Is REDD+ a risky, uber-complex business?
Tropical forests cover about 15 percent of the world’s land surface but every year around 13 million hectares of forest are cleared for crop cultivation, cattle, logging and mining (FAO 2010). Forests are both carbon guzzlers (sinks) and emitters (sources) and deforestation and forest degradation accounts for a whopping 15-17 percent of man-made GHG emissions each year.
In the context of climate change, a 50 percent reduction in GHG emissions is needed by 2030 to prevent global temperature rising above 2 degrees Celsius (IPCC 2007, AR4) but the positive news is that reducing deforestation is the “single largest opportunity for cost-effective and immediate reductions of carbon emissions.” (Stern Review, 2006) The Eliasch Review estimates that an annual investment of USD17 -33 billion is required to achieve a target of halving emissions from the global forestry sector by 2030.
Since 2005, a UN Framework Convention on Climate Change (UNFCCC) financial mechanism to reduce GHG emissions in the forestry sector has evolved from what was then known as "avoided deforestation", to become RED (Reducing Emissions from Deforestation) then REDD (plus Degradation) and now to REDD+ (also includes the sustainable management of forests and the enhancement of forest carbon stocks) which was officially agreed in Cancun in 2010.
Simply put, REDD+ is a form of a payments-for-environmental-services (PES) that would offer developing countries financial benefits for protecting their forests. The financing of REDD+ is still being worked out, but payments are likely to come in the form of a combination of verified/ certified emission reductions and removals, (recognized in voluntary and/or compliance markets) and through performance based payments from public sources (e.g., Green Climate Fund, bilateral REDD+ funding), as well as other financing (such as taxes and levies and the re-direction of subsidies) and new market mechanisms.
Over the last five years, REDD+ has grown increasingly broad and multifaceted in many unpredicted ways, according to Analysing REDD+: Challenges and Choices (CIFOR 2012). This is partly due to a lack of reliable long-term financing and the need to cater for huge diversity of interests, institutions, ideas and information. In addition, many of the first REDD+ projects were established with development funds and getting countries “ready” for REDD+ and ensuring projects are properly designed, funded and implemented has been slower and more complex than expected.
Many bilateral and multilateral initiatives are underway and there are now over 200 REDD+ projects running in around 50 countries. As an example, more than 40 developing countries have joined the World Bank-hosted Forest Carbon Partnership Facility (FCPF) and the UN REDD-programme in order to exchange experiences, tap into expertise and receive financial support to develop national REDD+ plans and strategies. Bilaterally, the Norwegian Government has pledged USD2.8 billion to support the development of REDD+ and emissions reductions interventions in several countries, including Indonesia, Guyana and Brazil.
Case Study: One interesting example of a REDD+ project is in Nepal where the government, in collaboration with a range of organizations, has initiated a pilot Forest Carbon Trust Fund. This is designed to involve local communities in monitor the carbon in their forests, providing the necessary training for them to do so and giving them the opportunity to claim reward for enhanced carbon capture. The project, financed by the Norwegian Agency for Development Co-operation under the Climate and Forest Initiative, covers over 10,000 hectares of community managed forest and has an outreach of over 18,000 households with over 90,000 forest-dependent people.
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