism we come up gets benefits to the 1.4 billion people who depend on the forests for their survival."

"Forestry is being taken seriously for the first time in a long time," said Bill Stanley of The Nature Conservancy (TNC). "In fact, I'd say that there's a consensus that the technical issues that a lot of people thought were the major obstacles to these types of projects are not the major obstacles. The most difficult thing is coming up with strategies for protected forests that will work for local people and for the governments involved, and that will be sustainable."

Perhaps, but de Boer said that technical issues such as validation and quantification remain a sticking point moving forward – prompting David Pearse of a group called OSMIA Partners, LLPto again call for a more streamlined process that steers clear of detailed prescriptions. He believes the United Nations should give more leeway to financial markets in hammering out the details; on the premise that buyers of climate risk, in whatever form, will kick all the tires to avoid being stuck with a lemon down the road.

Likewise, because of the challenges of commoditizing REDD activities into the general carbon markets, several groups have proposed that REDD activities be separated from the current Kyoto carbon markets.

Greenpeace, for example released a proposal for a "Tropical Deforestation Emission Reduction Mechanism" which proposes leaving REDD out of the Clean Development Mechanism and instead creating a separate commodity called "Tropical Deforestation Emission Reduction Units." The demand for these units would be a mandatory minimum commitment by developed countries to help finance tropical forest conservation, and such credits could be used to purchase Kyoto compliance credits, but only in a very limited capacity.

While REDD's integration into the Kyoto context was a central theme of last week's discussions in Bali, numerous side event speakers reminded participants that Kyoto carbon markets are not the only option for valuing forests and using a market- based approach to conservation.

Thinking Beyond Carbon


One theme that has emerged in virtually all deforestation workshops is the sense that better methods are evolving to quantify biodiversity as an ecosystem service, but that implementing pricing schemes based on these methods remains a few years away. At one side event, Dr Antonio Nobre of Brazil's National Institute of Amazonian Research delivered a frightening presentation on the biochemical impact of biodiversity on the atmosphere, the upshot being: you can maintain the same level of carbon in the Amazon short-term and still lose the forest and the weather patterns it maintains if you disrupt the blend of species growing there.


But the lack of current mechanisms for quantifying the actual benefits of biodiversity has skewed attention towards pure carbon, said Charlotte Streck, director of Climate Focus in the Netherlands, at a Saturday side event. "The title of this event here is 'Harmonizing the Rio Conventions', and we have 20 or 25 people," she said. "If we had called this same event 'REDD: Harmonizing the Rio Conventions', we would have a full room."


Streck, together with Robert O'Sullivan, pioneered the Carbon Stock Approach, which aims to reward any groups that place land into permanent protection with an escrow account initially valued based on the carbon content of the land, but gives the owners of the land the ability to capitalize on other ecosystem services as they become clear and quantifiable. Under such schemes, an escrow account is created to hold funds that are only paid out to land-owners if certain conditions are met, and these funds are then used to finance the maintenance of the land in its pure state by funding forest rangers or stimulating eco-friendly businesses. The idea is that the real money will begin to flow in from payments for biodiversity services and other ecosystem services as the field evolves. Investors in the fund can then – along with the owners of the land – benefit from those services.


"NGOs and the private sector are saying, 'This is something we can invest on,'" she says. "It's more saleable because we're simply raising money for conservation and not bogging down in talk about leakage and whatnot. That is what we need to get this ball rolling."


She said such an approach should not be viewed as an offset mechanism because that would make it too easy for someone to destroy an ecosystem in one part of the world and replenish one somewhere else. She also acknowledged the difficulty of coming up with a global trading regime based on such a program, due to the lack of commoditization in biodiversity, but said holders of land in such escrow accounts should be allowed to harvest carbon credits as well.


Similar projects are already underway. As was mentioned in a

previous article

groups such as Sustainable Forestry Management (SFM) and New Forests have recently arranged hundreds of millions of dollars in financing for forestry projects (with possible carbon benefits) in the developing world (among them the creation of forest buffer zones in Central Africa to protect the last remaining wild gorillas, and the conservation of Amazonian forests in Peru threatened by logging companies), and both Mitchell and Pearse say they will be announcing similar ventures soon.

Steve Zwick is a regular contributor to the Ecosystem Marketplace. He may be reached at steve.zwick at Katherine Hamilton is the Director of Carbon Programs for the Ecosystem Marketplace, she can be reached at khamilton at

First published: December 10, 2007

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