“The honeymoon for REDD+ is over”: consensus not yet reached in Doha on MRV, finance

The gap in financial support pledged by countries for REDD+ projects and that received on the ground remains a pressing challenge for the scheme. theverb.org

DOHA, Qatar (4 December, 2012)_Negotiators at the U.N. climate talks in Doha this past week did not reach consensus to move the REDD+ mechanism forward, said Tony La Viña, environmental policy expert, adding this was the first time there has been no progress on the climate-forestry mitigation scheme.

“The honeymoon period is over for REDD+, we are down to the nuts and bolts of the mechanism. The things that matter most on the ground: verification, how payments will be made, the inclusions of non-carbon benefits, the implementation of safeguards…continue to discussions,” said La Viña, who is also a lead negotiator for the Philippines, as he updated an audience of global leaders and forestry experts on the progress of the negotiations at Forest day 6, held yesterday in Doha.

“This is the first time in the whole process that the REDD+ group within SBSTA [the scientific advisory body to the UN Framework Convention on Climate Change, UNFCCC] has not reached a solution.”

REDD+ is a mechanism that sees money channelled to developing countries to incentivise them to adopt practices that reduce emissions from deforestation and forest degradation — estimated to account for 11-17 percent of global emissions. REDD+ was first agreed on at the 2007 UNFCCC climate summit in Bali and has been discussed and developed at subsequent meetings.

Last year, the Norway’s Environment and Development Minister declared REDD+ to be the “biggest success in climate change talks”,  but with decisions stalling on linking verification with financing the scheme, its success may be short lived.

Leaving REDD+ countries in the lurch

Initial progress during the week was positive and linking MRV methods with methods to set reference emission levels was generally seen as positive.  The lack of consensus on linking verification of the emission reduction measurements with payments as the key to achieving a performance based mechanism, could be a major setback for forest-rich countries already moving ahead with REDD+.

We still have a second week and Parties can always bring [MRV] up at the COP level…if we can nail down the MRV issue…the international policy framework on REDD+ is complete.

Many were expecting Doha to build on some of the robust decisions on monitoring, reporting and verifying (MRV) mechanisms agreed during the last round of talks in Durban, South Africa. This included a decision to take a “stepwise approach” which enables countries with low monitoring capacity to incrementally develop the technology and data to carry out more complex MRV and setting of reference levels. Subsequent discussions May’s SBSTA meeting in Bonn also focused on how developed countries could support forest-rich countries overcome many of the technical and financial MRV challenges.

The MRV impasse at Doha – reported to be between Brazil (a potential beneficiary of REDD+) and Norway (the largest funder of tropical forest conservation) — revolves around language governing the standards by which deforestation-related emissions would be verified. Norway has been pushing for an independent, international verification process undertaken by experts, whereas Brazil and other developing nations say they are not ready to commit to strong verification requirements.

“The feeling among developing countries is that they need to start getting something out of the program and there needs to be fewer hoops to jump through before receiving the promised support,” said Louis Verchot, CIFOR scientist in an interview on MRV and safeguards last year.

Despite the setbacks, La Viña remains optimistic that a decision might still be reached in the dying hours.

“We still have a second week and Parties can always bring [MRV] up at the COP level…if we can nail down the MRV issue…the international policy framework on REDD+ is complete.”

REDD+ finance decisions delayed for three more years: investors told to “make do” with current policies

Over the course of international climate change negotiations on REDD+, private sector engagement has repeatedly been identified as a key component in moving forward, including the possibility of linking REDD+ finance from carbon markets. The long term ‘finance gap’ remains a pressing challenge for REDD+, as well as the appropriate means and scope of private sector involvement.

The European Union’s has been hesitant to recognise forest carbon credits through REDD+ as part of their emission trading scheme (ETS), which accounts for 97 percent of the worldwide market and is, by far, the single largest carbon market. Engagement of the private sector in REDD+ is currently limited to selling forest carbon in the voluntary markets (though forest carbon credits only represent 10 percent of this market) and contributing funds to forest conservation or tree planting as part of corporate social responsibility programs.

“The stronger emissions reductions commitments needed to make REDD+ work through private sector involvement in regulated markets is not going to come…until 2015,” said La Viña.

“You probably have to be satisfied with whatever signal we are getting from the international process and make do with it…you should not expect more at this stage.”

Although little has been explicitly stated in the Durban agreements developed last year, private sector engagement appears to be particularly needed as countries transition from REDD+ Phase I (readiness) and Phase II (demonstration) to Phase III (results-based actions), where payments and other forms of compensation are offered for verifiable emission reductions. These payments will require significant sums of additional funding.

However La Viña believes countries can continue to move forward in the current international policy framework.

“We are really down to national implementation level now – countries really have to put their money where their mouth is in order for REDD+ to be implemented,” he said.

The stronger emissions reductions commitments needed to make REDD+ work through private sector involvement in regulated markets is not going to come…until 2015.

REDD+ has got its momentum irrespectively of what happening in the UN Climate negotiations, said Arild Angelsen, Professor of Economics at the Norwegian University of Life Sciences (UMB) and a senior associate at CIFOR.

“International funding form aid budgets, private sector’s involvement in low-carbon development projects, and – not at least – an increasingly stronger commitments from national and local governments in REDD countries are encouraging signs.”

This will continue in spite of slow progress in Doha, he said, adding that a strong result of course would help speed up the activities on the ground. But, many are also frustrated with the process, and look elsewhere for inspiration.

Another concern is expiration of the Ad-hoc Working group on Long-term Cooperative Action group (LCA) at the end of 2012. Without the LCA to push decisions on ‘who pays for climate mitigation activities’ and with no guarantee that REDD+ finance will be discussed under the new working group tasked with developing the post-2015 climate agreement, many REDD+ developers and investors are feeling nervous about moving into Phase II and III of REDD+ implementation.

“I’m worried from what I’ve heard. The science is strengthening, the value of REDD+ hasn’t gone away [but if] we have to wait three more years…my worry is too many people will exit the market,” said Jonathan Shopley, Managing Director of the Carbon Neutral Company.

The future of forests is broadening

I’m worried from what I’ve heard. The science is strengthening, the value of REDD+ hasn’t gone away [but if] we have to wait three more years…my worry is too many people will exit the market.

As the world’s global leaders and forestry experts convened at Forest Day 6, one of the recurring challenges voiced was how to meet the growing demands for food whilst protecting forests and meeting wider sustainable development goals.

landscape-based approach has been hailed as a new way to bring together the agricultural, forestry, energy and fishery sectors to better manage the world’s resources while offering opportunities for climate adaptation and mitigation.

For La Viña, despite the opportunities presented by REDD+ to meet some of the current challenges in reducing deforestation, there was need for a much broader long-term focus on managing landscapes.

“As good as the REDD+ mechanism is and can be, it’s limited by its emphasis on forests,” he said.

“For me, it’s obvious that a landscape approach that combines forests, agriculture and other land uses…is the way forward.”

For more stories from the UN climate talks in Doha, click here.


One Response to ““The honeymoon for REDD+ is over”: consensus not yet reached in Doha on MRV, finance”

  1. JimV says:

    REDD+ has been rejected by the marketplace of ideas and was conceptually flawed from the beginning. With tortured prose, the “NGO and Intergovermental Institutions Complex” burned their bridge with the financial community long ago with troublesome and politically motivated speech and maneuvers. The statist approach with its socialist dialogue has clearly run aground. So I really do wonder about the persistent socialist dialogue when meeting in places like Rio and Doha? If flying economy class, packing your own lunch, and weaving your own clothing I might feel differently about you but to be consistent with your rhetoric you need to stick with average world income of $10,000. What’s really happening here? Is it patrimony, hypocrisy, or a view toward a dictatorship of the proletariat? To subscribe your professional beliefs to things you don’t really believe is moral mischief and mental lying; we can do better and soon we’ll have to.

    Robert Heinlein was right when he said that “political tags are never basic criteria. The human race divides politically into those who want people to be controlled and those who have no such desire.”

    The solution to the loss of 13 million hectares of forest cover per year is plain and simple but the best one can muster here is “private sector engagement appears to be particularly needed” but a quick reversal with a statist comment that “countries really have to put their money where their mouth is…” Does it register at all that “countries” taken as a whole have a $3 trillion fiscal deficit? As the scheme unravels throughout this article we hear from an “environmental policy expert” who wants to move the goalposts with “it’s obvious that a landscape approach that combines forests, agriculture and other land uses is the way forward.” Well, yes and no.

    We’re losing 13 million hectares of land to deforestation each year and have the technology to monitor that very accurately. Solving this forest problem shouldn’t be passed off to a holistic approach with added complexity beyond the mandate of this forestry website. We are talking about forestry here and shouldn’t waver.

    The ecosystem services provided by forests will have exacting standards to be updated with technological breakthroughs when the incentive to do so is clear and measurable. An easy to understand cost/benefit analysis is a key ingredient. And the easiest, fastest, and most comprehensive way to do the job is via the financialization of a small percentage of our natural capital. For a simple illustration showing how this could work we can start with a World GDP of $70 trillion that is made possible by the sum of our natural assets. Mankind is not part of the equation; not without oxygen and all the rest. For our purpose the $70 trillion and a “cap rate” of 7% would benchmark the present value of natural assets at $1 quadrillion. That number isn’t very important but the realization that natural assets should be valued at some multiple of World GDP is an important principle. There are some who might argue that we need to include depreciation and depletion as recognition of natural capital that has been and continues to be lost. OK, adjust natural capital to $900 trillion for illustration. Let us now assume that we “sequester, audit, measure, watch closely” 5% of natural assets at a par value of $45 trillion. For strong backing, allowing the financialization of only 10% of this resource would capitalize a “natural resources bank” with $4.5 trillion. With that as primary capital, experience has shown that the use of fractional reserve banking methods should be governed by the best practices of the Bretton Woods era (1944-1971)rather than our recent history lesson. That means the hypothetical natural resources bank could be a safe source for financing 6 to 8 times its primary capital ($27 trillion to $36 trillion) in prescribed joint ventures. This is a sum that could stop deforestation in its tracks with enough left to realize the goals contained in “an amended” restatement of the three dimensions of sustainabilty.

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