REDD (Certification) Schemes

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REDD (Certification) Schemes Framing the
Issues By Eveline Trines Eveline.Trines_at_Silvestr
um.com www.Silvestrum.com 4 March 2009
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Presentation Outline

• Voluntary Market Standards
• Voluntary Carbon Standard (VCS)
• Climate, Community and Biodiversity Standard
  (CCBS)
• CDM versus VCS
• Regulated Market UN Post-2012
• REDD Methodologies

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Markets / Standards

• Regulated market
• UNFCCC / KP / CDM / UN-REDD
• Voluntary market
• Voluntary Carbon Standard (VCS)
• Climate, Community and Biodiversity
  Standard/Alliance (CCBS/A)
• Carbon Fix Standard (CFS)
• Etc.

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Voluntary Market Project Design Carbon
Accounting Issues

• Credibility of GHG Reductions
• Quantification Monitoring
• Permanence Leakage
• Additionality
• Impacts (Env. Soc.Econ.)
• Risk assessment Buffer
• Registry System

• Project Design, plus Social and Environmental
  Impacts
• Community
• Biodiversity
• Water
• Climate Adaptation
• Association with other standards

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Voluntary Carbon Standard
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• Global benchmark standard for voluntary carbon
  projects
• Developed by The Climate Group, the International
  Emissions Trading Association (IETA), the World
  Business Council for Sustainable Development
  (WBCSD) and a range of business, government and
  non-government organizations
• Designed to be as robust as Kyoto Protocols
  Clean Development Mechanism (CDM), while
  attempting to reduce costs and bottlenecks
• Covers new sectors (e.g., IFM, ALM, REDD) and
  creates permanent, fungible credits (VCUs)

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VCS AFOLU Categories

• Afforestation, Reforestation and Revegetation
  (ARR)
• Agricultural Land Management (ALM)
• Improved Forest Management (IFM)
• Reducing Emissions from Deforestation and Forest
  Degradation (REDD)
• New project categories, to be launched this year,
  e.g.
• Peatlands
• (Conservation)

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tC ha-1
Forest definition
RED
time
Forest Degradation
Afforestation Reforestation
Forest Management
Devegetation
Revegetation
Intact Forest
Forest Land
Forest Land
Non-Forest Land
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The Climate, Community Biodiversity Standards
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The Climate, Community Biodiversity Standards

• As a project design standard
• - Validate high-quality project design
• - Stimulate investment in project development
• - Attract investors interested in multiple
  benefits
• Attract co-funding from Govts, foundations, etc.
• Encourage integrated design
• As a multiple-benefit verification standard
• Combine with carbon accounting standard (CDM,
  VCS), which verifies quantified emissions
  reductions removals
• Verify positive biodiversity and community
  impacts and ensure best practices
• Demonstrate multiple benefits to investors and
  screen out unacceptable projects

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The Climate, Community Biodiversity Standards

• Includes Independent 3rd party validation and
  Verification at least once every 5 years.
• Does not in itself generate carbon credits.

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VCS versus CDM
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Major differences

• More activity types allowed under the VCS
• The VCS has permanent carbon credits (in stead of
  temporary)
• Risk assessment that results in a buffer carbon
  reserve of credits that cannot be traded
• More efficient relation with verifier (validation
  and verification one go, number of inspections
  flexible)

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Project Type Eligibility
CDM VCS Afforestation/Reforestat
ion (A/R) v v Revegetation v Forest
restoration v v Improved Forest Management
(IFM) v Reducing emissions from
Deforestation and Forest Degradation
(REDD) v Agricultural Land Management (ALM)
v v
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Addressing Permanence / VCS Buffer Approach

• Project risk assessment to determine buffer
  withholding percentage, placed in shared VCS
  buffer pool
• Re-verification optional, but incentivized
• 10 of projects buffer released every 5 yrs at
  re-verification (as project demonstrates
  longevity and risk mitigation)
• Buffer (insurance) approach ?
• no buyer or seller liability
• creates permanent, fungible credits (VCUs)
• Periodic truing-up ensures total portfolio
  carbon losses over time are covered by buffer
  pool
• adjust buffer values and/or risk criteria as
  needed
• CC AR forestry projects can participate in VCS
  buffer to generate permanent credits

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UNFCCC Post 2012
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What happens post-2012 in the regulated market?

• Acknowledgement of contribution of deforestation
  to global climate problem gt REDD
• Political will to include it in a future climate
  regime
• Option to increase the participation of
  developing countries
• National approach (versus project-based
  activities of CP1) voluntary sectoral target
• Numerous methodological issues and even more
  policy issues but if the political will exists.

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What is being done?

• A 2 year period to work on methodological issues
  and to undertake demonstration activities (2008
  and 2009)
• Work towards official decision text that is to be
  adopted December 2009 in Copenhagen

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REDD Reducing Emissions from Deforestation
Reduction in emissions in comparison to the
average base period emission level
Schematic representation of the compensated
reduction proposal. The solid line indicates
annual emission levels due to deforestation. The
dotted horizontal line is the average emissions
level during the base period. Area A is the
reduction in emissions during the 1st commitment
period below the base periods emission level.
Area B is the same but in the 2nd commitment
period, if there was to be one. (Trines et al.,
2007)
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Frontier Configuration
Humans and their infrastructure are encroaching
into areas with relatively little human activity.
No-Forest
A
B
Frontier
Forest
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Main Road
Deforestation Yellow Non-Forest Gray Blank
areas not available image
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Deforestation Yellow Non-Forest Gray Blank
areas not available image
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Mosaic Configuration
Human populations and associated agricultural
activities and infrastructure (roads, towns,
etc.) are spread out across the landscape and
most areas of forest within such a configured
region or country are accessible.
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Example of Mosaic-type forest configuration
(Jambi and Sumatera Selatan provinces,
Indonesia) (Source VCS)
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Governed Deforestation
1987 2003
Bolivia East of Santa Cruz

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Reality at the national level is a mix of
phenomena
Project-based activities?
Deflect forest degradation and increase carbon
stocks
Forest degradation
(Sustainable) Forest Management
Deforestation
Carbon -gt
Rehabilitation after deforestation
Time -gt
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Major challenge How to operationalise the
National Approach

• Instruments/options at the avail of governments
  to REDD
• Improved and integrated land-use planning /
  zoning
• Tax reforms (Mato Grosso, Brasil)
• Improved farming techniques (higher yields per ha
  gt less ha required)
• Shift to Sustainable Forest Management (less
  emissions from degradation and less
  susceptibility to fire e.g. Congo Basin)
• Market-oriented activities/projects (e.g.
  BioBank, Malaysia)
• Payment for Environmental Services (PES) systems
  (e.g Programa Socio Bosque in Ecuador)
• REDD projects

Project-type of activities, nested in a national
approach
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How can it be financed?
latest estimates from the Commission indicate
that the net global incremental investment, both
public and private, to reduce global greenhouse
gas emissions to a level compatible with the 2C
objective needs to increase to around EUR 175
billion per year in 2020. Source EU Council
Conclusions 2 March 09

• Fund based vs market based
• Nation wide vs project based
• Estimates of required resources impressive
  unlikely that this can be generated only with a
  fund (voluntary pledging)
• Combination of (Readiness) Fund Market
• Market only works if demand is created by high
  emission reduction targets
• Other innovative options auction top of AAUs
  (Norwegian proposal) oblige industries/sectors
  to buy emission allowances in national ETS and
  earmark revenues (Commission) contribution
  related to emissions or GDP or other index
  (Mexico) etc.

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Can the Regulated Market learn from the Voluntary
Market?
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Need for Different Methodologies for Different
Activities

• The difference in types and spatial
  configurations must be taken into account in
  projecting rate/location, in designing and
  stratifying a ground-based inventory, and in
  addressing leakage.
• However, some methodology components are the
  same.
• Modules allow for minimizing redundancies.
• Modules can be docked into a framework
  document.

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Draft VCS Modules

• Carbon pools

• Sources of emissions

• Above-ground biomass
• Below-ground biomass
• Dead wood
• Litter
• Soil organic carbon
• Harvested wood products

• Non-CO2 emissions from biomass burning
• Non-CO2 emissions from Nitrogen additions
• Emissions from fossil fuel combustion

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Draft VCS Modules

• Planned deforestation

• Unplanned deforestation

• Baseline GHG emissions of planned deforestation
• Activity shifting from avoided planned
  deforestation

• Baseline rate of unplanned deforestation
• Baseline location of unplanned deforestation
• Activity shifting from avoided unplanned
  deforestation

• Leakage due to market effects

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Draft VCS Modules

• Stratification
• Baseline GHG emissions from forest degradation
• Monitoring of deforestation and forest
  degradation
• Uncertainty analysis
• Framework document

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Communicating vessels
If we want to limit climate change, stabilize
GHG concentrations, a particular amount of
emission reductions has to be achieved, no
matter how, no matter where, no matter by
whom.
2o C
Sinks Developing countries
Non-sinks Developed countries
latest estimates from the Commission indicate
that the net global incremental investment, both
public and private, to reduce global greenhouse
gas emissions to a level compatible with the 2C
objective needs to increase to around EUR 175
billion per year in 2020. Source EU Council
Conclusions 2 March 09
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Many questions remain.

• What to do with good behaviour in the past?
  (e.g. Costa Rica)
• And what if the worst is yet to come? (Congo
  Basin)
• And what do we do with replacing high
  conservation value forests with e.g. oil palm?
  (Indonesia, Malaysia, PNG, etc.)

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REDD standard requirements....

• Irrespective of whether we talk regulated or
  voluntary markets, a REDD standard must be
• Robust
• Accommodate the diversity of circumstances that
  occur in the field
• Be able to fit in with national systems
• Respect and protect indigenous peoples rights
  and natural systems
• Reliably deal with the risk of non-permanence and
  leakage
• Demonstrate a deviation from business as usual
  (BAU) in relation to a reference period
• Generate credits that are accepted and fungible
  (inter-exchangeable) with the regulated and/or
  voluntary markets
• Including this type of REDD credits allows UN
  Parties to jointly commit to higher overall
  emission reduction targets post 2012 ceteris
  paribus.

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AND THEN MAYBE..... We can continue to enjoy this!
THANK YOU! Eveline.Trines_at_Silvestrum.com