Indonesia was one of the first developing nations to commit to reducing its greenhouse gas emissions (GHG) by 2020. Three quarters of Indonesia’s emissions result from deforestation and land degradation, so meeting this commitment will require major changes in how it manages its forests. Indonesia is developing a national strategy for REDD+ which includes respect for rights of indigenous peoples and local communities including the right to Free, Prior and Informed Consent (FPIC). Implementing commitments on the rights of indigenous peoples, in terms of rights in forestry issues as REDD+ plans are developed and implemented, will be a major challenge as land use planning, forestry licensing and agriculture policies and norms do not currently respect community rights.

Some 40 pilot projects and demonstration activities for REDD+ are under development around the archipelago, but none have completed negotiations with affected indigenous peoples and local communities. Most are still in the early stages of discussion with affected communities on potential benefits and costs, even though permits for REDD+ projects are already being issued by national and provincial governments.

In recent years, the voluntary over-the-counter (OTC) carbon market has reached a significant market volume. It is particularly interesting for forest mitigation projects which are either ineligible in compliance markets or confronted with a plethora of technical and financial hurdles and lacking market demand. As the OTC market is not regulated, voluntary standards have been created to secure the social and environmental integrity of the traded mitigation projects and thus to ensure the quality of the resulting carbon credits. Building on a theoretical efficiency-legitimacy framework, this study aims to identify and analyse the characteristics and indicators that determine the efficiency and organisational legitimacy of standards for afforestation/reforestation carbon projects.

A number of countries have instigated programmes that aim to build the capacity to initiate REDD+ based emissions reductions and attract investment. The two largest – in terms of expenditure rates and transfers rather than deposits – are the UN-REDD+ programme and the Forest Carbon Partnership Facility (FCPF).

This article discusses the current state of financing achieved for REDD+ programmes through the FCPF and the UN-REDD programme, how the state of these REDD+ programmes will affect the implementation of REDD+ and consequent impacts on multilateral efforts to reduce emissions.

Over the last four years, the United Nations’ negotiations on Reducing Emissions from Deforestation and Forest Degradation – REDD+ – has become increasingly central in global discussions on climate change. Unfortunately there are still a number of serious misconceptions about the suitability of carbon markets to finance forest protection. The aim of this paper is to demonstrate why these assumptions are false or misleading.

In February 2011, the Secretariat of the UNFCCC invited parties and accredited observer organisations to submit their views on how market-based mechanisms might promote mitigation actions and enhance their costeffectiveness. They were also asked to comment on issues such as ‘safeguarding environmental integrity’, ‘ensuring a net decrease and/or avoidance of global greenhouse gas (GHG) emissions’, and ‘ensuring good governance and robust market functioning and regulation’.

Many of the resulting submissions in support of carbon trading as an appropriate tool for financing forest protection rely on outdated or false assumptions. They also fail to address the additional criteria that the UNFCCC requested. Below we examine some of the common arguments in favour of forest carbon trading, and challenge the assumption that it is a useful and cost-effective way of mitigating climate change.

Abatement curves summarize the costs that are involved in reduction of pollution, in this case net greenhouse gas emissions, based on the volume of various types of emissions and the expected cost per unit emission reduction. Such representations support policy development, identifying an initial focus on the low-cost high-volume emission categories. Four approaches are described and compared to do such analysis for tropical forest margins in the context of Reducing Emissions from Deforestation and (forest) degradation. The four methods, of increasing complexity and costs of data collection are appropriate in different steps along the pathway to negotiated agreements that can meet ‘Free and Prior Informed Consent’ standards, while reducing overall transaction costs by early warnings for cases that are unlikely to lead to mutually beneficial agreements. In early screening of potential cases, a comparison of profitability and time-averaged carbon stock of the different landuse options within an area can be used to confirm that there are no high C stock + high profitability land uses (if there are the question shifts to why these are not universally adopted) and that there generally is a tradeoff. The presence of low C stock + low profitability land uses, can direct the focus on prevention of degradation and possibilities of win+win restoration. For a Project Information Note (PIN) this may give sufficient initial clues. In landscapes where tradeoffs are confirmed, a further quantification and spatial study of the emission pattern can use pixel-level ratios of change in C stock and profitability as basis for C price estimates (‘OpCost curves’). Such curves give an indication of baseline emissions and the opportunity for economic incentives to shift away from emissions that yielded low benefits in terms of profitability increases in land use. Such information can inform Project Design Documents (PDD). For further negotiations of contracts, forward looking landscape scenarios can further support the negotiations, as they can help define the bottom-line levels of alternative livelihood provisions that will be needed to make low C emission scenarios equivalent in terms of local economy to high C stock emission business as usual scenarios. Finally, further detail on the scenarios by inclusion of agent-based variation in resources and preferences may add further detail, but for this class of methods further tests are needed to judge their predictive value and relevance in the negotiation processes.

REDDy – Set – Grow explained

Part 1: A briefing for financial institutions

This part of the report provides private sector actors, particularly financial institutions, with an overview of the current and emerging business opportunities in forest-based climate-change mitigation, including an assessment of the risks involved and possible measures to reduce them. This will also be useful for policy makers in understanding the approach and needs of financial institutions.

Our objective was to compare and evaluate the practical applicability to REDD+ of ten forest management, social, environmental and carbon standards that are currently active worldwide: Climate, Community and Biodiversity (CCB), CCB REDD+ Social and Environmental Standards (CCBA REDD+ S&E), CarbonFix Standard (CFS), Forest Stewardship Council (FSC), Global Conservation Standard (GCS), ISO 14064:2006, Plan Vivo Standard, Programme for Endorsement of Forest Certification (PEFC), SOCIALCARBON Standard and the Voluntary Carbon Standard (VCS). We developed a framework for evaluation of these standards relative to each other using four substantive criteria: (1) poverty alleviation, (2) sustainable management of forests (SMF), (3) biodiversity protection, (4) quantification and assessment of net greenhouse gas (GHG) benefits; and two procedural criteria: (5) monitoring and reporting, and (6) certification procedures. REDD programs require assessment of GHG benefits, monitoring, reporting and certification. Our analysis shows that only the Voluntary Carbon Standard (VCS) treats these three criteria comprehensively. No standard provides comprehensive coverage of the social and other environmental criteria. FSC, PEFC and CarbonFix provide comprehensive assessments of the sustainable forest management criterion. CCBA REDD+ S&E, CCB, and GCS provide comprehensive coverage of the biodiversity and poverty alleviation criteria. Experience in using these standards in pilot projects shows that projects are currently combining several standards as part of their strategy to improve their ability to attract investment, but costs of implementing several certification schemes is a concern. We conclude that voluntary certification provides useful practical experience that should feed into the design of the international REDD+ regime.

This training manual shares hands-on experiences from field programs and presents the essential practical and theoretical steps, methods and tools to estimate the opportunity costs of REDD+ at the national level.