Climate and Deforestation

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Climate and Deforestation

• Positive incentives to reduce deforestation
  emissions in developing countries views from
  Brazil

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Climate and Deforestation

• Objective
• Premise
• Proposal

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1. Objective

• Develop a new arrangement to provide positive
  financial incentives for developing countries
  that voluntarily reduce their greenhouse gas
  emissions from deforestation.

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2. Premise

• Voluntary arrangement in the context of the
  UNFCCC
• Does not generate future obligations
• Does not count towards emissions reductions
  commitments of Annex I countries

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3. Proposal

• Concept
• Positive Incentive Arrangement
• Examples

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Concept Overview

• Positive financial incentives for the net
  reduction of emissions from deforestation in
  developing countries relative to a reference
  emission rate (calculated according to a
  pre-defined reference deforestation rate and an
  agreed Carbon Tonne content).

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Concept Quantifying the Incentive

• 1. Definition of the reference emission rate
• Average rate of deforestation in the country on a
  time period to be defined
• Based on assessment of previous deforestation
  rates
• Periodically updated
• Agreed Carbon Tonne per hectare per biome or
  vegetation type
• 2. Assessment of annual (or periodical) emissions
  from deforestation for comparison with the
  reference
• Based on a transparent, consistent and
  scientifically-based monitoring deforestation
  system
• Emissions are to be defined using agreed standard
  values Carbon tonnes per hectare, according to
  each biome or vegetation type.
• Eg. Amazon 90 tonnes C/ha

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Concept Quantifying the Incentive

• 3. If emissions from deforestation have
  decreased, the difference is converted into a
  financial incentive to be received (credit).
• 4. If emissions from deforestation have
  increased, the difference is converted into an
  amount to be subtracted (debit) from future
  financial incentives to be received.
• The amount of the incentive per carbon tonne is
  to be calculated by a set amount to be agreed and
  to be reviewed periodically.

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Concept Quantifying the Incentive
System
Reference Deforestation Rate
Actual Deforestation Rate
Credit
Deficit
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Concept Positive Incentive Arrangement

• 1. All the reduced emissions of a country are
  added together for a certain period. The avoided
  carbon tonnes are converted into US.
• 2. Annex II countries, voluntarily share the
  bill, taking into account, for example, their
  ODA commitments towards developing countries.
• 3. The collected amount is divided among the
  participating developing countries in the same
  ratio as the emissions reductions they have
  achieved.

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Example

• Situation 1
• 3 countries submit their emission reductions from
  deforestation at time t (assuming 90 tC/ha)
• Country A 150,000 ha gt 13,500,000 Carbon
  tonnes
• Country B 50,000 ha gt 4,500,000 Carbon
  tonnes
• Country C 200,000 ha gt 18,000,000 Carbon
  tonnes
• A reduction of 36 million Carbon tonnes requires
  a positive incentive of US 108 million, to be
  paid, voluntarily, by Annex II countries
  (assuming for example US 3/tC).
• Countries receive proportionally
• Country C 50,0
• Country A 37,5
• Country B 12.5