This Week In Forest Carbon: What Role Will Forests Play In Future Climate Deal?

Steve Zwick

Ecosystem Marketplace is right in the middle of the action in Lima, Peru this week, where, after last’s Warsaw COP, market participants are expecting a quiet year in terms of concrete decisions on forests – and that’s what they’ve mostly gotten so far.

9 December 2014 | Ecosystem Marketplace is right in the middle of the action in Lima, Peru this week, where thousands of government negotiators, non-profit representatives, indigenous leaders, corporate officials and journalists have gathered for the 20th Conference of the Parties (COP 20) of the United Nations Framework Convention on Climate Change (UNFCCC). It is in this strange alternative universe where people speak in acronyms and debate negotiating text over pisco sours that the groundwork for an international climate agreement next year in Paris is being laid.

What role will forests play in this future deal? After the last-minute agreement on the REDD (Reducing Emissions from Deforestation and forest Degradation) Rulebook at last year’s Warsaw COP, market participants were expecting a quiet year in Lima in terms of concrete decisions on forests – and that’s what they’ve mostly gotten so far.

In a roundtable discussion with Ecosystem Marketplace, REDD policy experts discussed the two major forest carbon issues on the table at COP 20: The rules for Safeguards and whether the guidelines for countries’ Intended Nationally Determined Contributions (see our COP alphabet soup piece for background) will include REDD.

The technical committee discussions concluded this weekend without a decision on whether the UNFCCC should offer further guidance on REDD social and environmental safeguards, punting the issue to June meetings in Bonn, Germany. Many tropical forest countries were in favor of this ‘no decision’ outcome.

“Many REDD countries said, ‘We’re implementing them [the safeguards], figuring out our system, making sure everything is connected,’ and they interpreted the calls for more guidance as additional demands being imposed even before they’ve been able to see if they have any problems or not,” said Peter Graham of World Wildlife Fund. “They’re basically saying, ‘You’re asking us to see how we’re doing before we do it,’ and they don’t see it as fair.”

The rules for INDCs will be discussed this week as the negotiations transition from technical discussions to policy ones and high-level ministers arrive.

“My understanding is that the INDCs to be submitted by March will be a range of numbers coupled with explanations saying, ‘This is how we came up with this number. These are the policies that we expect to use to implement or meet our INDC.’ Basically, numbers with context,” said Gustavo Silva of Forest Trends.

“Also, for some countries like least-developed countries, we’re not expecting them to come in with numbers, but more activities,” added Chris Meyers of Environmental Defense Fund. These activities might include forest conservation, climate-friendlier agricultural techniques, or even improved land tenure in indigenous territories, he said.

Over the next week, policy experts are following whether the rules for INDCs will specifically mention forests and land use, since this would send a signal about the potential role of REDD+ in countries’ emissions reductions plans.

More stories from the forest carbon market are summarized below, so keep reading.

—The Ecosystem Marketplace Team

If you have comments or would like to submit news stories, write to us at [email protected].

ANNOUNCEMENT

Ecosystem Marketplace in Lima

If you are in Lima this week, please join us tomorrow at 1 p.m. in the Forest Pavilion at Voces de Clima for a debrief of our State of the Forest Carbon Markets 2014 report. Co-authors Gloria Gonzalez and Allie Goldstein will present key findings from the report and provide insight on current market dynamics. Panelists Juan Carlos Gonzalez Aybar of Althelia Climate Fund and Mariama Vendramini of Biofílica will comment on their experience developing or investing in forest carbon projects and the state of the market in the context of the United Nations climate negotiations. More info about the event is available here. We look forward to seeing you there.

INTERNATIONAL POLICY

Older and wiser markets

Much discussion in Lima has centered on the potential “new market mechanisms” that could merge from the negotiations. But market experts speaking at a side event last week advocated that “new” should mean “reformed” rather than “starting from scratch.” “Because if we don’t learn the lessons of the (Clean Development Mechanism) and from Joint Implementation, then we’re simply going to recreate history,” said Miles Austin, Executive Director of the Climate Markets and Investment Association. The International Emissions Trading Association proposed language for a new agreement that includes a unified international transfer system that allows countries to transfer portions of the INDC contributions through instruments of their choice, whether that be CDM, REDD, or something else.

NATIONAL STRATEGY AND CAPACITY

Time to check those references

Colombia, Guyana, Indonesia, Malaysia and Mexico formally submitted information and data on their forest-based greenhouse gas emissions to the UNFCCC on Monday. This data is required to establish forest emissions levels in these countries – reference levels that are in turn used as the benchmarks for reducing deforestation and potentially receiving payments for REDD offsets. The data will now be assessed by forestry experts coordinated by the UNFCCC according to rules agreed on last year in Warsaw. These countries join Brazil, which was the first country to submit its reference level data last June.

Oh, how the mighty have fallen

New Zealand Carbon Farming is suing Mighty River Power for $34.7 million over carbon offsets the energy company contracted to buy to offset carbon emissions from electricity generation. The case is based on a methodology change governing the generation of forest offsets under New Zealand’s Emissions Trading Scheme. Mighty River Power is resisting the claim because it could be forced to buy significantly more forest carbon offsets than expected, which would double the value of its 15-year contract with New Zealand Carbon Farming.

SUSTAINABLE COMMODITIES

No easy assembly

The Swedish behemoth company IKEA just unveiled a new palm oil policy, calling for zero deforestation and no conversion of peatlands for any oil used in its candle and food products. These actions go a step beyond the certification standards required by the Roundtable on Sustainable Palm Oil, of which IKEA is a member. The company aims to source all of its palm oil sustainably by December 2017. Suppliers that fail to source certified palm oil will likely see their relationship “phased out”.

FINANCE & ECONOMICS

Just reaching the starting line

Norway last week announced it has doubled its pledge to the Green Climate Fund (GCF) to NOK 1.6 billion ($258 million USD), bringing the fund to $9.95 billion. And today Belgium contributed $60 million,officially bringing the fund up to the $10 billion that the UNFCCC Executive Secretariat and others have set as the minimum that should be achieved at this COP. Parties have agreed that $100 billion per year should flow annually from developed to developing countries, both to curb emissions and to adapt to climate change’s effects, by 2020.

Early movers get the worm

The governments of Germany and Norway committed up to $65 million apiece to Colombia and Ecuador, expanding the REDD Early Movers Program (REM) to these two rainforest nations. The contributions will be distributed over three years, starting in 2015 through the end of 2017, as payments for verified emissions reductions. “The best contribution we can make as donors is to demonstrate that we are willing to pay for the results,” said Hege Araldsen, the Norwegian Ambassador to Ecuador, Chile and Peru. The announcement marks a significant expansion of the REM program, following the 2013 agreement between Germany and the state of Acre, Brazil.

HUMAN DIMENSION

A tragic outcome

After going missing on November 28, Shuar leader José Isidro Tendetza Antún was found deadlast week. Tendetza disappeared on his way to meet protestors against the Mirador copper and gold mine on his peoples’ territory in the Ecuadorean Amazon. The project is operated by Chinese conglomerate Ecuacorriente, originally a Canadian-owned company. Tendetza had planned to participate in COP 20. “We believe that this murder is part of escalating violence against indigenous leaders which responds to the Ecuadorean government and the companies’ need to clear the opposition to a mega-mining project in the Cordillera del Condor,” Luis Corral, an advisor to Ecuador’s Assembly of the People of the South, told The Guardian newspaper.

STANDARDS AND METHODOLOGIES

Agriculture strikes Gold

The Gold Standard launched its agricultural program last week at a side event at COP 20. “Our secret agenda is to make sure that payments for carbon reduction actually become payments for sustainable development,” said Pieter van Midwoud, Director of Land Use and Forests. The certified emissions reductions program includes streamlined guidelines for smallholder farmers. The Gold Standard is working with partners Hivos, Solidaridad and the Cool Farm Alliance, and their announcement states that they aim to make their agricultural program “a strong weapon for corporates implementing zero-net deforestation commitments.”

Digging into the details

Australia’s Emissions Reduction Fund just released its soil carbon method for public consultation. The method seeks to offer a low-cost tool for cropping, pasture and mixed farming systems to calculate soil carbon. The method uses modeled estimates of sequestration and builds on the soil carbon grazing method used in the Carbon Farming Initiative. Consultation closes on December 12.

SCIENCE & TECHNOLOGY

When a tree is logged, does the soil notice?

While scientists have a clear understanding about the above-ground biomass stored in forests, a lot remains unanswered about what happens underneath. The U.S. Forest Service assumes soil carbon doesn’t change from harvesting, but Dartmouth College researchers thought differently. They examined mineral soils, which are difficult to collect but make up the majority of carbon storage in the northeastern U.S., from forests logged 5, 25, 50, 75 and 100 years ago. Their latest findings, reported in the Global Change Biology Bioenergy journal, found that harvested forests show a gradual release of carbon for decades following logging.

PUBLICATIONS

Keeping up on current events

Indigenous peoples in the Amazon have long suffered from economic straits while preserving standing forests. Yet because of these actions, they could not tap into REDD+ finance because their forests had no history of deforestation. A new study, “Forest Carbon in Amazonia: The Unrecognized Contributions of Indigenous Territories and Protected Natural Areas,” takes an innovative approach by focusing on current threats (instead of historic rates) of deforestation. It concluded that nearly one-third of indigenous and protected territories are under immediate threat from illegal logging, mining, dams and agriculture, while an additional one-fifth are under near-term threat. Presenting at COP 20, report authors emphasized the need to demarcate indigenous lands and to aid indigenous tribes in using life plan methodologies as a benchmark of success in REDD.

Consolidation is the name of the game

COP 19 in Warsaw, Poland produced a series of decisions around REDD+ commonly known as the REDD Rulebook. However, it wasn’t completely comprehensive. Prior UNFCCC decisions had additional implications for REDD+. A new publication, The Consolidated Guide to REDD+ Rules under the UNFCCC, written by the Baker and McKenzie Law for Development Initiative combines all of the UNFCCC REDD+ rules into a single document.

No clear road to REDD

In the Center for International Forestry Research’s (CIFOR) new book, “REDD+ on the Ground: A Case Book of Subnational Initiatives Across the Globe“, the authors analyzed 23 REDD+ initiatives from all over the world to try and tease out global lessons. William Sunderlin, a principal scientist for CIFOR, presented about the report findings at a COP 20 side event, noting the importance of clear land tenure in REDD projects. “There are reasons for hope in the future about REDD but there are certainly grounds for serious concern, and this book will give you an appreciation for how big the obstacles are,” he said. “The core concept of performance-based incentives has proved very difficult to implement without secure, long-term funding.”

JOBS

Staff Accountant – Forest Trends

Based in Washington, D.C., the Staff Accountant will focus on accounts payable, project audits and payroll. Candidates should have a bachelor’s degree in accounting, finance or equivalent with two to five years of experience in a non-profit setting.