As formal negotiations regarding the role of forest conservation to fight climate change occur behind closed doors, another major milestone is announced in the voluntary forest carbon market. After more than two years of development, a broad new REDD methodology has finally cleared the second validation needed for acceptance under the Voluntary Carbon Standard.

3 December 2010 |  CANCUN |  Despite widespread acknowledgement of the value of conservation and management of forests to help sequester carbon and reduce emissions from unsustainable forest uses, these activities have received limited practical support from the formal climate negotiations which resumed this week in Mexico.

But outside the scope of binding regulatory emissions programs, the global market for voluntary actions in the forest sector has continued to grow and become a fertile ground for the development and testing of groundbreaking methodologies for identifying and learning to reduce the pressures on forests to help keep the carbon they store out of the atmosphere.

And so, while negotiators debate if and how to move forward with a mechanism to Reduce Emissions from Deforestation and forest Degradation (REDD), Robert O’Sullivan of Climate Focus announced Tuesday evening that a major new step forward had been achieved for standardizing the way REDD projects get designed, monitored, and rewarded in the voluntary market.

Confronting a Growing List of Narrow Methodologies

Since 2008, O’Sullivan has been coordinating the development of the REDD Methodology Modules prepared for the US-based multi-stakeholder network Avoided Deforestation Partners. These efforts, funded by grants from the government of Norway, the Packard Foundation and the Sea Change Foundation employed a brain trust of experts to help write and steer the methodology through its two-year journey towards acceptance under the Voluntary Carbon Standard (VCS).

“When we started this, looking at CDM methodologies and how they developed initially, it ended up being a bunch of project-specific methodologies that cost a lot of money that didn’t help the market development in general” says O’Sullivan.

The challenge of moving beyond narrowly-construed methodologies has confronted both the CDM and even VCS, which has proposed new incentives that hope to encourage the emergence of methodologies with broad applicability.

But even before VCS started down this path, Avoided Deforestation Partners had a goal of making a contribution to the market at large.

“We thought if we took a different, modular approach where you had a broader applicability, it’s helpful for market development and means that project developers don’t have to go through that massive cost and upfront exercise of developing their own methodologies,” O’Sullivan says.

“So we basically broke a methodology down into its components.”

The REDD Building Blocks

In brief, the methodology was prepared with a set of modules or building blocks, that can be mixed and matched in different ways by new projects to meet the needs for an adaptable standard for unique local ecological and economic conditions around the world while still offering the reassurance to buyers and investors that the projects are utilizing an independently vetted and verified set of procedures that ensures the climate benefits of the project will be maintained over time.

As it currently stands, the methodology weighs in at more than 200 pages, comprised of 18 separate modules. They include:

• Planned deforestation
• Unplanned deforestation
• Forest degradation due to fuelwood consumption

• Planned deforestation
• Unplanned deforestation
• Forest degradation due to fuelwood consumption
• Market effects leakage

• Live biomass
• Dead wood
• Litter
• Soil
• Wood Products1 Monitoring Module

• Fossil fuel use
• Biomass burning

• Project area stratification
• Estimating uncertainty for project activities

Despite the considerable scope afforded by these modules, it may be helpful to note that it still does not exhaust the full array of possible REDD project carbon accounting concerns, and some gaps remain to be filled by new methodologies. According to O’Sullivan, the finalized methodology is not currently designed to address forest degradation arising from illegal logging or REDD in peatland forests or on small islands.

Cross-Pollination

The modular approach to the methodology is intended to allow project developers to take and apply only those modules that apply to their project conditions.

But even beyond the use of the new methodology by emerging projects, the value of the modular approach also lies in that its components can be tapped by other methodologies as they emerge.

To date, complete modules from the Avoided Deforestation Partner’s methodology have already been incorporated by at least two other REDD methodologies also working their way through the VCS double-validation process, and have been credited as a source used for the development of at least one other methodology as well.

Shining a Light on the Process

This methodology joins a growing cohort of forest carbon methodologies to emerge from VCS’s double-validation process, which in itself is in the process of being fine-tuned by the standard organization.

According to Jeff Hayward, Rainforest Alliance’s Climate Program Director, assessing these modules involved an extraordinary undertaking.

“I can not imagine we’d ever have a similar type of process,” says Hayward. “This was really one of a kind.”

The modular approach, while offering a unique opening in terms of flexibility for project developers, necessarily involved a complex matrix of options that needed to be considered in the validation process.

“Even though there were modules that could be analyzed in groups of related themes, such as emissions in different carbon pools, or baseline establishment, or leakage, it wasn’t possible to compartmentalize the evaluation,” adds Hayward. “We always had to be mindful of how different pieces of the puzzle would fit together.”

The Final Seal of Approval

At the time of this writing, the methodology still has yet to receive the final blessing from the Voluntary Carbon Standard. On Tuesday, the methodology received the final sign-off from the second validator, the Rainforest Alliance.   On Thursday morning, the first validator, the Swiss Association for Quality and Management Systems also signed off on Rainforest Alliance’s recent report.

O’Sullivan says he expects the final vote of confidence to come from VCS at a press event being held by the VCS here in Cancíºn this weekend. When contacted for comment, a VCS spokesperson opted to defer comment about the methodology until it has been officially endorsed.

What most observers will be watching for however, is not necessarily whether this new methodology will get its final approval from VCS, but further out on the horizon, what type of increased investment this new tool will generate for project developers around the world.

“Since there was a growing pool of REDD demonstration projects interested in meeting the VCS standards, the final approval of this set of modules will allow much wider usage and thus scale up for projects,” predicts Hayward.

And that is definitely what Avoided Deforestation Partners intended, according to O’Sullivan. “This wasn’t done as a commercial venture [for Avoided Deforestation Partners],” he says. “It was done on the basis of helping develop the market.”