US climate legislation and REDD+: progress and complications

World Agroforestry Centre climate change expert Jonathan Haskett reports back from the Carbon Markets, Forestry & REDD USA conference in Washington DC, June 10-11 2010. The conference, which brought together leading industry actors, policymakers and scientists, showcased progress in North American forest carbon markets and beyond,  with a special focus on current and potential links to international mechanisms for Reducing Emissions from Deforestation and forest Degradation (REDD+), land use, and sustainable development.

carbonmarkets_forestry&REDD_USAThe evolution of US climate legislation is critical and is already shaping REDD+ initiatives internationally. The climate legislation currently wending its way through the United States Congress featured prominently on the first day. The current incarnation of the legislation is the  'American Power Act', which includes a cap-and-trade system for utilities and industries, and has provisions for funding international actions to avoid deforestation. David Hunter of the International Emissions Trading Association (IETA) gave a lengthy account of the ups and downs of the US climate change legislative process to illustrate the on-again-off-again status of the bill. He emphasized that the bill had been declared “dead” a number of times and that each time it had been revived and moved forward. The oil spill in the gulf also seemed to be giving the legislation momentum and he remained cautiously optimistic that the legislation would pass in some form. Hunter was followed by Jeff Horowitz of Avoided Deforestation Partners (ADP), who initially stressed the need for universal REDD methodologies and then moved on to a discussion of the pledge of the United States of $1B in support of REDD to be matched by $2.5B pledged by other countries, as part of the interim partnership on REDD currently being led by Norway and France. Of this funding 25% was to be allocated to technical readiness activities to help nations prepare to participate in REDD activities, 60-70% was to go for demonstration activities (innovative, large scale, low-carbon development programs), with the balance of about 10% going for the purchase of REDD credits. USAID will be the gatekeeper of these funds on the US side and will be administering a centrally managed, performance based, landscape sustainability fund. On the legislative side ADP has been working an interesting argument with farm state Senators that stopping deforestation will help American farmers and producers by limiting the availability of cheap, deforestation sourced soybeans, beef, and timber. REDD payments are then seen as a vehicle for saving American jobs. More large-scale private investment in REDD+ Eric Bettleheim, founder and past Executive Chairman of Sustainable Forestry Management (SFM) Ltd, gave the day's starkest assessment of the current state of REDD. In his interpretation, current additionality rules create a contradiction in which project developers must tell investors that a project is inherently economically feasible while simultaneously telling the Clean Development Mechanism reviewers that it is infeasible so as to meet additionality requirements. Of more consequence was Mr. Bettleheim's view that the vast majority of the current inventory of REDD projects are too small to be economically viable and are too dependent on public or donor support, and that these projects would vanish when priorities shift. Without large scale private investment, he said, there is no way that small sub-national REDD efforts can survive as commercial ventures. He finished by stating that separating forests from agriculture and from agroforestry was a meaningless distinction in the tropics as agricultural encroachment was virtually always an important component of deforestation and went on to mention that land use remained a viable as a low risk, low tech abatement opportunity for climate change mitigation. Bettleheim's remarks were underscored to an extent by Yemi Katerere , head of the UN-REDD secretariat, who stated that while public sector finance was insufficient to fully support REDD, grant funding would be necessary initially for institutional capacity building. The private sector will only engage in a meaningful way when enabling legislation is in place. As a general matter, business is not positioning itself proactively to take advantage of REDD when legislation arrives. As a result a huge gap will occur after legislation passes, as project development takes 2-3 years. Finally he emphasized the importance of both viable, credible MRV systems and social safeguards in REDD implementation. Benoit Bosquet of the World Bank's Forest Carbon Partnership Facility (FCPF) also emphasized the importance of Measurement, Reporting and Verification (MRV) with respect to REDD, combined with credible baseline emissions assessments and subsequent development of REDD management arrangements. Benoit's noted that while progress was needed to scale REDD up to the national level, there was also a need for progress that can be executed at the district or project level. FCPF has not yet determined what price they might pay for REDD credits;  this will ultimately be based on a valuation made by the FCPF's governing body.

Forestry makes up one quarter of the voluntary carbon market, but needs further incentives The subsequent discussion panels outlined the importance of REDD in the voluntary carbon market - 24% of total projects are forest carbon , with most projects being implemented in North America and Latin America, specifically the US, Brazil and Peru. The lack of US legislation creates regulatory and policy uncertainty, and is seen as a severe hindrance to project development. This in turn was an obstacle to mobilizing the $17-28B need to finance REDD. It was also emphasized that the current legislative language before the US Senate does not recognize the legitimacy of individual REDD projects in regional schemes. This was viewed as an important difficulty in both the “launch” phase of REDD and the development of compliance market for REDD credits. While there are investors who are willing to take on REDD project risks in hope that with appropriate legislation that the value of their investment will markedly increase, most companies currently view REDD investment under a more limited Corporate Social Responsibility rubric.

Experience shows how people can, and must, be at the centre of REDD projects On the second day of the conference the presentation by Derek Charter of Helveta Inc, was very interesting from the point of view of community based REDD measurements. The company have developed a hand held device for verifying many important aspects of REDD implementation. The device is operated by a symbol-based interface that allows community members who may not be literate to gather and record information that is then transmitted electronically to a central database. The device can be used to verify both intact forest and illegal logging as well as other ecosystem values such as water, biodiversity and cultural resources. The company is currently working on carbon stock assessment addition to the device's capability. On the REDD implementation side there were interesting presentations from Brazil and Indonesia. In Brazil, the Amazonas Sustainable Foundation led by Virgilio Viana has developed a large scale REDD implementation that seeks to address deforestation driven by smallholder migration to the forest margin. The project seeks to improve livelihoods and give standing forests more value. Participants do a three day course and receive certificate of understanding of REDD and value of forests. Thereafter families receive monthly cash payment to women via an ATM card they can use in town. Participating communities receive USD $70K that they can manage and spend as they see fit for economic development uses that have included: a brazil nut processing factory, internet access and the purchase of a motor launch. This is a very large REDD project with 10M ha and 7000 registered families participating in a CCBA certified scheme. The project fits well within current Brazilian REDD legislation that takes a nested approach across National regional and project scales, uses a stock and flow approach, and provides a legal definition of a forest carbon credit.

The Berau Forest Carbon Program in Indonesia was described by Greg Fishbein of The Nature Conservancy, a major participant in the program. The focus of the program is job creation and economic growth to support forest conservation. The programme creates specific interventions for specific sectors, for example the conversion of conventional logging to low impact logging which reduces emissions by 50%, and an effort to divert oil palm plantation creation from areas of standing forest to degraded areas that have already been deforested. Ralph Dubayah of the University of Maryland rounded out the end of the second day with a presentation on advances in remote sensing. After a presenting a general on biomass relevant remote sensing techniques including active and passive systems,  Dubayah emphasized the utility of recently improved wave-form LIDAR, an active, laser-based system that is able to map larger areas in a single pass than conventional LIDAR systems and thus able to do large areas more rapidly with a corresponding reduction in cost per unit area.

A new planned mission by NASA will combine LIDAR and Interferometric RADAR to study deforestation, ecosystem structure, biomass and biomass dynamics, but is years away from launch. All in all seemingly the conference provided valuable the insights into the critical US legislative process and the corresponding overview of the current status of REDD-plus.

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