22 July 2009

Are we on the brink of saving rainforests?

Until now saving rainforests seemed like an impossible mission. But the world is now warming to the idea that a proposed solution to help address climate change could offer a new way to unlock the value of forest without cutting it down.

Rhett A. Butler | mongabay.com | July 22, 2009

Deep in the Brazilian Amazon, members of the Surui tribe are developing a scheme that will reward them for protecting their rainforest home from encroachment by ranchers and illegal loggers.

The project, initiated by the Surui themselves, will bring jobs as park guards and deliver health clinics, computers, and schools that will help youths retain traditional knowledge and cultural ties to the forest. Surprisingly, the states of California, Wisconsin and Illinois may finance the endeavor as part of their climate change mitigation programs.

Deforestation in southern Laos (January 2009). Photos by Rhett A. Butler

As unlikely as it may sound, this collaboration could become a reality under a far-reaching initiative to reduce emissions from deforestation and degradation (REDD), a climate change mitigation mechanism currently under consideration by U.S. legislators and in international discussions for a "framework" on climate change. Supporters say REDD could send billions of dollars a year to developing nations for conserving their rainforests, while preserving biodiversity; protecting ecosystem services like rainfall regulation, watershed functions, and erosion control; promoting rural development in some of the world's poorest, and in some cases, least, governed regions; and breaking a deadlock that has stalled international climate negotiations for over a decade, since the Kyoto Protocol in 1997.

The premise of REDD is straightforward: tropical forests store roughly 25 percent of the planet's terrestrial carbon, more than 300 billion tons. When forests are cut—their vegetation burned and timber converted into wood products—much of this carbon is released in the atmosphere as carbon dioxide. The clearing of 50,000 square miles of tropical forest annually accounts for roughly 20 percent of global emissions from human activities—a share larger than all the world's planes, ships, cars, and trucks combined. In other words, despite the attention given to the fuel efficiency of cars and the number of flights taken by celebrities, parking all the world's jets and cars still wouldn't offset the annual emissions from global deforestation.

Tropical deforestation rates from 2000-2005, ranked in descending order by the highest amount of average annual forest loss for 25 countries based on data from the U.N. Food and Agriculture Organization (FAO). Click to enlarge

But reducing deforestation is no simple effort. Forests are being destroyed as a consequence of global economic forces—demand for timber, pulpwood, beef, soybeans, and palm oil—as well as subsistence farming. Slowing or eliminating deforestation means addressing these underlying drivers by making forests valuable as living entities, rather than solely for what can be produced when they're cut. And the issue goes beyond economics. Good governance, including law enforcement, recognition of land rights, and fair distribution of benefits, is the issue that will make or break REDD.

Thinking REDD

The idea of forestalling climate change by saving forests is not new, but it has had to win its way slowly. The Kyoto Protocol went a different direction, and critics of REDD fear it would be too complex to manage in a world economic scheme for climate rescue. (Some critics also think most plans don't do enough to address overconsumption by developed nations.)

Draining and clearing of peat forest in Central Kalimantan (May 2009). Photo by Rhett A. Butler.

REDD suffers, like all such schemes, from the difficulty of explaining itself in terms non-specialists can understand. Carbons markets, offsets, cap-and-trade—all these have been in the language for years now, but the topics still seem esoteric to many. This "my-eyes-glaze-over" syndrome may be especially acute in the United States, whose government declined to join the Kyoto Protocol. But still, there are the Surui people—and if an Amazonian tribe can get help in saving its home forests by partnering with U.S. states, maybe the rest of us can get some handle on the idea.

What's more, the whole subject of climate change and its mitigation has gotten a renewed boost with the Obama administration's support of cap-and-trade—the concept of legally limiting a region's greenhouse-gas emissions and encouraging trade in the "credits" earned by industries that meet or exceed the standards. (A debate continues, however, over cap-and-trade vis-a-vis what are sometimes seen simply as "pay-to-pollute" offsets.)

The Birth—and death—of forest carbon

Protecting forests as a climate mitigation strategy has a history in the United States. American power companies—including American Electric Power (AEP), PacificCorp, BP Amoco, and others—spent millions of dollars in the 1990s to protect at-risk forests in Belize, Bolivia, and Brazil in hopes of getting early-action credit for "offsetting" their greenhouse gas emissions by preventing deforestation.

Rainforest in Borneo (April 2008). Photos by Rhett A. Butler

The Noel Kempff Mercado Climate Action Project, as the Bolivian initiative was known, would become model for "avoided deforestation." Project designers carefully calculated a baseline deforestation rate using business-as-usual scenarios; set up monitoring and verification systems; accounted for leakage—deforestation that would be displaced to other areas by the protected status of the park; and set up a system of incentives for people in and around the protected area.

Tia Nelson, daughter of the late Gaylord Nelson, the governor and senator who founded Earth Day, is now co-chairwoman of the Governor's Task Force on Global Warming and executive secretary of the Wisconsin Board of Commissioners of Public Lands. She was a key participant in the development of early forest-protection mechanisms as a deputy director of the Climate Change Program at the Nature Conservancy (TNC), a conservation group based in Washington D.C., which provided technical and scientific support for the projects.

"I was fascinated by the idea that companies would pay to conserve forests as a climate change mitigation strategy," she said. "Noel Kempff was particularly well-designed."

But the utility of Noel Kempff and other forest conservation projects was limited by the exclusion of forest conservation from the climate agreement reached in Kyoto in 1997. For many environmental groups, forest carbon was at best a distraction from the key issues of Kyoto, and at worst an insidious way for polluting industries to continue emitting greenhouse gases by paying poor countries to reduce their own emissions. When the United States pushed for inclusion in the Protocol of carbon sinks like forests, opponents saw it as an attempt by the world's largest polluter to avoid emissions cuts.

Stuart Eizenstat, a prominent attorney at Covington & Burling, former U.S. ambassador to the European Union, and the lead U.S. negotiator during the Kyoto talks, said that while justifications for conserving forests seemed strong, bigger concerns loomed over Kyoto, including emissions trading and contributions of developing countries to mitigation.

Deforestation-induced erosion in Madagascar (October 2004)

"We pushed for sinks because we were looking for every conceivable way to both engage developing countries and reduce costs. We knew that cost was going to be the most critical issue as it is today," Eizenstat said.

In the end, the rancor over offsets led to the exclusion of forest conservation from Kyoto. Forests were included in the Clean Development Mechanism (CDM)—Kyoto's attempt to involve developing countries in a climate solution. CDM allowed for afforestation (planting of new lands) and reforestation projects, but not for "avoided deforestation," although the provision was short-lived. Afforestation and reforestation was relegated to temporary credits in the Marrakesh Accords in 2001 and completely excluded from the Emissions Trading System (ETS), the European Union's compliance market for carbon. All this greatly limited the value of forestry credits.

Nelson said the decision not to include forest conservation in Kyoto came as a disappointment, but not a surprise. A lot of environmentalists argued that offsets were not a solution to reducing industrial emissions, a sentiment that remains strong today.

"It was a pretty lonely battle at the time," Nelson said. "I was hopeful that we had a good case but there were only a few voices arguing for avoided deforestation then."

The decision to exclude forests from Kyoto was a controversial one, producing shouting matches and bitter rifts between environmental groups. It would also prove costly to tropical forests and their inhabitants.

Oil palm plantations and logged over forest in Malaysian Borneo (April 2008). While much of the forest land converted for oil palm plantations in Malaysia has been logged or otherwise been zoned for logging, expansion at the expense of natural and protected forest does occur in the country. Reserve borders are sometimes redrawn to facilitate logging and conversion to plantations. Photo by Rhett Butler.

The years following Kyoto saw a surge in deforestation, particularly in two countries with the most extensive forest cover: Brazil and Indonesia. In Brazil, deforestation increased nearly year by year between 1997 and 2004, peaking at 10,600 square miles in 2004, an area the size of Massachusetts. The story in Indonesia was even worse. The collapse of the Suharto regime in 1997 ushered in a period of chaos, resulting in unprecedented destruction of forests. Loggers and oil palm plantation developers cleared and burned vast areas, facilitated by one of the strongest el Niño events on record. When the smoke cleared, more than 25,000 square miles had burned in Indonesian Borneo alone, unleashing upward of 2 billion tons of carbon. All told, since Kyoto's exclusion, the two countries have lost more than 160,000 square miles of forest, an area nearly the size of California, releasing billions of tons of carbon into the atmosphere and placing the two countries among the top emitters in the world—a position far outpacing their industrial output.

But deforestation wasn't limited to Brazil and Indonesia. With no incentives to keep forests standing, deforestation accelerated around the planet, especially in primary forests, the richest biologically and most carbon-dense form of forest and the most irreplaceable. Centuries-old rainforests were cleared for cattle pasture, oil palm plantations, mechanized soy farms, and industrial pulpwood. Environmentalists continued to sound the alarm, perhaps failing to realize their own role in the rising carnage. Meanwhile, supporters of avoided deforestation regrouped, expanded their reach, and explored new ways to include forests in a global climate deal. To be workable, a proposal would need to overcome serious technical, political, and ideological obstacles.

Rebirth of the forest initiative

A breakthrough came from an unlikely source: an academic paper. A team of American and Brazilian researchers analyzed the issues that kept forests out of the Kyoto Protocol and came up with a solution that addressed the most pressing concern, "leakage"—the idea that project-based schemes like CDM couldn't guarantee that shutting down deforestation in one area wouldn't simply shift it to another. The authors, including Márcio Santilli, Paulo Moutinho, Stephan Schwartzman, Daniel Nepstad, and Carlos Nobre, proposed a system of national accounting, meaning that countries would have to commit to national-level, rather than project-level, reductions in deforestation. The concept suggested a mechanism that would look a lot like trading between two capped systems, rather than just offsetting emissions.

Pastureland and transition forest in Mato Grosso, Brazil (April 2009). Since 2003 Brazil has set aside 523,592 square kilometers of protected areas, accounting for 74 percent of the total land area protected worldwide during that period. Photo by Rhett Butler.

"The publication of ‘Tropical deforestation and the Kyoto Protocol" was a very important development because it created a scientific space—and a policy space—where you could actually talk about reducing emissions from deforestation and put the leakage question to one side. It didn't completely resolve the leakage question but it greatly tempered it." Annie Petsonk, a policy expert at the Environmental Defense Fund (EDF), said.

A crucial parallel development was the emergence of a negotiating block—later to become known as the Coalition for Rainforest Nations—that would enable developing countries to participate meaningfully in reducing emissions and would help quiet complaints that Kyoto didn't do enough to include all countries.

In 2005 Papua New Guinea joined forces with other forest countries to form the Coalition of Rainforest Nations with Kevin Conrad as executive director. A key member of the coalition was Costa Rica, a country lauded by the international community for transforming itself from a high deforester to a model of conservation.

"One of my first official delegations was to Costa Rica to find out how they turned their deforestation rate around," Conrad said. "They said, 'Yes, we did it, but we've been taxing ourselves. No one's been helping us with it.' Well, we knew Costa Rica might be able to do that but for most of us, there was no way. We would need a source of funding."

The Coalition went to the U.N. Conference of the Parties (COP) meeting in Montreal in 2005 and immediately met opposition from the United States, which was content doing nothing on climate. The U.S. delegation told Conrad it would kill the Coalition's proposal, fearing that if developing countries put forth a plan committing to robust and meaningful reductions in greenhouse gases, the United States would no longer have an excuse not to take action on climate.

"The U.S. was going to block us simply for that," Conrad said.

Conrad engineered a strategy for delaying U.S. action during the Montreal talks, persuading dozens of countries supportive of the proposal to push their voting buttons ahead of the United States.

"If the U.S. went first, all the naysayers would pile on," he said. "But if they were fortieth following a long trail of positives I was hoping they wouldn't be able to kill the proposal."

Sure enough the United States agreed to give the proposal two years, sending it out to committee with the expectation that it would collapse under the technical challenges of measuring, verifying, and monitoring emissions from deforestation. Should the proposal make it to COP 13 in Bali in December 2007, the U.S. delegation promised to kill the measure then.

History took a different turn, though.

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.

"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.

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

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."

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

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."

Small-holder deforestation in Suriname (June 2008). 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."

Healthy forest and recently cleared forest adjacent to Tanjung Puting National Park in Kalimantan (Indonesian Borneo) (February 2006). Photos by Rhett Butler

Regardless of the eventual source of funding, there is no question that considerable funds need to be generated to effectively reduce deforestation. A recent report from the Meridian Institute on behalf of the Norwegian government estimates that to achieve a 50 percent reduction in deforestation by 2020, REDD will need a commitment of 2 billion per year in 2010, increasing to 10 billion per year in 2014 for capacity building, readiness activities, and demonstration projects. The report suggests financing could come through a global fund, financed through donations generated by auctioning of emission allowances, fuel surcharges, or development aid. Prince Charles has suggested a different approach: a rainforest bond issue to provide emergency funding.

Beyond the money

Beyond the issue of financing, there are other points of contention, including how to establish baselines, especially in countries and regions that have managed to maintain forest cover or have already reduced deforestation rates dramatically. Some countries—like Costa Rica—want credit for early action, while others are pushing for elevated baselines to account for potential deforestation, positions that raise eyebrows among those concerned about the integrity of REDD. But as Kevin Conrad of the Coalition for Rainforest Nations puts it, "If we don't provide incentives for countries that have so far maintained their forests, but otherwise have land suitable for conversion, then those forests are going to fall."

Negotiators must further work out whether to include emissions from degradation of other carbon-dense ecosystems like peatlands, which in some years may contribute more than 2 billion tons in emissions. Wetlands International is adamant that peatlands be part of a climate pact—especially in light of Indonesia's recent announcement that it will open millions of hectares of swampy wetlands to oil palm cultivation. The move—ostensibly to expand production of palm oil, which can be used as a feedstock for biofuels—could trigger millions of tons of emissions and destroy habitat critical for endangered species, including the orangutan and Sumatran tiger.

Another issue—known as permanence—stems from the integrity of forest carbon stocks and the capacity of a forest to retain carbon in the future. Critics ask how it can be assured that a forest protected for REDD won't be logged, accidentally burned, or damaged by a storm, flood, or drought, reducing its capacity to store carbon. The issue is a significant one given the forecast impacts of climate change in places like the Southern Amazon. The 2005 drought—caused by abnormally high temperatures in the Atlantic, rather than el Niño—killed millions of trees and turned large expanses of the Amazon into a tinderbox. Thousands of square miles of forest went up in smoke, releasing more than 100 million metric tons of carbon into the atmosphere.

Eroded hillsides in Madagascar (October 2004). Photo by Rhett Butler

REDD advocates say this issue can be addressed partly through safeguard required under criteria like the Voluntary Carbon Standard (VCS) and the Climate, Community, and Biodiversity Standards (CCB) as well as emerging insurance products and national reserve accounts proposed by the Coalition for Rainforest Nations. But the best protection may be the forests themselves. Studies suggest that reducing deforestation can be one of the most important factors in increasing forests' resistance to the effects of climate change.

New technology, including a new class of remote sensing applications, will help scientists and forest managers monitor forests for degradation. Satellites and high-altitude aircraft equipped with lasers and high-resolution sensors can map the structure of the forest, greatly increasing the accuracy of carbon estimates as well as documenting changes in carbon stock. CLASLite, an advanced processing application for monitoring tropical deforestation, and Google Earth are greatly expanding the availability of forest cover data to scientists, policymakers, and the general public.

An issue of payment

But great satellite imagery won't resolve a thorny issue arising from the need to directly address drivers of deforestation. Given that industrial activities today account for the bulk of deforestation, a successful REDD mechanism may mean paying agents of deforestation—forestry firms and agribusiness—to cease their activities. The concept doesn't sit well many environmentalists, but in cases where landowners are within the law, REDD becomes a way to encourage loggers, oil palm plantation developers, large-scale farmers, and ranchers to leave their forests standing.

"Without economic incentives, standing forest will always lose out to pressures from the market," explained John Carter, an American rancher in the Brazilian Amazon, who heads Alianca da Terra, an NGO that works to encourage environmental stewardship among beef producers in the Amazon. "Land appreciation and production value are at the end of the day what determine land use. In order for REDD to work, all landowners—whether they be Indians, ranchers, or farmers—should be allowed to participate."

Carter believes that forest reserves—required under Brazilian law for landowners in the Amazon—should be eligible for payments under REDD.

Some environmentalists worry that REDD could become a tool for "greenwashing," whereby firms mask their environmental damage by buying REDD credits. This concern touches on the entire debate about "offsets," a concept that activist groups like the World Rainforest Movement and the Rainforest Foundation UK find deeply troubling. Buying REDD credits, however, will not offer environmental transgressors sanctuary from environmental campaigns and freely accessible satellite imagery. Green groups are already putting Google Earth to use for monitoring deforestation and other activities.

Forestry remains a controversial issue in REDD discussions. Some environmental activists complain that REDD may allow selective logging in old-growth forests, the most biodiverse and carbon-dense ecosystems. Others argue conversely that sustainable logging should be allowed as a source of income for forest holders, including indigenous communities. Recent reports of the International Panel on Climate Change (IPCC) highlight the value of reduced-impact logging as a mitigation strategy. But the impact of logging depends largely on forestry rules and governance structures, an area of particular concern to the Ecosystems Climate Alliance (ECA), a coalition of eight environmental and rights groups.

Issues of consumerism, governance

The Environmental Investigation Agency (EIA), a member of the ECA that works on international trade and demand issues, believes REDD should incorporate rules for demand in consuming countries, since deforestation is as much driven by market demand in industrialized nations as it is by poverty in developing nations.

"My major concern is that until we talk about these demand issues in a meaningful way, we aren't talking about a real solution," EIA Forest Campaigns Director Andrea Johnson said.

Johnson believes funds for supplemental activities under the Waxman-Markey bill could be directed towards joint implementation of demand-side laws like the U.S. Lacey Act, which is used to fight illegal logging by requiring companies to respect environmental laws in the countries from which they obtain plant and wildlife products.

Jihan Gearon of the Indigenous Environmental Network, an indigenous rights coalition, said, "Offset mechanisms, including REDD, do not address the real problem causing climate change. The major driver of climate change is the historical and current burning of fossil fuels—coal, oil, and gas—to feed the unsustainable consumption needs of industrialized countries, like the United States. We have to prioritize and focus on changing these unsustainable consumption patterns, which are responsible for not only climate change but also a host of other issues including pollution to land, water, air, animals, and people."

Governance also is a critical issue for the success of REDD—it ranks among the top priorities among REDD designers, but good governance is difficult in frontier areas where most deforestation is occurring. Development agencies are positioning REDD as a vehicle to deliver services and protections that vast amounts of aid have so far failed to provide—a tall order for a conservation initiative. Still, REDD has at least two advantages over prior mechanisms: it offers a wide range of benefits and will be performance-based. If a country fails to reduce deforestation by meaningfully addressing drivers of deforestation, it won't collect.

But this new governance regime raises other questions, especially in areas where rights are poorly defined. This is particularly important for forest-dwelling communities and indigenous people, who despite having occupied lands for years or generations may still lack formal title, or even basic rights, to land and resources. Many groups fear that regulation could cause them to be further disadvantaged, depriving them of their land as well as leaving them out of carbon payments. Some paint a nightmare scenario of forced displacement at the hands of carbon speculators.

"REDD projects do not help indigenous peoples and forest peoples," Gearon said. "In fact they hurt these communities and take away access and rights to forests, traditional territories, and medicines. Our principal hope and concern for the REDD mechanism, as well as other market-based solutions to climate change, is they be rejected because they are false solutions to climate change."

School children in Madagascar (October 2004). Half of Madagascar's children under five years of age are malnourished. Photo by Rhett A. Butler

The Indigenous Environmental Network and other groups have called for the inclusion of the U.N. Declaration on the Rights of Indigenous Peoples, a treaty signed by the majority of the world's countries in 2007, in REDD. But REDD designers say the stipulation is unlikely because negotiators from countries that haven't signed the Declaration (Canada, Australia, New Zealand, and the United States) can't sign an agreement that binds them to a treaty their countries have not ratified. Many native leaders are lobbying for a mandate that all REDD programs seek the "free, prior, and informed consent" of local people.

But in spite of these concerns, the consensus among coalitions representing forest people is that forest conservation should be included in a climate framework. Some groups are even supportive of a market mechanism, recognizing that a well-designed mechanism is better than the status quo.

The Surui are an example. The tribe actively sought out its own carbon project, first focusing on reforestation of areas that had been illegally logged, but then exploring REDD as a means to generate income to defend its forest home. Almir Surui, a Surui chief who has become the public face of the tribe, said forest conservation is also a way to maintain culture in a place where there are strong bonds between land and society.

But in pioneering their REDD project, the Surui have run up against some obstacles, indicating that the forest carbon initiative hasn't been designed with indigenous issues in mind. For example, by virtue of being good stewards of their forests the Surui encounter the same problem faced by countries with high forest cover and low deforestation rates: the REDD process doesn't reward them for their success in maintaining their forest cover even as forests around their reservation fell to bulldozers and loggers.

"REDD should enhance recognition that indigenous people have maintained the state of their forests, not penalize them for this stewardship," said Vasco van Roosmalen, director of the Amazon Conservation Team-Brazil, an NGO that has helped the Surui develop an indigenous park-guards program and biocultural maps of their territories. "The Surui are guardians of forest carbon."

And while the debate continues, participants aren't sitting on the sidelines – REDD projects are sprouting around the world. Although these projects are limited to voluntary markets (like the Chicago Climate Exchange) where carbon fetches a fraction of the price seen in compliance markets (E.U. ETS), the number is nonetheless increasing due to the appetite of corporations to appear environmentally responsible. After all protecting habitat for endangered species and providing health and education to forest-dwelling communities is perhaps more compelling to consumers than projects to capture emissions from agricultural waste.

"If you had a choice between carbon credits generated when a commercial factory pig farm reduces its toxic methane emissions, or carbon credits from a threatened natural forest that brings with them protection of elephants, lions, cheetah, giraffe and 54 other large mammal species which one would you prefer?" said Mike Korchinsky, Founder and President of Wildlife Works, a firm that just signed the first REDD deal in Kenya.

The Nhambita project in Mozambique has won acclaims for its levels of transparency and the benefits it is delivering to people in a desperately poor area. The project was initiated by Envirotrade, a London-based carbon finance outfit.

Philip Powell, founder of Envirotrade, explains: "The Nhambita project employs more than 150 people and compensates thousands of farmers who voluntarily sign agreements to confront destructive forest fires, conserve forest and replant trees on their lands. Our greatest long-term challenge is to deliver equitable and significant benefits directly to individuals and communities that are the forest custodians. We believe the best way to advance this is through transparent reporting and a commitment to fair compensation for measured changes in forest and land management."

Meanwhile, the Juma project in the Amazonas state of Brazil, which is the first project in the world to attain the Climate, Community and Biodiversity Alliance's Gold Standard for its safeguards, is compensating 6,000 families who voluntarily agree to limit forest cutting. The project is expected to reduce emissions in an at-risk forest area by 190 million tons of carbon dioxide by 2050.

John O. Niles, a REDD expert with the Tropical Forest Group, a forest policy think tank, said that REDD offers the potential to make the world a lot more aware of indigenous issues.

"REDD will put a microscope on these issues and will be infinitely better than the status quo," he said. "For decades, capitalists, socialists, private companies, governments and local operators have blasted into tropical communities, razed forests and moved on with little concern for the fact that they just denuded the land. I think a UN-driven system of incentives for keeping forests, a system of oversight with some transparency, and the strong voice of critical observers will lead to more positive outcomes more of the time. Anything via the UNFCCC is likely to be an improvement over plantation forestry, industrial logging, large infrastructure projects or commercial agriculture."

Dan Nepstad, an ecologist formerly of the Woods Hole Research Institute but now with the Moore Foundation, agrees.

"We have heads of state listening to indigenous leaders – that is unheard of."

Moving forward

Given myriad issues, will REDD designers be able to develop a workable framework? People involved in REDD discussions think so.

"I think the chances are very strong that if we get a climate agreement in Copenhagen that REDD will be a part of it," said Tracy Johns of the Woods Hole Research Center. "All of the stakeholders that have been involved in the REDD process in recent years—governments, NGOs, the private sector, indigenous peoples—have done a lot of work and made a lot of progress on the issues and challenges for REDD. I think in many ways the REDD negotiation process is more advanced than many of the other lines of negotiation that are under way for Copenhagen."

While the details for REDD are far from settled and obstacles remain, there is growing support for the phased approach proposed by the Coalition for Rainforest Nations and presented in the Meridian report for the Norwegian government. In the first phase, countries would receive funds—as they would through the World Bank's FCPF, the UN REDD Program, or another voluntary mechanism—to develop a national REDD strategy including consultation with indigenous peoples and local communities, capacity building, and pilot projects.

Phase 2 would support reform of land tenure and forestry laws, sustainable forest management initiatives, and payments for environmental services to local communities, indigenous peoples, and other parties. Funding would be performance-based and come from a global fund financed by voluntary donations, auctioning of emissions allowances, and possibly fuel and carbon taxes in some countries.

Rainforest pool in Belize (May 2008). Photo by Rhett Butler.

Phase 3 would include compliance-grade monitoring, reporting, and verification of emissions against agreed reference levels. It would likely be financed by the sale of REDD units within global compliance markets or a non-market compliance mechanism. Supporters of the phased approach say it accommodates both fund- and market-based mechanisms, includes provisions for indigenous people, offers flexibility allowing countries at different levels of capacity to participate, and considers many of the outstanding concerns for REDD.

For conservationists REDD offers the best hope that rainforests—including their biodiversity, ecosystem services, and resident peoples—can be saved.

"REDD is being asked to do a lot of things—improving governance, promoting sustainable development, and mitigating climate change, but the potential benefits are so great, it's a chance worth taking," said Schwartzman, whose paper helped get things started.

"As long as forests are worth more dead than alive, it's going to be extremely difficult, and probably ultimately impossible, to preserve more than fragments of the world's forests. Creating that positive economic value for living forests is a key part of the solution to the global warming crisis."

Box 1: The Coalition for Rainforest Nations

The Coalition for Rainforest Nations was born out of a conflict between the World Bank and Papua New Guinea (PNG), a country better known for its cultural diversity (more than 800 languages are spoken across its rugged mountainous terrain) than its political acumen. But the dispute over a $50 million payment could someday lead to billions of dollars in payments for protecting global rainforests. PNG could be one of the largest beneficiaries.

In 2001 the World Bank came to PNG with a loan proposal: around $50 million over 10 years for the country to cease all logging and transition to sustainable forest management. But PNG turned it down, arguing that the offer was too low to meet the needs of the forest communities that had signed the logging contracts. The loan rejection triggered a standoff between PNG and the bank, leading to damaging accusations and an ugly fight.

"These communities want to save the forests, which are the basis for society and culture in New Guinea," said Kevin Conrad, an American born to parents living in Papua New Guinea and now a lead climate negotiator for the G-77 and China. "But at the same time these communities need schools, health and access to markets to develop."

Conrad went to graduate school at Columbia University with the intention is exploring ways for PNG to capitalize on its forests without destroying them. In New York he met with the World Bank and was surprised to find that it was the world's largest carbon trader. He asked the bank how one of its departments could be demanding that New Guinea stop logging, while another was trading carbon.

"I asked the World Bank, 'Why not put your efforts together and give us something we can work with?'"

The World Bank told Conrad the idea was a non-starter because the Kyoto Protocol didn't allow forest conservation projects.

"So I asked, 'what if we change the Kyoto Protocol?'

The World Bank told him that if he changed the Kyoto Protocol then all options would be open.

"So that was the basis of our submission in 2005."

 

Box 2: National vs. Sub-National

There is heated debate over the scale and scope of REDD projects. Because few countries are expected to have national REDD programs up-and-running anytime soon, developers are first starting with individual projects within countries—a sub-national approach—that are ready for market-based compensation now. But eventually these projects will need to be integrated into a national system to avoid leakage and other issues. The process of integration remains contentious and some fear that early stage projects will never be recognized in national level accounting, depriving them of access to lucrative compliance markets.

Copyright mongabay 2009

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Bonn II: REDD discussions at the June 2009 UNFCCC climate meeting

By Chris Lang | REDD Monitor | 21st July 2009

By the end of the UN negotiations in June in Bonn, the negotiating text had expanded from 50 pages to 200 pages. For those of you who like your square brackets, curly brackets and brackets within brackets within brackets, it’s a particular treat. The REDD section of the document is 20 pages long. But what actually happened during the negotiations and what do we need to look out for in the lead up to Copenhagen?

FERN’s “Forest Watch” this month includes this useful overview of the REDD discussions at the Bonn meetings.

Bonn II: REDD discussions at the June 2009 UNFCCC climate meeting

By Kate Dooley (FERN) and Nikki Reisch (Rainforest Foundation UK)

After little progress was made on REDD at the last two meetings of the United Nations Framework Convention on Climate Change (UNFCCC), much was expected of the June discussions in Bonn, Germany. During this session, dubbed “Bonn II”, all four bodies of the Convention met,[1] with REDD discussions occurring primarily within the Ad-hoc Working Group on Long Term Cooperative Action (AWG-LCA), where Parties debate how forests may fit into a new global climate deal, and under the Subsidiary Body for Scientific and Technological Advice (SBSTA), responsible for methodological issues related to REDD. Forests are also discussed under the working group on the future of the Kyoto Protocol (AWG-KP), where there is debate about expanding existing “offset” mechanisms to include REDD and revising the rules for measuring forest-related emissions in industrialised countries. While Bonn II is unlikely to be remembered as a decisive meeting for REDD, it seemed to mark the beginning of real negotiations, with countries laying down goalposts and creating openings to enable the development of detailed rules later. Perhaps most notably, Bonn II saw significant growth in the ranks of countries opposed to offsetting and a refocusing of the debate around industrialised countries’ historical responsibility for climate change.[2]

Overview of REDD discussions
In the AWG-LCA, Parties reviewed draft negotiating text which could form the basis of a decision at the COP15[3] in Copenhagen. Summarizing the discussion, the Chair of the working group commented that views continue to diverge around the most fundamental issues regarding REDD: scope (whether REDD should be extended to include afforestation and agriculture); financing (whether REDD should be brought into the carbon offset market); institutional arrangements (whether REDD should be treated distinctly from other nationally appropriate mitigation actions (NAMA) in developing countries); and definitions (whether there is an agreed understanding of key terms such as “permanence”).

At this stage in the negotiations, Parties’ chief concern appeared to be ensuring that all their issues were “on the table”, with more focus on inserting additional elements than refining text. Consequently, the overall negotiating text grew from 50 to 200 pages, with outstanding disagreements over almost every line.[4] By the end of the meetings, the REDD section of the document was 20 pages long. It will likely be reduced to a single page in any climate agreement reached this December—making it critically important how broadly the scope of REDD is defined and which options are ‘locked in’ or ‘locked out’ for elaboration post-Copenhagen.

The REDD debate within SBSTA focused almost entirely on methodologies for forest carbon accounting, with recurrent disagreements over whether different approaches are needed to measure reduced deforestation and degradation versus avoided deforestation (conservation). Several Parties stressed the need to incorporate indigenous peoples’ knowledge in monitoring and baseline data. This was supported by civil society representatives who also called for the development of proxy indicators to monitor and reward actions that reduce the pressure on forests, even if their impacts cannot be quantified in carbon units. Although Parties approved Draft Conclusions proposed by the Chair of SBSTA,[5]they did not finalise a decision. Many elements remain contested pending further discussion when SBSTA meets in Copenhagen. These include proposals to develop further guidance on community participation in monitoring and to require countries to allow independent verification of REDD monitoring systems and results; as well as recommendations to adjust reference levels to accommodate future increases in deforestation and degradation.

Indigenous peoples’ rights and forest governance
The discourse on indigenous peoples has improved since the December 2008 UNFCCC meetings when the US, Canada, New Zealand and Australia blocked the inclusion of reference to “indigenous peoples” (plural) and explicit mention of rights. Whilst the reference to the UN Declaration on the Rights of Indigenous Peoples (UNDRIP) in the draft negotiating text was welcomed, many indigenous peoples and NGOs expressed concern that language remains weak and subordinates UNDRIP to national law. There is increased mention of indigenous peoples and local communities in the draft text, with particularly strong statements made by Bolivia, El Salvador, Tuvalu, Norway and Switzerland. However, proposed language emphasizes participation and consultation, rather than rights and consent. Only Bolivia has explicitly mentioned free, prior and informed consent as a pre-condition for REDD, as well as the full involvement of local communities, from planning through implementation phases.

Although “forest governance” is virtually absent from the draft negotiating text on REDD, Norway’s submission includes it among the eligibility requirements for accessing REDD financing. Tuvalu’s submission of draft legal text also emphasised the need for appropriate governance structures and mechanisms to ensure respect for rights.

Reductions, responsibility and offsets
REDD is just one piece in the larger puzzle of the international climate negotiations; the coming months will see much debate over the legal form of the agreement and how the negotiating tracks will combine. Parties such as the US and Japan are pushing to replace the Kyoto Protocol with a new agreement that ends the distinction between Annex 1 and non-Annex 1 countries.[6] At the same time, developing countries are increasingly insistent that industrialised countries recognise their historical responsibility, commit to reducing their own emissions, and finance adaptation, mitigation and technology transfer for developing countries.

Bonn II also saw mounting concern among developing countries over the role offsetting plays in enabling industrialised countries to avoid cutting their own emissions. In the AWG-KP, many Parties called for emissions reduction targets to be met domestically, with use of flexible mechanisms, such as the Clean Development Mechanism (CDM) or potential credits from “sinks” (emissions removals from land use change), being allowed only in addition to binding reduction commitments met within industrialised countries. South Africa emphasised that offsetting creates additional burdens on the poor because it allows industrialised countries to buy developing countries’ cheapest emissions reductions, leaving the latter to foot the bill for any future, more costly cuts.

A growing number of developing countries, including China, Brazil, Bolivia, Tuvalu, Paraguay and El Salvador, have stated that REDD should not be used as an offset mechanism. Norway and Tuvalu both recommended that a decision on whether or not to link REDD to carbon trading be postponed until after Copenhagen, and that any trading in forest carbon credits be ruled out for the post-2012 commitment period. Tuvalu underscored the risks involved in trading-based REDD, referring to the recent carbon trading scandal in PNG.[7]

Issues to watch:

  • Rules: Discussion continues about revising the rules by which industrialised countries account for emissions and removals within the land use sector.[8] These potential revisions could not only affect whether industrialised countries continue to “game the system” by claiming credits for forests as carbon “sinks” whilst under-accounting emissions from destruction of forests through logging and other “forest management” activities; they are also likely to affect how the rules are set for REDD in developing countries.
  • Scope: Whilst negotiators now refer to “REDD plus”,[9] there remains confusion over which activities will be eligible under a REDD agreement and the risks involved. Without explicit safeguards against conversion of forests to plantations, inclusion of afforestation/reforestation in a REDD mechanism could increase forest loss.
  • Industry: The draft negotiating text reveals a shift in language from “sustainable management of forests”, to “sustainable forest management” (SFM), and from “forest” sector to “forestry”. Forestry refers to the harvesting of timber and SFM has become synonymous with industrial logging of forests. This shift in emphasis detracts from the focus on forest protection as the primary means to achieve REDD and signals potential perverse outcomes from REDD.[10]

It is more important than ever to keep an eye on how a future REDD mechanism fits into the overall objective of the Convention – keeping emissions low enough to avoid the anticipated rise in global temperatures of 2°C. The relatively narrow focus of the REDD negotiations on measuring forest carbon stocks in order to trade carbon credits fails to address the underlying drivers of deforestation and degradation. It is well documented that without a focus on governance, rights and security of resource tenure, REDD is likely to fail.[11] Thus REDD must measure more than carbon. Preconditions for effective REDD must include wide stakeholder participation in policy development; secure land tenure and resource rights; and strong forest protection laws and enforcement. Organisations working on forest governance are clearly stating that forest governance standards should constitute eligibility criteria for participation in future REDD schemes and forests should be kept out of offset markets. Given its official policy on avoided deforestation and its FLEGT work, the European Union should strongly support the establishment of such governance criteria and prevent environmental and social risks by ensuring REDD is not funded by trading carbon credits.


Endnotes

[1] The Subsidiary Body for Scientific and Technological Advice (SBSTA), the Subsidiary Body for Implementation (SBI), the Ad-Hoc Working Group on Long-Term Cooperative Action and the Ad-Hoc Working Group on Further Commitments for Annex 1 Countries under the Kyoto Protocol.

[2] FCCC/AWGLCA/2009/MISC.4 (Part I), page 44.

[3] COP15 is the 15th Conference of the Parties to the UNFCCC. Legally binding decisions under the Convention can only be made at the COP.

[4] The latest revised draft negotiating text is: FCCC/AWGLCA/2009/INF.1

[5] FCCC/SBSTA/2009/L.9

[6] Annex 1 of the Kyoto Protocol lists countries expected to take on legally binding reduction targets; non-annex 1 countries have no targets.

[7] See, for example, “Money grows on trees“, The Economist, 6 June 2009.

[8] Referred to under the Kyoto Protocol as the “land use, land use change, and forestry sector” (LULUCF).

[9] Reduced emissions from deforestation and degradation, plus conservation, forest management enhancement of carbon stocks and potentially expanding.

[10] For further information, see: Rice, R.E., Sugal, C.A., Ratay, S.M., Fonseca, G.A., (2001) Sustainable forest management: A review of conventional wisdom.Advances In Applied Biodiversity Science, No. 3, p. 1-29. Washington, DC: CABS/Conservation International.

[11] Including Cotula, L. and Mayers, J. 2009. Tenure in REDD – Start-point or afterthought? Natural Resource Issues No. 15. International Institute for Environment and Development. London, UK. See also www.rightsandclimate.orgfor more documents and presentations making this point.

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Carbon trading could slash ‘green’ costs

By Fiona Harvey, Environment Correspondent | Financial Times | July 20 2009

Carbon trading could slash the cost of cutting greenhouse gas emissions by 70 per cent, a report commissioned by the prime minister found on Monday. Money invested in emissions cuts through a carbon market produces a greater “bang per buck” than other methods, the Global Carbon Trading report found.

A dollar invested in a global emissions market can cut 40 to 50 per cent more carbon than one invested only in reductions within the UK, the report found. In part, this is because cutting emissions in developing countries is often cheaper than in rich nations.

Mark Lazarowicz, the Labour MP responsible for the report and the prime minister’s special representative on carbon trading, said: “The evidence shows that global carbon trading can deliver substantial cuts in greenhouse gases rapidly and cost-effectively.”

Many businesses would prefer to invest in cheaper carbon-cutting projects abroad – a practice known as carbon offsetting – rather than undertake difficult emissions reduction programmes at home. However, the government’s message is controversial, since it has resisted the use of offsets in meeting its emissions-cutting targets.

Gareth Stace, head of climate and environment policy at EEF, the manufacturers’ organisation, said: “We do not support the premise that organisations should take all steps to reduce their own emissions before purchasing offsets. Organisations should be encouraged to find the most cost-effective approach – only by advocating this will manufacturers be encouraged to set ambitious reduction targets.”

But some environmental groups say this gives companies an excuse for failing to pursue green opportunities. “Carbon offsetting is a complete con which allows rich countries to shirk their responsibility to lead in tackling climate change by cutting their emissions first and fast,” said Tom Picken, international climate campaigner at Friends of the Earth.

The government sought to defuse the row on Monday by arguing that companies should pursue a carbon-cutting agenda domestically because of the benefits it could bring to British business in efficiency and new business opportunities, such as renewable energy and electric cars.

Separately, the government also put forward the idea of imposing carbon budgets on local authorities. The first carbon budgets have been set at central government level, requiring departments to bring in policies that help the UK cut emissions by 34 per cent, compared with 1990 levels, by 2020.

John Denham, communities secretary, said local councils should also have targets. “Many people feel they can’t make a difference to reducing carbon emissions because the problem is too big and the solution too far removed from their community. It is right that we have ambitious national targets but public enthusiasm can be renewed by giving it a local democratic basis with local mechanisms that people can manage and influence.”

Copyright The Financial Times Limited 2009

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Climate Loopholes

Editorial | The New York Times | July 21, 2009

The House’s approval of the Waxman-Markey climate change bill earlier this month was a remarkable political achievement and an important beginning to the task of reducing greenhouse gas emissions. But in all the last-minute wheeling and dealing, the House bill acquired two big loopholes that the Senate must close.

The first loophole involves coal-fired power plants. Coal is the world’s most abundant fossil fuel — producing more than half the electricity in the United States — and also its dirtiest, with twice the carbon content of natural gas.

The House bill would limit emissions from coal-fired power plants in two ways. It imposes a cap on emissions from all industrial facilities that tightens slowly over time. It also sets tough performance standards on new power plants permitted after 2009, requiring emissions reductions of 50 percent or more. The bill would help underwrite advanced technologies capable of capturing carbon dioxide and storing it underground.

The bill does not, however, impose any performance standards on existing power plants. And it explicitly removes these plants from the reach of the Clean Air Act. This is a mistake. The overall cap on industrial emissions will not be fully effective for a long time, and, meanwhile, the government should be able to impose lower-emissions requirements on the older, dirtiest plants.

There is little doubt that the Clean Air Act authorizes the Environmental Protection Agency to require existing plants to reduce emissions by, say, using cleaner fuels or increasing efficiency. But the House bill says otherwise, at least when it comes to carbon dioxide. The Senate must fix this problem by writing standards for existing plants into its bill or restoring the E.P.A.’s authority to do so. The old plants simply cannot be let off the hook.

The second loophole involves the tricky matter of offsets. Offsets allow polluters who cannot immediately reduce their own emissions to get credit for reducing emissions elsewhere. A rich country can earn credits by helping a poor country save its rain forests. Domestically, a power company can earn credits by, say, helping farmers capture methane emitted by animal waste ponds or cultivate land in ways that help absorb carbon.

Offsets are an important cost containment mechanism since it is usually cheaper for a company to buy offsets in the near term and gain time to install the new technology necessary to eventually meet its targets. But they can be easily manipulated. Academic studies have found that many of the offsets purchased by industrialized countries under the Kyoto treaty turned out to be bogus or produced far less reductions than advertised.

This is a very real danger with some of the offsets in the House bill. For instance, the bill would allow polluters to meet their requirements not by paying farmers to put new conservation techniques in place but by paying them to keep doing things they were already doing. The result is that money changes hands, but the atmosphere is no better off. Offsets must be real and verifiable, or the integrity of the entire scheme is at risk.

There are risks here. The Senate has already rejected much weaker bills. But the political climate is more favorable now than it has ever been, and Senate Democrats should not settle for half-measures.

Copyright 2009 The New York Times Company

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Tuvalu plots world's first zero carbon output by 2020

The tiny South Pacific island nation of Tuvalu could become the first zero-carbon country after vowing to abandon fossil fuels and generate all of its energy from renewable sources by 2020.

By Bonnie Malkin in Sydney | The Telegraph | 20 Jul 2009

Tuvalu: Tuvalu plots zero carbon output by 2020

Tuvalu: Tuvalu could become the first country in the world to realise the zero-carbon dream.Photo: AFP

At threat from rising sea levels caused by global warming, the low-lying nation plans to swap imported "dirty fuel" for wind and solar power.

With no heavy industry, almost no natural resources and very low existing greenhouse gas emissions, Tuvalu could become the first country in the world to realise the zero-carbon dream.

Lying halfway between Australia and Hawaii in the middle of the Pacific, the government has been forced to act because the nation stands to lose so much from climate change.

Home to a population of 12,000 people, Tuvalu is the fourth-smallest country in the world, measuring just 10 square miles in size. Most of its population are either fishermen or farmers, relying on the land and sea for income and food.

However, the island chain is very low-lying, with most of the country less than three feet above sea level, and the nation's highest point standing at just 15 feet. Worsening flooding in recent years has reminded the administration that Tuvalu faces becoming uninhabitable if predictions of a large sea-level rise this century come true.

In response, a 40 kilowatt solar energy system has been installed on the roof of the country's largest football stadium. The panels now supply five per cent of the electricity needed by the capital, Funafuti and in their first 14 months reduced Tuvalu's consumption of generator fuel shipped from New Zealand by about 17,000 litres.

The project was set up by the e8, an international nonprofit organisation of 10 leading power utilities from G8 countries, and funded by two Japanese power firms.

The Tuvalu government is now working to expand the initial project, and wants to take solar power to the outer islands, starting later this year with the commission of a $800,000 (£480,000), 46 kilowatt solar power system for a secondary school. In all the project is expected to cost the state, which relies on foreign aid as its main source of income, an estimated $20 million.

"We thank those who are helping Tuvalu reduce its carbon footprint as it will strengthen our voice in those international negotiations," said Kausea Natano, the island's public utilities and industries minister. "And we look forward to the day when our nation offers an example to all powered entirely by natural resources such as the sun and the wind."

Tuvalu is among a cluster of countries, including the Maldives, that aim to reduce their emissions to zero over the next decade.

While its effort alone is not expected to make a significant difference in the fight to cut the volume of heat-trapping gases emitted across the globe, the United Nations and many environmentalists have said the move could inspire larger emitters like the United States and China to take bolder steps to limit their carbon footprints.

"In a sense, they are paving the way for medium and larger economies which have to move if we are going combat climate change," said Nick Nuttal, spokesman for the United Nations Environment Programme. "These smaller economies are out to prove you can do it, and do it faster than some people previously thought."

Tuvalu by numbers:

Population: 12,373

Size: 10 square miles

Relative size: 4th smallest country in the world

Population density: 1,142 people per square mile

Highest point: 15 feet above sea level

GDP: $14.94 million (£9 million)

Number of islands: 4

Number of atolls: 5

Capital: Funafuti

History: former British protectorate and now Commonwealth member

© Copyright of Telegraph Media Group Limited 2009

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U.N. approves new generation carbon offset project

By David Fogarty, Climate Change Correspondent, Asia | Reuters | Mon Jul 20, 2009 9:39am EDT

SINGAPORE (Reuters) - The United Nations has given a green light to the first of a new generation of carbon offset programs designed to bring carbon reductions to a mass market in developing nations.

Photo

The panel that oversees the running of the U.N.'s Clean Development Mechanism (CDM) gave in-principle approval during a meeting last week to the project that will deploy 30 million compact fluorescent light bulbs (CFLs) in Mexico.

The U.N. has released the details of the meeting on its website, www.unfccc.int.

Under the project designed by energy efficiency project developer Cool nrg International, the CFLs will be distributed in phases over the next two to three years with the aim of generating up to 7.5 million U.N. offsets called Certified Emission Reductions, or CERs.

Each offset represents the equivalent of one ton of carbon dioxide, the main greenhouse gas blamed for global warming.

Dutch firm Eneco Energy Trade B.V. has agreed to buy the CERs in a deal brokered by TFS Green. Spot CERs traded at around 12.95 euros a ton on Monday.

Under the CDM, companies in rich nations can invest in emissions cuts made by clean energy projects in the developing world and earn CERs than can be sold for profit or used to meet greenhouse gas targets.

CDM has been criticized for only focusing on individual projects and for the high administration costs of getting U.N. approval. Trying to group smaller projects that bring emissions reductions to large numbers of people, such as energy efficient lighting schemes, has proven expensive.

Under what is called programmatic CDM, developers can deploy projects at scale in theoretically unlimited numbers providing each uses the same approved standards or methodologies from the start. This keeps fees to a minimum.

RANDOM SURVEYS

The Mexico project plans to have 30 CDM program activities, to ensure full deployment of the 30 million CFLs, said Phil Cohn, Cool nrg's head of carbon markets and accreditation.

The distribution of the first 1 million CFLs will occur during October-November, he told Reuters from London on Monday.

Asked how the project would ensure the CFLs were not sold once people received them, Cohn said strict monitoring of households and limiting the number of CFLs to each home were key parts of the design.

Each household would receive four CFLs, and details such names and addresses and utility bill numbers taken for tracking.

"People also need to bring four old incandescent bulbs and exchange them, so this creates a barrier to stockpiling CFLs," Cohn said. "As part of the ongoing monitoring, we survey a sample of households to see the proportion of CFLs that are in operation."

Cohn said the CDM executive board had requested minor clarifications and expected the panel to formally approve the project within the coming weeks.

He also said the design team had been working for the project to be awarded the premium Gold Standard certification and expected this to follow formal registration.

"This is a groundbreaking deal," said Chris Halliwell from brokers TFS in Melbourne, Australia.

"We believe it will strongly encourage the programmatic approach particularly across Asia, and bring home the message of sustainable yet efficient ways of generating carbon credits on a large scale."

(Editing by Michael Szabo)
© Thomson Reuters 2009 All rights reserved

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Palm oil companies trade plantation concessions for carbon credits from forest conservation

Rhett A. Butler | mongabay.com | July 22, 2009

Indonesian palm oil producers are eying forest conservation projects as a way to supplement earnings via the nascent carbon market, reports Reuters.

Frank Momberg, Fauna and Flora International's Asia-Pacific director for program development, told Reuters' David Fogarty that plantations companies have agreed to forgo converting rainforest areas in West Kalimantan on the island of Borneo in exchange for a share of the revenue generated from the sales of forest carbon credits. Forest conservation is expected to be an important emissions mitigation mechanism under the next global climate treaty, with tropical countries earning carbon credits for reducing deforestation.

Peat forest conversion in Kalimantan, Indonesian Borneo.

Forestry companies are well-positioned to benefit from the potential mechanism, which is known as REDD for Reducing Emissions from Deforestation and Degradation. Logging companies and plantation operators that agree not to develop their existing concessions stand to potentially earn credits for preserving carbon locked up in forest vegetation that would otherwise be released by deforestation. Provided credits could be used by companies and countries to meet emissions reductions obligations, earnings from REDD could be substantial, and in some cases comparable to the proceeds from logging the forest or turning it into plantations, according to a pair of studies published earlier this year in the journal Conservation Letters.

Oil palm plantation and forest in North Sumatra

Fauna and Flora International (FFI) said that Sinar Mas and First Borneo Group are involved in the West Kalimantan project, which is based in a 90,000-hectare tract of carbon-dense peat swamp forest in Kupuas Hulu. FFI estimates the first phase of the project, which covers 46,000 hectares, will avoid 2.8 million tonnes of CO2 a year over a 10-year period. FFI is also developing carbon conservation projects in the Sungai Putri peat swamp in West Kalimantan (60,000 ha) and Papua, on the island of New Guinea (250,000 ha) as well as a separate community forest project in West Kalimantan (30,000-50,000 ha). FFI is involved with the 750,000-ha Ulu Masen project in Aceh, on the island of Sumatra.

Copyright mongabay 2009

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India refuses to set emissions reduction target despite US "pressure"

Country's carbon output per capita among the world's lowest, says environment minister

Yvonne Chan in Hong Kong | BusinessGreen | 21 Jul 2009

The Indian government has insisted that it is under no obligation to set an emission reduction target, despite "pressure" to do so from US Secretary of State Hillary Clinton during a visit to the subcontinent over the weekend.

Indian environment minister Jairam Ramesh told Clinton that "there is simply no case for the pressure that we, who have among the lowest emissions per capita, face to actually reduce emissions".

During an hour-long private meeting with Clinton, Ramesh also accused the US of threatening to impose carbon tariffs on Indian exports if it failed to sign up to international emission redcuction targets.

He provided local media with printed copies of his statements from the discussion.

The US has been stepping up efforts to get developing nations to agree on measures to combat global warming prior to the UN climate change talks in Copenhagen in December.

Earlier this year, the US held secret talks with China and speculation is mounting that the Chinese government could support a deal in Copenhagen. However, reaching an accord with India is proving more difficult with the government maintaining that while it has introduced measures to address climate change it is not willing to sign up to any targets it views as detrimental to economic growth.

While visiting the country, Clinton noted that "India's greenhouse gas pollution is projected to grow by about 50 per cent between now and 2030", and told local officials that curbing carbon dioxide emissions would not dampen India's economic growth.

During her visit, India announced that land had been allotted for two nuclear power stations to be built by US companies, which Clinton said would help the country to meet its growing energy needs.

Japan's Nikkei newspaper, citing unnamed sources, today reported that Westinghouse Electric and a venture between General Electric and Hitachi will likely be awarded orders for the nuclear plants.

In a written statement to India's upper house of the Parliament yesterday, Ramesh clarified his stance from the meeting with Clinton. He noted that under the terms of the Kyoto Protocol, India does not need to set a carbon reduction target.

Ramesh added that the government was committed to implementing the National Action Plan on Climate Change – a set of initiatives covering such areas as solar power, energy efficiency and climate change – which would help to reduce greenhouse gas emissions.

Documents for the plan "are at various stages of finalisation", he said, but did not give a timeframe for implementing the scheme.

© Incisive Media Ltd. 2009 Incisive Media Limited

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20 July 2009

Smart biofuels that don't hurt people or the environment are possible

Sustainable biofuels can be a reality but only in combination with reductions in fuel demand and increased productivity on existing agricultural lands, argue researchers writing in the journal Science.

mongabay.com | July 16, 2009

Five years ago biofuels were seen as a panacea for the world's energy hunger and the need to address climate change, but increased production of biofuels soon contributed to a clutch of problems, including competition with food, resulting in rising prices, and large-scale conversion of rainforests and tropical grasslands for feedstocks, resulting in biodiversity loss and increased greenhouse gas emissions. Environmentalists and scientists condemned many biofuels — including ethanol produced from Midwestern corn ethanol and biodiesel generated from European rapeseed and Southeast Asian palm oil — as a short-sighted energy solution. Some biofuels were found to be even worse for the environment, and more costly, than conventional gasoline.

Price index including corn, palm oil, and soybean oil for January 2000 through June 2009. Click chart to enlarge.

However some researchers remain optimistic that smart biofuel production could help meet energy demand without hurting people or the planet. In a Science Policy Forum piece, David Tilman and colleagues explore some of these options, noting that biofuels can be produced in substantial quantities at low environmental cost provided they are derived from feedstocks that have lower greenhouse gas emissions than conventional energy sources and don't compete with food production. The authors highlight several potential feedstocks, including perennial plants grown on degraded and abandoned agricultural land; crop residues; sustainably harvested wood and forest residues; double crops and mixed cropping systems to maximize production between and during harvest cycles; and municipal and industrial waste.

Chart modified from Science. Tilman was co-author of a study published in Science in February 2007 that showed the production of some biofuels can result in emissions greater than those from fossil fuels. The analysis looked at the lifecycle emissions from various biofuel feedstocks and presented the results as a "carbon debt" ranking.

But use of these biomass sources may not emerge on its own, note the authors, who lament that recent biofuels policy dialogue in the United States has become "increasingly polarized" with political influence seeming to trump science.

"The best available science, continually updated, should be used to evaluate the extent to which various biofuels achieve their multiple objectives, and policy should reward achievement," they write.

To this end, Tilman and colleagues suggest three steps to be taken: "meaningful science-based environmental safeguards should be adopted, a robust biofuels industry should be enabled, and those who have invested in first-generation biofuels should have a viable path forward."

Such policy should be supported by "rigorous" accounting rules that "measure the impacts of biofuels on the efficiency of the global food system, greenhouse-gas emissions, soil fertility, water quality, and biodiversity. Accounting rules should consider the full life cycle of biofuels production, transformation, and combustion."

Oil palm plantations near Lahad Datu, Malaysia. Photo by Rhett A. Butler

Without such safeguards, "the massive projected increases in global energy and food consumption will greatly elevate atmospheric greenhouse gas levels from fossil fuel combustion, land clearing, and livestock production and will create immense biodiversity loss from habitat destruction and climate change," the authors warn. "The quality of human life will be compromised."

David Tilman, Robert Socolow, Jonathan A. Foley, Jason Hill, Eric Larson, Lee Lynd, Stephen Pacala, John Reilly, Tim Searchinger, Chris Somerville, Robert Williams. Beneficial Biofuels—The Food, Energy, and Environment Trilemma. SCIENCE 17 JULY 2009 VOL 325

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Next IPCC report will focus on clouds and sea level rises

The Intergovernmental Panel on Climate Change (IPCC) is also planning an extra report on extreme events such as droughts, floods, heat waves or mudslides projected because of global warming.

Michael von Bülow | COP15 Copenhagen | 20/07/2009 07:55

The next assessment report from the Intergovernmental Panel on Climate Change (IPCC), due in 2014, will have more attention on cloud formation and rises in sea level, the head of the panel Rajendra Pachauri said on Friday.

"In the case of clouds we will certainly provide much greater emphasis in this report – clouds, aerosols, black carbon. These are issues that we will certainly cover in much greater detail," he told Reuters in a telephone interview from Venice, where leading scientists met last week to work out an outline to be approved later this year.

"Sea level rise is another issue that...will get much greater in-depth attention," Pachauri said.

The next report by the IPCC, which shared the 2007 Nobel Prize with climate activist and former US Vice President Al Gore, is intended to guide nations after the planned agreement of a new UN climate treaty in Copenhagen this December.

In addition to the assessment report the IPCC is planning an extra report on extreme events such as droughts, floods, heat waves or mudslides projected because of global warming.

COPYRIGHT 2008-2009

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Malaysia's rainforests being insidiously replaced with plantations of clones

mongabay.com | July 20, 2009

Rainforests once managed for selective logging in Malaysia are now being are clear-felled and replaced with latex-timber clones—rubber trees that yield latex and can be harvested for timber—reports the Malaysian Star. Up to 80 percent of Malaysia's remaining forest cover could be at risk.

Journalist Tan Cheng Li reports that permanent forest reserves in Selandor and Johor have already been cleared for rubber plantations, while other reserves are now being targeted. Permanent forest reserves are forest areas that have been set aside for selective logging under sustainable forest management. They account for 82 percent of Malaysia's remaining forest cover.

The development is driven by the government's effort to expand timber plantations across the country and has been facilitated by a system which classifies single-species monocultures as forests.

"This labeling has severe repercussion[s]: Forestry Department figures will not show a decline in forest cover despite massive tracts of natural forest being turned into evenly planted rows of rubber saplings," writes Tan Cheng Li.

Conversion of natural forest for rubber trees in Laos. Photos by Rhett A. Butler.

"What we're seeing today is wholesale clearing of permanent forest reserves and massive conversion to plantations," Tan Cheng Li quoted Surin Suksuwan, Chief Technology Officer at the World Wildlife Fund for Nature, as saying.

The replacement of natural forests with plantations has significant ecological implications. Plantations house fewer plant and animals species and generally store less carbon than natural forests. Clear-cutting also results in soil erosion and increases the risk of fire.

According to the article, permanent forest reserves are also being converted for other types of plantations, including African mahogany, teak, Acacia, sentang, kelempayang, batai, and binuang, although latex-timber clones (LTC) is "favored." The government plans to have 375,000 hectares of tree farms by 2020.

While there is nothing illegal about conversion of natural forest to plantations under Malaysian law, questions are being raised about lack of environmental oversight. Dylan Ong, an environmental consultant interviewed by Tan Cheng Li, said that while the Department of the Environment requires and Environment Impact Assessment for any logging over 500 hectares in extent, he had yet to see one for a LTC plantation.

"Permanent forest reserves are classified as Environmentally Sensitive Areas Rank Two in the National Physical Plan whereby no development or agriculture is allowed. So all latex timber clone projects in forest reserves should not have been approved," said Ong.

Tan Cheng Li. Whither our wilds. The Malaysian Star, 7 July 2009.
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The World Bank’s Forest Investment Programme – the story so far

By Chris Lang | REDD Monitor | 20th July 2009

The World Bank is positioning itself as one of the major funders of REDD. One of the Bank’s funding mechanisms is the Forest Investment Program. So far, the FIP has held three design meetings.

PHOTO: The World Bank by Shiny Things on Flickr

Sena Alouka, Executive Director of Jeune Volontaires pour l’Environnement, Togo is one of the civil society representatives at the FIP meetings. He wrote the following account of the FIP so far in theGlobal Forest Coalition’s newsletter “Forest Cover“, July 2009.

A useful overview of the Forest Investment Program is available on the Heinrich Böll Foundation and Overseas Development Initiative’s website, climatefundsupdate.org. The World Bank’s FIP website, perhaps not surprisingly, is far less informative.

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Forest Investment Program Meets for Second Design Meeting

Sena Alouka, Executive Director, Jeunes Volontaires pour l’Environnement, Togo

The Bali Action Plan calls on parties to “consider policy approaches and positive incentives on issues relating to reducing emissions from deforestation and forest degradation [REDD] in developing countries; and the role of conservation, sustainable management of forests, and the enhancement of forest carbon stocks in developing countries.” This call prompted the World Bank to set up several mechanisms through which it could provide the necessary funding for REDD plans being developed by several countries and multilateral institutions.

During the final design meeting of Bank’s Climate Investment Funds (CIF), held in Potsdam, in May 2008, it was agreed that “a forest investment program should be established by the end of 2008 to mobilize significantly increased funds to reduce deforestation and forest degradation and to promote sustainable forest management, leading to emission reductions and the protection of carbon reservoirs. The FIP should be developed based on a broad and transparent consultative process. That process should take into account country led priority strategies for the containment of deforestation and degradation and build upon complementarities between existing forest initiatives.”

According to the World Bank, the main goal of the FIP is “to support developing countries’ REDD-efforts, providing up-front bridge financing for readiness reforms and investments identified through national REDD readiness strategy building efforts, while taking into account opportunities to help them adapt to the impacts of climate change on forests and to contribute to multiple benefits such as biodiversity conservation and rural livelihoods enhancements. The FIP will finance efforts to address the underlying causes of deforestation and forest degradation and to overcome barriers that have hindered past efforts to do so.” The FIP is supposed to achieve all this by serving as a vehicle to finance large scale investments, promoting transformational change, generating understanding and learning of the links between investments and outcomes, and piloting replicable models to leverage additional and sustained financial resources for REDD.

Design meetings

The first design meeting for the development of the FIP was held in Washington DC, 16-17 October 2008. A working group experts’ meeting was then convened 8-9 January 2009, and a second design meeting organized on 5-6 March 2009. A third design meeting took place in Washington DC, 4-5 May, but no consensus could be reached, and the current version of the proposal stems from an online consultation organized by the FIP secretariat.

Arrangements made for civil society participation in these meetings has been haphazard at best. Some NGOs and Indigenous People were invited to the initial presentation meeting of the CIF in October 2008, thanks to the Development and Environment Group of BOND (British Overseas NGOs for Development) in the UK. Since then, IUCN has been asked to conduct a self-selection process to identify six civil society delegates from the various regions of the world. Another process was arranged for the selection of the Indigenous peoples’ delegate.

Participation in the second design meeting was particularly poorly organized. Because of the extremely late notice and failure to facilitate participants’ visa and travel arrangements in a timely fashion, civil society representatives who were duly elected to attend the FIP meeting, through a formalized selection process, were unable to take part in the end: the delegate from Togo, for example, got his ticket one hour before departure. Even for the lucky few who managed to attend, background materials and the agenda had not been circulated to all in advance, meaning that participants had had little time to review and prepare their inputs to the meeting, let alone consult their constituencies and solicit input in a meaningful manner. In the end, the civil society group wrote a joint letter to express its deep disappointment in the ongoing organization – or rather lack of organization – of the Forest Investment Programme (FIP) design meetings, which is making meaningful and broad civil society participation impossible.

This is of particular concern given that the majority of those unable to attend were from tropical forest countries – the very people whose voices, opinions, and knowledge are essential to ensure the success of measures to stop deforestation and forest degradation in those countries, and to guarantee respect for the rights and interests of forest-dependent communities. The joint letter queries the “sincerity of the World Bank Group’s stated commitment to ensure that the FIP is based on ‘a broad and transparent’ and ‘fully’ consultative process.”

Business-as-usual

Key issues that have been important for civil society participants have included the principles of the FIP, the Special Initiative for Indigenous Peoples and Local Communities, the level of transformational change the Bank and its acolytes are willing to reach, and the broad participation of civil society organizations and local communities. But it is ever clearer that the FIP could be business-as-usual. Several countries insisted on their need for development – the right to keep on logging – and their national sovereignty; but this approach risks reducing compliance, transparency and windows for broad participation from civil society organisations and Indigenous People.

Concerning the Special Initiative for Indigenous Peoples and Local Communities, civil society participants stressed that activities eligible for support should include capacity building; securing and strengthening customary land tenure, resource rights and traditional forest management systems of Indigenous Peoples and local communities; support for the development of pilot project proposals from Indigenous Peoples and local communities; and support for their involvement in monitoring and evaluating forest activities. Additionally, there is also a need to ensure that support for Indigenous Peoples and local communities is fully integrated into national forest-climate policy, REDD/FIP processes and investment plans. This means that activities supported through a dedicated mechanism should not be isolated or marginalized from the design and implementation of national REDD/FIP plans, nor should the existence of such a mechanism stop Indigenous Peoples’ and local communities’ accessing funds through other mechanisms or for other activities.

One point that has drawn a lot of attention is the “Illustrative Examples of Potential Investments under the FIP.” While this could be useful, civil society participants indicated their preference for an exclusion list, detailing activities that will not, under any circumstances, be supported by the FIP. As the FIP is designed to “support countries’ REDD-efforts” and maximize benefits of sustainable development, particularly in relation to biodiversity conservation, rural livelihoods, and ecosystem services, it should never be used to finance deforestation or forest degradation.

Concerns were also raised around Sustainable Forest Management, which may hide an intention to promote industrial-scale logging or ‘certification’ systems, plantations (monocultures, potentially including genetically modified trees), and destructive mining and infrastructure projects, with the pretention of making participation of civil them more sustainable.

In the end, for the FIP to be truly transformative, it should support efforts to reduce demand for wood and agricultural products altogether, and halt the production and purchase of products derived from degraded or converted forests, as well as conserving intact or primary natural forests – not just ‘high conservation value or pristine forests.’ CSOs decided to participate in the FIP sub-committee as active observers, rather than full members, to avoid the possibility of legitimizing harmful projects. In general, however, they were relatively satisfied with the openness of the FIP secretariat and the positive attitude displayed by several participants (apart from some developing country governments that seem to regard the FIP as a means of financing and legitimizing industrial logging).

Finally, taking into consideration the sunset clause in the CIF, which obliges it to come to an end by 2012 (unless otherwise requested by the UNFCCC), there is reason to ask about the relevance of the FIP as well, since most institutions, are already calling for a redrafting of the REDD or REDD+. Fingers are crossed that future meetings address these profound concerns, before the FIP’s Design Document is finally validated by the Strategic Climate Fund Trust Committee.

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