GCP Briefing #3, January 2010

The Copenhagen Accord:  Whilst this was not a legally binding agreement, it mentions forests specifically in Section 6 recognising the ‘crucial role of reducing emissions from deforestation and degradation’ and calls for ‘the immediate establishment of a mechanism including REDD+’.  Also Section 8 calls for ‘substantial finance to prevent deforestation (REDD+)’.  It also commits developed countries to provide ‘new and additional resources amounting to $30 billion for the period 2010-2012’.  Not all of this would be for forests but ‘Forestry’ is specifically mentioned as one of the mitigation and adaptation options.  The developed countries also set themselves a ‘goal of mobilising jointly $100 billion a year by 2020 to ‘address the needs of developed countries’.  They also decided that a ‘Copenhagen Green Climate Fund be established as an operating entity of the financial mechanism of the Convention’ to support projects and programmes ‘including REDD+’.  This is considerably more than the $7.2bn of finance generated by the CDM, JI and voluntary markets in 2008 (according to the World Bank’s State and Trends of the Carbon Market 2009).  We should also note that the Accord covers 80% of all emissions, whilst the Kyoto Protocol covers barely 30%, because major emitters such as US, China and India have no commitments within it.

Conclusion: Taken together, and considering at the UN Bali meeting forests were an outsider to these negotiations, it is remarkable that in just two years they have moved to pole position.  No other sector receives such attention, reinforcing the view that forests are now widely recognised within the negotiations as a, if not the, primary means of mitigating and adapting to climate change between now and 2030.  A key moment will be the delivery of emissions reduction targets by signatories by the end of January as planned, or later in 2010.

The $3.5 Billion Commitment:

Six countries (Britain, France, USA, Japan, Norway and Australia) committed these resources at COP 15 specifically towards a fund to halt deforestation between 2010 and 2012.  This is close to the sum requested for the first two years of the IWG-IFR (Informal Working Group on Interim Financing for REDD), at USD 22-37 billion over 5 years (c. € 25 billion).  This emerged out of the Emergency package for Tropical Forests, developed by the Princes’ Rainforests Project, which now has the support of over 40 rainforest nations.  There was much talk of a ‘Fast Start’ package of funding in the negotiations and France and the UK proposed that 20% of this funding would be to curb deforestation.

Conclusion: Whilst far short of the total of €15-25 billion the IWG was looking for to curb deforestation by 25% by 2015, this is a real start.  It remains to be seen how much of this money is ‘additional’ to existing commitments and through what mechanisms it will be spent.  Capacity to absorb funds at this scale in developing countries is still weak.

 

Box 1: Inter Academy Panel Statement on Tropical Forests and Climate Change:    Signed by more than 50% of the world’s scientific academies, this powerful statement was catalysed by the Royal Society, The Inter Academy Panel and GCP following the Nobel Laureate’s Meeting on Climate Change in St James Palace hosted by the HRH The Prince of Wales.  It makes six calls on world leaders for comprehensive and immediate action on forests saying ‘there can be no solution to climate change without addressing deforestation’.  It also calls for an emergency funding mechanism for avoided deforestation and sustainable forest management and $15-35 billion in financing through a mix of public and private funding to reduce deforestation by 50% in 2020.   Conclusion: There can be no doubting the scientific case for early action on forests.

 

The REDD+ Text:

REDD+ is discussed under the AWG-LCA track (Long-term Cooperative Action) in the UNFCCC talks.  The REDD+ text was more advanced than almost all other sectors under discussion.  The scope of REDD+ was agreed including emissions (from deforestation), conservation (of carbon stocks including in protected areas), degradation and enhanced carbon stocks (mainly aforestation and reforestation).  Unfortunately talks at the Ministerial level on REDD+ at Copenhagen were suspended to concentrate on the Accord at the last minute and NOT simply due to unresolvable issues.  Substantive issues remaining to be resolved in 2010 are: The overall objective (the emissions reduction target for REDD+), means of financing (extent of role of carbon markets remains undecided), and scale of accounting of REDD+ (national level or sub-national – to best avoid leakage).  A decision on both reference levels and the drivers of deforestation was reached under the Subsidiary Body for Scientific and Technological Advice (SBSTA) tasked with discussing the methodological issues of REDD+.  Historical Reference levels are likely to be used but with an adjustment factor for countries with traditionally low deforestation rates.  This is a significant step forward, making it easier to determine the REDD+ ‘objective’.

 

Conclusion: It is likely that these final areas will be resolved at the forthcoming UNFCCC meeting in Bonn and the REDD+ text may then be agreed as a ‘decision’ in Mexico at COP 16 in December.  A growing focus on the drivers of deforestation is emerging.  However, in the absence of a comprehensive international agreement under the UN, the risk of a pluri-lateral range of actions among individual governments becomes an increasing possibility.

 

The US Climate Bill:  

A key question is whether the Accord will provide sufficient momentum for President Obama to get the 60 votes he needs in the Senate to pass the Waxman Markey Bill in March or possibly May 2010.  Demand at the scale of 1.5 billion t/C from forests annually may come on stream, and possibly substantially more.  Pundits are divided and some believe other domestic issues will bump the Bill off the agenda, even until after the next US election.

 

Conclusion: If bumped this could significantly hold up negotiations in December at the next UNFCCC COP 16 climate meeting in Mexico, as the US would once again be without a legal mandate from which to negotiate, just as was the case in Copenhagen.  If passed, it will greatly speed up emerging appetite for action on forests.

Private Sector Responses:  

Large-scale funds could now come on-stream in 2010/11 and begin to enable faster action to curb deforestation - whether a Kyoto Agreement is reached or not.  This could restrict access to rainforests for agricultural expansion, increase incentives to intensify production and restore degraded land.  Copenhagen made it more likely that REDD+ will form part of a regulated climate regime, post 2012 - if there is a Kyoto II agreement.  This could increase incentives for REDD+ projects and values of carbon and biodiversity rich forests.  Private sector disaffection with the UN, is forcing attention to the US and the potential scale of their market pull for forest credits, if there is Senate Approval of their climate bill.  Whatever the outcome, the US is still likely to act on forests using the agreed $1 billion dollars, and more funding may emerge.  Growing calls for sustainability in supply chains that drive deforestation, such as ‘Forest Footprint Disclosure’ launched by GCP in June’09 and prominent civil society actions on beef and soy in Brazil and Palm oil production in Asia, which drive deforestation, are raising the risks of corporate inaction on unsustainable use of these products in corporate supply chains. 

 

Conclusion: Optionality for all areas of REDD+ (emissions reduction, conservation of stocks, reduction of degradation and sustainable management of forests) is increasing.  Access to carbon rich or high biodiversity forests for agribusiness will become increasingly regulated and expensive.  Incentives will emerge to restore degraded land and intensify production.

Box 2  - Next steps on Forests & REDD+ 1.     Clarity is being sought on the status of the $3.5 billion, by GCP and many others frustrated by the chaos of the latter part of COP 15.   2.     A meeting of the key stakeholders, possibly to be held under the leadership of France, to decide how these funds should be spent, is being considered for the end of February, when the Accord emissions commitments are in.   3.     The position of the US will become clearer after any Senate vote in March or May 2010.   4.     A meeting on these issues of the World Bank is planned for April.  There is emerging talk of the World Bank’s Forest Carbon Partnership Facility (FCPF) and UN-REDD merging.   5.     The work of the IWG could be maintained to ensure momentum for a good decision on REDD+ at the UNFCCC COP 16 in Mexico, but more importantly to define the interim funding package for forests now.  6.     Clarity on a transfer mechanism engaging the World Bank, UN-REDD, and possibly the GEF or other multilateral bodies is urgently needed.  This could be a bespoke, fast track ‘Tropical Forest Facility’ as proposed by the IWG to disperse funds, perhaps operating between now and 2015 only, until REDD+ mechanisms can take the strain.   7.     There is a distinct feeling that the process is currently somewhat in limbo.  The initiative needs to pick up with the proposed February meeting in France, the next high-level opportunity to discuss all these issues and forge ahead in 2010 – because forests cannot afford to wait.

 

Contact:  Andrew Mitchell a.mitchell@globalcanopy.org