REDD (Certification) Schemes Framing the Issues By Eveline Trines [email protected] 4 March 2009.

REDD (Certification) Schemes

Framing the Issues

By Eveline Trines [email protected]

www.Silvestrum.com

4 March 2009

Presentation Outline

• Voluntary Market Standards• Voluntary Carbon Standard (VCS)• Climate, Community and Biodiversity Standard (CCBS)

• CDM versus VCS• Regulated Market: UN Post-2012• REDD Methodologies

•Regulated market: UNFCCC / KP / CDM / UN-REDD

•Voluntary market:

– Voluntary Carbon Standard (VCS)– Climate, Community and Biodiversity

Standard/Alliance (CCBS/A)– Carbon Fix Standard (CFS)– Etc.

Markets / Standards

Credibility of GHG Reductions– Quantification & Monitoring– Permanence & Leakage– Additionality – Impacts (Env. & Soc.Econ.)– Risk assessment & Buffer– Registry System

Project Design, plus Social and Environmental Impacts

– Community– Biodiversity– Water– Climate Adaptation– Association with other

standards

Voluntary Market: Project Design & Carbon Accounting Issues

Voluntary Carbon Standard

• Global benchmark standard for voluntary carbon projects

• Developed by The Climate Group, the International Emissions Trading Association (IETA), the World Business Council for Sustainable Development (WBCSD) and a range of business, government and non-government organizations

• Designed to be as robust as Kyoto Protocol’s Clean Development Mechanism (CDM), while attempting to reduce costs and bottlenecks

• Covers new sectors (e.g., IFM, ALM, REDD) and creates permanent, fungible credits (VCUs)

VCS AFOLU Categories

– Afforestation, Reforestation and Revegetation (ARR)

– Agricultural Land Management (ALM)– Improved Forest Management (IFM)– Reducing Emissions from Deforestation and

Forest Degradation (REDD)

– New project categories, to be launched this year, e.g.:

– Peatlands– (Conservation)

For

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Rev

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Affo

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Forest Land Forest Land

Non-Forest Land

Inta

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Forest definition

IFM

IFM

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ALMRED

The Climate, Community & Biodiversity Standards

As a project design standard - Validate high-quality project design

- Stimulate investment in project development

- Attract investors interested in multiple benefits

- Attract co-funding from Govts, foundations, etc.

- Encourage integrated design

As a multiple-benefit verification standard- Combine with carbon accounting standard (CDM, VCS), which verifies quantified emissions reductions & removals

- Verify positive biodiversity and community impacts and ensure best practices

- Demonstrate multiple benefits to investors and screen out unacceptable projects

The Climate, Community & Biodiversity Standards

The Climate, Community & Biodiversity Standards

•Includes: Independent 3rd party validation and Verification at least once every 5 years.•Does not in itself generate carbon credits.

VCS versus CDM

Major differences

• More activity types allowed under the VCS• The VCS has permanent carbon credits (in stead

of temporary)• Risk assessment that results in a buffer: carbon

reserve of credits that cannot be traded• More efficient relation with verifier (validation and

verification one go, number of inspections flexible)

Project Type Eligibility

CDM VCS

Afforestation/Reforestation (A/R) √ √Revegetation √Forest restoration √# √Improved Forest Management (IFM) √Reducing emissions from Deforestationand Forest Degradation (REDD) √Agricultural Land Management (ALM) √ √

Addressing Permanence / VCS Buffer Approach

– Project risk assessment to determine buffer withholding percentage, placed in shared VCS buffer pool

– Re-verification optional, but incentivized…• 10% of project’s buffer released every 5 yrs at re-verification (as project

demonstrates longevity and risk mitigation)

– Buffer (insurance) approach • no buyer or seller liability• creates permanent, fungible credits (VCUs)

– Periodic “truing-up” ensures total portfolio carbon losses over time are covered by buffer pool

• adjust buffer values and/or risk criteria as needed

– CC AR forestry projects can participate in VCS buffer to generate permanent credits

UNFCCC Post 2012

What happens post-2012 in the regulated market?

• Acknowledgement of contribution of deforestation to global climate problem => REDD

• Political will to include it in a future climate regime• Option to increase the participation of developing

countries• National approach (versus project-based activities of

CP1): voluntary sectoral target• Numerous methodological issues and even more policy

issues: but if the political will exists….

What is being done?

• A 2 year period to work on methodological issues and to undertake demonstration activities (2008 and 2009)

• Work towards official decision text that is to be adopted December 2009 in Copenhagen

Time (yr)

Base period

Flux (tC yr-1)

Average emissions level during the base period

CP1 CP2

t0 t10

Annual emissions due to deforestation

A BReduction in emissions in comparison to the average base period emission level

Schematic representation of the compensated reduction proposal. The solid line indicates annual emission levels due to deforestation. The dotted horizontal line is the average emissions level during the base period. Area A is the reduction in emissions during the 1st commitment period below the base period’s emission level. Area B is the same but in the 2nd commitment period, if there was to be one. (Trines et al., 2007)

REDD: Reducing Emissions from Deforestation

Frontier Configuration

Humans and their infrastructure are encroaching into areas with relatively little human activity.

A BFrontier

No-Forest

Forest

Main Road

Deforestation: Yellow Deforestation: Yellow

Non-Forest: GrayNon-Forest: Gray

Blank areas: not availableBlank areas: not available imageimage

Deforestation: Yellow Deforestation: Yellow

Non-Forest: GrayNon-Forest: Gray

Blank areas: not availableBlank areas: not available imageimage

Mosaic Configuration

Human populations and associated agricultural activities and infrastructure (roads, towns, etc.) are spread out across

the landscape and most areas of forest within such a configured region or country are accessible.

Example of Mosaic-type

forest configuration

(Jambi and Sumatera Selatan

provinces, Indonesia)

(Source: VCS)

1987

2003

Bolivia

East of

Santa Cruz

Governed Deforestation

Forest degradation

Deflect forest degradation and increase carbon stocks

Deforestation

Rehabilitation after deforestation

(Sustainable) Forest Management

Time ->

Carb

on

->Reality at the national level is a

mix of phenomenaProject-based

activities?

Major challenge: How to operationalise the National

ApproachInstruments/options at the avail of governments to REDD:

– Improved and integrated land-use planning / zoning– Tax reforms (Mato Grosso, Brasil)– Improved farming techniques (higher yields per ha => less ha

required)– Shift to Sustainable Forest Management (less emissions from

degradation and less susceptibility to fire – e.g. Congo Basin)– Market-oriented activities/projects (e.g. BioBank, Malaysia)– Payment for Environmental Services (PES) systems (e.g

Programa Socio Bosque in Ecuador)– REDD projects…

Project-type of activities, nested in a

national approach

• Fund based vs market based• Nation wide vs project based• Estimates of required resources impressive: unlikely that this

can be generated only with a fund (voluntary pledging)• Combination of (Readiness) Fund & Market• Market only works if demand is created by high emission

reduction targets• Other innovative options: auction top % of AAUs (Norwegian

proposal); oblige industries/sectors to buy emission allowances in national ETS and ‘earmark’ revenues (Commission); contribution related to emissions or GDP or other index (Mexico); etc.

How can it be financed?

“…latest estimates from the Commission indicate that the net global incremental investment, both public and private, to reduce global greenhouse gas emissions to a level compatible with the 2°C objective needs to increase to around EUR 175 billion per year in 2020.”

Source: EU Council Conclusions 2 March 09

Can the Regulated Market learn from the Voluntary

Market?

• The difference in types and spatial configurations must be taken into account in projecting rate/location, in designing and stratifying a ground-based inventory, and in addressing leakage.

• However, some methodology components are the same.

• “Modules” allow for minimizing redundancies.

• Modules can be “docked” into a framework document.

Need for Different Methodologies for Different Activities

Draft VCS Modules

Carbon pools

• Above-ground biomass

• Below-ground biomass

• Dead wood

• Litter

• Soil organic carbon

• Harvested wood products

Sources of emissions

• Non-CO2 emissions from biomass burning

• Non-CO2 emissions from Nitrogen additions

• Emissions from fossil fuel combustion

• …

Planned deforestation

• Baseline GHG emissions of planned deforestation

• Activity shifting from avoided planned deforestation

Unplanned deforestation

• Baseline rate of unplanned deforestation

• Baseline location of unplanned deforestation

• Activity shifting from avoided unplanned deforestation

• Leakage due to market effects

Draft VCS Modules

• Stratification

• Baseline GHG emissions from forest degradation

• Monitoring of deforestation and forest degradation

• Uncertainty analysis

• …

• Framework document

Draft VCS Modules

Communicating vessels

If we want to limit climate change, stabilize GHG concentrations, a particular amount of emission reductions has to be achieved, no matter how, no matter where, no matter by whom….

Non-sinks

Developed countries

Sinks

Developing countries

2o C

“…latest estimates from the Commission indicate that the net global incremental investment, both public and private, to reduce global greenhouse gas emissions to a level compatible with the 2°C objective needs to increase to around EUR 175 billion per year in 2020.”

Source: EU Council Conclusions 2 March 09

Many questions remain….

• What to do with “good behaviour in the past”? (e.g. Costa Rica)

• And what if the worst is yet to come? (Congo Basin)• And what do we do with replacing high conservation

value forests with e.g. oil palm? (Indonesia, Malaysia, PNG, etc.)

Irrespective of whether we talk regulated or voluntary markets, a REDD standard must be:

• Robust• Accommodate the diversity of circumstances that occur in “the

field”• Be able to fit in with national systems• Respect and protect indigenous peoples’ rights and natural

systems• Reliably deal with the risk of non-permanence and leakage• Demonstrate a deviation from business as usual (BAU) in relation

to a reference period• Generate credits that are accepted and ‘fungible’ (inter-

exchangeable) with the regulated and/or voluntary markets

Including this type of REDD credits allows UN Parties to jointly commit to higher overall emission reduction

targets post 2012 ceteris paribus.

REDD standard requirements....

THANK [email protected]

AND THEN MAYBE.....We can continue to enjoy

this!